Along with an insurance policy, the parties previously entered into an administration agreement that obligated the defendant to reimburse the plaintiff for claims made under extended warranty contracts. The plaintiff brought suit in state court over the alleged failure to pay reimbursement requests. The defendant removed and then sought to compel arbitration and stay proceedings pursuant to the arbitration provision in the administration agreement. However, this agreement was to be interpreted in accordance with Nebraska law, and the Nebraska Uniform Arbitration Act (“NUAA”) exempts from arbitration any agreement that concerns or relates to an insurance policy. In denying the defendant’s motion to compel arbitration and stay proceedings, the court ruled that the NUAA reverse-preempted the Federal Arbitration Act (“FAA”) pursuant to the McCarran-Ferguson Act, finding that the NUAA was enacted for the purpose of regulating the business of insurance and would be invalidated, impaired or superseded by the FAA. The Court therefore denied the motion to compel arbitration, finding that the Nebraska statute prevailed over the FAA. Datacor, Inc. v. Heritage Warranty Ins. Risk Retention Group, Inc., Case No. 09-1123 (USDC E.D. Mo. Dec. 16, 2009).
This post written by Dan Crisp.