Opinion ID: 150389
Heading Depth: 2
Heading Rank: 1

Heading: The FAA and the Enforceability of Arbitration Agreements

Text: To the extent pertinent to this appeal, § 2 of the FAA provides, in essence, that in any contract evidencing a transaction involving interstate commerce, a written provision agreeing to submit to arbitration a controversy arising out of the contract or transaction shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.  9 U.S.C. § 2 (emphasis added). FAA §§ 3 and 4 provide generally that if an action is brought in federal court on an issue that is referable to arbitration under such an agreement, the court, upon a timely motion by a proper party, is to stay the action until completion of arbitration in accordance with the terms of the agreement, see id. § 3, and is to order that arbitration proceed in the manner provided for in such agreement, id. § 4. See generally Stolt-Nielsen S.A. v. AnimalFeeds International Corp., ___ U.S. ___, ___ - ___, 130 S.Ct. 1758, 1773-75, 176 L.Ed.2d 605 (2010) ( Stolt-Nielsen ). Congress' purpose in enacting the FAA was to reverse the longstanding judicial hostility to arbitration agreements ... and to place arbitration agreements upon the same footing as other contracts. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991); see, e.g., Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468, 478-79, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989) ( Volt ); Southland Corp. v. Keating, 465 U.S. 1, 12-16, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984). [T]he interpretation of an arbitration agreement is generally a matter of state law, Stolt-Nielsen, 130 S.Ct. at 1773, and the FAA contains no express pre-emptive provision, nor does it reflect a congressional intent to occupy the entire field of arbitration, Volt, 489 U.S. at 477, 109 S.Ct. 1248. However, even when Congress has not completely displaced state regulation in an area, state law may nonetheless be pre-empted 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. Id. (internal quotation marks omitted). Section 2 precludes state laws`whether of legislative or judicial origin'that invalidate arbitration provisions on any basis that is applicable only to arbitration provisions. Doctor's Associates, Inc. v. Casarotto, 517 U.S. 681, 685, 687, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996) ( Doctor's Associates ) (quoting Perry v. Thomas, 482 U.S. 483, 492 n. 9, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987) (emphasis in Doctor's Associates )). But  generally applicable contract defenses, such as fraud, duress, or unconscionability, may be applied to invalidate arbitration agreements without contravening § 2. Doctor's Associates, 517 U.S. at 687, 116 S.Ct. 1652 (emphases added).