Petition for Writ of Certiorari — SSC Odin Operating Operating Co., LLC v Carter (No. 08-805)

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No Oiirscé OF THE CLERK

a a

Jn the Supreme Court of the Gnited States

SSC ODIN OPERATING COMPANY LLC,

D/B/A ODIN HEALTH CARE CENTER, PETITIONER

SUE CARTER, SPECIAL ADMINISTRATOR OF THE

ESTATE OF JOYCE GOTT

ON PETITION FOR A WRIT OF CERTIORARI

TO THE APPELLATE COURT OF ILLINOIS,

FIFTH DISTRICT

PETITION FOR A WRIT OF CERTIORARI

W. JEFFREY MUSKOPF MALCOLM J. HARKINS III

MARK R. FELDHAUS Counsel of Record

LASHLY & BAER, P.C. JAMES F. SEGROVES

714 Locust Street PROSKAUER ROSE LLP

St. Louis, MO 63101 1001 Pennsylvania Ave., NW

(314) 436-8326 Suite 400 South

Washington, DC 20004

DECEMBER 2008 (202) 416-6800

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 — WASHINGTON, D.C. 20002

QUESTIONS PRESENTED

Section 2 of the Federal Arbitration Act (FAA)

provides that arbitration agreements “shall be valid,

irrevocable, and enforceable, save upon such grounds

as exist at law or in equity for the revocation of any

contract.” 9 U.S.C. § 2. The Illinois Nursing Home

Care Act (INHCA) renders “null and void” any

“waiver by a resident lof a nursing facility] or his le-

gal representative of the right to commence an ac-

tion” to enforce INHCA and any “waiver of the right

to a trial by jury” executed prior to the commence-

ment of any such action. 210 Ill. Comp. Stat. 45/3-

606, 3-607. The court below held that § 2 of the FAA

does not preempt INHCA’s anti-waiver provisions

because (1) a violation of public policy is a generally

applicable contract defense in Illinois and (2) the

“emphatically stated public policy” expressed in IN-

HCA’s anti-waiver provisions “concerns the validity,

revocability, and enforceability of contracts generally

and does not specifically target arbitration agree-

ments.” The questions presented are:

1. Whether the emphatically stated public policy

of a State precluding the enforcement of arbitration

agreements related to a single category of disputes

may supersede Congress’s declared policy requiring

enforcement of arbitration agreements.

2. Whether a state statute must specifically tar-

get arbitration agreements in order to be preempted

by § 2 of the FAA or whether it is sufficient if the

state statute as applied precludes any and all arbi-

tration of disputes between private parties.

(ii)

RULE 29.6 CORPORATE

DISCLOSURE STATEMENT

Petitioner SSC Odin Operating Company LLC,

doing business as Odin Health Care Center, is a lim-

ited lability company whose sole member is SSC

Submaster Holdings LLC. SSC Submaster Holdings

LLC is a limited liability company whose sole mem-

ber is SSC Equity Holdings, LLC. SSC Equity Hold-

ings, LLC is a limited lability company whose sole

member is SavaSeniorCare, LLC. SavaSeniorCare,

LLC is a limited liability company whose sole mem-

ber is SVCARE Holdings LLC. SVCARE Holdings

LLC is a limited liability company whose sole mem-

ber is Canyon Sudar Partners, LLC.

No publicly held company owns a 10 percent or

greater ownership interest in petitioner.

(iii)

TABLE OF CONTENTS

OPINIONS BELOW

JURISDICTION

CONSTITUTIONAL AND

STATUTORY PROVISIONS INVOLVED

STATEMENT

REASONS FOR GRANTING THE PETITION

I. THE DECISION BELOW CONFLICTS

WITH THIS COURT’S UNAMBIGUOUS

PRECEDENT ADDRESSING THE

PREEMPTIVE EFFECT OF THE

FEDERAL ARBITRATION ACT

A. Preston and Southland Demonstrate

That a State Statute Need Not

“Specifically Target” Arbitration In

Order to be Preempted and that the

“Public Policy” Logic of the Court

Below Is Invalid

The Decision Below Is Based on a

Clear Misreading of Perry and

Casarotto

THE DECISION BELOW CONFLICTS

WITH THE LAW OF FOUR FEDERAL

CIRCUITS ADDRESSING THE

PREEMPTIVE EFFECT OF THE

FEDERAL ARBITRATION ACT ................... 19

Ill. THE PETITION RAISES SUBSTANTIAL

QUESTIONS OF FEDERAL LAW

Se Te PII icine Ses dedacac ca tassiinanaucgnseeeneimarnnreon ae 29

(iv)

Table of Contents—Continued:

APPENDICES

APPENDIX A: Opinion of the Appeliate Court

of Illinois, Fifth District, dated April 4, 2008........la

APPENDIX B: Order of the Circuit Court for

the Fourth Judicial Circuit, Marion County,

litinetis, Gated dune 20, BOGT .........6ccccveseccscccess 12a

APPENDIX C: Order of the Supreme Court of

Illinois, dated September 24, 2008

APPENDIX D: Constitutional and Statutory

Provisions Involved

U.S. Const. Art. I, § 8, cl. 3

U.S. Const. Art. VI, cl. 2

9U.8.C. §1

9 U.S.C. § 2

210 Ill. . Stat.

210 Ill. ps IOS vaisiciktxe nse inwcssseueunt 18a

210 Ill. C . Stat. 45/3-603

210 Ill. C . Stat. 45/3-604

210 Ill. C . Stat. 45/3-605

210 Ill. C RM, ID a nnncdic sa scnviecscutnns 19a

210 Ill. Comp. Stat. 45/3-607

APPENDIX E: Arbitration Agreement

dated May 20, 2005

APPENDIX F: Arbitration Agreement

dated January 18, 2006

(v)

Table of Contents—Continued: Page

APPENDIX G: Complaint dated

ge Re) ee |

TABLE OF AUTHORITIES

Cases:

Allied-Bruce Terminix Cos. v. Dobson,

513 U.S. 265 (1995)

Bradley v. Harris Research, Inc.,

275 F.3d 884 (9th Cir. 2001)

Bruner v. Timberland Manor Ltd. P’ship,

155 P.3d 16 (Okla. 2006)

Citizens Bank v. Alafabco, Inc.,

539 U.S. 52 (2003)

Commerce Park v. Mardian Constr. Co.,

729 F.2d 334 (5th Cir. 1984)

Doctor’s Assocs., Inc. v. Casarotto,

517 U.S. 681 (1996)

Doctor’s Assocs., Inc. v. Hamilton,

150 F.3d 157 (2d Cir. 1998),

cert. denied, 525 U.S. 1103 (1999).......... 19, 22. 23

Hines v. Davidowitz,

312 U.S. 52 (1941)

In re Nexion Health at Humble, Inc.,

173 S.W.3d 67 (Tex. 2005)

KKW Enters., Inc. v. Gloria Jean’s Gourmet

Coffees Franchising Corp..,

184 F.3d 42 (1st Cir. 1999) 21, 22

Cases—Continued:

Kubis & Perszyk Assocs. v. Sun Microsystems,

Inc., 680 A.2d 618 (N.J. 1996)

McGuffrey Health & Rehab. Ctr. v. Jackson,

864 So. 2d 1061 (Ala. 2003)

Moses H. Cone Mem 'l Hosp. v. Mercury

Constr. Corp., 460 U.S. 1 (1983)

OPE Int'l LP v. Chet Morrison Contractors,

Inc., 258 F.3d 443 (5th Cir. 2001).....19, 20, 21, 22

Perry v. Thomas,

OE Fives vadscsvvveaavavsevessesecsesea passim

Preston v. Ferrer,

128 S. Ct. 978 (2008) passim

Rainbow Health Care Ctr., Inc. v. Crutcher,

No. 07-CV-194-JHP, 2008 WL 268321

(N.D. Okla. Jan. 29, 2008) wore 20, 24, 28

Securities Indus. Ass'n v. Connolly,

883 F.2d 1114 (1st Cir. 1989)

Sooner Geriatrics, L.L.C. v. Crutcher,

No. CIV-07-244-M, 2007 WL 2900535

(W.D. Okla. Oct. 3, 2007)

Sooner Geriatrics, L.L.C. v. Crutcher,

No. CIV-07-244-M, slip op. (W.D. Okla.

May 27, 2008)

Southland Corp. v. Keating,

465 U.S. 1 (1984) passim

Carter v. SSC Odin Operating Co..,

885 N.E.2d 1204 (Il]. App. Ct. 2008) passim

Cases—Continued:

Stawski Distrib. Co. v. Browary Zywiec S.A.,

DOD FOE TOTS (FG Cie. BOOS) vc ovsessevscssoceeeseccseess 23

Vicksburg Partners, L.P. v. Stephens,

911 So. 2d 507 (Miss. 2005)

Volt Info. Scis., Inc. v. Board of Trustees of

Leland Stanford Junior Univ.,

oe Ae ek E _| See 25

Constitution and Statutes:

U.S. Const. Art. I, § 8, cl. 3 (Commerce Clause)

U.S. Const. Art. VJ, cl. 2 (Supremacy Clause) ...2, 16

passim

28 U.S.C. § 1257(a)

210 Nl. Comp. Stat. 45/3-606 passim

210 Ill. Comp. Stat. 45/3-607 passim

Cal. Bus. & Prof. Code Ann. § 20040.5............000.... 20

Oh, Ta FRI, Bn va vier nnd oso decevccusiersccuses 17

Cal. Lab. Code Ann. § 1700.44(a) ............ cc. ce cece eee 12

Rsth, WRU, PCR, Fame. Be 0 vn dics vce vececanvevcccbenycaces 21

Mont. Code Ann. § 27-5-114(4)

Okla. Stat. tit. GS, $ 1-1BGSCD).........ccccccscccsccccoccecsnces 25

Cyt, Tobe. CEE, Ge, BB Be vn vas vcs eu caccsncececsccwoncecs ?

R.I. Gen. Laws § 19-28.1-14

W. Va. Code § 16-5C-15(c)

(vill)

Other Authorities:

Christopher R. Drahozal, Federal

Arbitration Act Preemption, 79 Ind.

Lik. Ble Ediciones 24, 25, 28

Restatement (Second) of Contracts ch. 8 (1981) ....16

Stanley A. Leasure, Arbitration of Nursing

Home Claims: Oklahoma Goes Its Qwn Way,

60 Okla. L. Rev. 737 (2007)............. ePaper 28

Jn the Supreme Court of the Anited States

SSC ODIN OPERATING COMPANY LLC,

D/B/A ODIN HEALTH CARE CENTER, PETITIONER

SUE CARTER, SPECIAL ADMINISTRATOR OF THE

ESTATE OF JOYCE GOTT

ON PETITION FOR A WRIT OF CERTIORARI

TO THE APPELLATE COURT OF ILLINOIS,

FIFTH DISTRICT

PETITION FOR A WRIT OF CERTIORARI

Petitioner SSC Odin Operating Company LLC,

doing business as Odin Health Care Center (the Cen-

ter), respectfully submits this petition for a writ of

certiorari to review the judgment of the Appellate

Court of Illinois, Fifth District in this case.

OPINIONS BELOW

The opinion of the Appellate Court of I[liinois

(App., infra, la-lla) is reported at 381 ill. App. 3d

717, 885 N.E.2d 1204. The order of the Supreme

Court of Illinois denying the Center’s petition for

leave to appeal (App., infra. 15a) is reported at 229

Ill. 2d 618, N.E.2d __. The order of the Circuit

Court for the Fourth Judicial Circuit, Marion

County, Illinois (App., infra, 12a-14a) is unreported.

JURISDICTION

The judgment of the Appellate Court of Illinois

was entered on April 4, 2008 (App., infra, la). The

Supreme Court of Illinois denied the Center’s peti-

tion for leave to appeal on September 24, 2008 (App.,

infra, 15a). The jurisdiction of this Court is invoked

under 28 U.S.C. § 1257(a).

CONSTITUTIONAL AND

STATUTORY PROVISIONS INVOLVED

Article VI, Clause 2 of the United States Consti-

tution (the Supremacy Clause) provides:

This Constitution, and the Laws of the United

States which shall be made in Pursuance thereof;

and all Treaties made, or which shall be made,

under the Authority of the United States, shall be

the supreme Law of the Land; and the Judges in

every State shall be bound thereby, any Thing in

the Constitution or Laws of any State to the Con-

trary notwithstanding.

Section 2 of the Federal Arbitration Act (FAA), 9

U.S.C. § 2, provides:

A written provision in any maritime transaction

or a contract evidencing a transaction involving

commerce to settle by arbitration a controversy

thereafter arising out of such contract or transac-

tion, or the refusal to perform the whole or any

part thereof, or an agreement in writing to submit

to arbitration an existing controversy arising out

of such a contract, transaction, or refusal, shall be

valid, irrevocable, and enforceable, save upon

such grounds as exist at law or in equity for the

revocation of any contract.

