Wednesday, February 20, 2008
Earlier posts here and here describe the facts in Preston v. Ferrer. "Judge" Alex [E. Ferrer] arbitrates petty civil disputes in a taped television series. He signed an agreement containing an arbitration clause with Artist Manager Arnold Preston, but didn't make the stipulated payments. Preston filed for arbitration, but Judge Alex challenged the legality of the entire agreement under the California Talent Agencies Act. This Act, among other things, provides that disputes under the Act must be referred to the California Labor Commissioner. California courts ruled that the legality of the Alex-Ferrer agreement should be decided by the Labor Commissioner.
The Supreme Court today reversed, holding that "when parties agree to arbitrate all questions arising under a contract, state laws lodging primary jurisdiction in another forum, whether judicial or administrative, are superseded by the FAA." Questions of contract validity must be decided by an arbitrator.
Here's the Supreme Court opinion in Preston v. Ferrer.