SHAW, Justice.
This is a petition to review Young v. Oppenheimer & Co., 434 So.2d 369 (Fla. 3d DCA 1983), on the ground it conflicts with Raymond, James & Associates v. Maves, 384 So.2d 716 (Fla. 2d DCA 1980), and Merrill Lynch Pierce Fenner & Smith, Inc. v. Melamed, 405 So.2d 790 (Fla. 4th DCA 1981). We have jurisdiction. Art. V, § 3(b)(3), Fla. Const.
Respondent Young sued petitioner Oppenheimer claiming Oppenheimer violated the Florida Securities Act, chapter 517, Florida Statutes (1981), and committed common law fraud, negligence, and breach of fiduciary duty in handling Young's brokerage account. The trial court granted Oppenheimer's motion to compel arbitration
Petitioner first urges that section 517.241, Florida Statutes (1981) does not contain an express prohibition against arbitration of disputes arising under the Florida Securities Act and that our decision is controlled by section 682.03, Florida Statutes (1981), which provides that arbitration agreements are valid, irrevocable, and enforceable. In support, petitioner points out that there is a strong public policy favoring arbitration as an alternative to judicial litigation of disputes. Petitioner concedes that the arbitration agreement would not be enforceable under federal securities laws but nevertheless urges that it should be enforced under state law.
Petitioner next urges that the Federal Arbitration Act (FAA) preempts the question of arbitration of disputes concerning interstate commerce and that the supremacy clause mandates that we enforce the arbitration agreement. In support, petitioner relies most heavily on Southland Corp. v. Keating, ___ U.S. ___, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984), but also cites Scherk v. Alberto-Culver Co., 417 U.S. 506, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974), Kroog v. Mait, 712 F.2d 1148 (7th Cir.1983), cert. denied, ___ U.S. ___, 104 S.Ct. 1001, 79 L.Ed.2d 233 (1984), Melamed, and Maves, for the same proposition. In Keating v. Superior Court of Alameda County, 31 Cal.3d 584, 183 Cal.Rptr. 360, 645 P.2d 1192 (1982), the California Supreme Court held that claims asserted under the state's Franchise Investment Law were not arbitrable and that the state law did not contravene the provisions of the FAA calling for the enforcement of arbitration agreements when the dispute involved interstate commerce. In so holding, the
Southland, 104 S.Ct. at 864 n. 11. Petitioner urges that Southland is directly on point and dispositive of the issue before us because, in petitioner's view, Southland holds that a state may not contravene the provisions of the FAA. Although it is substance and not form which controls the question of what constitutes a "security," typically, a franchise is not considered to be a security within the meaning of federal securities law. Nash & Associates, Inc. v. Lum's, Inc., 484 F.2d 392 (6th Cir.1973). In our view, the Southland court simply recognized that a franchise is not typically a security and rejected the attempted analogy between franchise regulation and securities regulation. The court did not reject, or even address, the question of whether the Wilko exemption from the FAA extended to state securities laws. It is hazardous to draw conclusions from non-dispositive footnotes, but the rejection of the analogy at least suggests that had the analogy been accepted or had the California law concerned securities regulations, the Wilko exemption would have extended to the state law. For our purposes, it is enough to say that Southland is off point.
Petitioner also relies on Scherk, which dealt with an agreement between United States and foreign citizens to resolve any disputes in an international forum. On its facts, Scherk offers no guidance here. Scherk appears to rest on the pragmatic consideration that there is no international supremacy clause to resolve disputes about forum selection.
Petitioner also relies on Kroog. We agree that Kroog is on point but, for the reasons set forth herein, do not agree with the Kroog court.
Petitioner also relies on two Florida cases, Melamed and Maves. The issue in Melamed was whether the FAA superseded inconsistent provisions of the Florida arbitration code, sections 682.01 to 682.22, Florida Statutes (1979), which provided that an arbitration agreement was not enforceable if it incorporated the laws of another state. Although the facts of the case indicate that an interstate securities transaction was involved, the court did not address the issue of whether Wilko and Florida securities law controlled. We agree with the court's disposition of the issue as posed and see no conflict with our decision here. In Maves the court addressed the issue posed here but concluded that the Florida Securities Act had no counterpart to the federal anti-waiver exemption established by Wilko. We disagree and disapprove Maves.
Finally, petitioner urges that in deciding this question we are obliged to look only at the FAA and that the issue is one involving arbitration, not securities regulations. We disagree. It is true that if we looked only at the text of the FAA we would find conflict between preemptive federal law and our decision here. What petitioner overlooks is that we are obliged not only to look at federal statutes but at controlling case law from the Supreme Court interpreting these statutes. In Wilko the Court interpreted both federal securities law and the FAA and held that the FAA did not require arbitration of disputes concerning interstate securities transactions. Thus, we see no conflict between our decision here and federal law.
The decision of the district court is approved.
It is so ordered.
BOYD, C.J., and ADKINS, OVERTON and ALDERMAN, JJ., concur.
EHRLICH, Justice, dissenting.
I dissent because I do not believe that section 517.241(3), which incorporates into Florida law the civil remedies provided by federal law, makes Wilko v. Swan a mandatory gloss on the state security laws under which this claim was raised.
I recognize that Wilko stands for the semantically and logically incongruous proposition that the choice of a forum is, in itself, a remedy. That decision was based on the protection expressed in section 14 of the Securities Act of 1933 (codified at 15 U.S.C. § 77n): "Any condition, stipulation, or provision binding any person acquiring any security to waive compliance with any provision of this subchapter or of the rules and regulations of the Commission shall be void." (Emphasis supplied.) The Wilko Court went on to find that the right to bring a claim in judicial proceedings is "a provision of this subchapter" which could not be waived. The Court there, it must be remembered, balanced a general arbitration act against a specific anti-waiver protection, and applied the rule of statutory construction that a specific provision controls over a general one. Thus, the section which specifically addressed federal securities regulation controlled over a federal statute which generally authorized arbitration.
If the Florida legislature intended to provide anti-waiver protection through section 517.241(3), it did so in an oblique and confusing way. The general incorporation of a body of law that includes a federal anti-waiver provision which, by its very terms, limits its applicability to that specific subchapter of federal law and the rules and regulations of the SEC, cannot, it seems clear to me, control over the specific authorization of arbitration in Florida law. To the extent the incorporation of the anti-waiver provision is incorporated into Florida law, it is still expressly limited to those claims asserting federal civil remedies, not those, like the one now before us, arising from state law.
I would disapprove the decision of the district court below and approve Maves and Melamed.
McDONALD, J., concurs.
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