The Illinois Nursing Home Care Act (INHCA) pro-

vides, 1n pertinent part:

§ 3-606. Any waiver by a resident or his legal

representative of the right to commence an action

under Sections 3-601 through 3-607, whether oral

or in writing, shall be null and void, and without

legal force or effect.

§ 3-607. Any party to an action brought under

Sections 3-601 through 3-607 shall be entitled to

a trial by jury and any waiver of the right to a

trial by a jury, whether oral or in writing, prior to

the commencement of an action, shall be null and

void, and without legal force or effect.

210 lil. Comp. Stat. 45/3-606 and 3-607.

The Commerce Clause of the United States Con-

stitution, as well as other provisions of the FAA and

INHCA, are reprinted in the appendix to this peti-

tion (App., infra, 16a-19a).

STATEMENT

In enacting § 2 of the FAA, “Congress declared a

national policy favoring arbitration and withdrew

the power of the states to require a judicial forum for

the resolution of claims which the contracting parties

agreed to resolve by arbitration.” Southland Corp. v.

Keating, 465 U.S. 1, 10 (1984). Just last Term, this

Court reaffirmed what had already been “well-

established” and “repeatedly reaffirmed”: § 2 of the

FAA preempts conflicting state law in proceedings

before state courts. Preston v. Ferrer, 128 S. Ct. 978,

983 (2008) (citing Doctor's Assocs., Inc. v. Casarotto,

517 U.S. 681, 684-85 (1996); Allied-Bruce Terminix

Cos. v. Dobson, 513 U.S. 265, 272 (1995); Perry v.

Thomas, 482 U.S. 483, 489 (1987); Southland, 465

U.S. at 15-16).

The Appellate Court of Illinois ignored this

Court’s well-established FAA jurisprudence, holding

that § 2 of the FAA does not preempt INHCA’s anti-

waiver provisions because (1)a violation of public

policy 1s a generally applicable contract defense in [)-

linois and (2) the “emphatically stated public policy”

expressed in INHCA’s anti-waiver provisions “con-

cerns the validity, revocability, and enforceability of

contracts generally and does not specifically target

arbitration agreements.” App., infra, 10a. As a re-

sult, the lower court held that INHCA’s anti-waiver

provisions provide a “legitimate state law contract

defense of a violation of public policy” that, as ap-

plied by the court below, voids every agreement to

arbitrate any type of dispute arising between nursing

facilities and their residents. Jd.

The ruling of the Appellate Court of Illinois is

patently erroneous and conflicts with a long line of

this Court’s precedent holding that the FAA pre-

empts state laws such as INHCA.

1. Respondent Sue Carter is the special admin-

istrator of the estate of Joyce Gott. Ms. Gott was a

resident of the Center, which is a skilled nursing fa-

cility located in southern Illinois. Upon Ms. Gott’s

initial admission to the Center, Ms. Carter and the

Center executed a Health Care Arbitration Agree-

ment (App., infra, 20a). Ms. Gott was discharged

from the Center and was later readmitted. Upon her

readmission, Ms. Gott and the Center executed a

second Health Care Arbitration Agreement substan-

tially similar to the first agreement (App., infra,

34a).

In both agreements, the parties agreed to submit

to binding arbitration “all disputes against each

other and their representatives arising out of or in

any way related or connected to [Ms. Gott’s] Admis-

sion Agreement and all matters related thereto in-

cluding matters involving [Ms. Gott’s] stay and care

provided at the [Center].” App., infra, 22a, 29a.

Specifically included within the scope of the agree-

ments were “any disputes concerning whether any

statutory provisions relating to [Ms. Gott’s] rights

under Illinois law were violated.” App., infra, 22a,

29a.

In addition, the parties expressly agreed that

both agreements were governed by the FAA. App.,

infra, 22a, 29a. The parties recognized that the

agreements involved interstate commerce because,

among other things, the Center was affiliated with a

“foreign corporation with a nationwide network of

over 250 nursing facilities, all of which are fully en-

gaged in interstate commerce by activity that in-

cludes, but is not limited to, execution of interstate

contracts relating to services, management and in-

terstate marketing, acceptance of federal funds as a

significant source of income, regulation by federal

statutes and the use of goods, services, employees

and management personnel in multiple states.”

App., infra, 21a, 28a.

The agreements also expressly stated that each

party waived its right to a jury trial, stating in all

capital letters:

YOU CANNOT BE REQUIRED TO SIGN THIS

AGREEMENT IN ORDER TO RECEIVE

TREATMENT. BY SIGNING THIS AGREE-

MENT, YOUR RIGHT TO TRIAL BY A JURY OR

A JUDGE IN A COURT WILL BE BARRED AS

TO ANY DISPUTE RELATING TO INJURIES

THAT MAY RESULT FROM NEGLIGENCE

DURING YOUR TREATMENT OR CARE, AND

WILL BE REPLACED BY AN ARBITRATION

PROCEDURE.

App., infra, 25a, 32a. Under each agreement, Ms.

Gott and Ms. Carter were given the ability to rescind

the agreements by providing written notice to the

Center within thirty days of signing the agreements.

App., infra, 25a, 32a. The agreements also stipu-

lated that the Center would pay all arbitrator fees

and up to $5,000 of attorney’s fees Ms. Gott or Ms.

Carter incurred in any arbitration. App., infra, 21a,

28a.

2. Ms. Gott passed away after her readmission

to the Center. Several months later, Ms. Carter filed

a civil action against the Center in the Circuit Court

for the Fourth Judicial Circuit, Marion County, IIli-

nois. In her two-count complaint (App., infra, 34a-

39a), Ms. Carter alleged that the Center failed to

provide adequate care to Ms. Gott and that the Cen-

ter’s acts or omissions resulted in Ms. Gott’s death.

The first count of Ms. Carter’s complaint alleged that

the Center’s acts or omissions violated INHCA. The

second count, which was brought under the Illinois

Wrongful Death Act, alleged that the Center’s treat-

ment of Ms. Gott had been negligent.

The Center moved to compel arbitration, filing an

affidavit in support of its motion setting forth facts

establishing the arbitration agreements involved in-

terstate commerce within the meaning of the FAA.

Ms. Carter neither challenged this evidence nor pro-

duced any evidence to the contrary. Instead, she ar-

gued that the arbitration agreements were void and

unenforceable under INHCA. Ms. Carter also ar-

gued that the arbitration agreements were unen-

forceable due to lack of mutuality and that the

agreements to arbitrate Ms. Gott’s claims did not

preclude Ms. Carter from bringing her claim under

the Illinois Wrongful Death Act. Ms. Carter did not

contend or produce evidence in the Circuit Court that

the arbitration agreements were unconscionable, nor

did she argue that they were the product of fraud,

duress or undue influence.

3. The Circuit Court denied the Center’s motion

to compel arbitration without conducting an eviden-

tiary hearing. App., infra, 12a-14a. With regard to

the complaint’s INHCA cause of action, the Circuit

Court concluded that the arbitration agreements

were unenforceable because they were “in direct vio-

lation of emphatically stated public policy and for

lack of mutuality.” Jd. at 13a. The Circuit Court

also concluded that the FAA did not apply because

“in the aggregate the economic activity does not rep-

resent general practice subject to federal control.”

Id. at 14a.

With respect to the complaint’s wrongful-death

though the decedent (Ms. Gott) was bound by the

agreements with regard to her own claims, a plaintiff

such as Ms. Carter bringing a wrongful-death claim

on behalf of Ms. Gott’s estate was not bound by the

agreements. Jd. at 13a.

4. The Appellate Court of Illinois affirmed the

Circuit Court’s ruling. App., infra, la. After deter-

mining that a violation of public policy is a generally

applicable contract defense in Illinois (id. at 6a), the

Appellate Court of Illinois looked to language from

this Court’s decision in Doctor’s Associates, Inc. uv.

Casarotto, 517 U.S. 681 (1996), in which this Court—

quoting from its earlier decision in Perry v. Thomas,

482 U.S. 483 (1987)—observed:

In Perry, we reiterated: “(S]tate law, whether of

legislative or judicial origin, is applicable if that

law arose to govern issues concerning the vahid-

ity, revocability, and enforceability of contracts

generally. A state-law principle that takes its

meaning precisely from ‘the fact that a contract to

arbitrate is at issue does not comport with [the

text of § 2].”

Casarotto, 517 U.S. at 685 ‘quoting Perry, 482 U.S.

at 492 n.9) (emphasis supplied by Perry Court;

brackets supplied by Casarotto Court).

According to the Appellate Court of Illinois, appli-

cation of Casarotto and Perry meant that INHCA’s

anti-waiver provisions were not preempted because

neither provision “mentions arbitration agreements

at all, nor by their terms are they limited to those

agreements. The sections, by their explicit terms,

apply equally to all contracts attempting to restrict

the right of nursing home residents to ‘commence an

action’ pursuant to [INHCA] or to waive the right to

a trial by a jury in an action commenced pursuant to

[INHCA]}, regardless of whether the contract involves

arbitration.” App., infra, 8a-9a. Furthermore, “to

the extent that [INHCA’s anti-waiver provisions!

may void agreements calling for arbitration,” the

Appellate Court of Illinois held that it was “an inci-

dental, tangential effect of the sections, not their

primary purpose, and so the sections can hardly be

said to specifically target arbitration agreements.”

Id. at 9a (quotation omitted). “Although it is cer-

tainly true that if [INHCA] expressly directed its

prohibitions only at arbitration agreements it would,

as the defendant contends, run afoul of the [FAA],”

INHCA did “no such thing,” in the opinion of the Ap-

pellate Court of Illinois. Jd.

“Applying the Casarotto and [Perry] rule to the

facts in this case,” the Appellate Court of Illinois held

that “because the public policy expressed in [IN-

HCA’s anti-waiver provisions| concerns the validity,

revocability, and enforceability of contracts generally

and does not specifically target arbitration agree-

ments, it presents a legitimate state law contract de-

fense of a violation of public policy to the agreements

and so voids the agreements.” /d. at 9a-10a. With-

out any substantive explanation, the Appellate Court

of Illinois extended its ruling to include the coin-

plaint’s wrongful-death cause of action, holding that

the same “emphatically stated public policy” embod-

ied in INHCA’s anti-waiver provisions precluded ar-

bitration of the wrongful-death cause of action as

well. Jd. at 10a.

5. The Supreme Court of Illinois subsequently

denied the Center’s petition for leave tc appeal.

App., infra, 15a.

REASONS FOR GRANTING THE PETITION

This Court’s review is necessary to ensure the

proper and uniform application of the FAA. The

lower court’s decision stands in direct conflict with

this Court’s decisions in Preston and Southland, both

of which demonstrate that a state statute need not

“specifically target” arbitration agreements in order

to be preempted by § 2 of the FAA if the state statute

as applied precludes the enforcement of arbitration

agreements. The unanimous rulings of four federal

circuit courts of appeals provide further evidence

that the ruling below is patently erroneous.

Moreover, as this Court recognized in Southland,

the “public policy” logic of the decision below would

allow States to “wholly eviscerate” federally pro-

tected arbitration rights. Southland, 465 U.S. at 17

n.l11. The decision below held that States may enact

statutes that have the effect of precluding the en-

forcement of arbitration agreements so long as the

state statute does not expressly mention arbitration.

This Court considered—and expressly rejected—that

argument in Southland, holding that Congress’s pro-

arbitration policy choice supersedes any contrary pol-

icy choice made by a State.

Accordingly, the Court should grant the petition

for a writ of certiorari and, as it has done under simi-

lar circumstances, summarily reverse the judgment

of the Appellate Court of Illinois. See, e.g., Citizens

Bank v. Alafabco, Inc., 539 U.S. 52, 57 (2003) (per

curlam) (reversing summarily state supreme court

ruling imposing an unduly narrow interpretation of

the FAA’s “involving commerce” requirement be-

cause this Court’s decision fell “well within [its] pre-

vious pronouncements”). Alternatively, the Court

should grant the petition for a writ of certiorari, con-

sider this case on the merits and reverse the judg-

ment of the Appellate Court of Illinois.

I. THE DECISION BELOW CONFLICTS WITH

THIS COURT’S UNAMBIGUOUS PRECE-

DENT ADDRESSING THE PREEMPTIVE

EFFECT OF THE FEDERAL ARBITRATION

ACT

A. Preston and Southland Demonstrate That

a State Statute Need Not “Specifically

Target” Arbitration In Order to be Pre-

empted and that the “Public Policy”

Logic of the Court Below Is Invalid

Section 2 of the FAA “supplies not simply a pro-

cedural framework applicable in federal courts; it

also calls for the application, in state as well as fed-

eral courts, of federal substantive law regarding ar-

bitration.” Preston v. Ferrer, 128 S. Ct. 978, 981

(2008). For example, “when parties agree to arbi-

trate all questions arising under a contract, state

laws lodging primary jurisdiction in another forum,

whether judicial or administrative, are superseded

by the FAA.” 7d. at. 987.

