Amicus Curiae Brief — SNH SE Ashley River Tenant, LLC, et al., Petitioners v. Thayer W. Arredondo, as Personal Representative of the Estate of Hubert Whaley, Deceased

No. 21-196

In the Supreme Court of the United States

SNH SE ASHLEY RIVER TENANT, LLC; FVE MANAGERS,

INC.; FIVE STAR SENIOR LIVING INC. F/K/A FIVE STAR

QUALITY CARE, INC.; SNH SE TENANT TRS, INC.; DIVERSIFIED HEALTHCARE TRUST F/K/A SENIOR HOUSING PROPERTIES TRUST; SNH TRS, INC.; AND CANDY D. CURE,

Petitioners,

v.

THAYER W. ARREDONDO

AS PERSONAL REPRESENTATIVE OF THE ESTATE OF

HUBERT WHALEY, DECEASED,

Respondent.

On Petition for a Writ of Certiorari to the

Supreme Court of South Carolina

BRIEF OF ARGENTUM AND THE AMERICAN

SENIORS HOUSING ASSOCIATION AS

AMICI CURIAE IN SUPPORT OF PETITIONERS

T. ANDREW GRAHAM

Hall Booth Smith, P.C.

366 Madison Ave,

5th Floor

New York, NY 10017

(212) 805-3630

dgraham@hallboothsmith.com

ANDREW J. PINCUS

Counsel of Record

ARCHIS A. PARASHARAMI

DANIEL E. JONES

Mayer Brown LLP

1999 K Street, NW

Washington, DC 20006

(202) 263-3000

apincus@mayerbrown.com

i

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES....................................... ii

INTEREST OF THE AMICI CURIAE .......................1

INTRODUCTION AND SUMMARY OF

ARGUMENT .........................................................3

ARGUMENT ...............................................................6

I. The Decision Below Conflicts With The

FAA And Defies This Court’s Precedents. ...........6

II. The Question Presented Has Tremendous

Practical Importance. ......................................... 12

CONCLUSION .......................................................... 20

ii

TABLE OF AUTHORITIES

Page(s)

Cases

14 Penn Plaza LLC v. Pyett,

556 U.S. 247 (2009) .............................................. 16

Allied-Bruce Terminix Cos. v. Dobson,

513 U.S. 265 (1995) ........................................ 13, 16

AT&T Mobility LLC v. Concepcion,

563 U.S. 333 (2011) ................................................ 6

Ball v. Ball,

430 S.E.2d 533 (S.C. Ct. App. 1993) ...................... 7

Cambridge Place Grp. v. Mundy,

617 S.W.3d 838 (Ky. Ct. App. 2021) .................... 15

Circuit City Stores, Inc. v. Adams,

532 U.S. 105 (2001) .............................................. 16

CNL SF LLC v. Fountain,

--- S.E.2d ----, 2021 WL 4268081

(Ga. Sept. 21, 2021) .................................. 13, 14, 15

Dalon v. MS HUD Ocean Springs LLC,

283 So.3d 90 (Miss. 2019) .................................... 15

DIRECTV, LLC v. Imburgia,

577 U.S. 47 (2015) .................................................. 6

Doctor’s Assocs., Inc. v. Casarotto,

517 U.S. 681 (1996) ................................................ 6

Epic Sys. Corp. v. Lewis,

138 S. Ct. 1612 (2018) ............................................ 6

Fiala v. Bickford Senior Living Grp.,

32 N.E.3d 80 (Ill. Ct. App. 2015) ......................... 15

iii

TABLE OF AUTHORITIES—continued

Page(s)

Golden Gate Nat’l Senior Care, LLC v.

Dolan,

579 S.W.3d 874 (Ky. Ct. App. 2019) .................... 15

Harrison v. Farmington Operations,

LLC,

2020 WL 3259521 (N.M. Ct. App.

June 11, 2020) ...................................................... 15

Heaphy v. Willow Healthcare, Inc.,

491 P.3d 1165 (Ariz. Ct. App. 2021) .................... 15

Kindred Nursing Ctrs. Ltd. P’ship v.

Clark,

137 S. Ct. 1421 (2017) .................................. passim

Kindred Nursing Ctrs. Ltd. P’Ship v.

