preemption

In Kindred Nursing Centers v. Clark the Supreme Court held 7-1 that an arbitration agreement entered into by a power of attorney may still be valid even if the power of attorney doesn’t specifically say the representative may enter into arbitration agreements.

Beverly Wellner and Janis Clark moved their husband and mother, respectively, into a nursing home using their powers of attorney. Both wanted to sue the nursing home in court after their relative died. But both had signed contracts stating that any claims would be resolved through arbitration.

The Kentucky Supreme Court concluded that Wellner’s power of attorney wasn’t broad enough to allow her to enter into an arbitration agreement but Clark’s was. Regardless, the court held that both arbitration agreements were invalid because “a power of attorney could not entitle a representative to enter into an arbitration agreement without specifically saying so.” According to the Kentucky Supreme Court, this is because the right to a jury trial under the Kentucky Constitution is the only right declared “sacred” and “inviolate.”

In Coventry Health Care of Missouri v. Nevils the State and Local Legal Center (SLLC) asked the Supreme Court in its amicus brief to rule that Chevron deference does not apply when an agency is construing the scope of a statute’s preemption provision, absent Congress’s assent. The Court didn’t rule on (or even discuss) this issue in its brief, unanimous opinion.

The Court held that the Federal Employees Health Benefits Act (FEHBA) preemption clause overrides state laws prohibiting subrogation and reimbursement and that the preemption clause is consistent with the Supremacy Clause.    

The Supreme Court’s 2016-2017 docket is now set. The Court is still down a Justice but has accepted as many cases as usual (about 75). In theory all the cases discussed below will be decided by June 30, 2017. The Court may decide to rehear tied (4-4) cases next term, when a new Justice will presumably join the bench.

This articles covers cases of interest to the states which the Court agreed to hear this term accepted after September 15, 2016. Here is a summary of cases of interest to the states which the Court agreed to hear before September 15, 2016.

State and local governments would not be disappointed if the Supreme Court overturned Chevron v. NRDC (1984). While overturning Chevron isn’t on the table in Coventry Health Care of Missouri v. Nevils, limiting it is. The State and Local Legal Center (SLLC) asked the Court in its amicus brief to rule that Chevron deference does not apply when an agency is construing the scope of a statute’s preemption provision, absent Congress’s assent.   

In Chevron v. NRDC the Supreme Court held that courts should defer to reasonable agency interpretations of ambiguous statutes. States and local governments generally prefer that courts not defer to federal agency regulations because this deference gives federal agencies a lot of power. 

Every time a federal agency thinks the scope of a preemption clause in federal law is too narrow may it just write a regulation expanding it? That is the heart of the matter in Coventry Health Care of Missouri v. Nevils.

The question of most interest to state and local governments in this case, more technically, is whether Chevron deference applies to an agency’s regulation construing the scope of a statute’s express-preemption provision.

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