In Preston, an actor and his manager had agreed

to arbitrate disputes arising under a management

contract. See id. at 982-83. The plaintiff-manager

later claimed that he was owed fees under the con-

tract, but the defendant-actor claimed the contract

was void because the plaintiff-manager was acting as

an unlicensed talent agent. See id.

California’s Talent Agencies Act specified that

“liJn cases of controversy arising under this chapter,

the parties involved shall refer the matters in dis-

pute to the Labor Commissioner, who shall hear and

determine the same, subject to an appeal within 10

days after determination, to the superior court where

the same shall be heard de novo.” Cal. Lab. Code

Ann. § 1700.44(a) (West 2003 & Supp. 2008) (empha-

sis added). Following the procedure prescribed by

the state statute, the defendant-actor petitioned the

state labor commissioner to decide whether the con-

tract was unenforceable because it violated a state

law requiring licensure of talent agents. See Preston,

128 S. Ct. at 982-83. The plaintiff-manager moved to

compel arbitration, but the California Court of Ap-

peal eventually refused to do so because it believed

the FAA did not preempt actions before an adminis-

trative agency with exclusive jurisdiction over a dis-

pute. Id.

After the Supreme Court of California denied the

plaintiff-manager’s petition for review, this Court

granted the plaintiff-manager’s petition for a writ of

certiorari and reversed the judgment of the Califor-

nia Court of Appeal, finding that the issue was sim-

ply “who decides whether [the plaintiff-manager]

acted as personal manager or as a talent agent.” Jd.

at 987. In reversing the California Court of Appeal,

this Court concluded that the motion to compel arbi-

tration raised solely the question of which forum

would hear the parties’ dispute and the parties had

not forfeited any substantive claims under the stat-

ute. Id. They were merely submitting to resolution

in an arbitral, rather than a judicial or administra-

tive, forum. Jd. In other words, the parties had not

waived causes of action under the state statute; in-

stead, they had agreed who would decide such issues,

and that “who” was an arbitrator.

As the Court itself acknowledged, the holding of

Preston was hardly groundbreaking. See id. at 984

(recognizing that existing precedent “largely, if not

entirely, resolve[d] the dispute before” the Court).

This Court faced a similar question almost twenty-

five years earlier in Southland Corp. v. Keating, 465

U.S. 1 (1984).

In Southland, a California statute designed to

protect franchisees contained an anti-waiver provi-

sion similar to those at issue here, which stated that

“talny condition, stipulation or provision purporting

to bind any person acquiring any franchise te waive

compliance with any provision of this law or any rule

or order hereunder is void.” Jd. at 10 (citation omit

ted). Like INHCA’s anti-waiver provisions and the

state statute at issue in Preston, the state statute in

Southland did not expressly mention arbitration.

Despite that fact, the Southland Court reversed a

Supreme Court of California decision refusing to

compel arbitration, finding that the FAA withdraws

the “power of the states to require a judicial forum

for the resolution of claims which the contracting

parties agreed to resolve by arbitration.” Jd. at 12.

Moreover, the opinion for the Court in Southland

expressly rejected the “public policy” theory adopted

by the Appellate Court of Illinois in the case below.

In recognizing that § 2 of the FAA provides that arbi-

tration agreements “shall be valid, irrevocable, and

enforceable, save upon such grounds as exist at law

or in equity for the revocation of any contract,” 9

U.S.C. §2 (emphasis added), the Court explained

that § 2’s savings clause did not allow state legisla-

tures to countermand the _ pro-arbitration policy

choice made by Congress.

In particular, the opinion for the Court responded

to the dissenting opinion of Justice Stevens, which,

applying the same “public policy” rationale adopted

by the Appellate Court of Illinois here, stated in rele-

vant part:

A contract which is deemed void is surely revoca-

ble at law or in equity, and the California legisla-

ture has declared all conditions purporting to

waive compliance with the protections of the

Franchise Disclosure Act, including but not lim-

ited to arbitration provisions, void as a matter of

public policy. Given the importance to the State

of franchise relationships, the relative disparity

in the bargaining positions between the franchi-

sor and the franchisee, and the remedial purposes

of the California Act, I believe this declaration of

State policy is entitled to respect.

xk s&s +: @

We should not refuse to exercise independent

judgment concerning the conditions under which

an arbitration agreement, generally enforceable

under the [FAA], can be held invalid as contrary

to public policy simply because the source of the

substantive law to which the arbitration agree-

ment attaches is a State rather than the Federal

Government.

Southland, 465 U.S. at 20-21 (Stevens, J., dissent-

ing).

In response, the opinion for the Court in South-

land expressly rejected the dissent’s “public policy”

theory adopted by the Appellate Court of Illinois

here, stating in relevant part:

JUSTICE STEVENS dissents in part on the ground

that § 2 of the Arbitration Act permits a party to

nullify an agreement to arbitrate on “such

grounds as exist at law or in equity for the revo-

cation of any contract.” We agree, of course, that

a party may assert general contract defenses such

as fraud to avoid enforcement of an arbitration

agreement. We conclude, however, that the de-

fense to arbitration found in the California Fran-

chise Investment Law is not a ground that exists

at law or in equity “for the revocation of any con-

tract” but merely a ground that exists for the

revocation of arbitration provisions in contracts

subject to the California Franchise Investment

Law. Moreover, under this dissenting view, “a

state policy of providing special protection for

franchisees... can be recognized without impair-

ing the basic purposes of the federal statute.” If

we accepted this analysis, states could wholly

eviscerate Congressional intent to place arbitra-

tion agreements upon the same footing as other

contracts ... simply by passing statutes such as

the Franchise Investment Law. We have rejected

this analysis because it is in conflict with the Ar-

bitration Act and would permit states to override

the declared policy requiring enforcement of arbi-

tration agreements.

Southland, 465 U.S. at 16-17 n.11 (citations omitted;

ellipses in original).

Despite this Court’s decision in Southland, the

Appellate Court of Illinois held that “because the

public policy expressed in |INHCA’s anti-waiver pro-

visions] concerns the validity, revocability, and en-

forceability of contracts generally and does not spe-

cifically target arbitration agreements, it presents a

legitimate state law contract defense of a violation of

public policy to the agreements and so voids the

agreements.” App., infra, 10a. The “defense to arbi-

tration found in” INHCA’s anti-waiver provisions,

however, “is not a ground that exists at law or in eq-

uity ‘for the revocation of any contract’ but merely a

ground that exists for the revocation of arbitration

provisions in contracts subject to [INHCA].” South-

land, 465 U.S. at 16 n.11. Asa result, the Appellate

Court of Illinois committed plain error in the face of

unambiguous precedent when it held the FAA does

not preempt INHCA’s anti-waiver provisions, which

as applied preclude the enforcement of otherwise

valid arbitration agreements such as those at issue

here.

That a violation of public policy is a generally ap-

plicable contract defense in Illinois does not change

this conclusion. Violation of public policy is a well-

established common-law contract defense. Indeed,

the Restatement (Second) of Contracts dedicates an

entire chapter to the subject. See Restatement (Sec-

ond) of Contracts ch. 8 (1981). As Southland recog-

nized, however, the Supremacy Clause instructs that

Congress's pro-arbitration policy choice controls over

any contrary policy choice made by a State. In sum,

the “public policy” analysis of the Illinois Court of

Appeals “is in conflict with the |FAA| and would

permit states to override the declared policy requir-

ing enforcement of arbitration agreements.” South-

land, 465 U.S. at 17 n.11.

B. The Decision Below Is Based on a Clear

Misreading of Perry and Casarotto

In Perry v. Thomas, 482 U.S. 483 (1987), the

Court was asked to decide whether § 2 of the FAA

preempted § 229 of the California Labor Code. On

its face, the state statute in question “singled out”

arbitration agreements, providing that suits for the

collection of wages could be maintained “without re-

gard to the existence of any private agreement to ar-

bitrate.” Jd. at 484 (quoting Cal. Lab. Code Ann.

§ 229 (West 1971)). The Court found that the pro-

arbitration policy of the FAA placed it in “unmistak-

able conflict with California’s § 229 requirement that

litigants be provided a judicial forum for resolving

wage disputes.” /d. at 491. As a result, the Court

held that the state statute had to “give way” under

the Supremacy Clause. /d.

In finding the state statute preempted, the opin-

ion for the Court included a footnote reading, in rele-

vant part:

In instances such as these, the text of § 2 provides

the touchstone for choosing between state-law

principles and the principles of federal common

law envisioned by the passage of that statute: An

agreement to arbitrate is valid, irrevocable, and

enforceable, as a matter of federal law, see Moses

H. Cone Memorial Hospital v. Mercury Construc-

tion Corp., 460 U.S. 1, 24 (1983), “save upon such

grounds as exist at law or in equity for the revo-

cation of any contract.” 9 U.S.C. § 2 (emphasis

added). Thus state law, whether of legislative or

judicial origin, is applicable if that law arose to

govern issues concerning the validity, revocabil-

ity, and enforceability of contracts generally. A

state-law principle that takes its meaning pre-

cisely from the fact that a contract to arbitrate is

at issue does not comport with this requirement

of § 2.... Acourt may not, then, in assessing the

rights of litigants to enforce an arbitration

agreement, construe that agreement in a manner

different from that in which it otherwise con-

strues nonarbitration agreements under state

law. Nor may a court rely on the uniqueness of

an agreement to arbitrate as a basis for a state-

law holding that enforcement would be uncon-

scionable, for this would enable the court to effect

what we hold today the state legislature cannot.

Id. at 492 n.9 (citations omitted).

Several years later, in Doctor’s Associates, Inc. v.

Casarotto, 517 U.S. 681 (1996), the Court held that

the FAA preempted a Montana statute conditioning

the enforceability of arbitration agreements on com-

pliance with a first-page notice requirement. As in

Perry, the state statute at issue in Casarotto “singled

out” arbitration by making arbitration clauses “unen-

forceable unless ‘[njotice that [the] contract is subject

to arbitration’ is ‘typed in underlined capital letters

on the first page of the contract.” Jd. at 683 (quoting

Mont. Code Ann. § 27-5-114(4) (1995)) (brackets sup-

plied by Casarotto Court). In finding the state stat-

ute preempted, the Court referenced the Perry foot-

note and explained that, under the savings clause of

§ 2 of the FAA, courts could not “invalidate arbitra-

tion agreements under state laws applicable only to

arbitration provisions.” Jd. at 687.

Read correctly, Perry and Casarotto stand for the

proposition that § 2 of the FAA preempts those state

laws that “single out” arbitration agreements for

special treatment. As demonstrated by Southland

and Preston, however, Perry and Casarotto do not

stand for the converse proposition: namely, that state

laws avoid FAA preemption so long as they do not

“single out” arbitration agreements for special

treatment. Instead, Southland and Preston make

clear that state statutes are preempted by the FAA if

the state statutes as applied preclude the enforce-

ment of federally protected arbitration rights, re-

gardless of whether the state statutes “single out” or

“specifically target” arbitration agreements. The de-

cision of the Appellate Court of Illinois is predicated

on a misunderstanding of this fundamental concept.

It. THE DECISION BELOW CONFLICTS

WITH THE LAW OF FOUR FEDERAL CIR-

CUITS ADDRESSING THE PREEMPTIVE

EFFECT OF THE FEDERAL ARBITRA-

TION ACT

In relevant part, § 2 of the FAA provides that ar-

bitration agreements “shall be valid, irrevocable, and

enforceable, save upon such grounds as exist at law

or in equity for the revocation of any contract.” 9

U.S.C. § 2 (emphasis added). Contrary to the deci-

sion below, the federal courts of appeals have

unanimously held that the FAA preempts a state law

that invalidates only certain types of clauses in

some, but not all, contracts, regardless of whether

the state law mentions arbitration. See Bradley uv.

Harris Research, Inc., 275 F.3d 884, 889-90 (9th Cir.

2001): OPE Intl LP v. Chet Morrison Contractors,

Inc., 258 F.3d 443, 447 (5th Cir. 2001) (per curiam);

KKW Enters., Inc. v. Gloria Jean’s Gourmet Coffees

Franchising Corp., 184 F.3d 42, 50-51 (1st Cir. 1999);

Doctor’s Assocs., Inc. v. Hamilton, 150 F.3d 157, 163

(2d Cir. 1998), cert. denied, 525 U.S. 1103 (1999) (No.

98-630).

In Bradley v. Harris Research, Inc., 275 F.3d 884

(9th Cir. 2001), the Ninth Circuit was asked to de-

cide whether the FAA preempted a California statute

that had the effect of voiding forum-selection clauses

in franchise agreements if the clauses restricted

venue to an out-of-state forum. See id. at 889.' Rely-

ing on decisions from the First, Second and Fifth Cir-

cuits, the Ninth Circuit held that § 2 of the FAA pre-

empted the California statute because the California

statute applied “only to forum selection clauses and

only to franchise agreements; it therefore does not

apply to ‘any contract.” Jd. at 890 (quoting 9 U.S.C.

