AGREEMENT

Issues

In 2002, Arnold Preston, a lawyer, and Judge Alex Ferrer entered into a contract where Preston agreed to act as Ferrer's personal manager in exchange for a portion of the earnings from a potential television deal. The contract contained a clause which required that any disputes over the validity of the contract be arbitrated. Several years later, Preston filed an action with the American Arbitration Association against Ferrer, seeking earnings which he claims are owed under that contract. Ferrer claims that the entire contract is invalid under the California Talent Agencies Act, and also contends that under that act, the parties must exhaust their administrative remedies by submitting the dispute to the California Labor Commissionerbefore an arbitrator or court can hear the case. The California Court of Appeals agreed with Ferrer. Preston challenges this holding, claiming that that the Federal Arbitration Act and the Supreme Court's decision in Buckeye Check Cashing v. Cardegna, 546 U.S. 440 (2006), which held that when there is an arbitration agreement disputes over the validity of a contract must first be submitted to an arbitrator, require this dispute to be first submitted to arbitration. Arbitration agreements are found in many contracts, and this decision could have a significant impact on the enforceability of such clauses and on the States' ability to regulate certain industries and agreements.

Questions as Framed for the Court by the Parties

Additional Resources