Preston v. Ferrer, 552 U.S. 346 (2008)
Primary Holding
The Federal Arbitration Act (FAA) supersedes state laws that require certain disputes to be resolved in a judicial or administrative forum, allowing parties who agree to arbitrate all questions arising under a contract to have those disputes resolved by an arbitrator instead.
In the case of Preston v. Ferrer, the U.S. Supreme Court decided that when two parties agree to resolve their disputes through arbitration, state laws that require those disputes to go to court or an administrative agency cannot override that agreement. This matters because it reinforces the idea that arbitration is a valid way to settle disagreements, which can save time and money for consumers involved in contracts. For consumers, this ruling means that if you sign a contract that includes an arbitration clause, you generally have to resolve any issues through arbitration instead of going to court. This case is relevant if you're involved in a contract dispute and the contract specifies arbitration as the way to handle disagreements.
AI-generated plain-language summary to help you understand this case
In *Preston v. Ferrer*, 552 U.S. 346 (2008), the underlying dispute arose from a contract between Arnold M. Preston, a California attorney, and Alex E. Ferrer, a former Florida trial court judge. Preston sought to collect fees he believed were owed under their agreement, which included a clause mandating arbitration for any disputes related to the contract. In June 2005, Preston initiated arbitration proceedings, but Ferrer countered by filing a petition with the California Labor Commissioner, claiming that the contract was invalid under the California Talent Agencies Act (TAA) because Preston was acting as an unlicensed talent agent. Ferrer argued that this lack of licensure rendered the entire contract void. The procedural history of the case began when the Labor Commissioner’s hearing officer acknowledged that Ferrer had a valid basis for jurisdiction but denied his request to stay the arbitration, citing the Labor Commissioner’s lack of authority to do so. Subsequently, Ferrer filed a lawsuit in the Los Angeles Superior Court, seeking a declaration that the dispute was not subject to arbitration and requesting an injunction to prevent Preston from proceeding with the arbitration. The Superior Court ruled against Preston, denying his motion to compel arbitration and issuing an injunction against him. The case was brought before the Supreme Court on a writ of certiorari to the California Court of Appeal, which had upheld the lower court's decision. The Supreme Court was tasked with determining whether the Federal Arbitration Act (FAA) preempted state laws that required certain disputes to be resolved in administrative forums, including those related to the validity of contracts under the TAA. The Court ultimately held that the FAA supersedes state statutes that assign primary jurisdiction to other forums, affirming the enforceability of arbitration agreements in such contexts.
Whether the Federal Arbitration Act overrides state statutes that refer certain disputes initially to an administrative agency when the parties have agreed to arbitrate all questions arising under their contract.
The judgment is reversed.
- Court
- Supreme Court
- Decision Date
- January 14, 2008
- Jurisdiction
- federal
- Case Type
- landmark
- Majority Author
- Ginsburg
- Damages Awarded
- N/A
- Data Quality
- high
Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006)
Consumer LostThe Federal Arbitration Act (FAA) mandates that arbitration agreements are to be enforced according to their terms, even when a party claims that the entire contract is void for illegality, thereby allowing arbitrators to resolve disputes regarding the contract's legality.
Hall Street Associates, L. L. C. v. Mattel, Inc., 552 U.S. 576 (2008)
Consumer LostThe statutory grounds for vacating and modifying arbitration awards under the Federal Arbitration Act are exclusive, and parties cannot contractually expand those grounds.
Chamber of Commerce of United States v. Brown, 554 U.S. 60 (2008)
Consumer LostThe California statute Assembly Bill 1889, which prohibits certain employers receiving state funds from using those funds to assist, promote, or deter union organizing, is preempted by federal law that mandates certain zones of labor activity be unregulated.
San Remo Hotel, L. P. v. City and County of San Francisco, 545 U.S. 323 (2005)
Consumer LostFederal courts cannot create an exception to the full faith and credit statute, 28 U.S.C. §1738, for claims brought under the Takings Clause of the Fifth Amendment, thereby affirming that state court decisions on takings claims must be respected in federal court.