§ 2).

In Bradley, the appellee-franchisees contended—

like the Appellate Court of Illinois in this case—that

the California statute was not preempted “because it

treats arbitration and litigation equally and does not

single out arbitration as a disfavored form of dispute

resolution.” Jd. at 889. The Ninth Circuit rejected

that argument outright, holding that “only state law

that addresses the enforcement of ‘contracts gener-

ally’ is not preempted by the FAA.” Jd. (quoting

Casarotto, 517 U.S. at 686-87). As Bradley ex-

plained, even if a state statute places arbitration on

“equal footing” with litigation, it is preempted by the

FAA if it invalidates only certain types of clauses in

certain types of contracts. See id.

The Fifth Circuit applied similar reasoning in

OPE International LP v. Chet Morrison Contractors,

' The California statute at issue in Bradley provided that

“laj] provision in a franchise agreement restricting venuc to a

forum outside this state is void with respect to any claim aris-

ing under or relating to a franchise agreement involving a fran-

chise business operating within this state.” Cal. Bus. & Prof.

Code Ann. § 20040.5

Inc., 258 F.3d 443 (5th Cir. 2001) (per curiam).

There, the appellant argued that the arbitration

agreement in question was invalid under a Louisiana

statute that voided out-of-state forum-selection

clauses in certain construction contracts. See id. at

446.° The Fifth Circuit disagreed, holding that a

state law that places a requirement on arbitration

clauses “not applicable to contracts generally” is pre-

empted by § 2 of the FAA. Id. at 447. The Fifth Cir-

cuit held that the state statute, which did not “spe-

cifically target” arbitration for special treatment,

“directly conflicts with § 2 of the FAA because the

State’s law conditions the enforceability of arbitra-

tion agreements on compliance with a ... require-

ment not applicable to contracts generally.” dd.

(quoting Casarotto, 517 U.S. at 687) (alteration omit-

ted); see also Commerce Park v. Mardian Constr. Co.,

729 F.2d 334, 337 (5th Cir. 1984) (holding that state

statute, which voided any waiver of rights under a

state deceptive trade practices statute, was pre-

empted by the FAA even though the state statute did

not mention arbitration).

To the same effect is KKW Enterprises, Inc. v.

Gloria Jean’s Gourmet Coffees Franchising Corp.,

184 F.3d 42 (1st Cir. 1999). There, the First Circuit

held that a Rhode Island statute applicable only to

forum-selection clauses in franchise agreements was

* The Louisiana statute at issue in OPE International ren-

dered “null and void and unenforceable as against public policy

any provision in a contract” for certain types of construction

that required a “suit or arbitration proceeding to be brought in

a forum or jurisdiction outside of this state.” La. Rev. Stat

Ann. § 9:2779

preempted by § 2 of the FAA because the state stat-

ute “{did] not apply to all contracts and [did] not es-

tablish a generally applicable contract defense.” Jd.

at 52. Like the state statutes addressed by Bradley

and OPE International, the Rhode Island statute at

issue in KKW Enterprises voided any provision in a

franchise agreement restricting venue to an out-of-

state forum. See id. at 50.° The First Circuit rea-

soned that only state statutes that apply to “any con-

tract” are consistent with the FAA. /7/d. at 50-51.

“Because [the state statute] limits the statute’s ap-

plication to one type of provision, venue clauses, in

one type of agreement, franchise agreements, the

statute does not apply to any contract.” Jd. at 51.

Therefore, the First Circuit held that the Rhode Is-

land statute was preempted by the FAA. 7d.

Similarly, in Doctor’s Associates, Inc. v. Hamil-

ton, 150 F.3d 157 (2d Cir. 1998), cert. denied, 525

U.S. 1103 (1999) (No. 98-630), the Second Circuit

held that § 2 of the FAA preempted a rule of law es-

tablished by the Supreme Court of New Jersey in

Kubis & Perszyk Associates, Inc. v. Sun Microsys-

tems, Inc., 680 A.2d 618 (N.J. 1996), in which the

state high court found that a forum-selection clause

in a franchise agreement was presumptively invalid

under the New Jersey Franchise Practices Act if the

clause designated an out-of-state judicial forum. The

franchisee in Hamilton argued that the state-law

’ The Rhode Island statute at issue in KKW Enterprises

read: “A provision in a franchise agreement restricting jurisdic-

tion or venue to a forum outside this state is void with respect

tv a claim otherwise enforceable under this uct.” R.I. Gen.

Law > § 19-28.1-14.

precedent should be extended to invalidate such fo-

rum-selection clauses as they related to arbitration.

See 150 F.3d at 163. The Second Circuit rejected the

franchisee’s argument, explaining:

Kubis did not establish a “generally applicable”

contract defense that applies to “any” contract; it

invalidated a franchise agreement’s forum selec-

tion clause under the New .Jersey Franchise Prac-

tices Act because it required the franchisce to sue

in another jurisdiction. The Kudis decision ap-

plies to one sort of contract provision (forum se-

lection) in only one type of contract (a franchise

agreement). Therefore, to the extent that Kubis

can be read to invalidate arbitral forum selection

clauses in franchise agreements, it is preempted

by the FAA.

Id.; see also Stawski Distrib. Co. v. Browary Zywiec

S.A., 349 F.3d 1023, 1024-26 (7th Cir. 2003) (over-

turning district court order denying a “stay [of] liti-

gation in favor of arbitration” and holding that IIli-

nois statute governing contracts between brewers

and distributors was preempted because it did not

apply generally to all contracts).

These cases demonstrate that four federal courts

of appeals have applied the unambiguous language

of § 2’s savings clause to hold that courts may not re-

fuse to enforce arbitration agreements based on

state-law grounds other than “grounds that exist at

law or in equity for the revocation of any contract.” 9

U.S.C. § 2 (emphasis added). A state law that in-

validates only certain types of clauses in certain

types of contracts is not a “ground[{] that exist{s] at

law or in equity for the revocation of any contract,”

and therefore any such state law is preempted by the

FAA to the extent that it precludes enforcement of

arbitration agreements.

Because INHCA’s anti-waiver provisions invali-

date only certain types of clauses (waivers of the

right to commence an action under INHCA and to

have such cases tried by a jury) in certain types of

contracts (agreements subject to INHCA), well-

established circuit precedent demonstrates that the

savings clause of § 2 does not apply and the Appel-

late Court of Illinois’s ruling is erroneous.

lil. THE PETITION RAISES SUBSTANTIAL

QUESTIONS OF FEDERAL LAW

“The ‘singling out’ theory’—whereby courts hold

that a state statute must “specifically target” or “sin-

gle out” arbitration agreements in order to be pre-

empted by the FAA—is best viewed as a “backdoor

attempt to have the Supreme Court overrule South-

land, which it already has refused to do.” Christo-

pher R. Drahozal, Federal Arbitration Act Preemp-

tion, 79 Ind. L.J. 393, 410 (2004) (Drahozal). Profes-

sor Drahozal correctly observes that the “singling

out’ phrasing comes from language in Supreme Court

cases, not from the [FAA] itself, and is contraindi-

cated by other language in the Court’s own opinions.”

Id. at 409 (footnotes omitted). Echoing the concern

expressed by this Court in Southland, Professor

Drahozal concludes that

the “singling out” interpretation of FAA preemp-

tion would permit states to eviscerate the FAA

entirely. Under that interpretation, a state law

that invalidated all pre-dispute waivers of the

right to jury trial would not be preempted by the

FAA because it did not single out arbitration

clauses: it also would invalidate jury trial waivers

in court selection clauses. And yet such a state

law would make arbitration agreements wholly

unenforceable in the state, because by definition

arbitration clauses provide for an arbitrator,

rather than a jury, to resolve the parties’ dispute.

Nothing in the FAA or the Supreme Court’s in-

terpretations of the FAA supports such a result.

In short, courts should reject the view that the

FAA preempts only state laws that single out ar-

bitration clauses.

Id. at 410 (footnotes omitted).

Contrary to the decision below, federal preemp-

tion analysis does not look solely to the language of

the state statute to determine whether it is pre-

empted by federal law. “[S]tate law may nonetheless

be preempted to the extent that it actually conflicts

with federal law—that is, to the extent that it ‘stands

as an obstacle to the accomplishment and execution

of the full purposes and objectives of Congress.” Volt

Info. Scis., Inc. v. Board of Trustees of Leland Stan-

ford Junior Univ., 489 U.S. 468, 477 (1988) (quoting

Hines v. Davidowittz, 312 U.S. 52, 67 (1941)).

Nor is the state statutory language at issue here

unique to Illinois. At least two other States have en-

acted virtually identical anti-waiver provisions in the

nursing facility context. Oklahoma’s Nursing Home

Care Act, for example, provides that “[a]ny waiver by

a resident or the legal representative of the resident

of the right to commence an action under this sec-

tion, whether oral or in writing, shall be null and

void, and without legal force or effect.” Okla. Stat.

tit. 63, §$ 1-1939(D). In similar fashion, the Okla-

homa statute also provides that “[a]Jny party to an

action brought under this section shall be entitled to

a trial by jury and any waiver of the right to a trial

by a jury, whether oral or in writing, prior to the

commencement of an action, shall be null and void,

and without legal force or effect.” § 1-1939(E); see

also W. Va. Code § 16-5C-15(c) (“Any waiver by a

resident [of a nursing facility] or his or her legal rep-

resentative of the right to commence an action under

this section, whether oral or in writing, shall be null

and void as contrary to public policy.”).

Unlike the decision of the Appellate Court of Illi-

nois in this case, however, the FAA has been held to

preempt Oklahoma’s identical anti-waiver provi-

sions. In Rainbow Health Care Center, Inc. uv.

Crutcher, No. 0O7-CV-194-JHP, 2008 WL 268321

(N.D. Okla. Jan. 29, 2008), a nursing facility filed

suit against the head of a state regulatory agency

seeking a declaratory judgment that Oklahoma’s

anti-waiver provisions were preempted by the FAA

after the state agency threatened to revoke the

plaintiff-facility’s license because the plaintiff-facility

included certain arbitration provisions in its admis-

sion agreements. See id. at *1. The district court

held the FAA did in fact preempt Oklahoma’s anti-

waiver provisions, explaining: “In enacting the FAA,

Congress expressed a national policy favoring en-

forcement of arbitration agreements, and there ts

nothing to suggest that Congress ever intended to

carve out an exception to that broad policy allowing

the state of Oklahoma to disfavor arbitration agree-

ments in nursing home admission agreements.” /d.

at *8. The defendant-official did not appeal the dis-

trict court’s ruling.

A different federal district court in Oklahoma

reached a similar conclusion in Sooner Geriatrics,

L.L.C. v. Crutcher, No. CIV-07-244-M, 2007 WL

2900535 (W.D. Okla. Oct. 3, 2007). There, the dis-

trict court granted several nursing facilities’ request

for a preliminary injunction after the same state

regulatory agency cited the plaintiff-facilities for in-

cluding certain arbitration provisions in their admis-

sion agreements that the state agency believed vio-

lated Oklahoma’s anti-waiver provisions. See id. at

*6. The district court later converted its preliminary

injunction into a permanent injunction after the de-

fendant-official failed to contest the plaintiff-

facilities’ motion to confess judgment, finding that

the FAA preempted Oklahoma’s anti-waiver provi-

sions. See Sooner Geriatrics, L.L.C. v. Crutcher, No.

CIV-07-244-M, shp op. (W.D. Okla. May 27, 2008).

As in Rainbow Health Care Center, the defendant-

official in Sooner Geriatrics did not appeal the dis-

trict court’s ruling.

Despite these federal court rulings holding that

Oklahoma’s anti-waiver provisions are preempted by

the FAA, Oklahoma’s state courts have proven ex-

tremely hostile to claims that the FAA preempts

Oklahoma’s anti-waiver provisions. In Bruner uv.

Timberland Manor Ltd. Partnership, 155 P.3d 16

(Okla. 2006), the Supreme Court of Oklahoma up-

held a trial court’s refusal to enforce an arbitration

agreement between a nursing facility and a resident

after the trial court held the FAA did not preempt

Oklahoma’s anti-waiver provisions. To reach this re-

sult, the Bruner court applied an overly narrow con-

struction of the FAA, finding that the FAA did not

reach what the court characterized as the “pro-

foundly local transaction” evidenced by the agree-

ment between the nursing facility and its resident.

Id. at 31. In doing so, the Bruner court expressly

disagreed with contrary rulings issued by three other

state supreme courts. See id. at 29-30 (disagreeing

with McGuffrey Health & Rehab. Ctr. v. Jackson, 864

So. 2d 1061 (Ala. 2003); Vicksburg Partners, L.P. v.

Stephens, 911 So. 2d 507 (Miss. 2005); and Jn re Nex-

ion Health at Humble, Inc., 173 S.W.3d 67 (Tex.

