Preston, v. Ferrer, was a dispute between him as a “talent agent” and his client Ferrer. “In his argument, Preston was claiming for a fee from Ferrer, thus invoking this proviso accruing under the contract, however, Ferrer argued that the contract was null and it was not determinable under the “California’s Talent Agencies Act” (TAA) since his agent, Preston, had acted as an agent even though he did not have an agency license.” Therefore, according to Ferrer’s claim, the invalidity of the contract was solid proof of his abolition from the obligation of paying the attorney’s fees. It was a requirement for talent agents to have a license from the state, an action that was determined as a relationship regulator between “talent agents” and their clients. After Ferrer was disallowed a motion hold the arbitration by the Labor Commissioner’s hearing officer, he filed a case in a court of law to seek a redirection of arbitration, while Preston took a step to coerce an arbitration. Thus, the Supreme Court was faced with an issue to determining who between the Labor Commissioner of the state of California and an arbitrator should settle the dispute between Preston and Ferrer (Johnson 2008).
The law stated that if two parties decided to arbitrate all matters involved in their contract, “Federal Arbitration Act (FAA) supersedes the laws of state lodging primary jurisdiction in another forum, despite whether judicial or administrative, thus the Federal Arbitration Act preempts California Talent Agencies Acts (TAA) provisions, allowing Labor Commissioner restricted authority to solve matters where parties decide to arbitrate” (Kluwer 2008). In addition, it imposes basics to enforcement of agreement based on arbitration considered inapplicable to contract in general terms. More so, according to FAA, any written arbitration agreement based on commercial contracts is meant to remain valid, enforceable, and irrevocable. Accordingly, through the validity and existence of an agreement, it is therefore allowed that whenever there is an agreed-upon decision by parties to arbitrate all the disputes within their contract, any question regarding the entire contracts’ validity should be resolved by the arbitrator but not the state or federal court.
Therefore, in a critical analysis of the case, it is clear that in Preston, the claimant wanted to recover fees purportedly owed to him under the services of the contract with the defendant. However, the contract was entitled to a clause regarding the arbitration, which was the same as the one defined by the rule, with a requirement of parties to arbitrate any of their disagreement relating to the contract. Preston’s arguments were constrained within the Labor commission where he sought to obtain his fee through decisions of labor commissioners. Ferrer on the other hand was fighting to obtain an arbitrator who would settle down their case by making decisions on the matter with it. Therefore, the question is not whether the FAA preempts the TAA in totality, but rather who is eligible in deciding between the Labor Commissioner or arbitrator.
Kluwer (2008) notes that “it was this issue the State Supreme Court had to consider in deciding whether, according to Ferrer’ claim, Preston acted as an unlicensed talent agent which was a violation of the TAA or according to Preston; he was a personal manager who was not under TAA.” In Ferrer’s claim it shows that he does not dispute the written arbitration regarding the contact falls within the purview, but rather he sought the wholesomeness of the invalidation of the contract. However, in his claim on the arbitration, he did not show any clear opposition to the arbitrator’s clauses’ legitimacy.
In conclusion, the courts’ decision of denying Preston’s motion of compelling arbitration and enjoining him from proceeding before the arbitration was the right decision the court could have ever made. This was so because it was a commercial contract with a written arbitration agreement. This is a condition that is different from one taken to California courts by Ferrer which is not subjected to examination. More importantly, “the decision of Supreme Court to resolve the issue in favor of the arbitrator’s power to make the decision foreclosed attempts of state legislation to undercut the enforceability of arbitration agreements” (Johnson 2008).
Reference list
Johnson, S. (2008) ‘Supreme Court of the United States.’ Preston v. Ferrer, 128 s ct. 978 (2008). 1, 1-14.
Kluwer, W. (2008). ‘Law and Business.’ Preston v. Ferrer. 1, 613-615.