This Article argues that the current doctrine of preempting state
substantive law in favor of the Federal Arbitration Act (FAA)
contravenes core federalism principles generally, the Tenth Amendment
specifically, and well-established anti-commandeering and federalism
doctrine. These authorities are all concerned with a core federalism
principle: state sovereignty.
The states retained sovereignty when they joined the Union. The
Tenth Amendment expressly enshrines this retention. Modern federal
court doctrine, which imposes federal arbitration law on the states,
encroaches on retained state sovereignty by preempting state substantive
law. This is erroneous regardless of whether Congress enacted the FAA
as a rule of federal judicial procedure or as an exercise of its substantive
Commerce Clause power. Encroaching on the states’ retained
sovereignty, as the FAA does, violates the fundamental federalism
principle and opens a path toward disrupting the power balance between
the state and federal governments that James Madison considered crucial
to protecting individual liberty.
When one sovereign comes to dominate in a federalist system, that
government begins to lose its federalist character. Consequently, conflict
about the FAA is no dry procedural dispute—it is a battle over the
republic’s core principles. State courts should continue to serve their
federalist role and fight in their corners, and the United States Supreme
Court should revisit its FAA interpretation.