Wellner,

533 S.W.3d 189 (Ky. 2017)........................... passim

Logan v. Zimmerman Brush Co.,

455 U.S. 422 (1982) ................................................ 8

Malvern Operations, LLC v. Moss,

605 S.W.3d 291 (Ark. Ct. App. 2020) .................. 15

Miller v. Life Care Ctrs.,

478 P.3d 164 (Wyo. 2020) .................................... 15

Mitsubishi Motors Corp. v. Soler

Chrysler-Plymouth, Inc.,

473 U.S. 614 (1985) .............................................. 11

Mullane v. Central Hanover Bank &

Trust Co.,

339 U.S. 306 (1950) ................................................ 8

iv

TABLE OF AUTHORITIES—continued

Page(s)

Mullen v. Saber Health Care Grp., LLC,

2020 WL 5118038 (E.D.N.C. Aug. 31,

2020) ......................................................... 13, 14, 15

Nitro-Lift Techs., LLC v. Howard,

568 U.S. 17 (2012) ................................................ 15

Perry v. Thomas,

482 U.S. 483 (1987) ................................................ 6

Scherk v. Alberto-Culver Co.,

417 U.S. 506 (1974) .............................................. 11

Silvera v. AristaCare at Cherry Hill,

LLC,

2021 WL 1186555 (N.J. App. Div.

Mar. 30, 2021) ...................................................... 15

Southland Corp. v. Keating,

465 U.S. 1 (1984) .................................................. 11

Statutes

S.C. Code Ann. § 62-8-201........................................... 9

Other Authorities

Annual Report of the Office of the

Independent Administrator of the

Kaiser Foundation Health Plan, Inc.

Mandatory Arbitration System for

Disputes with Health Plan

Members, January 1, 2020 –

December 31, 2020 ............................................... 17

v

TABLE OF AUTHORITIES—continued

Page(s)

Andrea Cann Chandrasekher & David

Horton, Arbitration Nation: Data

from Four Providers,

107 Cal. L. Rev. 1 (2019) ...................................... 17

Michael Delikat & Morris M. Kleiner,

An Empirical Study of Dispute

Resolution Mechanisms: Where do

Plaintiffs Better Vindicate Their

Rights?,

58 Disp. Resol. J. 56 (Nov. 2003-Jan.

2004) ..................................................................... 18

Christopher R. Drahozal & Samantha

Zyontz, An Empirical Study of AAA

Consumer Arbitrations,

25 Ohio St. J. on Disp. Resol. 843

(2010) .................................................................... 19

Elizabeth Hill, Due Process at Low Cost:

An Empirical Study of Employment

Arbitration under the Auspices of the

American Arbitration Association,

18 Ohio St. J. on Disp. Resol. 777

(2003) .................................................................... 18

Nam D. Pham & Mary Donovan, Fairer,

Faster, Better: An Empirical

Assessment of Employment

Arbitration,

NDP Analytics (May 2019) ...................... 17, 18, 19

vi

TABLE OF AUTHORITIES—continued

Page(s)

Nam D. Pham & Mary Donovan, Fairer,

Faster, Better II: An Empirical

Assessment of Consumer Arbitration,

NDP Analytics (Nov. 2020) ............................ 17, 19

David Sherwyn et al., Assessing the

Case for Employment Arbitration: A

New Path for Empirical Research,

57 Stan. L. Rev. 1557 (2005)................................ 17

Theodore J. St. Antoine, Labor and

Employment Arbitration Today: MidLife Crisis or New Golden Age?,

32 Ohio St. J. on Disp. Resol. 1 (2017) ................ 19

Theodore J. St. Antoine, Mandatory

Arbitration: Why It’s Better Than It

Looks,

41 U. Mich. J.L. Reform 783 (2008) .................... 18

INTEREST OF THE AMICI CURIAE

Argentum is the leading national association exclusively dedicated to supporting companies operating

professionally managed, resident-centered senior living communities and the older adults and families

they serve. Since 1990, Argentum has advocated for

choice, independence, dignity, and quality of life for all

older adults. Argentum member companies operate

senior living communities offering assisted living, independent living, continuing care, and memory care

services. Along with its state partners, Argentum’s

membership represents approximately 75 percent of

the professionally managed communities in the senior

living industry—an industry with a national economic

impact of nearly a quarter of a trillion dollars and responsible for providing over 1.6 million jobs.1

Based in Washington, DC, the American Seniors

Housing Association (ASHA) represents approximately 500 organizations involved in the financing,

development and operation of the full spectrum of

housing and services for older adults—including active adult, independent living, assisted living,

memory care, and continuing care (or life plan) communities. ASHA’s members, both for-profit and notfor-profit, collectively own and/or operate approximately 750,000 senior living units across the United

States. ASHA is focused on legislative and regulatory

advocacy, and the organization supports research and

Pursuant to Rule 37.6, amici affirm that no counsel for a party

authored this brief in whole or in part and that no person other

than amici, their members, or their counsel made a monetary

contribution to its preparation or submission. Counsel of record

for all parties received notice of the intention to file this brief over

10 days prior to the due date and all parties have consented to

the filing of this brief.

1

2

national initiatives that advance high quality services

for older adults so they can live with dignity in the

setting of their choice.

