New Obstacles to Arbitration

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It is common practice in long term care and other health care facilities for a resident or a resident’s family member to sign an arbitration agreement upon admission. Such agreements require the resident to arbitrate any dispute that may arise out of his or her stay or care received at the facility. Arbitration agreements have proven to be a cost-effective and efficient method for resolving disputes.

Arbitration agreements have long been favored under Washington state law. However, in May 2010, the Washington Court of Appeals in the Woodall case limited enforcement to claims asserted by the resident and/or statutory beneficiaries who actually signed the agreement. Prior to this, courts routinely enforced arbitration agreements in total by virtue of the resident’s signature, even as to claims asserted by non-signatory heirs. As a result, Washington courts are now splitting up, or bifurcating, claims asserted in lawsuits against health care providers.

In Woodall, nursing home resident Henry Woodall, 86, voluntarily signed a “resident and facility arbitration agreement,” in which he agreed to submit to binding arbitration in the event of a dispute. The arbitration agreement bound “all persons,” including “any spouse, children or heirs” of Mr. Woodall. After Mr. Woodall died in July 2007, his son sued the nursing home, bringing survivorship claims on behalf of his father and wrongful death claims on behalf of Mr. Woodall’s heirs. When the nursing home requested that the trial court compel Mr. Woodall’s son to participate in arbitration pursuant to the clear language of the arbitration agreement, the court denied the request, in part.

The court upheld the arbitration agreement, holding that Mr. Woodall’s survivorship claims, meaning those that he could assert on his own behalf had he survived, must be arbitrated because he signed the arbitration agreement. However, the wrongful death claims asserted by his surviving heirs who did not sign the agreement were not subject to arbitration.

The Court of Appeals upheld the trial court’s ruling, beginning with this basic principle: “[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” With that principle in mind, the court held that: (1) because the survival claim was essentially Mr. Woodall’s own claim, it was covered by Mr. Woodall’s arbitration agreement with the nursing home; and (2) the wrongful death was a separate cause of action that belonged exclusively to Mr. Woodall’s heirs. Since Mr. Woodall’s heirs were not parties to the arbitration agreement, the court concluded that the wrongful death claims were not subject to binding arbitration.

The holding in Woodall reflects that arbitration agreements are indeed enforceable. However, the Woodall ruling has resulted in a cumbersome outcome. The claims of the resident and statutory heirs who signed the agreement are being tried in private arbitration, while the claims of the heirs who did not sign the agreement will be tried separately in the court system. Despite the court’s acknowledgment that public policy favors arbitration and resolution of claims in one forum, it determined that such a consideration does not overcome the policy that one who is not a party to an agreement to arbitrate cannot generally be required to arbitrate.

Providers must be aware that the traditional outcome of these agreements—arbitrating the claims of all plaintiffs in a wrongful death or personal injury lawsuit at one time—is not achievable at this time absent all potential heirs signing an arbitration agreement with the health care provider. While this process is not perfect, the advantages to arbitrating claims against health care providers still outweigh these new obstacles.

 

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Legal Briefs: Navigating Environmental Regulations

Legal Briefs: Navigating Environmental Regulations

Tips for staying in compliance.
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Our state’s ever-changing regulatory environment makes it hard to stay on the right side of the law. Here are some simple steps to help keep your business in compliance:
 
1. Ignorance Is Not Bliss. Take time to research which environmental regulations apply to your operations. Consider all relevant media — air, water and land. For example:
 
• Does your facility emit air pollutants? Consult with the local air pollution control agency.
• Are you planning construction near a shoreline or wetland? Consult with the Washington Department of Ecology’s Shorelands and Environmental Assistance Program.
• Do your operations require a stormwater permit? Consult with the Washington Department of Ecology’s Water Quality Program. 
 
As a starting point, review the Regulatory Handbook prepared by the Governor’s Office for Regulatory Innovation and Assistance (oria.wa.gov). When in doubt, it is best to consult experienced environmental counsel to determine which regulations apply. Once you have this information, you can develop the appropriate compliance programs.
 
2. Uncover Your Property’s History. Under the Model Toxics Control Act, RCW 70.105D, a business that owned or operated a facility where hazardous substances have come to be located may be liable for cleaning up the property. To manage this risk, it is essential to conduct due diligence before entering into a lease or buying a commercial or industrial property. A reputable consulting firm can assist. If any notable conditions arise, a subsurface investigation may be warranted. Frequently, businesses negotiate environmental indemnity agreements to address this kind of liability, but it is important to do so before you lease or buy, not after.
 
3. Identify Your Waste Streams. Every business generates waste, whether from an office building or a manufacturing facility. Be sure to review your local rules, since some jurisdictions mandate recycling. It is also critical to determine whether a waste is “dangerous” under WAC 173-303. This is more common than you think. Most businesses generate some type of dangerous waste, including adhesives, aerosol cans, paints, solvents, fertilizers and cleaners. You can start by taking a look at the materials you use and the wastes that remain. If you have products labeled “DANGER,” “FLAMMABLE,” “WARNING” or “POISON,” they may become a dangerous waste if discarded or mixed with other wastes. Electronic waste, such as batteries, mercury-containing equipment and light bulbs, are also regulated. If used oil, batteries and other wastes are recycled, they may be partially or fully exempt from the regulations.
 
4. Recordkeeping Is Essential. You should live by the mantra: “If you don’t write it down, it never happened.” The key to compliance is meticulous recordkeeping. Keeping records up to date, organized and readily available for an inspector is critical. Create easy-to-use logs to track internal inspections, monitoring programs and the use of best management practices.  
 
5. Violation Issued. Now What? If you get a notice of violation from an agency or a citizens’ suit notice, immediately take note of the deadlines to respond and any procedures for contesting or appeal. Contact a lawyer to discuss your rights, whether there may be other parties at fault and settlement options. Once you have established the deadlines and determined the best course of action, evaluate what circumstances led to the violation. Plan a debriefing session with your employees to discuss how to prevent future violations. Establish what changes can be implemented to ensure compliance, which may involve enhanced training requirements or the development of an internal auditing program. Use this as a learning opportunity for your business.
MICHAEL A. NESTEROFF is a member of Lane Powell’s Construction and Environmental Practice Group and has handled numerous environmental claims and litigations. Reach him at 206.223.6242 or nesteroffm@lanepowell.com, or follow him on Twitter @MikeNesteroff. 
JULIE S. NICOLL is a member of Lane Powell’s Construction and Environmental Practice Group and has extensive experience advising clients on environmental compliance matters. Reach her at 206.223.7118 or nicollj@lanepowell.com.