Valley View Health Care v. Chapman, California Court Limits Nursing Fa - AARP... Legal Advocacy
California Court Limits Nursing Facility Residents' Rights Law
Read AARP's (PDF) A federal court ruled that California’s nursing facility rights legislation does not preempt federal law favoring arbitration. Background
A lawsuit was brought by six nursing facilities and the nursing facility trade association to overturn California statutory protections — which AARP California strongly supported during the legislative process — on the grounds that they run afoul of the Federal Arbitration Act (FAA). The nursing facilities claimed that the state law and its regulations are preempted by federal law and are unenforceable. Among the provisions of the California law being challenged (the Patient Bill of Rights) are its limits on arbitration in nursing facility contracts and the enforceability of those rights by private citizens. Arbitration is a dispute resolution mechanism designed for business-to-business transactions and it does not provide the same public scrutiny, right to a jury trial, right to access evidence, adherence to precedence and other procedural protections lawsuits provide; it can also be significantly more expensive. Despite its original design for business-to-business disputes — where the parties have similar sophistication, access to resources, access to legal assistance, and similar bargaining power — arbitration clauses are becoming increasingly common in everyday transactions for ordinary people, including credit card, cell phone, and employment contracts as well as nursing facility admission contracts. Moreover, mandatory arbitration is particularly problematic in the context of nursing facility admissions. By its very nature a nursing facility admission almost always represents a time of crisis for the person being admitted and his/her family. AARP Foundation Litigation attorneys represented a nursing facility resident and California Advocates for Nursing Home Reform (CANHR), who sought to intervene in the case and were denied that formal participation but allowed to participate by filing a brief as friends of the court. In its friend of the court brief, AARP, CANHR and the facility resident carefully parsed the history of both federal and state statutes in question and argued that there is no preemption because the federal nursing facility statutes referred to collectively as the Nursing Home Reform Act clearly defer to state laws that are more protective of for nursing facility residents’ rights. The brief went on to argue when the nursing facilities sought their licenses and agreed by contract to abide by the state’s law, they waived their right to challenge those laws. The court did not agree and held the provisions of the state law that address arbitration invalid, unlawful, and preempted by the FAA.
What s at Stake
This case directly implicates the rights and obligations of nursing facility residents and their families in California, and will also be watched closely by legislatures and courts in other states. The decision is a tremendous blow to nursing facility residents’ rights.
Case Status br
Valley View Health Care v. Chapman was decided by the U.S. District Court for the Eastern District of California. AFL filed AARP’s friend-of-the-court brief with the firms of BraunHagey & Borden LLP, Kreindler & Kreindler, Lieff Cabraser Heimann & Bernstein, and the Janssen Malloy, LLP. The state of California appealed the decision but later withdrew its appeal.
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