Opinion ID: 891680
Heading Depth: 3
Heading Rank: 2

Heading: Arbitration Provisions in a Contract Must, If Possible, Be Enforced According to Their Terms, Subject to Established Principles of Contract Law.

Text: {15} While the interpretation of an arbitration agreement is generally a matter of state law, the [Federal Arbitration Act] imposes certain rules of fundamental importance. Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. ___, ___, 130 S.Ct. 1758, 1773, 176 L.Ed.2d 605 (2010) (internal quotation marks and citation omitted). The arbitration provisions in the form title loan contract between Rivera and American General state that the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-16 (2006), applies to and governs the Arbitration Provisions. To determine whether the arbitration provisions are enforceable, we therefore must consider not only general principles of New Mexico contract law but also substantive federal caselaw interpreting the FAA. {16} Section 2 of the FAA provides that arbitration provisions in contracts involving interstate commerce are valid, irrevocable, and enforceable. 9 U.S.C. § 2. The United States Supreme Court has emphasized the fundamental principle that arbitration is a matter of contract and that courts must place arbitration agreements on an equal footing with other contracts ... and enforce them according to their terms. AT&T Mobility LLC v. Concepcion, 563 U.S. ___, ___, 131 S.Ct. 1740, 1745, 179 L.Ed.2d 742 (2011) (internal quotation marks and citations omitted). {17} Despite the policy favoring enforcement of arbitration agreements, under the FAA an arbitration agreement is not enforceable where grounds ... exist at law or in equity for the revocation of any contract. 9 U.S.C. § 2. Agreements to arbitrate may accordingly be invalidated by generally applicable contract defenses, such as fraud, duress, or unconscionability. Rent-A-Center, West, Inc. v. Jackson, 561 U.S. ___, ___, 130 S.Ct. 2772, 2776, 177 L.Ed.2d 403 (2010) (internal quotation marks and citation omitted). [S]tate law, whether of legislative or judicial origin, is applicable if that law arose to govern issues concerning the validity, revocability, and enforceability of contracts generally. Perry v. Thomas, 482 U.S. 483, 492-93 n. 9, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987). But states cannot invalidate arbitration agreements through the application of defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue. AT&T Mobility, 563 U.S. at ___, 131 S.Ct. at 1746. State law is preempted to the extent that it actually conflicts with federal lawthat is, to the extent that it stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress. Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 477, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989) (internal quotation marks and citation omitted). {18} With this interplay of federal and state law in mind, our evaluation of the meaningful enforceability of the arbitration provisions turns on consideration of generally applicable principles of New Mexico contract law.