Interaction of Federal and State Law - Part 1 - Chapter 3 - AAA Yearbook on Arbitration and the Law - 24th Edition
BEN H. SHEPPARD, JR. is a Distinguished Lecturer and Director of the A.A. White Dispute Resolution Center at the University of Houston Law Center. From 1969 through 2005 he practiced at Vinson & Elkins L.L.P. where he was a Partner and Co-Chair of the firm's international dispute resolution practice. He was chair of AAA/ICDR task force that promulgated the 2006 amendment to the ICDR International Arbitration Rules that established a pre-arbitral emergency arbitrator procedure. He was the author of the report and recommendation to the ABA House of Delegates in support of the 2004 Revision to the AAA/ABA Code of Ethics for Arbitrators in Commercial Disputes. He chaired one of the two working groups that promulgated the CPR Protocol on Disclosure of Documents and Presentation of Witnesses in Commercial Arbitration. He is a past chair of the Disputes Division of the ABA Section of International Law and for five years served as editor-in-chief of The International Arbitration News. He is a member of the American Law Institute and a Fellow of the College of Commercial Arbitrators.
Originally from: AAA Yearbook on Arbitration and the Law - 24th Edition
CHAPTER 3
INTERACTION OF FEDERAL AND STATE LAW
3.01 Commerce Clause Preemption of State Law by the FAA
AT&T Mobility LLC v. Concepcion, 131 S.Ct 1740 (2011)
The FAA preempts California’s judicial rule prohibiting as unconscionable waivers of class arbitration in consumer cases.
Citations and References
See § 2.06, supra for full discussion of the decision.
Preston v. Ferrer, 128 S. Ct. 978 (2008)
When parties agree to arbitrate all questions arising under a contract, the FAA supersedes state laws granting primary jurisdiction in another forum, whether judicial or administrative.
Ferrer, who appears on television as “Judge Alex” contracted with Preston, an entertainment industry attorney, for personal management services. The parties’ contract mandated arbitration for “any dispute . . . relating to the [contract’s] terms . . . in accordance with the [AAA] rules.” Preston invoked the arbitration clause in order to recover fees allegedly owed under the contract.
Ferrer then petitioned the California Labor Commissioner for a determination that Preston had illegally acted as an unlicensed talent agent in violation of California’s Talent Agencies Act (TAA), thereby invalidating the parties’ contract. After a hearing, the Labor Commissioner denied Ferrer’s motion to stay arbitration, on the ground that the Commissioner lacked authority to order such relief. Ferrer then filed suit in state court, seeking to enjoin arbitration. The state court denied Preston’s motion to compel arbitration and enjoined Preston from proceeding to arbitration “unless and until the Labor Commissioner determines that . . . she is without jurisdiction” over the contract dispute.
CHAPTER 3 INTERACTION OF FEDERAL AND STATE LAW
3.01 Commerce Clause Preemption of State Law by the FAA
- AT&T Mobility LLC v. Concepcion, 131 S.Ct 1740 (2011)
- Preston v. Ferrer, 128 S. Ct. 978 (2008)
- Vis v American Family Life Assur Co of Columbus, 778 F.Supp.2d 971 (N.D. Iowa 2011)
- Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84 (Tex. 2011)
- Gruma Cor. v. Morrison, 2010 Ark. 151, ---S.W. 3d--- (Ark. 2010)
- Aramark Uniform & Career Apparel v. Hunan, Inc., 757 N.W.2d 205 (N.M. 2008)
- Moscatiello v. Hilliard, 939 A.2d 325 (Pa. 2007)
- Satomi Owners Ass'n v. Satomi, L.L.C., 225 P.3d 213 (Wash. 2009) (en banc)
- The Shakespeare Foundation, Inc. v. Jackson, 61 So.3d 1194 (Fla. App. 1 Dist., 2011)
3.02 The Role of State Arbitration Law
- Ario v. Underwriting Members of Syndicate 53 at Lloyds for the 1998 Year of Account, 618 F.3d 277 (3d Cir. 2010)
- Drummond v. State Farm Mut. Auto Ins. Co., 785 N.W.2d 829 (Neb. 2010)
3.03 Federal Court Jurisdiction and the FAA
- Vaden v. Discover Bank, 129 S. Ct. 1262 (2009)
- Countrywide Home Loans v. Mortgage Guaranty Insurance Corp., 642 F.3d 849 (9th Cir. 2011)
- Community State Bank v Strong, 651 F.3d 1241 (11th Cir. 2011)
- Northport Health Serv. v. Rutherford, 605 F.3d 483 (8th Cir. 2010)
- Geographic Expeditions, Inc. v. Estate of Lhotka ex rel. Lhotka, 599 F.3d 1102 (9th Cir. 2010)
- Metcalf v. Merrill Lynch Pierce Finner Smith Inc., 768 F.Supp.2d 762 (M.D. Pa. 2011)
3.04 Choice of Law and Choice of Forum
- Pokorny v. Quixtar, 601 F.3d 987 (9th Cir. 2010)
- Northrop Grumman Ship Sys., Inc. v. Ministry of Defense of the Republic of Venezuela, 575 F.3d 491 (5th Cir. 2009)
- Ruiz v. Carnival Corp., 754 F.Supp.2d 1328 (S.D. Fla. 2010)
- LRN Holding, Inc. v. Windlake Capital Advisors, LLC, 949 N.E. 264 (Ill.App.3d 2011)