Southern District of New York twice finds that, under the McCarran Ferguson Act, Louisiana statute barring arbitration of insurance disputes reverse-preempts the New York Convention:
Arbitration agreements were not “forum selection clauses” exempted from Louisiana statute’s proscription on arbitrating insurance disputes.
Certain Underwriters at Lloyds, London et al v. Mpire Properties, LLC, No. 22-CV-9607, 2023 WL 6318034 (S.D.N.Y. Sept. 28, 2023).
Certain Underwriters at Lloyds, London et al. v. 3131 Veterans Blvd LLC, No. 22-CV-9849, 2023 WL 5237514 (S.D.N.Y. Aug. 15, 2023).
Under the Supremacy Clause of the U.S. Constitution, the Federal Arbitration Act (“FAA”) and the New York Convention (codified in Chapter 2 of the FAA) generally preempt state laws invalidating arbitration agreements. However, the McCarren-Ferguson Act (MFA), another federal statute, provides that “the business of insurance” is “subject to the laws of the several States,” and that “no Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance[.]” In other words, the MFA “reverse-preempts” federal laws that conflict with state laws regulating insurance, unless the federal law is specifically addressed to the business of insurance.