Many of amici’s members enter into arbitration

agreements that allow parties to resolve disputes

promptly and efficiently while avoiding the high litigation costs associated with resolving disputes in

court. They do so in reliance on the principles embodied in the Federal Arbitration Act (FAA) and this

Court’s precedents.

In Kindred Nursing Centers Limited Partnership

v. Clark, 137 S. Ct. 1421 (2017), this Court held that

the Kentucky Supreme Court’s clear-statement rule—

that a “power of attorney could not entitle a representative to enter into an arbitration agreement without specifically saying so”—violated the FAA’s mandate “to put arbitration agreements on an equal plane

with other contracts.” Id. at 1425, 1427 (emphasis in

original).

Some courts have faithfully adhered to Kindred

and this Court’s other FAA precedents. But other

courts, including the court below, have not. Instead,

they have interpreted power-of-attorney documents in

a singular, anti-arbitration fashion in order to avoid

enforcing arbitration agreements, depriving amici’s

members and other participants in the senior living

industry of the benefits of arbitration.

Amici thus have a strong interest in this Court’s

review and reversal of the decision below to ensure

that the FAA’s pro-arbitration mandate applies uniformly nationwide.

3

INTRODUCTION AND

SUMMARY OF ARGUMENT

Lower courts are defying this Court’s holdings in

Kindred, and related FAA precedents—engaging in

the very discrimination against arbitration agreements that Congress prohibited when it enacted the

FAA. This Court’s intervention is urgently needed.

The defiance began with the Kentucky Supreme

Court’s decision on remand from this Court. The Kentucky court enforced one of the arbitration agreements at issue, but, in a closely divided 4-3 ruling, the

majority interpreted the second power of attorney,

which was signed by Beverly Wellner, to exclude arbitration agreements. See Kindred Nursing Ctrs. Ltd.

P’Ship v. Wellner, 533 S.W.3d 189 (Ky. 2017), cert. denied, 139 S. Ct. 319 (2018).2

The Wellner power of attorney broadly authorized

Wellner to make “contracts of every nature in relation

to both real and personal property.” 137 S. Ct. at 1425

(emphasis added). The Wellner majority acknowledged that as a matter of settled Kentucky law, the

term “personal property” includes legal claims (and

personal-injury claims in particular). But the majority

nonetheless held that Wellner lacked authority to enter into arbitration agreements because, in its view, a

pre-dispute arbitration agreement does not relate to

the principal’s legal claims but instead involves only

his or her constitutional rights to a jury trial and to go

to court. 533 S.W.3d at 194.

2 To avoid confusion, we refer to this Court’s opinion as Kindred

and the Kentucky Supreme Court’s opinion on remand as Wellner.

4

Here, the power-of-attorney documents are even

broader than the power of attorney in Wellner. See

Pet. 5-7. The authority conferred on respondent

Thayer Arredondo included the power to “execute any

and all instruments * * * concerning any or all of [the

principal’s] business affairs, property, or other assets

whatsoever, including all property, real, personal, or

mixed * * * and choses in action.” Pet. App. 48a (emphases added).

Yet the court below, perhaps emboldened by this

Court’s denial of review in Wellner, see Pet. App. 11a

n.3, reached the same result as the Kentucky court in

that case, see id. at 6a-20a. With little additional analysis, the court below “agree[d] with the rationale” in

Wellner and adopted it as the court’s own. Id. at 11a.3

But as Justice Hughes’s powerful dissent in Wellner explains, that “rationale” makes no sense. It “divorce[s] an arbitration agreement from the reality of

what it is and what it does” (533 S.W.3d at 196)—

providing a mechanism for the resolution of legal

claims. Echoing this Court’s holding that the clearstatement rule previously adopted by the Kentucky

court was “arbitration-specific”—because its applicability outside the arbitration context reached only the

legal equivalent of “black swans” (137 S. Ct. at 142728)—Justice Hughes explained that the analysis

adopted below “returns to black swan territory by a

different route.” 533 S.W.3d at 197.

3 As the petition explains (at 31), the Wellner majority’s invoca-

tion of waiver may have contributed to this Court’s decision to

deny review. See 533 S.W.3d at 192 n.3. No such concerns are

presented here.

5

Courts across the country routinely address the

enforceability of arbitration agreements entered into

by attorneys-in-fact acting on their principals’ behalf

under written powers of attorney. If Wellner’s spread

into South Carolina is left unchecked, Wellner and the

decision below will provide a roadmap for other States

hostile to arbitration to refuse to enforce valid arbitration agreements under the auspices of contract interpretation.

Finally, the immense practical importance of the

question presented underscores the need for this

Court’s intervention. The use of powers of attorney is

routine in the senior living context, as older or ailing

adults entrust family members or other advisors with

the authority to enter into transactions on their behalf. Senior living facilities and long term care providers rely on these delegations of authority when entering into contractual relationships with residents and

their families.

