Jun 8 2020

Joe Desmond Obtains Back to Back Wins in the First Circuit Court of Appeals

Morrison Mahoney Partner Joe Desmond obtains two consecutive wins in the First Circuit Court of Appeals in the same month. 

In the first case, the central issue in the litigation in various courts was whether the beneficiaries of an estate are bound to arbitrate their claims under the wrongful death statute in light of the agreement to arbitrate between our client’s nursing home and the decedent. The plaintiff’s medical malpractice case was filed in the state court, and we filed a separate action in the federal district under the Federal Arbitration Act, 9 U.S.C.A. § 4 , seeking to enjoin the state court action pursuant to 28 U.S.C. § 2283and compel arbitration. After a two day evidentiary hearing, the district court ordered the case to arbitration, and the plaintiff appealed. After oral argument in the First Circuit, the Court certified questions of state law to the Supreme Judicial Court, namely whether the claims of the beneficiaries under the wrongful death statute were derivative of those of the decedent’s claims, thus binding the beneficiaries to arbitrate their claims with the claims of the decedent. After the SJC decided those issues in our client’s favor and certified its answers to the First Circuit, the plaintiff raised additional challenges to the application of that precedential state law, arguing that the class of plaintiffs bound by the decision (wrongful death beneficiaries) would be unfairly prejudiced in prosecuting claims under the Equal Protection Clause, and that strict scrutiny should apply to the SJC’s classification. The First Circuit rejected the argument, and affirmed the district court’s order compelling arbitration.

In the second case, the United States District Court denied our client’s motion to compel arbitration, finding that the initial admissions contract for assisted living services that contained an arbitration provision had been terminated, and the obligation to arbitrate claims perished upon its termination. On appeal, we argued that the contract delegated the threshold issues of arbitrability to the arbitrator, precluding the district court from making that determination. We further argued that the arbitration provision survived the termination of the contract. While the First Circuit found that the delegation clause failed to establish, by clear and unmistakable evidence that the parties intended to delegate gateway issues of enforceability of the arbitration clause to the arbitrator, the arbitration provision survives the termination of the contract in the absence of a legally sufficient challenge to the arbitration provision itself. The Court further rejected the Plaintiff’s claims that the arbitration agreement was both procedurally and substantively unconscionable. On this issue, the First Circuit rejected the claim that the fee-splitting requirements of the arbitration proceeding was insufficient to establish substantive unconscionability in the light of the absence of evidence in the record that established that the fee splitting would have prevented the plaintiff from being able to litigate her claims.

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