[Dis-res] WLO-DR (Apr. 14-18, 2003)

[James A Papachristopoulos]

Willamette Law Online - Dispute Resolution
Willamette University, College of Law
Center for Dispute Resolution
April 14 - 18, 2003

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THIS WEEK:

1.  Arbitration: Federal policy favoring arbitration preempts local law
    that seeks to limit the availability of arbitration.

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CASE SUMMARY:

Arbitration: Federal policy favoring arbitration preempts local law that
seeks to limit the availability of arbitration. Saturn Distribution Corp.
v. Paramount Saturn, LTD.; 2003 WL 1561908 (5th Cir. (Texas) 2003)

Paramount became a franchisee in Houston Texas, in December 1997. The
agreement between Paramount and Saturn Distribution contained a broard
arbitration provision. Paramount sought to purchase three dealerships from
Saturn Distribution, but Saturn did not sell the dealerships to Paramount.
Paramount brought action, alleging Saturn breached its statutory duty to
bargain in good faith. Saturn sought to compel Paramount to arbitrate the
dispute. Paramount argued that the arbitration clause did not apply,
because the Texas Motor Vehicle Board (TMVB) had exlusive jurisdiction
over the dispute. The district court granted Saturn’s motion to compel
arbitration, and closed the case, with out dismissing it, while labeling
this as the court’s “Final Judgment.” On appeal, the Fifth Circuit Federal
Court of Appeals found two issues to decide. The issues the Court found
were whether the district court’s decision was appealable, and whether the
dispute was arbitrable. The Court held that the case was appealable
despite the fact that the case was not dismissed. The FAA permitted this
case to be appealed because the district court closed the case, used
language to end the matter, and because the order by the district court
was not accompanied by a stay of federal court proceedings. Next, the
Court held that the case may proceed through arbitration, because it
contained a broad arbitration provision. The Court held the TMVB did not
have exclusive jurisdiction because the federal policy favoring
arbitration preempted the Texas law. (DH)

Available online at:
http://caselaw.lp.findlaw.com/data2/circs/5th/0220431p.pdf

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Editor-in-Chief:  Demetri Papachristopoulos
Writers:          David Hannon, Michael Greene, Kyle Abraham
Faculty Advisor:  Richard Birke