Yet decisions like the one below, if allowed to

stand, threaten to deprive all participants in the senior living industry—including facilities, their residents, and the residents’ families—of the important

benefits that arbitration provides. Instead, senior living facilities will be forced to engage in costly, burdensome, and unpredictable litigation in our overcrowded

court system. And the increased costs of litigation will

not be borne by facilities alone, but also by their residents and their families in the form of higher charges.

This Court’s review is therefore essential.

6

ARGUMENT

I.

The Decision Below Conflicts With The FAA

And Defies This Court’s Precedents.

This Court has made clear that Section 2 of the

FAA blocks at least two routes that lower courts have

utilized in attempting to invalidate arbitration agreements. First, “Congress precluded States from singling out arbitration provisions for suspect status,”

Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687

(1996), or from invalidating arbitration provisions on

the basis of state-law rules that “apply only to arbitration or that derive their meaning from the fact that an

agreement to arbitrate is at issue,” Kindred, 137 S. Ct.

at 1426 (quoting AT&T Mobility LLC v. Concepcion,

563 U.S. 333, 339 (2011)); see also Perry v. Thomas,

482 U.S. 483, 492 n.9 (1987).

Second, Section 2 of the FAA precludes States from

discriminating against arbitration agreements by interpreting contractual language in a “unique” manner

that is “restricted to th[e] field” of arbitration. DIRECTV, LLC v. Imburgia, 577 U.S. 47, 55 (2015). Indeed, Imburgia makes clear that States may not avoid

preemption by laundering their anti-arbitration goal

through purported application of general principles of

contract interpretation. As this Court has more recently recognized, “[j]ust as judicial antagonism toward arbitration before the Arbitration Act’s enactment ‘manifested itself in a great variety of devices

and formulas declaring arbitration against public policy,’” courts must be “alert to new devices and formulas that would achieve much the same result today.”

Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1623 (2018)

(quoting Concepcion, 563 U.S. at 342).

7

The decision below is a paradigmatic example of

both Section 2 violations.

First, just as in Imburgia, the South Carolina

court’s proclamation of neutrality must be viewed

skeptically.

The court paid lip service to this Court’s opinion

in Kindred, proclaiming that its holding did not turn

on the absence of an express mention of arbitration in

the power-of-attorney documents. Pet. App. 6a-7a.

But the court then followed the Kentucky Supreme Court’s opinion on remand in Wellner, which,

as the dissent in that case pointed out, interpreted a

broad power of attorney in a uniquely anti-arbitration

fashion, reflecting “simply another attempt to single

out arbitration for ‘hostile’ treatment under the guise”

of contract interpretation. Wellner, 533 S.W.3d at 195

(Hughes, J., dissenting).

Here, for example, Ms. Arredondo’s power of attorney granted her broad authority to “execute any

and all instruments * * * of every kind and description

whatsoever * * * concerning any or all of [the principal’s] business affairs, property, or other assets whatsoever, including all property, real, personal, or mixed

* * * and choses in action.” Pet. App. 48a (emphases

added).

Under South Carolina law, as the court below

readily acknowledged, legal claims (including tort

claims) are personal property. Pet. App. 9a (citing Ball

v. Ball, 430 S.E.2d 533, 534-35 (S.C. Ct. App. 1993),

aff’d, 445 S.E.2d 449 (1994)). And the inclusion of the

express term “choses in action” underscored the parties’ intent to cover legal claims, with all parties

8

agreeing that the phrase means “cause[s] of action.”

Ibid.4

That should have been the end of the analysis. Because a legal claim is “property” and a “chose in action” under South Carolina law, it then follows that

an arbitration agreement—which binds the parties to

resolve any legal claims in arbitration, rather than in

court—“concern[s]” the principal’s property.

But the court below rejected this straightforward

analysis. The court instead “agree[d] with the rationale of” the Kentucky Supreme Court’s opinion on

remand in Wellner, in which the majority concluded

that a pre-dispute arbitration agreement—the most

common kind of arbitration agreement—relates solely

to the principal’s “constitutional rights” of access to

court and trial by jury and not to the principal’s “personal property.” Pet. App. 11a (quoting Wellner, 533

S.W.3d at 194).

That characterization of an arbitration agreement

makes no sense, because the point of such an agreement is to address the resolution of the legal claims of

the parties—claims that the court below conceded are

property under South Carolina law. As the Wellner

dissent put it, “[a]n arbitration agreement, regardless

of when signed or whether characterized as pre- or

post-dispute, has absolutely no reason to exist unless

there is a current or potential claim to be pursued or

defended against.” 533 S.W.3d at 195 (Hughes, J., dissenting).