2005)). But see Rainbow Health Care Center, 2008

WL 268321, at *6 (rejecting Bruner’s interstate-

commerce analysis); Stanley A. Leasure, Arbitration

of Nursing Home Claims: Oklahoma Goes Its Own

Way, 60 Okla. L. Rev. 737, 767-68 (2007) (question-

ing Bruner’s reasoning in light of contrary state su-

preme court rulings).

There is only one FAA, the interpretation of

which should be uniform regardless of whether one

sues in state court or in federal court. As Rainbow

Health Care Center, Sooner Geriatrics, Bruner and

the decision below demonstrate, such is not the case

in the context of arbitration agreements between

nursing facilities and their residents.

This case implicates much more than just state

statutes related to disputes between nursing facili-

ties and their residents, however. This case—and

the obvious disregard for this Court’s FAA jurispru-

dence evidenced throughout the lower court’s deci-

sion—implicates the very type of judicial hostility to

arbitration § 2 of the FAA was designed to overcome.

The “specifically target” theory adopted by the court

below represents the secon:’ front in state courts’ ef-

forts to circumvent this Court’s FAA jurisprudence.

See Drahozal, 79 Ind. L.J. at 410.

“{(Cjourts must be on guard for artifices in which

the ancient suspicion of arbitration might reappear.”

Securities Indus. Ass’n v. Connolly, 883 F.2d 1114,

1119 (1st Cir. 1989). The rule adopted by the Appel-

late Court of Illinois, whereby a state statute may

avoid FAA preemption if a violation of public policy

is a generally applicable contract defense and the

state statute in question does not “specifically target”

arbitration agreements, is one such “artifice” that

must be rejected outright lest the lower court’s deci-

sion serve as a roadmap for how other state courts

and state legislatures can frustrate the pro-

arbitration policy choice made by Congress through

the use of selective (and patently erroneous) parsing

of this Court’s FAA jurisprudence.

CONCLUSION

For the foregoing reasons, the Court should grant

the petition for a writ of certiorari and summarily

reverse the judgment of the Appellate Court of IIli-

nois. Alternatively, the Court should grant the peti-

tion for a writ of certiorari, consider this case on the

merits and reverse the judgment of the Appellate

Court of Illinois.

Respectfully submitted.

W. JEFFREY MUSKOPF MALCOLM J. HARKINS III

MARK R. FELDHAUS Counsel of Record

LASHLY & BAER, P.C. JAMES F. SEGROVES

714 Locust Street PROSKAUER ROSE LLP

St. Louis, MO 63101 1001 Pennsylvania Ave., NW

(314) 436-8326 Suite 400 South

Washington, DC 20004

DECEMBER 2008 (202) 416-6800

APPENDICES

APPENDIX A

NOTICE NO. 5-07-0392

Decision filed 04/04/08. IN THE

The text of this deci-

sion may be changed or

corrected prior to the

filing of a Petition for

Rehearing or the dis-

position of the same. FIFTH DISTRICT

APPELLATE COURT

OF ILLINOIS

SUE CARTER, Special

Administrator of the Estate

of Joyce Gott, Deceased, Appeal from the

Circuit Court of

Plaintiff-Appellee, Marion County.

No. 06-L-75

SSC ODIN OPERATING ) Honorable

COMPANY, LLC, d/b/a Odin David L. Sauer,

Healthcare Center, Judge, presiding.

Defendant-Appellant.

JUSTICE SPOMER delivered the opinion of the

court:

The defendant, SSC Odin Operating Company,

LLC, doing business as Odin Healthcare Center, ap-

peals an order of the circuit court of Marion County

denying the defendant’s motion to compel arbitration

in the present lawsuit brought by the plaintiff, Sue

Carter, as the special administrator of the estate of

Joyce Gott, deceased. For the reasons that follow, we

affirm the order of the circuit court.

BACKGROUND

The facts necessary to our disposition of this ap-

peal are undisputed by the parties and are as fol-

lows. The plaintiff, Sue Carter, is the special admin-

istrator of the estate of Joyce Gott, deceased. Joyce

was a resident of the defendant’s facility, Odin

Healthcare Center (Odin), in Odin, Illinois, from May

20, 2005, until July 29, 2005, and again from Janu-

ary 12, 2006, until her death on January 31, 2006.

At the outset of Joyce’s first stay at Odin, the plain-

tiff, acting not on her own behalf, but as Joyce’s legal

representative, executed a written “Health Care Ar-

bitration Agreement” with the defendant; at the out-

set of Joyce’s second stay at Odin, Joyce executed a

second written “Health Care Arbitration Agreement”

with the defendant, the terms of which are identical

to those of the first agreement. In pertinent part, the

two “Health Care Arbitration Agreements” (the

agreements) require that all disputes between Joyce

and the defendant related to Joyce’s care at Odin be

submitted to binding arbitration. By their own

terms, however, the agreements do not apply “to any

dispute where the amount in controversy is less than

two hundred thousand ($200,000.00) dollars.”

Within the agreements, Joyce and the defendant ex-

pressly agree that the agreements will be governed

by the Federal Arbitration Act (9 U.S.C. §1 et seq.

(2000)).

Following Joyce’s January 31, 2006, death, the

plaintiff filed, on November 22, 2006, the instant

two-count lawsuit, alleging in count | a statutory

survival action pursuant to the Probate Act of 1975

(755 ILCS 5/27-6 (West 2006)) and the Nursing

Home Care Act (210 ILCS 45/1-101 et seg. (West

2006)) (the survival action) and in count II a statu-

tory action under the Wrongful Death Act (740 ILCS

180/0.10 et seg. (West 2006)) (the wrongful death ac-

tion). In both counts, the plaintiff alleged that the

defendant had failed to provide adequate and prop-

erly supervised care as needed by Joyce. In the sur-

vival action count, the plaintiff alleged that the de-

fendant’s acts and/or omissions resulted in Joyce suf-

fering pain and suffering, emotional distress, and

mental anguish between January 12, 2006, and

January 31, 2006. In the wrongful death action

count, the plaintiff alleged that the defendant’s acts

and/or omissions resulted in Joyce’s death and there-

fore the loss of Joyce’s companionship and society for

her heirs.

On December 26, 2006, the defendant filed an an-

swer to the plaintiffs complaint, denying in perti-

nent part the allegations therein and asserting a

number of affirmative defenses, including the de-

fense that both counts of the lawsuit were precluded

by the agreements, which required the disputes con-

tained therein to be resolved by binding arbitration.

On January 11, 2007, the plaintiff filed a reply to the

affirmative defenses, denying them, and filed a mo-

tion to strike a number of the defenses, which are not

relevant to this appeal. On March 5, 2007, the de-

fendant filed a motion to compe! arbitration, a

memorandum of law in support of that motion, a

copy of each of the agreements, and an affidavit of an

employee of the defendant that sets forth facts that

the defendant alleges establish that the agreements

involve interstate commerce within the meaning of

the Federal Arbitration Act. On April 19, 2007, the

plaintiff filed a memorandum of law in opposition to

the motion to compel arbitration. In that memoran-

dum and in a supplemental memorandum filed by

the plaintiff on June 20, 2007, the plaintiff argued,

inter alia, that (1) a violation of public policy is a le-

gitimate generally applicable defense to all contracts

in Illinois, (2) legitimate generally applicable state

defenses to all contracts are not preempted by the

Federal Arbitration Act, and (3) the agreements are

in violation of this state’s public policy, as set forth in

sections 3-606 and 3-607 of the Nursing Home Care

Act (210 ILCS 45/3-606, 3-607 (West 2006)), and so

are void.

On June 20, 2007, the trial judge entered an or-

der denying the defendant’s motion to compel arbi-

tration. With regard to the wrongful death action,

the judge reasoned that although Joyce was bound

by the agreements with regard to her own claims, a

plaintiff bringing a wrongful death claim on behalf of

an estate was not bound by the agreements. With

regard to the survival action, the judge concluded

that the agreements were not enforceable because

they were “in direct violation of emphatically stated

public policy and for lack of mutuality” and because,

with regard to interstate commerce, “in the aggre-

gate the economic activity does not represent general

practice subject to federal control.” A timely notice of

interlocutory appeal was filed by the defendant, and

this appeal followed.

—_

STANDARD OF REVIEW

An order to compel arbitration is injunctive in na-

ture and is appealable under Supreme Court Rule

307(a)(1) (188 Dl. 2d R. 307(a)(1)). Peach v. CIM In-

surance Corp., 352 Ill. App. 3d 691, 694 (2004) (citing

Sals tz v. Kreiss, 198 ill. 2d 1, 11 (2001)). Generally,

the standard employed in reviewing an interlocutory

order granting or denying a motion to compel arbi-

tration is whether the circuit court abused its discre-

tion. Peach, 352 Ill. App. 3d at 694. However, in an

appeal from the cenial of a motion to compel arbitra-

tion without an evidentiary hearing, the standard of

review is de novo. Ragan v. AT&T Corp., 355 II.

App. 3d 1143, 1147 (2005). In the case at bar, there

was no evidentiary hearing. Accordingly, we shall

review de novo the trial judge’s ruling. This court

may affirm the judgment of a trial court on any basis

warranted by the record. Evans v. Lima Lima Flight

Team, Inc., 273 Ill. App 3d 407, 418 (2007).

DISCUSSION

On appeal, the defendant contends the trial court

erred because (1) the Federal Arbitration Act is pre-

emptive, (2) the agreements involved interstate com-

merce, (3) the agreements are supported by mutual

promises, and (4) the agreements require the arbi-

tration of the wrongful death action. To understand

the defendant’s preemption argument, we must ex-

amine both what the defendant does contend on ap-

peal and what the defendant does not contend on ap-

peal. We begin with the latter. Nowhere in its open-

ing brief or reply brief, and at no time during oral

argument, has the defendant contended that a viola-

tion of public policy is not a legitimate generally ap-

plicable defense to all contracts in Illinois. Accord-

ingly, the defendant has waived the consideration of

any argument on that issue. See 210 Hl. 2d R.

341(h)(7) (the argument section of the opening brief

of the appellant must include, inter alia, “the conten-

tions of the appellant and the reasons therefor, with

citation of the authorities and the pages of the record

relied on”; points not argued in the opening brief “are

waived and shall not be raised in the reply brief, in

oral argument, or on petition for rehearing”); South-

western Illinois Development Authority v. Vollman,

235 Ill. App. 3d 32, 38 (1992) (a reviewing court is

entitled to have the issues clearly defined; it may

deem waived issues not sufficiently or properly pre-

sented). Moreover, even if the defendant had not

waived this issue, there is voluminous case law in

Illinois holding that a violation of public policy can

be a legitimate generally applicable defense to all

contracts in [llinois. E.g., O'Hara v. Ahlgren, Blu-

menfeld & Kempster, 127 Ill. 2d 333, 341-42 (1989);

Kleinwort Benson North America, Inc. v. Quantum

Financial Services, Inc., 181 Il. 2d 214, 226-27

(1998). Likewise, nowhere in its opening brief or re-

ply brief, «nd at no time during oral argument, has

the defendant contended that the protections found

in sections 3-606 and 3-607 of the Nursing Home

Care Act (210 ILCS 45/3-606, 3-607 (West 2006))—

which, we note, were first implemented in 1980, long

before arbitration agreements were as prevalent as

they are today—are not “emphatically stated public

policy.” Accordingly, the defendant has waived the

consideration of any argument on that issue. See

210 Ill. 2d R. 341(h)\(7) (the argument section of the

opening brief of the appellant must include, inter

alia, “the contentiors of the appellant and the rea-

sons therefor, with citation of the authorities and the

pages of the record relied on”; points not argued in

the opening brief “are waived and shall not be raised

in the reply brief, in oral argument, or on petition for

rehearing”); Southwestern Illinois Development Au-

thority v. Vollman, 235 Ill. App. 3d 32, 38 (1992) (a

reviewing court is entitled to have the issues clearly

defined; it may deem waived issues not sufficiently

or properly presented).

We turn now to the preer.ption issue the defen-

dant has sufficiently and properly presented on ap-

peal. Notwithstanding the facts that a violation of

public policy can be a legitimate generally applicable

defense to all contracts in [llinois and that the pro-

tections found in sections 3-606 and 3-607 of the

Nursing Home Care Act (210 ILCS 45/3-606, 3-607

(West 2006)) represent “emphatically stated public

policy” that has existed in this state for nearly 30

years, the defendant contends that in this particular

case the state law contract defense of a violation of

public policy is preempted by the Federal Arbitration

Act because the public policy expressed in sections 3-

606 and 3-607 is not applicable to all contracts but is

used to “specifically target arbitration agreements.”

In support of this argument, the defendant points to

the pronouncement of the United States Supreme

Court in Doctor’s Associates, Inc. v. Casarotto, 517

U.S. 681, 685, 134 L. Ed. 2d 902, 907, 116 S. Ct.

1652, 1655 (1996) (quoting Perry v. Thomas, 482 U.S.

483, 492 n.9, 96 L. Ed. 2d 426, 437 n.9, 107 S. Ct.

