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NEWS | Legal Matters Ask The Legal Expert Federal Arbitration Act loses John Durso, Esq. Ungaretti & Harris LLP strength under federal ruling By Brett Bakshis tration Act should overrule any What will be the impact of the By refusing to review an state law governing arbitration federal “Red Flags Rules” on Illinois appellate court rul- agreements, especially in light long-term care facilities? ing, the U.S. Supreme Court of the fact that the NHCA has tacitly agreed that a state applies to nursing home con- To combat identity theft, the Federal law nullifying nursing home tracts in a broad and more Trade Commission has implemented arbitration agreements super- generalized way, rather than the “Red Flags Rules.” These rules sedes the Federal Arbitration speciﬁcally singling out arbitra- Photo: iStockphoto require certain covered entities to Act, which favors arbitration tion agreements. The Appellate create a program to defend against agreements. Court of Illinois, however, shot potential identity theft. In the case of SSC Odin down that argument in April The Red Flags Rules apply to a credi- Operating Co. v. Carter, Sue The Supreme Court let stand a 2008, saying instead that it is tor’s covered accounts. The FTC uses Carter originally sued SSC state law that nulliﬁes arbitra- because the NHCA applies so tion agreements. a broad deﬁnition of creditor, which Odin Operating Co. over the generally to all nursing home includes any party that allows the right alleged wrongful death of contracts that it can be applied to purchase services and defer pay- Joyce Gott, a former resident provisions apply to all con- in this case. ment for those services. All long-term of Odin Healthcare Center tracts involving nursing home The Illinois Supreme Court care facilities that use deferred pay- in Odin, IL. According to a residents, not just arbitration refused to review the decision ment or billing systems are considered state appellate court ruling, clauses. Therefore, they can in October of last year. With creditors. Covered accounts include two provisions of the Illinois be applied to the arbitration its June 1 rejection of the case, any account either designed to permit Nursing Home Care Act pro- agreement signed by Gott, the U.S. Supreme Court has let multiple payments or where there is a hibit the facility from enforc- the Appellate Court of Illinois the lower court’s ruling stand, reasonably foreseeable risk of identity ing an arbitration agreement ruled, according to a Bureau thereby setting a precedent theft to the customer. Any resident signed by Gott at the time of of National Affairs report. under which other states’ laws billing account will constitute a covered her admission.
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