4 This Court has also recognized “that a cause of action is a spe-

cies of property protected by the Fourteenth Amendment’s Due

Process Clause.” Logan v. Zimmerman Brush Co., 455 U.S. 422,

428 (1982) (citing Mullane v. Central Hanover Bank & Trust Co.,

339 U.S. 306, 313 (1950)).

9

The concessions by the court below and by the

Wellner majority that the powers of attorney authorized the formation of an arbitration agreement after a

dispute arises (Pet. App. 9a) confirms the contrived

nature of the asserted distinction between legal

claims and constitutional rights to a jury trial and to

go to court. The only possible basis for that distinction,

which the court below expressly endorsed (Pet. App.

10a-11a), is a view that future legal claims that have

not yet accrued cannot be considered “property.”

But there is no indication that South Carolina

courts apply that purported distinction to any other

kind of property apart from legal claims. On the contrary, the South Carolina Uniform Power of Attorney

Act codifies the common-sense proposition that the

authority granted by a power of attorney over property includes property that the principal “acquires

later.” S.C. Code Ann. § 62-8-201; see Pet. 22.

It would be nonsensical to limit a power of attorney’s authority to make contracts in relation to property to the principal’s existing property interests.

Such a rule would yield the illogical result, for instance, that the attorney-in-fact could sell the principal’s existing possessions at the time the power of attorney was executed but not possessions that the principal acquired the next day. South Carolina courts

would never hold that an agent’s authority to sell a

principal’s car under a power of attorney signed in

2020 turns on whether the principal bought the car in

2019 or 2021.

The Wellner dissent therefore rightly criticized

this line of reasoning. It explained that as a matter of

logic and common sense, the right to “collect debts,”

for example, “manifestly includes future debts”—and

the same is true of the authority to make contracts in

10

relation to personal property, which “includes future

property of the principal whether a stock dividend, a

check for a property insurance claim, an unexpected

inheritance or a run-of-the-mill refund in a consumer

class action.” 533 S.W.3d at 198-99 (Hughes, J., dissenting).

Second, having adopted this special arbitrationspecific, gerrymandered definition of contracts relating to property, the Wellner majority—and by extension, the court below (Pet. App. 11a)—went on to categorize arbitration agreements by recycling the very

same arbitration-specific approach that this Court

held impermissible in Kindred.

The Kentucky court majority held in its initial decision that a power of attorney authorized the holder

to enter into an arbitration agreement only if the

power clearly conferred that authority, because an arbitration agreement waived the “sacred” constitutional right of trial by jury. This Court held that rule

invalid under the FAA, because it “hing[ed] on the primary characteristic of an arbitration agreement—

namely, a waiver of the right to go to court and receive

a jury trial.” Kindred, 137 S. Ct. at 1427. “Such a rule

is too tailor-made to arbitration agreements,” the

Court explained, “to survive the FAA’s edict against

singling out those contracts for disfavored treatment.”

Ibid.

Yet the Wellner majority returned to this precise

impermissible rationale on remand. Rather than characterizing an arbitration agreement as relating to

property—as its precedents equating legal claims

with property required—the Wellner majority characterized arbitration agreements solely by reference to

the very same characteristics that this Court held outof-bounds in Kindred: that an arbitration agreement

11

relates to the principal’s “fundamental constitutional

rights” of access to court and trial by jury. Wellner, 533

S.W.3d at 194; see Pet. App. 11a.

To be sure, an arbitration agreement relates to

rights to a jury trial and to go to court. Kindred, 137

S. Ct. at 1427. But an arbitration agreement also relates to legal claims—which are property in both

South Carolina and Kentucky—by specifying the

mechanism for the resolution of those claims.

This Court recognized nearly half a century ago

that an arbitration agreement is simply “a specialized

kind of forum-selection clause that posits not only the

situs of suit but also the procedure to be used in resolving the dispute.” Scherk v. Alberto-Culver Co., 417

U.S. 506, 519 (1974) (emphasis added); see also, e.g.,

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,

Inc., 473 U.S. 614, 628 (1985) (explaining that by entering into an arbitration agreement, a party “submits

to the[] resolution [of claims] in an arbitral, rather

than a judicial, forum”); Southland Corp. v. Keating,

465 U.S. 1, 10 (1984) (explaining that the FAA prohibits States from requiring a judicial forum for the resolution of claims which the contracting parties agreed

to resolve by arbitration”) (emphasis added).

The two functions of an arbitration agreement—

“waiver of a right to go to court and receive a jury

trial” and establishing a mechanism relating to a form

of property, legal claims—therefore cannot be separated; both are “primary characteristic[s] of an arbitration agreement.” Kindred, 137 S. Ct. at 1427. The

contrary holding below “divorce[s] an arbitration

agreement from the reality of what it is and what it

does.” Wellner, 533 S.W.3d at 196 (Hughes, J., dissenting).

