Posts tagged "reverse preemption"

The New York Convention Preempts State Law Regulating The Business of Insurance - Fifth Circuit Affirms Dismissal In Favor of Arbitration

In McDonnel Group, LLC v. Great Lakes Insurance SE, UK Branch (5th Cir. 2019)the Fifth Circuit recently held that the New York Convention trumps state insurance law.  When its insurance claim was denied, McDonnel Group, LLC ("McDonnel") sued the insurers seeking a declaratory judgment that it was entitled to coverage.  The insurers moved to dismiss arguing that the policy contained a provision to arbitrate all disputes between the parties.  The policy, however, also contained a conformity to statute provision, meaning that if any term of the policy conflicts with a state statute, then "the terms are amended to conform to such statutes."  Invoking that provision, McDonnel argued that it had no obligation to arbitrate because the arbitration clause was void as it conflicted with a Louisiana statute forbidding arbitration in insurance contracts.  

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