2520, 2527 n.9 (1987) (emphasis in original)), that

state law is applicable and is not preempted by the

Federal Arbitration Act “if that law arose to govern

issues concerning the validity, revocability, and en-

forceability of contracts generally,” but that a “state-

law principle that takes its meaning precisely from

the fact that a contract to arbitrate is at issue does

not comport with” the text of the Federal Arbitration

Act.

To understand the nexus between the rule stated

in Casarotto and Thomas, which this court agrees 1s

absolutely correct, and sections 3-606 and 3-607 of

the Nursing Home Care Act, we must examine the

latter sections in detail. Section 3-606 states, in its

entirety, the following:

“Any waiver by a resident or his legal repre-

sentative of the right to commence an action un-

der Sections 3-601 through 3-607, whether oral or

in writing, shall be null and void, and without le-

gal force or effect.” 210 ILCS 45/3-606 (West

2006).

Section 3-607 states, in its entirety, the following:

“Any party to an action brought under Secc-

tions 3-601 through 3-607 shall be entitled to a

trial by jury and any waiver of the right to a trial

by a jury, whether oral or in writing, prior to the

commencement of an action, shall be null and

void, and without legal force or effect.” 210 ILCS

45/3-607 (West 2006).

Although the defendant attempts to invoke the rule

in Casarotto and Thomas by claiming that the above-

quoted language of sections 3-606 and 3-607 is used

to “specifically target arbitration agreements,” we do

not agree with such a narrow reading of the lan-

guage. First, neither section 3-606 nor section 3-607

mentions arbitration agreements at all, nor by their

terms are they limited to those agreements. The sec-

tions, by their explicit terms, apply equally to all

contracts attempting to restrict the mght of nursing

home residents to “commence an action” pursuant to

the Nursing Home Care Act or to waive the right to a

trial by a jury in an action commenced pursuant to

the Nursing Home Care Act, regardless of whether

the contract involves arbitration. Accordingly, a con-

tract that never mentions arbitration but instead re-

quires a bench trial, or some other form of alterna-

tive dispute resolution, rather than a trial by a jury,

would be voided by the sections to the same extent as

a contract containing an arbitration agreement. Sec-

ond, to the extent that the sections may void agree-

ments calling for arbitration, this is an incidental,

tangential effect of the sections, not their primary

purpose, and so the sections can hardly be said to

“specifically target arbitration agreements.” To the

contrary, the sections apply to all contracts involving

nursing home residents, not merely to contracts in-

voking arbitration. Accordingly, the rule stated in

Casarotto and Thomas that state law is applicable

and is not preempted by the Federal Arbitration Act

if that law arose to govern issues concerning the va-

lidity, revocability, and enforceability of contracts

generally (see Doctor’s Associates, Inc. v. Casarotto,

517 U.S. 681, 685, 134 L. Ed. 2d 902, 907, 116 S. Ct.

1652, 1655 (1996) (quoting Perry v. Thomas, 482 U.S.

483, 492 n.9, 96 L. Ed. 2d 426, 437 n.9, 107 S. Ct.

2520, 2527 n.9 (1987)) supports the position of the

plaintiff, not of the defendant. Although it is cer-

tainly true that if the Nursing Home Care Act ex-

pressly directed its prohibitions onl: at arbitration

agreements it would, as the defendant contends, run

afoul of the Federal Arbitration Act, the Nursing

Home Care Act does no such thing. Applying the

Casarotto and Thomas rule to the facts in this case,

10a

we conclude that because the public policy expressed

in sections 3-606 and 3-607 concerns the validity,

revocability, and enforceability of contracts generally

and does not specifically target arbitration agree-

ments, it presents a legitimate state law contract de-

fense of a violation of public policy to the agreements

and so voids the agreements. See also Kinkel v. Cin-

gular Wireless LLC, 223 Ill. 2d 1, 15-19 (2006).

Although the trial judge limited his preemption

analysis to the survival action, denying the defen-

dant’s motion on the wrongful death action on differ-

ent grounds, we conclude that the foregoing analysis

apphes equally to both counts of the plaintiff's com-

plaint and precludes the enforcement of the agree-

ments with regard to the plaintiffs entire complaint.

Accordingly, our conclusion that the trial judge did

not err when he found that the Federal Arbitration

Act did not preempt the generally applicable state

law contract defense of public policy, and thus that

the agreements were void as against the public policy

of this state, renders it unnecessary for us to con-

sider the defendant’s arguments with regard to the

alternative bases on which the trial court denied the

defendant’s motion: a lack of mutuality, a lack of in-

terstate commerce, and no requirement that a plain-

tiff bringing a wrongful death claim on behalf of an

estate proceed according to the agreements. See Ev-

ans v. Lima Lima Flight Team, Inc., 373 Ill. App. 3d

407, 418 (2007) (the appellate court may affirm the

judgment of a trial court on any basis warranted by

the record).

lla

CONCLUSION

For the foregoing reasons, the circuit court’s order

denying the defendant’s motion to compel arbitration

is affirmed.

Affirmed.

STEWART, P.J., and GOLDENHERSH, J., con-

Cur.

12a

APPENDIX B

IN THE CIRCUIT COURT FOR THE

FOURTH JUDICIAL CIRCUIT

MARION COUNTY, ILLINOIS

SUE CARTER, Special

Administrator, In Re The _ ) FILED

Estate of JOYCE GOTT, ) CLERK OF THE

Deceased, ) CIRCUIT COURT

)

Plaintiff, JUN 20 2007

)

VS. ) Ronda Yates

) MARION COUNTY

SSC ODIN OPERATING ) SALEM ILLINOIS

COMPANY, LEC d/b/a

ODIN HEALTHCARE ) No. 06-L-75

CENTER, )

)

Defendant. )

Order on Motion to Compe! Arbitration

1. Concerning Count II this Court believes that

Varelis 167 Ill 2 449 provides significant insight into

the answer of the question of statutory interpreta-

tion presented by defendant. Yes, wrongful death is

a Statutory right appropriately limited by the legis!a-

ture. Although attorneys generally refer to wrongful

death actions as non-derivative, they are derivative

in the sense that the ability to bring the wrongful

death action is conditioned on the deceased having

“had a right of action against the same person or

l3a

persons for injuries sustained.” Biddy 374 Ill at 513-

14.

The examples in Varelis are indeed illustrative

and confirm this Court’s interpretation that the leg-

islature would consider the right to proceed to recov-

ery via arbitration as being a right of action. We

have the same defendants and the same injuries.

The statutory cause of action is even the same. Only

the forum is different. Perhaps the deceased would

have to proceed via arbitration, but she still had a

cause of action. This Court will not make the re-

quested leap in logic suggested by defendant that de-

ceased claim perhaps being required to be presented

through arbitration, requires current plaintiffs to do

the same.

2. Concerning Count I this Court believes that

the series of cases presented by both plaintiff and de-

fendant establish that state contract defenses that

avoid the effect of the contract remain a defense to

the enforcement of FAA application. Although not

essential to this examination, it assists this Court’s

understanding to observe that the affirmative de-

fenses to the contract are available. This seems all

too obvious that an unenforceable contract with FAA

language avoids preemption of the ancillary claims.

The underlying contract is unenforceable both be-

cause it is in direct violation of emphatically state

public policy and for lack of mutuality.

3. Defendant boldly suggests that even if Illinois

law requires the voiding of the arbitration agreement

for violation of public policy that “FAA preempts any

contrary state law that prohibits or restricts arbitra-

tion.” (memorandum filed March 5, 2007 p. 5). This

l4a

issue, this Court believes, is avoided if the underly-

ing contract is unenforceable via state laws which is

provided for by FAA’s language.

Further, the underlying contractual relationship

was between an elderly Marion County resident and

a Marion County care facility. The contract was for

personal care within this county. The action relates

to the care provided. The state statute involved here

is a public safety statute that affects the relation-

ships between the contracting parties. This trial

count believes that in the aggregate the economic ac

tivity does not represent general practice subject to

federal control.

MOTION DENIED

6/20/07 s/David L. Sauer

15a

APPENDIX C

SUPREME COURT OF ILLINOIS

CLERK OF THE COURT

SUPREME COURT BUILDING

SPRINGFIELD, ILLINOIS 62701

(207) 782-2035

September 24, 2008

Mr. W. Jeffrey Muskopf

Lashly & Baer, P.C

714 Locust Street

St. Louis, MO 63101-1699

No. 106511 Sue Carter, Special Adm’r, etc., re-

spondent, v. SSC Odin Operating

Company, LLC, etc., petitioner. Leave

to appeal, Appellate Court, Fifth Dis-

trict.

The Supreme Court today DENIED the petition

for leave to appeal in the above entitled cause.

The mandate of this Court will issue to the Appel-

late Court on October 29, 2008.

16a

APPENDIX D

CONSTITUTIONAL AND

STATUTORY PROVISIONS INVOLVED

1. Article I, Section 9, Clause 3 of the United States

Constitution (the Commerce Clause) provides, in

pertinent part:

The Congress shall have Power * * * To regulate

Commerce with foreign Nations, and among the sev-

eral States, and with the Indian Tribes.

2. Article VI, Clause 2 of the United States Consti-

tution (the Supremacy Clause) provides:

This Constitution, and the Laws of the United

States which shall be made in Pursuance thereof;

and all Treaties made, or which shall be made, under

the Authority of the United States, shall be the su-

preme Law of the Land; and the Judges in every

State shall be bound thereby, any Thing in the Con-

stitution or Laws of any State to the Contrary not-

withstanding.

3. Sections 1 and 2 of the Federal Arbitration Act, 9

U.S.C. §§ 1-2, provide:

$1. “Maritime transactions” and “commerce”

defined; exceptions to operation of title

“Maritime transactions”, as herein’ defined,

means charter parties, bills of lading of water carri-

ers, agreements relating to wharfage, supplies fur-

nished vessels or repairs to vessels, collisions, or any

other matters in foreign commerce which, if the sub-

ject of controversy, would be embraced within admi-

ralty jurisdiction; “commerce”, as herein defined,

l7a

means commerce among the several States or with

foreign nations, or in any Territory of the United

States or in the District of Columbia, or between any

such Territory and another, or between any such

Territory and any State or foreign nation, or between

the District of Columbia and any State or Territory

or foreign nation, but nothing herein contained shal]

apply to contracts of employment of seamen, railroad

employees, or any other class of workers engaged in

foreign or interstate commerce

§ 2. Validity, irrevocability, and enforcement

of agreements to arbitrate

A written provision in any maritime transaction

or a contract evidencing a transaction involving

commerce to settle by arbitration a controversy

thereafter arising out of such contract or transaction,

or the refusal to perform the whole or any part

thereof, or an agreement in writing to submit to arbi-

tration an existing controversy arising out of such a

contract, transaction, or refusal, shall be valid, ir-

revocable, and enforceable, save upon such grounds

as exist at law or in equity for the revocation of any

contract.

’

1. The Illinois Nursing Home Care Act, Chapter

210, Act 45, Article III, Part 6 of the [Illinois Com-

piled Statutes, provides, in pertinent part:

45/3-601. Liability to residents

§ 3-601. The owner and licensee are liable to a

resident for any intentional or negligent act or omis-

sion of their agents or employees which injures the

resident.

18a

45/3-602. Actual damages; costs and attorney’s

fees

§ 3-602. The licensee shall pay the actual] dam-

ages and custs and attorney’s fees to a facility resi-

dent whose rights, as specified in Part 1 of Article TI

of this Act, are violated.

45/3-603. Actions; injunctive and declaratory

relief

§ 3-603. A resident may maintain an action un-

der this Act for any other type of relief, including in-

junctive and declaratory relief, permitted by law.

45/3-604. Class actions

§ 3-604. Any damages recoverable under Sections

3-601 through 3-607, including minimum damages as

provided by these Sections, may be recovered in any

action which a court may authorize to be brought as

a class action pursuant to the Civil Practice Law.

The remedies provided in Sections 3-601 through

3-607, are in addition to and cumulative with any

other legal remedies available to a resident. Exhaus-

tion of any available administrative remedies shal]

not be required prior to commencement of suit here-

under.

45/3-605. Medical assistance; exemption of

damages recovered

§ 3-605. The amount of damages recovered by a

resident in an action brought under Sections 3-601

through 3-607 shall be exempt for purposes of deter-

mining initial or continuing eligibility for medical as-

sistance under “The Illinois Public Aid Code”, as now

or hereafter amended, and shall neither be taken

into consideration nor required to be applied toward

19a

the payment or partial payment of the cost of medi-

cal care or ser ; available under “The Illinois Pub-

lic Aid Code”.

45/3-606. Waiver of right to sue

§ 3-606. Any waiver by a resident or his legal

representative of the right to commence an action

under Sections 3-601 through 3-607, whether oral or

in writing, shall be null and void, and without legal

force or effecv.