12

The decision below and Wellner also single out arbitration contracts based on characteristics unique to

an arbitration agreement—precisely what this Court

found unlawful in Kindred. As the Wellner dissent explained, the “narrow focus on the constitutional jury

right to the exclusion of the reality of an arbitration

agreement returns us to the realm of ‘utterly fanciful

contracts’ where arbitration agreements exist in a

vacuum independent of disputes and property rights.”

533 S.W.3d at 197 (quoting Kindred, 137 S. Ct. at

1427). It reaches the same, illegitimate “black swan

territory” of the Kentucky Supreme Court initial ruling in Kindred “by a different route”: “narrow[ly] focus[ing] on the constitutional jury right to the exclusion of the reality of an arbitration agreement.” Ibid.

In short, it is unthinkable that South Carolina

courts would interpret the language in the power-ofattorney documents to exclude any other kind of

agreement relating to an individual’s legal claims or

property. The decision below is thus preempted by the

FAA every bit as much as the California Court of Appeal’s contractual interpretation in Imburgia. And because the lower court’s defiance of the FAA and this

Court’s precedents is so clear, the Court may wish to

consider summary reversal. See Pet. 31-32.5

II. The Question Presented Has Tremendous

Practical Importance.

The defiance of this Court’s precedents reflected

in the decision below provides ample reason for review. But the practical importance of the issue to the

As the petition persuasively explains (at 24-28), similar errors

infect the portion of the decision below analyzing Ms. Arredondo’s broadly written health care power of attorney.

5

13

senior living industry further confirms the need for

this Court’s intervention.

1. The use of powers of attorney is common in senior living transactions. Older or ailing adults use

these instruments to allow family members or other

trusted individuals to manage their affairs and enter

into a wide array of transactions on their behalf. It is

therefore common for senior living facilities to transact with their residents’ agents rather than with the

residents directly.

This Court has long recognized that “private parties have likely written contracts relying on [its FAA

precedent] as authority.” Allied-Bruce Terminix Cos.

v. Dobson, 513 U.S. 265, 272 (1995). Unreasoned, ad

hoc departures from the FAA’s principles like the

holding below will create confusion about the application of arbitration agreements, defeat contracting parties’ expectations, and spawn ancillary litigation over

the scope of power-of-attorney documents or other

conveyances of authority to contract on another’s behalf.

For example, decisions from South Carolina’s

neighboring States, North Carolina and Georgia, appear to take a significantly less cramped view in construing documents granting authority to enter into

pre-dispute arbitration agreements. See CNL SF LLC

v. Fountain, --- S.E.2d ----, 2021 WL 4268081 (Ga.

Sept. 21, 2021); Mullen v. Saber Health Care Grp.,

LLC, 2020 WL 5118038 (E.D.N.C. Aug. 31, 2020). In

the guardianship context, the Supreme Court of Georgia recently held that entering into a pre-dispute arbitration agreement is among the powers “reasonably

necessary” to a guardian’s statutory authority to arrange for the welfare and care of his ward. CNL SF,

2021 WL 4268081, at *4. The court therefore reversed

14

the lower courts’ refusal to enforce an arbitration

agreement entered into by the guardian with a skilled

nursing facility—even though, as here, the arbitration

agreement was not a requirement of admission to the

facility. Ibid.

As the Georgia Supreme Court explained, a contrary reading of the guardianship statutes would

mean parsing out every contract term offered by the

facility to determine whether that term is “necessary

to secure care”—a wholly unworkable proposition. Instead, the court concluded, a guardian can more

broadly “consider whether to enter into terms that are

being presented by the care-provider,” including an

arbitration agreement. Ibid.; see Pet. 25-27 (explaining why the court below should have construed Ms.

Arredondo’s health care power of attorney in a similarly practical way).

In addition, a federal court in North Carolina recently enforced an arbitration agreement entered into

by the principal’s attorney-in-fact under general and

health care powers of attorney. Mullen, 2020 WL

5118038, at *3-4. The general power of attorney gave

the plaintiff authority over the principal’s “personal

property.” Id. at *3. In addition, the court relied on the

documents’ grant of authority “‘to provide * * * custodial care’” and to “‘authorize [] admission’” to nursing

homes or other assisted living facilities, explaining

that “the power to provide custodial care for [the principal] and to secure her admission to a nursing home

necessarily implies the authority to sign arbitration

agreements with assisted living facilities.” Id. at *4.

More broadly, courts across the country have repeatedly addressed the enforceability of arbitration

agreements entered into by attorneys-in-fact in recent

15

years.6 As these cases demonstrate, the issues posed

in this case are frequently recurring and vitally important.

