law-FAA-preemption-issues | Does the FAA preempt the TAA? If so, when? | FEDERAL
ARBITRATION ACT VS. TEXAS ARBITRATION ACT (TAA) aka Texas General Arbitration Act
(TGAA)
Texas Arbitration Case Law

DOES THE FEDERAL ARBITRATION ACT PREEMPT THE TEXAS
ARBITRATION ACT? AND RELATED LEGAL ISSUES

Ellis v. Schlimmer, No. 10-0243 (Tex. Apr. 1, 2011) (per curiam)(FAA vs TAA, preemption issue)
In this case, the court of appeals dismissed an interlocutory appeal of the trial court’s order denying the
defendants’ motion to compel arbitration for want of jurisdiction because the movants failed to establish that the
Federal Arbitration Act did not apply. ___ S.W.3d ___, ___. We reverse and remand to the court of appeals to
consider the appeal’s merits.  * *  *
In this case, while Ellis and Pacesetter did not specifically invoke the TAA in their motion to compel arbitration,
their counsel specifically referred to it in the hearing on the motion. The burden was on the Schlimmers to show
that some Texas state law or statutory requirement would prevent enforcement of the arbitration agreement
under the TAA so that the FAA would preempt the Texas act. They did not raise any such defenses, nor did they
question the agreement’s existence. Instead, they argued merely that the agreement did not cover the dispute,
and that Ellis and Pacesetter had waived the right to arbitration or were estopped from enforcing it.
The court of appeals’ decision erroneously placed the burden to establish the absence of any defenses to
arbitration on Ellis and Pacesetter. Under these circumstances, its decision is contrary to the strong policy
favoring arbitration. Forest Oil Corp. v. McAllen, 268 S.W.3d 51, 56 (Tex. 2008). Accordingly, under Rule 59.1 of
the Texas Rules of Appellate Procedure, without hearing oral argument, we reverse the court of appeals’
judgment and remand to that court to allow it to consider the appeal’s merits.
VERONICA ELLIS AND PACESETTER BUILDERS, INC. D/B/A COLDWELL BANKER PACESETTER STEEL
REALTORS v. DR. RON AND TANA SCHLIMMER; from Nueces County; 13th district (13-09-00426-CV, ___ SW3d
___, 01-28-10)  
Pursuant to Texas Rule of Appellate Procedure 59.1, after granting the petition for review and without hearing
oral argument, the Court reverses the court of appeals' judgment and remands the case to that court.
Per Curiam Opinion [4-page opinion in
pdf]
View
Electronic Briefs in Case No. 10-0243 ELLIS v. DR. RON AND TANA SCHLIMMER  


Determination of whether valid agreement to arbitrate was formed is a  question
of state contract law, and is not preempted
Poly-America argues that the FAA’s “strong presumption” favoring arbitration applies in this case,
and furthermore that the FAA preempts all state
public-policy grounds for finding the
agreement to arbitrate
unenforceable. See In re R&R Personnel Specialists of Tyler, Inc., 146
S.W.3d 699, 705 (Tex. 2004) (holding that the FAA preempts “any public policy underlying the
Texas workers’ compensation statutes that is contrary to the enforceability of arbitration
agreements”). Because neither this presumption nor federal preemption applies in a state court’s
assessment of whether parties have entered into a valid and enforceable agreement to arbitrate
under state contract law, we disagree.  
In re Poly-America, LP, 262 S.W.3d 337 (Tex. 2008)
(
arbitration in employment context, FAA, retaliatory discharge, employment law, limitation of
remedies,
unconscionability argument challenge sustained, offending provision stricken, but
remainder of arbitration agreement given effect).


POST-INJURY AGREEMENTS TO ARBITRATE UNDER THE TAA APPARENTLY PREEMPTED
The Plan’s effective date predated her injury, even though her Acknowledgment did not. As it is
undisputed that the Plan adopted the
Federal Arbitration Act, the limitations on such post-injury
agreements in the Texas Act do not apply. See TEX. CIV. PRAC. & REM . CODE § 171.002(c)
(prohibiting post-injury arbitration agreements unless signed by each party’s attorney).
In Re Macy's Texas, Inc., No. 08-0584 (Tex. Jun. 26, 2009)(per curiam)(arbitration under FAA
compelled by mandamus in dispute over
personal injuries sustained at work)(correct
identification of employer was an issue, but did not defeat duty to arbitrate claim against
"company" / employer)(
conclusory affidavit as to entity name)
IN RE MACY'S TEXAS, INC.; from Bexar County; 4th district (
04-08-00469-CV, ___ SW3d ___,
[
per curiam opinion of the San Antonio Court of Appeals denying mandamus relief] 07-23-08)
stay order issued October 10, 2008, lifted
Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court
conditionally grants the petition for writ of mandamus.
Per Curiam Opinion [pdf]


COURT OF APPEALS CASES IN WHICH TEX. SUP. CT. DENIED
REVIEW

07-1008  
HERITAGE OAKS WEST RETIREMENT VILLAGE, ET AL. v. EUGENIA GINGER SIKES, ET AL.;
from Navarro County; 10th district (10-06-00176-CV, 238 SW3d 807, 09-26-07, pet. denied April
2008)(arbitration award challenge) Having found there is
no valid agreement to arbitrate, we
reverse the judgment of the trial court and remand this cause for further proceedings consistent
with this opinion.
The wife and children of decedent Joel Sikes[1] filed
wrongful death and survival claims
against Heritage Oaks West Retirement Village and others[2] alleging malpractice in his
treatment.
The Sikeses appeal the trial court’s judgment on an arbitration award.  They first complain that
the Dispute Resolution Plan is
unenforceable because: 1) it does not comply with former article
4590i; 2) Heritage failed to sign the agreement; 3) the wrongful death claims are not within the
scope of the agreement; 4) Eugenia Sikes lacked authority to sign the agreement on behalf of
her husband; 5) the agreed order to arbitrate was both revoked and superseded; and 6)
Heritage failed to negate the Sikeses’ contractual defenses to arbitration.  In the alternative, the
Sikeses contend that the judgment on the arbitrator’s decision is in error because: 1)
under
federal law
, the arbitrator’s decision failed to adjudicate all claims and reflected a manifest
disregard of the law
; and 2) under state law, the decision resulted from a gross mistake
and a failure to execute an honest judgment.  We will reverse and remand.