STATE COURT MAY NOT IGNORE FEDERALLY MANDATED ARBITRATION CLAUSE ON EQUITABLE GROUNDS
After suffering loss from a drought, a farmer sued his insurance agent for negligent misrepresentation of the amount of crop insurance coverage available and the insurance company that issued his crop insurance policy. The insurance company moved to compel arbitration under the terms of the insurance policy, which is reinsured by the Federal Crop Insurance Corporation and subject to federal regulations requiring disagreements to be resolved by arbitration. The state superior court and court of appeals refused to compel arbitration on the grounds that arbitration would result in piecemeal litigation of the claims against the insurer and the insurance agent. On appeal, the state supreme court reversed, holding that the “Federal Arbitration Act prohibits a state court from ignoring a valid federally mandated arbitration clause on equitable grounds.” Weidert v. Hanson, No. 88293-2 (Wash. Sept. 12, 2013).
This post written by Abigail Kortz.
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