While variations in state law and the text of powers-of-attorney documents and arbitration agreements may account for some of these divergent outcomes, lower courts across the country would benefit

greatly from this Court’s reaffirmation in the powerof-attorney context of the basic principle that arbitration agreements cannot be treated differently from

other contracts. And review will prevent aberrant decisions like the one below and in Wellner from taking

root in other States. As this Court has emphasized,

because “[s]tate courts rather than federal courts are

most frequently called upon to apply the * * * FAA,”

“[i]t is a matter of great importance * * * that state

supreme courts adhere to a correct interpretation of

the legislation.” Nitro-Lift Techs., LLC v. Howard, 568

U.S. 17, 17-18 (2012) (per curiam).

2. Decisions like the one below not only generate

uncertainty and undermine uniform application of the

FAA, but they also threaten to deprive participants in

6 Compare, e.g., Heaphy v. Willow Healthcare, Inc., 491 P.3d 1165

(Ariz. Ct. App. 2021); Cambridge Place Grp. v. Mundy, 617

S.W.3d 838 (Ky. Ct. App. 2021); Malvern Operations, LLC v.

Moss, 605 S.W.3d 291 (Ark. Ct. App. 2020); Harrison v. Farmington Operations, LLC, 2020 WL 3259521 (N.M. Ct. App. June 11,

2020); Miller v. Life Care Ctrs., 478 P.3d 164 (Wyo. 2020); Golden

Gate Nat’l Senior Care, LLC v. Dolan, 579 S.W.3d 874 (Ky. Ct.

App. 2019) (declining to enforce arbitration agreements), with,

e.g., CNL SF, 2021 WL 4268081; Silvera v. AristaCare at Cherry

Hill, LLC, 2021 WL 1186555 (N.J. App. Div. Mar. 30, 2021); Mullen, 2020 WL 5118038; Dalon v. MS HUD Ocean Springs LLC,

283 So.3d 90 (Miss. 2019); Fiala v. Bickford Senior Living Grp.,

32 N.E.3d 80 (Ill. Ct. App. 2015) (enforcing arbitration agreements).

16

the senior living industry of the benefits of their

agreements to arbitrate.

This Court has repeatedly recognized that there

are “real benefits to the enforcement of arbitration

provisions,” including “allow[ing] parties to avoid the

costs of litigation.” Circuit City Stores, Inc. v. Adams,

532 U.S. 105, 122-23 (2001); see also, e.g., 14 Penn

Plaza LLC v. Pyett, 556 U.S. 247, 257 (2009) (“Parties

generally favor arbitration precisely because of the

economics of dispute resolution.”); Allied-Bruce, 513

U.S. at 280 (recognizing that one of the “advantages”

of arbitration is that it is “cheaper and faster than litigation”) (quotation marks omitted).

Empirical evidence confirms that these benefits of

arbitration apply in the senior living context and in

resolving disputes involving health care.

For example, one study of resolved claims in the

long term care context (including senior living facilities) reported outcomes of disputes resolved through

arbitration and litigation. It found that 72.6% of

claims subject to arbitration result in some payment,

compared with 77.9% of claims without arbitration

agreements. AON Global Risk Consulting, 2018 Long

Term Care: General Liability and Professional Liability Actuarial Analysis 11, 50 (Oct. 2018).

Importantly, those claimants who obtained relief

in arbitration tended to receive larger amounts: Of the

claims that resulted in payment, over 60% of payments exceeded $25,000 for claims subject to arbitration, compared to only 55% of payments for claims not

subject to arbitration. Id. at 11.

In addition, a 2020 survey of parties and attorneys

who participated in arbitrations under the Kaiser

Foundation Health Plan’s arbitration system—which

17

covers more than 8 million members in California—

showed that 90 percent of the respondents who went

through arbitrations that year reported that the arbitration system was as good or better than the state

court system. Annual Report of the Office of the Independent Administrator of the Kaiser Foundation

Health Plan, Inc. Mandatory Arbitration System for

Disputes with Health Plan Members, January 1, 2020

– December 31, 2020 at 51, http://www.oia-kaiserarb.com/pdfs/2020-Annual-Report.pdf.

Empirical evidence from the consumer and employment contexts further supports these conclusions.

