law-preemption

law-preemption | federal preemption | preemption of common law by statute |

Preemption: Federal Arbitration Act & TEXAS ARBITRATION ACT

In its second issue, Rapid Settlements asserts the FAA preempts the SSPA.

"[S]tate law is naturally preempted to the extent of any conflict with a federal statute." Crosby v. Nat. Foreign
Trade Coun., 530 U.S. 363, 372, 120 S. Ct. 2288, 2294 (2000). Rapid Settlements cites Preston v. Ferrer,
128 S. Ct. 978 (2008), Circuit City Stores Inc. v. Adams, 532 U.S. 105, 121 S. Ct. 1302 (2001), Southland
Corp. v. Keating, 465 U.S. 1, 104 S. Ct. 852 (1984), and In re David's Supermarkets, Inc., 43 S.W.3d 94
(Tex. App.--Waco 2001, no pet.), contending that these cases "put to rest" "the question of conflict or
violation of an arbitration decision with state law." However, these cases concern state laws that expressly or
directly interfere with a party's voluntary decision to arbitrate under the FAA. In contrast, the SSPA in no way
prohibits or limits arbitration between parties. See Symetra, 599 F.Supp.2d at 827-28; Symetra Nat. Life Ins.
Co. v. Rapid Settlements, Ltd., No. 14-07-00880-CV, 2009 WL 1057339, at *4-5 (Tex. App.--Houston [14th
Dist.] Apr. 21, 2009, no pet. h.) (mem. op.); Rapid Settlements, Ltd. v. Symetra Life Ins. Co., 234 S.W.3d
788, 797 (Tex. App.--Tyler 2007, no pet.); In re Rapid Settlements, 202 S.W.3d 456, 460 (Tex.
App.--Beaumont 2006, pet. denied). "Nothing in the [SSPA] prohibits parties from including an arbitration
provision in the transfer agreement. . . . Section 141.004 of the SSPA requires prior court approval of the
transfer agreement, not the arbitration clause, and is therefore not pre-empted by the FAA." Rapid
Settlements, 202 S.W.3d at 460 (citing Tex. Civ. Prac. & Rem. Code Ann. § 141.004. We hold the FAA does
not preempt the SSPA.
Rapid Settlements, Ltd v. Green (Tex.App.- Houston [1st Dist.] Jun. 18, 2009)(Op. By Alcala) (transfer of structured settlement
rights, grounds for v acature of arbitration award entered under the Federal Arbitration Act (FAA), applicability of FAA, does the
FAA preempt the TAA?, nonexistence of arbitration agreement between the parties, when are nonsignatories bound to by
arbitration agreement? nonparties to the agreement, nonsignatories)(arbitrator exceeded his authority in issuing the award.
See 9 U.S.C.S. § 10(a)(4).
AFFIRM TC JUDGMENT DENYING CONFIRMATION OF ARB AWARD: Opinion by Justice Alcala
Before Justices Jennings, Alcala and Higley
01-08-00109-CV Rapid Settlements, Ltd. v. Jerry M. Green
Appeal from County Civil Court at Law No 3 of Harris County
Trial Court Judge: Hon. Linda Storey

Assuming that federal preemption does apply in this case, the application of the FAA, without more, does not
divest a state court of jurisdiction. Mills v. Warner Lambert Co., 157 S.W.3d 424, 427 (Tex. 2005) (per
curiam). Federal and state courts instead have concurrent jurisdiction to enforce the FAA. See Moses H.
Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 (1983); In re Kellogg Brown & Root, Inc., 166
S.W.3d 732, 739 (Tex. 2005) (orig. proceeding). Moreover, the FAA does not preempt state common-law
actions to confirm arbitration awards. FIA Card Servs., N.A. v. Gachiengu, 571 F. Supp. 2d 799, 805 (S.D.
Tex. 2008). Credigy Receivables, Inc v. Mahinay (Tex.App.- Houston [14th Dist.] Jun. 30, 2009) (op. by
Guzman) (county court had jurisdiction over suit to confirm arbitration award regardless of whether TAA or
FAA applied)(dismissal reversed)
REVERSED AND REMANDED: Opinion by Justice Guzman
Before Justices Brock Yates, Guzman and Sullivan
14-07-01091-CV Credigy Receivables, Inc v. Alexander R. Mahinay
Appeal from County Civil Court at Law No 1 of Harris County
Trial Court Judge: R. Jack Cagle

City of Mont Belvieu v. Enterprise Products Operating LP (Tex.App.- Houston [14th Dist.] Feb. 27,
2007)(opinion by Justice Seymore)(land use dispute, plea to the jurisdiction, preemption)