Over the past two years the Supreme Court has consistently held that the Federal Arbitration Act (FAA) will trump conflicting state law remedies or decisions, in the context of arbitration clauses subject to the FAA. That act, which applies to any arbitration agreement involving interstate commerce, has far-reaching impact in today's national, if not global, business network. Massachusetts courts have demonstrated the scope of that impact in the past month, reversing Massachusetts precedent in situations where the FAA applies. Other states will be doing the same.
The string of Supreme Court decisions included AT&T Mobility v. Concepcion (state efforts to address contracts of adhesion cannot conflict with the FAA or frustrate its purpose); Nitro-Lift Techs. v. Howard (judge must consider validity only of arbitration clause in the first instance, and if valid must leave to the arbitrator the decision on validity of the underlying contract); Marmet Health Care Center, Inc. v. Brown (where a specific state statute conflicts with the FAA, the FAA preempts the state statute); and most recently American Express Co. v. Italian Colors Restaurant (class action...