First, arbitration is generally faster and more efficient than litigation. Recent empirical studies in

both the consumer and employment context found

that claims in arbitration are resolved more quickly

than claims in court.7 Another study found that

awarded arbitrations took an average of just 11

months to decision, versus an average of 26.6 months

to verdict in state court jury trial cases. Andrea Cann

Chandrasekher & David Horton, Arbitration Nation:

Data from Four Providers, 107 Cal. L. Rev. 1, 51

(2019); see also, e.g., David Sherwyn et al., Assessing

See Nam D. Pham & Mary Donovan, Fairer, Faster, Better II:

An Empirical Assessment of Consumer Arbitration 11, NDP Analytics (Nov. 2020), https://instituteforlegalreform.com/wp-content/uploads/2020/11/Final-Consumer-Arbitration-Paper.pdf

(arbitrations in which the consumer-plaintiff prevailed averaged

299 days, while cases in court required an average of 429 days);

Nam D. Pham & Mary Donovan, Fairer, Faster, Better: An Empirical Assessment of Employment Arbitration 11-12, NDP Analytics (May 2019), https://instituteforlegalreform.com/wp-content/uploads/media/Empirical-Assessment-Employment-Arbitration.pdf (reporting an average of 569 days for arbitrations in

which the employee-plaintiff prevailed, compared to 665 days for

cases in court).

7

18

the Case for Employment Arbitration: A New Path for

Empirical Research, 57 Stan. L. Rev. 1557, 1572-73

(2005) (“few dispute the assertion that arbitration is

faster than litigation”); Michael Delikat & Morris M.

Kleiner, An Empirical Study of Dispute Resolution

Mechanisms: Where do Plaintiffs Better Vindicate

Their Rights?, 58 Disp. Resol. J. 56, 58 (Nov. 2003Jan. 2004) (reporting findings that arbitration was

33% faster than analogous litigation).

Second, both common sense and empirical evidence confirm that arbitration is cheaper than litigation, particularly for the individuals bringing claims.

In the consumer and employment contexts, arbitration costs very little or nothing for many individuals—

all or virtually all of the fees are borne by the business. See Elizabeth Hill, Due Process at Low Cost: An

Empirical Study of Employment Arbitration under the

Auspices of the American Arbitration Association, 18

Ohio St. J. on Disp. Resol. 777, 802 (2003) (reporting

that 61 percent of employee claimants paid no arbitration fees). And because of arbitration’s decreased procedural complexity, it is also cheaper for individuals

to present their claims. Accordingly, the cost savings

of arbitration allow individuals to bring small-value

claims that would be priced out of court and larger

claims that would be substantially reduced by contingency fees. See Theodore J. St. Antoine, Mandatory

Arbitration: Why It’s Better Than It Looks, 41 U. Mich.

J.L. Reform 783, 791-92 (2008).

Third, claimants tend to fare just as well or even

better in arbitration than they do in court. A recent

study in the employment context found that employees were three times more likely to win in arbitration

than in court. Pham, Fairer, Faster, Better, supra, at

19

5-7 (surveying more than 10,000 employment arbitration cases and 90,000 employment litigation cases resolved between 2014 to 2018). The same study found

that employees who prevailed in arbitration “won approximately double the monetary award that employees received in cases won in court.” Id. at 5-6, 9-10.

Similarly, a recent study in the consumer context

found that consumer claimants win more often, and

receive higher monetary awards, in arbitration than

in court. Pham, Fairer, Faster, Better II, supra, at 710 (for cases that result in a decision, consumer claimants win 44% in arbitration compared to 30% in court,

and the average award in arbitration is $68,198 in arbitration compared to $57,285 in court).

These findings are consistent with earlier surveys. One 2010 study found, for example, that plaintiffs who file consumer claims with the American Arbitration Association win relief 53.3% of the time,

compared with a win rate of roughly 50% in state and

federal court. Christopher R. Drahozal & Samantha

Zyontz, An Empirical Study of AAA Consumer Arbitrations, 25 Ohio St. J. on Disp. Resol. 843, 897 (2010).

As another scholar agreed in the employment context,

“there is no evidence that plaintiffs fare significantly

better in litigation [than in arbitration]”; rather, arbitration is “favorable to employees as compared with

court litigation.” Theodore J. St. Antoine, Labor and

Employment Arbitration Today: Mid-Life Crisis or

New Golden Age?, 32 Ohio St. J. on Disp. Resol. 1, 16

(2017) (quotation marks omitted; alterations in original).

In short, claimants in arbitration generally fare as

well—if not better—in arbitration than in court, especially when settlements and the lower forum costs for

claimants are taken into account. Decisions like the

20

one below, if allowed to stand, threaten to deprive senior living facilities, their residents, and their residents’ families of the benefits of arbitration.

CONCLUSION

The petition for a writ of certiorari should be

granted. The Court may wish to consider summary reversal.

21

Respectfully submitted.

T. ANDREW GRAHAM

Hall Booth Smith, P.C.

366 Madison Ave,

5th Floor

New York, NY 10017

(212) 805-3630

dgraham@hallboothsmith.com

ANDREW J. PINCUS

Counsel of Record

ARCHIS A. PARASHARAMI

DANIEL E. JONES

Mayer Brown LLP

1999 K Street, NW

Washington, DC 20006

(202) 263-3000

apincus@mayerbrown.com

Counsel for Amici Curiae

SEPTEMBER 2021