45/3-607. Jury trial; waivers

§ 3-607. Any party to an action brought under

Sections 3-601 through 3-607 shall be entitled to a

trial by jury and any waiver of the right to a trial by

a jury, whether oral or in writing, prior to the com-

mencement of an action, shall be null and void, and

without legal force or effect.

20a

APPENDIX E

[ARBITRATION AGREEMENT DATED MAY 20, 2005}

HEALTH CARE ARBITRATION AGREEMENT

PLEASE READ CAREFULLY

I. EXPLANATION

Under federal law two or more parties may agree

in writing for the settlement by arbitration of any

dispute arising between them. Arbitration is a

method for resolving disputes without involving the

courts. It is frequently faster and less expensive

than using the court system. In these arbitration

proceedings, the dispute is heard by private indi-

viduals, called arbitrators, who are selected by the

Resident and/or the Resident’s Legal Representative

and the Facility. The decision of the arbitrators

binds both parties and are [sic] final. By agreeing to

binding arbitration, both parties waive the right to

trial before a judge or jury.

If. AGREEMENT

The following is an agreement to arbitrate any

dispute that might arise between Joyce Gott

(“Resident”) and/or Sue Carter (“Legal Repre-

sentative”) and _ Odin Healthcare (“Facility”)

(“Facility” includes the particular facility where the

Resident resides, its parents, affiliates, and subsidi-

ary companies, owners, officers, directors, medical

directors, employees, successors, assigns, agents, at-

torney[s] and insurers). The parties expressly agree

and voluntarily enter into this binding Health Care

Arbitration Agreement (the “Agreement”). The Resi-

dent and the Facility have entered into an Admission

2la

Agreement and acknowledge that such Admission

Agreement constitutes the foundation of the rela-

tionship between them and all duties and obligations

arising between them. The Resident and the Facility

further acknowledge that said Admission Agreement

evidences a transaction involving interstate com-

merce. The Resident and the Facility understand

that the Admission Agreement involves interstate

commerce because the Facility is affiliated with

Mariner Health Care, Inc., which is a foreign corpo-

ration with a nationwide network of over 250 nurs-

ing facilities, all of which are fully engaged in inter-

state commerce by activity that includes, but is not

limited to, execution of interstate contracts relating

to services, management and interstate marketing,

acceptance of federal funds as a significant source of

income, regulation by federal statutes and the use of

goods, services, employees and management person-

nel in multiple states. This Agreement shall not ap-

ply to any dispute where the amount in controversy

is less than two hundred thousand ($200,000.00) do!-

lars.

In consideration of this binding Agreement, the

Facility and the Resident acknowledge that they are

agreeing to a mutual arbitration, regardless of which

party is making a claim; that the Facility agrees to

pay the fees of the arbitrators and up to $5,000.00 of

reasonable and appropriate attorney’s fees and costs

for the Resident in any claims against the Facility;

that the Resident shall have the right to choose the

location of any arbitration under this Agreement;

that the parties will mutually benefit from the

speedy and efficient resolution of disputes which ar-

bitration is expected to provide; and other good and

22a

valuable consideration, the receipt and sufficiency of

which is hereby acknowledged by all parties hereto.

Intending to be legally bound, the parties expressly

agree that this Agreement will be governed by the

Federal Arbitration Act, 9 U.S.C. §[§] 1-16 (“FAA”).

It is the express intent of the parties to have a bind-

ing arbitration agreement and the parties further

agree as follows:

The parties agree that they shall submit to bind-

ing arbitration all disputes against each other and

their representatives, affiliates, governing bodies,

agents and employees arising out of or in any way

related or connected to the Admission Agreement

and all matters related thereto including matters in-

volving the Resident’s stay and care provided at the

Facility, including but not limited to any disputes

concerning alleged personal injury to the Resident

caused by improper or inadequate care including al-

legations of medical malpractice; any disputes con-

cerning whether any statutory provisions relating to

the Resident’s rights under Illinois law were vio-

lated; any disputes relating to the payment or non-

payment for the Resident’s care and stay at the Fa-

cility; and any other dispute under state or Federal

law based on contract, tort, statute (including any

deceptive trade practices and consumer protection

statutes), warranty or any alleged breach, default,

negligence, wantonness, fraud, misrepresentation or

suppression of fact or inducement.

An arbitration hearing regarding any disputes

shall be held before a board of three arbitrators (se-

lected from a nationally recognized arbitration asso-

ciation), one chosen by each side in the dispute with

the third to be chosen by the two arbitrators previ-

23a

ously chosen. Such hearing and all other proceed-

ings relative to the arbitration of the claim(s) shall

be conducted in accordance with the applicable rules

of procedure governing the selected arbitrators that

do not conflict with the FAA. In rendering a decision

on the merits of the claim(s), the arbitrators shall

apply the substantive law of the State of Illinois.

Each party may be represented by counsel in

connection with all arbitration proceedings and each

party agrees to bear their own attorney fees and

costs, except as expressly provided for above. Any

other fees and costs associated with these arbitration

proceedings shall be determined by the panel of arbi-

trators. In the event that any party to this Agree-

ment refuses to go forward with arbitration, the

party compelling arbitration reserves the right to

proceed with arbitration, and the Resident and the

Facility specifically acknowledge the applicability of

the FAA allowing the aggrieved party to petition an

appropriate court for enforcement of the arbitration

agreement and to obtain a stay of any other proceed-

ing. Submission of any dispute under this Agree-

ment to arbitration may only be avoided as specifi-

cally allowed by the FAA. To the extent permitted

by applicable law, any party to this Agreement who

refuses to go forward with arbitration hereby ac-

knowledges that the arbitrator will go forward with

the arbitration hearing and render a binding decision

without the participation of the party opposing arbi-

tration or despite their absence at the arbitration

hearing.

It is the intention of the Facility and the Resident

that this Agreement shall inure to the benefit of and

bind the Facility, its parents, affiliates, and subsidi-

24a

ary companies, owners, officers, representatives, di-

rectors, medical directors, employees, successors, as-

signs, agents, attorneys and insurers; the Resident,

his/her successors, assigns, agents, attorneys, insur-

ers, heirs, trustees, and representatives, including

the personal representative or executor of his or her

estate; and the Legal Representative, his/her succes-

sors, assigns, agents, attorneys, insurers, heirs, trus-

tees, and representatives or executor of his or her es-

tate.

In the event that any portion of the Agreement

will be determined to be invalid or unenforceable, the

remainder of this Agreement will be deemed to con-

tinue to be binding upon the parties hereto in the

same manner as if the invalid or unenforceable pro-

vision were not a part of the Agreement.

ul. ACKNOWLEDGEMENTS

The execution of this Agreement is not a precon-

dition to receiving medical treatment or for admis-

sion to the Facility.

The Resident/Legal Representative acknowledges

that the Resident has been admitted to the Facility

to receive care and services as of ___5/20/05 ___..

The Resident and/or Legal Representative under-

stand(s) that he/she has the right to consult with an

attorney of his/her choice, prior to signing this

agreement, to receive explanations or clarification or

any of the terms of this Agreement.

The Resident and/or Legal Representative under-

stand(s), agree(s) to, and has received a copy of this

Agreement, and acknowledges that the terms have

been explained to him/her, or his/her designee, by a

25a

representative of the Facility, and that he/she has

had an opportunity to ask questions about this

Agreement.

Each party agrees to waive the right to a trial, be-

fore a judge or jury, for all disputes, including those

at law or in equity, subject to binding arbitration un-

der this Agreement.

The Resident and/or Legal Representative under-

stand(s) that this agreement may be rescinded by

giving written notice to the Facility within 30 days of

signature. If not rescinded within 30 days of signa-

ture, this Agreement shall remain in effect for all

claims arising out of the Resident’s stay at the Facil-

ity. This Agreement will continue to be valid for any

stay at this Facility by this Resident, even when the

Resident has been discharged and later readmitted.

If the act(s) underlying the dispute is committed

prior to the revocation date, this Agreement shall be

binding with respect to said act or acts.

* * - ¥ eS * * of: 4 *

AGREEMENT TO ARBITRATE HEALTH CARE

NEGLIGENCE CLAIMS

NOTICE TO PATIENT

YOU CANNOT BE REQUIRED TO SIGN THIS

AGREEMENT IN ORDER TO RECEIVE TREAT-

MENT. BY SIGNING THIS AGREEMENT, YOUR

RIGHT TO TRIAL BY A JURY OR A JUDGE INA

COURT WILL BE BARRED AS TO ANY DISPUTE

RELATING TO INJURIES THAT MAY RESULT

FROM NEGLIGENCE DURING YOUR TREAT-

MENT OR CARE, AND WILL BE REPLACED BY

AN ARBITRATION PROCEDURE.

26a

THIS AGREEMENT PROVIDES THAT ANY

CLAIMS WHICH MAY ARISE OUT OF YOUR

HEALTH CARE WILL BE SUBMITTED TO A

PANEL OF ARBITRATORS, RATHER THAN TO A

COURT FOR DETERMINATION. THIS AGREE-

MENT REQUIRES ALL PARTIES SIGNING IT TO

ABIDE BY THE DECISION OF THE ARBITRA-

TION PANEL.

Signature of Resident/Date

s/Sue Carter 5/20/05

Signature of Legal Representative/Date

df signing on behalf of Resident)

Signature of Legal Representative/Date

(if signing on his or her own behalf)

s/Vicki Johnson SSD 0/20/05

Signature of Facility Representative/Date

27a

APPENDIX F

[ARBITRATION AGREEMENT DATED JANUARY 18, 2006]

HEALTH CARE ARBITRATION AGREEMENT

PLEASE READ CAREFULLY

I. EXPLANATION

Under federal law two or more parties may agree

in writing for the settlement by arbitration of any

dispute arising between them. Arbitration is a

method for resolving disputes without involving the

courts. It is frequently faster and less expensive

than using the court system. In these arbitration

proceedings, the dispute is heard by private indi-

viduals, called arbitrators, who are selected by the

Resident and/or the Resident’s Legal Representative

and the Facility. The decision of the arbitrators

binds both parties and are [sic] final. By agreeing to

binding arbitration, both parties waive the right to

trial before a judge or jury.

Il. AGREEMENT

The following is an agreement to arbitrate any

dispute that might arise between Joyce Gott

(“Resident”) and/or = (“Legal Representa-

tive”) and Odin Healthcare (“Facility”) (“Facil-

ity” includes the particular facility where the Resi-

dent resides, its parents, affiliates, and subsidiary

companies, owners, officers, directors, medical direc-

tors, employees, successors, assigns, agents, attor-

neyls] and insurers). The parties expressly agree

and voluntarily enter into this binding Health Care

Arbitration Agreement (the “Agreement”). The Resi-

dent and the Facility have entered into an Admission

28a

Agreement and acknowledge that such Admission

Agreement constitutes the foundation of the rela-

tionship between them and all duties and obligations

arising between them. The Resident and the Facility

further acknowledge that said Admission Agreement

evidences a transaction involving interstate com-

merce. The Resident and the Facility understand

that the Admission Agreement involves interstate

commerce because the Facility is affiliated with

Mariner Health Care, Inc., which is a foreign corpo-

ration with a nationwide network of over 250 nurs-

ing facilities, all of which are fuily engaged in inter-

state commerce by activity that includes, but is not

limited to, execution of interstate contracts relating

to services, management and interstate marketing,

acceptance of federal funds as a significant source of

income, regulation by federal statutes and the use of

goods, services, employees and management person-

nel in multiple states. This Agreement shall not ap-

ply to any dispute where the amount in controversy

is less than two hundred thousand ($200,000.00) dol-

lars.

In consideration of this binding Agreement, the

Facility and the Resident acknowledge that they are

agreeing to a mutual arbitration, regardless of which

party is making a claim; that the Facility agrees to

pay the fees of the arbitrators and up to $5,000.00 of

reasonable and appropriate attorney’s fees and costs

for the Resident in any claims against the Facility;

that the Resident shali have the right to choose the

location of any arbitration under this Agreement;

that the parties will mutually benefit from the

speedy and efficient resolution of disputes which ar-

bitration is expected to provide; and other good and

29a

valuable consideration, the receipt and sufficiency of

which is hereby acknowledged by all parties hereto.

Intending to be legally bound, the parties expressly

agree that this Agreement will be governed by the

Federal Arbitration Act, 9 U.S.C. §[§] 1-16 (“FAA”).

It is the express intent of the parties to have a bind-

ing arbitration agreement and the parties further

agree as follows:

The parties agree that they shall submit to bind-

ing arbitration all disputes against cach other and

their representatives, affiliates, governing bodies,

agents and employees arising out of or in any way

related or connected to the Admission Agreement

and all matters related thereto including matters in-

volving the Resident’s stay and care provided at the

Facility, including but not limited to any disputes

concerning alleged personal injury to the Resident

caused by improper or inadequate care including al-

legations of medical malpractice; any disputes con-

cerning whether any statutory provisions relating to

the Resident’s rights under Illinois law were vio-

lated; any disputes relating to the payment or non-

payment for the Resident's care and stay at the Fa-

cility; and any other dispute under state or Federal

law based on contract, tort, statute (including any

deceptive trade practices and consumer protection

statutes), warranty or any alleged breach, default,

negligence, wantonness, fraud, misrepresentation or

suppression of fact or inducement.

