Texas Supreme Court Hears Oral Argument Over Possible FAA Preemption in Nursing Home Case

On Tuesday, the Supreme Court of Texas heard oral argument in Fredricksburg Care Co., L.P. v. Perez, No. 13-0573. In the case, a Texas nursing home sought appellate review after the Fourth Court of Appeals in San Antonio denied its motion to compel arbitration in a wrongful death lawsuit based on the requirements set forth in the Texas Medical Liability Act (“TMLA”). The issue presented in the case is:

The Federal Arbitration Act preempts state laws which restrict arbitration agreements. The McCarran-Ferguson Act protects state insurance regulations from unintended federal law preemption. Is Texas Civil Practice and Remedies Code, Section 74.451—which restricts arbitration between healthcare providers and patients—an insurance regulation?

According to the nursing home, the dispute was subject to arbitration under the Federal Arbitration Act despite that an arbitral agreement the company entered into with the decedent did not meet the requirements of the TMLA. The deceased woman’s family claimed that the Texas law is an insurance statute that is protected from preemption by the McCarran-Ferguson Act.

Oral argument in the case may be viewed online through the TexasBar CLE.

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