CopyCited 3 times | Published | District Court, S.D. Florida | 1990 U.S. Dist. LEXIS 16529, 1990 WL 185715
...N, et al., Motion for Summary Judgment. Upon consideration of said motion and having heard oral argument on this matter on October 5, 1990, the Court finds as follows: I. FACTUAL BACKGROUND In this case, Plaintiffs challenge the Constitutionality of § 517.122, Fla.Stat., as amended by the Florida Legislature. No genuine issue of material fact is presented as the parties agree on the facts. The old version of § 517.122 provided as follows: 517.122 ArbitrationAny agreement to provide services that are covered by this chapter, entered into after January 1, 1987, by a person required to register under this chapter, for arbitration of disputes arising under the agreement may provide to an aggrieved party the option of having arbitration before and pursuant to the rules of the American Arbitration Association. Thus, before § 517.122 was amended, the parties to an arbitration agreement had the option of arbitration "before and pursuant to the rules of the American Arbitration Association. The amendment to § 517.122, by contrast, is mandatory. It provides: 517.122 ArbitrationAny agreement to provide services that are covered by this chapter, entered into after October 1, *206 1990, by a person required to register under this chapter, for arbitration of disputes arising under the agreement shall provi...
...[1] Under the arbitration clauses that are regularly included in Plaintiffs' customer agreements, there is no provision which permits an option to arbitrate before the American Arbitration Association or other "independent nonindustry arbitration forum." Thus, Plaintiffs' customer agreements violate the amended version of § 517.122....
...Yellow Freight System, Inc.,
529 F.2d 721, 728 n. 13 (5th Cir.1976). However, summary judgment is an extreme remedy which should not be granted unless the moving party has established the right to judgment beyond controversy. Id. III. ANALYSIS A. Validity of §
517.122 under Section 2 of the Federal Arbitration Act Section 2 of the FAA provides that an arbitration agreement "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contrac...
...Connolly, etc., et al.,
883 F.2d 1114, 1120, 1119-21 (1st Cir.1989), cert. denied, ___ U.S. ___,
110 S.Ct. 2559,
109 L.Ed.2d 742 (1990) [3] and cases cited therein; and Collins Radio Co. v. Ex-Cell-O Corp.,
467 F.2d 995 (8th Cir.1972). Under the amended version of §
517.122, parties to an arbitration agreement must provide an option for non-industry arbitration....
...ay have against the other party in a court of law rather than through arbitration. Thus, both cases involved issues of state law that were not applicable only to the enforceability of agreements to arbitrate. Defendant does not contest the fact that § 517.122, as amended, affects only arbitration agreements....
...ibit such arbitration agreements. The state is free to legislate in a way that affects the validity, revocability and enforceability of contracts generally. However, a state law that singles out arbitration agreements, as does the amended version of § 517.122, conflicts with section 2 of the FAA. B. Validity of § 517.122 under Section 5 of the Federal Arbitration Act The Court finds that § 517.122 also violates section 5 of the FAA....
...We have no power to change any of the terms of the agreement. "If in the agreement provision be made for a method of naming or appointing an arbitrator ... such method shall be followed." Id. at 372-73 (quoting 9 U.S.C. §§ 2 & 5). Defendant argues that rather than limiting arbitration options, § 517.122 expands the parties' choices by requiring more options to be provided in the customer agreements....
...This argument ignores the fact that the parties may choose to exclude the option of a judicial resolution of their disputes. If a securities broker-dealer and his customer agree by an otherwise valid contract to direct their dispute to a securities industry arbitrator only, this agreement would be held invalid under § 517.122 for failing to provide an option for non-industry arbitration....
...Section 5 of the FAA prohibits such a limitation on the parties' ability to decide which type of arbitration agreement to enter. IV. CONCLUSION Sections 2 and 5 of the FAA allow the parties to an arbitration agreement to freely choose the terms of their agreement. The legislative encroachment imposed by § 517.122 violates the protections embodied in both sections 2 and 5 of the FAA, and therefore, violates the Supremacy Clause....
...§ 1281.2(c) to stay arbitration where, as here, the parties have agreed to arbitrate in accordance with California law. [3] Defendant argues that the Connolly case is distinguishable from the instant case. While this Court agrees that the Massachusetts regulations involved in Connolly were more intrusive than § 517.122 on the parties' ability to freely negotiate their arbitration agreement, the Eighth Circuit's reasoning is equally applicable here....