An arbitration hearing regarding any disputes

shall be held before a board of three arbitrators (se-

lected from a nationally recognized arbitration asso-

ciation), one chosen by each side in the dispute with

the third to be chosen by the two arbitrators previ-

30a

‘ously chosen. Such hearing and all] other proceed-

ings relative to the arbitration of the claim(s) shall

be conducted in accordance with the applicable rules

of procedure governing the selected arbitrators that

do not conflict with the FAA. In rendering a decision

on the merits of the claim(s), the arbitrators shall

apply the substantive law of the State of Illinois.

Each party may be represented by counsel in

connection with all arbitration proceedings and each

party agrees to bear their own attorney fees and

costs, except as expressly provided for above. Any

other fees and costs associated with these arbitration

proceedings shall be determined by the panel of arbi-

trators. In the event that any party to this Agree-

ment refuses to go forward with arbitration, the

party compelling arbitration reserves the right to

proceed with arbitration, and the Resident and the

Facility specifically acknowledge the applicability of

the FAA allowing the aggrieved party to petition an

appropriate court for enforcement of the arbitration

agreement and to obtain a stay of any other proceed-

ing. Submission of any dispute under this Agree-

ment to arbitration may only be avoided as specifi-

cally allowed by the FAA. To the extent permitted

by applicable law, any party to this Agreement whe

refuses to go forward with arbitration hereby ac-

knowledges that the arbitrator will go forward with

the arbitration hearing and render a binding decision

without the participation of the party opposing arbi-

tration or despite their absence at the arbitration

hearing.

It is the intention of the Facility and the Resident

that this Agreement shall inure to the benefit of and

bind the Facility, its parents, affiliates, and subsidi-

sla

ary companies, owners, officers, representatives, di-

rectors, medical directors, employees, successors, as-

signs, agents, attorneys and insurers; the Resident,

his/her successors, assigns, agents, attorneys, insur-

ers, heirs, trustees, and representatives, including

the personal representative or executor of his or her

estate; and the Legal Representative, his/her succes-

sors, assigns, agents, attorneys, insurers, heirs, trus-

tees, and representatives or executor of his or her es-

tate.

In the event that any portion of the Agreement

will be determined to be invalid or unenforceable, the

remainder of this Agreement will be deemed to con-

tinue to be binding upon the parties hereto in the

same manner as if the invalid or unenforceable pro-

vision were not a part of the Agreement.

Il, ACKNOWLEDGEMENTS

The execution of this Agreement is not a precon-

dition to receiving medical treatment or for admis-

sion to the Facility.

The Resident/Legal Representative acknowledges

that the Resident has been admitted to the Facility

to receive care and services as of _ 1-12-06 __..

The Resident and/or Legal Representative under-

stand(s) that he/she has the right to consult with an

attorney of his/her choice, prior to signing this

agreement, to receive explanations or clarification or

any of the terms of this Agreement.

The Resident and/or Legal Representative under-

stand(s), agree(s) to, and has received a copy of this

Agreement, and acknowledges that the terms have

been explained to him/her, or his/her designee, by a

32a

representative of the Facility, and that he/she has

had an opportunity to ask questions about this

Agreement.

Each party agrees to waive the right to a trial, be-

fore a judge or jury, for all disputes, including those

at law or in equity, subject to binding arbitration un-

der this Agreement.

The Resident and/or Legal Representative under-

stand(s) that this agreement may be rescinded by

giving written notice to the Facility within 30 days of

signature. If not rescinded within 30 days of signa-

ture, this Agreement shal! remain in effect for all

claims arising out of the Resident’s stay at the Facil-

ity. This Agreement will continue to be valid for any

stay at this Facility by this Resident, even when the

Resident has been discharged and later readmitted.

If the act(s) underlying the dispute is committed

prior to the revocation date, this Agreement shall be

binding with respect to said act or acts.

F * ae * * *K * **

AGREEMENT TO ARBITRATE HEALTH CARE

NEGLIGENCE CLAIMS

NOTICE TO PATIENT

YOU CANNOT BE REQUIRED TO SIGN THIS

AGREEMENT IN ORDER TO RECEIVE TREAT-

MENT. BY SIGNING THIS AGREEMENT, YOUR

RIGHT TO TRIAL BY A JURY OR A JUDGE IN A

COURT WILL BE BARRED AS TO ANY DISPUTE

RELATING TO INJURIES THAT MAY RESULT

FROM NEGLIGENCE DURING YOUR TREAT-

MENT OR CARE, AND WILL BE REPLACED BY

AN ARBiTRATION PROCEDURE.

30a

THIS AGREEMENT PROVIDES THAT ANY

CLAIMS WHICH MAY ARISE OUT OF YOUR

HEALTH CARE WILL BE SUBMITTED TO A

PANEL OF ARBITRATORS, RATHER THAN TO A

COURT FOR DETERMINATION. THIS AGREE-

MENT REQUIRES ALL PARTIES SIGNING IT TO

ABIDE BY Th? DECISION OF THE ARBITRA-

TION PANEL.

s/Joyce Gott 1-18-06

Signature of Resident/Date

Signature of Legal Representative/Date

(if signing on behalf of Resident)

Signature of Legal Representative/Date

(if signing on his or her own behalf)

s/[illegible] 1-18-06

Signature of Facility Representative/Date

34a

APPENDIX G

IN THE CIRCUIT COURT FOR THE

FOURTH JUDICIAL CIRCUIT

MARION COUNTY, ILLINOIS

SUE CARTER, Special

FILED

CLERK OF THE

CIRCUIT COURT

Administrator, In Re The

ESTATE OF JOYCE

GOTT, Deceased,

Plaintiff, NOV 22 2006

MARION COUNTY

SSC ODIN OPERATING SALEM ILLINOIS

COMPANY, LLC d/b/a

ODIN HEALTHCARE

CENTER,

)

VS. ) Ronda Yates

)

) NO. _06-L-75

)

Defendant.

COMPLAINT

COUNT I

(STATUTORY ACTION-

NURSING HOME CARE ACT)

Comes now plaintiff, SUE CARTER, Special Ad-

ministrator of the ESTATE OF JOYCE GOTT, De-

ceased, by and through her attorneys, Staci M.

Yandle and The Rex Carr Law Firm, and for her

cause of action against defendant, SSC ODIN OP-

ERATING COMPANY LLC d/b/a ODIN HEALTH-

CARE CENTER, states as follows:

35a

1. SUE CARTER is the duly-appuinted Special

Administrator of the Estate of Joyce Gott, who died

January 31, 2006. She has been appointed Special

Administrator by the Circuit Court for the Fourth

Judicial Circuit, Marion County, Illinois.

2. At all times relevant herein, JOYCE GOTT,

Deceased, was a resident of ODIN HEALTHCARE

CENTER, Odin, Marion County, Illinois.

3. At all times relevant herein, defendant, SSC

ODIN OPERATING COMPANY LLC d/b/a ODIN

HEALTHCARE CENTER, was a limited liability

company which operated a long-term nursing care

facility known as ODIN HEALTHCARE CENTER,

and which held itself out to the public as a nursing

and rehabilitation center which provides nursing

care for aging persons.

4. At all times relevant herein, there was in full

force and effect, a statute known as “The Nursing

Home Care Act”, as amended (The “Act”), 210 ILCS

45/1-101 et. [sic] seq. and the facility operated by

SSC ODIN OPERATING COMPANY LLC was a “fa-

cility” as defined by 45/1-113 of the Act and was sub-

ject to the requirements of the Act and the regula-

tions of the Illinois Department of Public Health

promulgated pursuant to the Act.

5. At all times relevant herein, the facility, re-

ceived payment from Medicare to provide JOYCE

GOTT nursing home care, treatment and related

services, and was subject to the requirements of 42

USC Section 1396r (1990) et. [sic] seq., as amended

by the Omnibus Budget Reconciliation Act of 1987

(““OBRA”) and Volume 42, Code of Federal Regula-

tions, Part 483 setting forth Medicare and Medicaid

36a

requirements for long-term facilities (“OBRA Regula-

tions”), as effective on October 1, 1990.

6. At all times relevant herein, the facility oper-

ated by defendant was a “nursing facility” as defined

by 42 USC, Section 1396r.

7. Throughout the time JOYCE GOTT was a

resident of the facility, defendant was the licensee of

the facility.

8. The defendant, through its agents, servants

and employees, had a duty not to violate the rights of

any resident of the facility including the duty not to

neglect any resident as provided by 210 ILCS 45/2-

107 and 210 ILCS 45/1-117.

9. Notwithstanding the aforementioned duty, the

defendant, by and through its agents, servants and

employees and during the period between January

12, 2006 through January 31, 2006, violated the Act

as follows:

a. In violation of 77 Ill. Admin. Code, Ch. I,

Section 300.1210(a), failed to provide ade-

quate and properly supervised care as

needed by JOYCE GOTT in that it failed to

conduct INR testing on JOYCE GOTT who

was receiving anti-coagulant therapy;

In violation of Section 483.75(b) of the

OBRA Regulations, failed to operate its fa-

cility and provide services in compliance

with all applicable federal, state, local

laws, regulations and codes and within ac-

cepted professional standards and princi-

ples that apply to professionals providing

serves in such facility.

37a

10. As a direct and proximate result of one or

more of defendant’s statutory violations, JOYCE

GOTT sustained injuries including, but not limited

to gastrointestinal bleeding, anemia and respiratory

failure.

11. As a further direct and proximate result of

one or more of defendant’s statutory violations,

JOYCE GOTT suffered pain and suffering, emotional

distress and mental anguish between January 12,

2006 through January 31, 2006.

12. This is a survivorship action brought pursu-

ant to 755 ILCS 5/27-6 for JOYCE GOTT’s personal

injuries sustained prior to her death as a result of

defendant’s statutory violations.

WHEREFORE, plaintiff, SUE CARTER, Special

Administrator of the Estate of JOYCE GOTT, de-

ceased, demands judgment against defendant, SSC

ODIN OPERATING COMPANY, LLC d/b/a ODIN

HEALTHCARE CENTER, in an amount in excess of

$50,000.00, attorneys fees and costs as provided for

by statute.

PLAINTIFF DEMANDS A TRIAL BY JURY.

COUNT II

(WRONGFUL DEATH)

Comes now plaintiff, SUE CARTER, Special Ad-

ministrator of the Estate of JOYCE GOTT, Deceased,

by and through her attorneys, Staci M. Yandle and

The Rex Carr Law Firm, and for her cause of action

against defendant, SSC ODIN OPERATING COM-

PANY, LLC d/b/a ODIN HEALTHCARE CENTER,

states as follows:

38a

1-3. Plaintiff repeats and re-allege |{sic| the alle-

gations contained in Paragraphs 1 though 3 of Count

I as Paragraphs 1 - 3 of Count I.

4. In providing nursing home services to JOYCE

GOTT, defendant, through its agents, servants and

employees, had a duty to exercise ordinary care in

the provision of care and treatment to JOYCE GOTT.

5. Notwithstanding the aforementioned duty, de-

fendant, by and through its agents, servants and

employees and during the period January 12, 2006

through January 31, 2006, was guilty of one or more

of the following negligent acts or omissions:

a. Negligently and carelessly failed to provide

adequate and properly supervised care as

needed by JOYCE GOTT in that it failed to

conduct INR testing on JOYCE GOTT who

was on anti-coagulant therapy;

Negligently and carelessly failed to operate

its facility and provide services in compli-

ance with all applicable federal, state, local

laws, regulations and codes and within ac-

cepted professional standards and princi-

ples that apply to professionals providing

services in such facility.

6. As a direct and proximate result of one or

more of the negligent acts or omissions of the aefen-

dant, JOYCE GOTT sustained injuries including, but

not limited to, gastrointestinal bleeding, anemia and

respiratory failure, all of which caused or contmbuted

to cause her death on January 31, 2006.

7. As a further direct and proximate result of the

negligence of this defendant, the heirs of JOYCE

39a

GOTT have been deprived of her companionship and

society.

WHEREFORE, plaintiff, SUE CARTER, Special

Administrator of the Estate of JOYCE GOTT, De-

ceased, demands judgment against defendant, SSC

ODIN OPERATING COMPANY, LLC d/b/a ODIN

HEALTHCARE CENTER in an amount in excess of

$50,000.00, plus costs of this suit.

PLAINTIFF DEMANDS A TRIAL BY JURY.

THE REX CARR LAW FIRM, LLC

BY: s/Staci M. Yandle |

STACI M. YANDLE #06196436

412 Missouri Avenue

East St. Louis, [L 62201

(618) 274-0434

(618) 274-8369/F acsimile

ATTORNEYS FOR PLAINTIFF

CLERK TO ISSUE SUMMONS ACCORDING TO

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