GGNSC Chestnut Hill LLC v. Schrader, No. 18-1779 (1st Cir. 2020)

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In this case concerning arbitration agreements, nursing homes, and wrongful death claims under Massachusetts law, the First Circuit affirmed the judgment of the district court compelling arbitration after first certifying two questions to the Massachusetts Supreme Judicial Court (SJC), holding that the SJC's decision compelled the First Circuit to affirmed the judgment compelling arbitration.

The personal representative of a deceased former nursing home resident brought a state wrongful death action against a set of organizations that oversaw the nursing home (collectively, nursing home). The nursing home sued to compel arbitration. The federal court compelled arbitration. On appeal, the personal representative argued that she was not bound by the decedent’s agreement to arbitrate with the nursing home because her wrongful death right of recovery was independent of the decedent’s wrongful death claim. The First Circuit certified questions of law to the SJC. After the SJC answered that claims of statutory beneficiaries under the state's wrongful death statute are derivative of the decedent's own cause of action, the First Circuit affirmed the district court's judgment, holding that the SJC's decision required this Court to affirm the judgment compelling arbitration.

This opinion or order relates to an opinion or order originally issued on February 26, 2019.

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United States Court of Appeals For the First Circuit No. 18-1779 GGNSC ADMINISTRATIVE SERVICES, LLC; GOLDEN GATE NATIONAL SENIOR CARE, LLC; GGNSC HOLDINGS, LLC; GGNSC CHESTNUT HILL, LLC, d/b/a Golden Living Center - Heathwood, Plaintiffs, Appellees, v. JACKALYN M. SCHRADER, as the personal representative of the estate of Emma J. Schrader, Defendant, Appellant. APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Douglas P. Woodlock, U.S. District Judge] Before Howard, Chief Judge, Lynch and Lipez, Circuit Judges. John Vail, with whom John Vail Law, PLLC, Daniel T. Landry, David J. Hoey, and Law Offices of David J. Hoey, P.C. were on brief, for appellant. William Alvarado Rivera, Meryl D. Grenadier, and Kelly R. Bagby on brief for AARP and AARP Foundation, amici curiae. Robert E. Curtis, Jr. on brief for Massachusetts Advocates for Nursing Home Reform, amicus curiae. Joseph M. Desmond, with whom Justin L. Amos and Morrison Mahoney LLP were on brief, for appellees. May 11, 2020 LYNCH, Circuit Judge. On February 26, 2019, we certified two questions in this case to the Massachusetts Supreme Judicial Court ("SJC"). GGNSC Admin. Servs., LLC v. Schrader, 917 F.3d 20, 25 (1st Cir. 2019). opinion. On February 27, 2020, the SJC issued its The SJC wrote: We conclude that claims of statutory beneficiaries under our wrongful death statute, G. L. c. 229, § 2, are derivative of the decedent's own cause of action, and that therefore the decedent's arbitration agreement binds those beneficiaries. We also conclude that, in the circumstances of this case, the arbitration agreement binds the executor or administrator of the decedent's estate to arbitrate the wrongful death action on behalf of the decedent's statutory beneficiaries. GGNSC Admin. Servs., LLC v. Schrader, 140 N.E.3d 397, 407 (Mass. 2020). We then ordered the parties to file supplemental briefs addressing the resolution of this appeal in light of the SJC's opinion. Appellees argue that the SJC's decision requires us to affirm the district court's judgment compelling arbitration. They argue that the SJC's decision "resolves the previously unsettled state law questions presented to it for certification" and that "this Court must now accept and apply the state law as determined." Appellant disagrees. She makes several assertions, all of which are without merit. - 3 - Appellant first argues that the SJC's decision rests on a "patent misreading" of the Massachusetts wrongful death statute. She urges that this court is "not obliged to accept an interpretation based on clear error in reading -- regardless of the source." But a federal court is "duty-bound to accept controlling state law" as set forth by a state's highest court, and, in this case, "it is incumbent upon us to accept the clear statement of Massachusetts law articulated by the SJC." v. Phoenix Ins. Co., 843 F.3d 37, 47 (1st Cir. 2016). argument is wrong that this court may now Sanders Appellant's reject the SJC's interpretation of Massachusetts law. Appellant describes her next argument as "that the state court's incorrect interpretation of the statute violates the Federal Arbitration Act." But, despite this passing reference to the Act Federal Arbitration argument based on the FAA. ("FAA"), appellant develops no Her brief does not cite the FAA or federal cases construing the FAA. "[I]ssues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived." United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990). Finally, appellant asserts that beneficiaries of wrongful death claims in cases where decedents agreed to arbitrate will now be unfairly prejudiced in violation of the Equal Protection Clause. Although she argues that strict scrutiny should - 4 - apply to the SJC's classification, whatsoever for this proposition. she cites no authority This purported equal protection claim is also waived for lack of developed argument. See id. Even if not waived, it is meritless. "Under legislative traditional classification classification itself is governmental interest." 528, 533 (1973). beneficiaries under derivative the therefore equal of the beneficiaries." protection must be rationally analysis, sustained, related to if a a the legitimate U.S. Dep't of Agric. v. Moreno, 413 U.S. The SJC our held wrongful decedent's decedent's own that "claims death cause arbitration of statute of action, agreement statutory . . . are and that binds those GGNSC Admin. Servs., LLC, 140 N.E.3d at 407. As the SJC observed, "the decedent alone had the right to decide whether the beneficiaries must arbitrate those claims." 406. Id. at This fulfills "[t]he Legislature['s] . . . inten[t that] wrongful death rights . . . remain tied to the decedent's action." Id. at 404. Allowing decedents to agree to arbitration of their beneficiaries' wrongful death claims advances that government interest, as well as Massachusetts's "strong public policy in favor of arbitration in commercial disputes." Id. at 406. It does not infringe beneficiaries' equal protection rights. The judgment arbitration is affirmed. of the district No costs are awarded. - 5 - court compelling

Primary Holding

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