Jackson Walker Wins Appellate Victory for Client in Healthcare Arbitration Case

February 3, 2015 | Client Results

Jackson Walker represented The Villas of Mount Pleasant in the defense of healthcare liability claims asserted on behalf of a former patient of the nursing facility. As part of the admission process the patient’s representative signed an admission agreement containing an arbitration clause requiring the parties to arbitrate any controversy arising from the services provided by The Villas.

Under Section 74.451 of the Texas Civil Practice and Remedies Code, in order to be enforceable the arbitration agreement must contain a conspicuously placed, written notice stating that the agreement is invalid unless it is also signed by an attorney chosen by and representing the patient. The admission agreement contained no such notice and was not signed by an attorney acting on the patient’s behalf. The trial court found that the arbitration agreement was not enforceable and denied The Villas’ motion to compel arbitration.

On appeal, the Sixth District Court of Appeals in Texarkana reversed the trial court’s denial of The Villas’ motion to compel arbitration determining that the Federal Arbitration Act, which does not impose a requirement for an attorney signature in an agreement to arbitrate, preempts state law in this case because the underlying transaction and services provided to the patient constitute a transaction involving interstate commerce. The Texarkana court’s opinion conflicts with a recent decision from the Fourth District Court of Appeals in San Antonio, which held that the Federal Arbitration Act was reverse-preempted by the McCarran-Ferguson Act on grounds that the anti-arbitration statute was a law enacted for the purpose of regulating the business of insurance. The Texas Supreme Court has granted review on the San Antonio court’s decision and is expected to issue a ruling later this year.

Jackson Walker attorney Jorge Padilla presented oral arguments before the trial court on behalf of The Villas and also successfully represented the client on appeal along with Breck Harrison and Al Kainz. The favorable result in this case demonstrates the strength of Jackson Walker’s Healthcare Litigation and Appellate practice groups, which have significant experience representing healthcare providers and practitioners in a broad range of healthcare litigation matters.