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CHAPTER 3 - C
ASE
S
YNOPSIS
Cleveland Construction, Inc. v. Levco Construction, Inc.
Cleveland Construction, Inc. (CCI), was the general contractor on a project to build a grocery
store in Houston, Texas. CCI hired Levco Construction, Inc., as a subcontractor to perform
excavation and grading. The contract provided that any dispute would be resolved by arbitration in
Ohio. When a dispute arose, Levco filed a suit against CCI in a Texas state court. CCI sought to
compel arbitration in Ohio under the Federal Arbitration Act (FAA). Because a Texas statute allows a
party to void a contract provision that requires arbitration outside Texas, the court denied CCIs
request. CCI appealed.
A state intermediate appellate court reversed. The parties had a valid arbitration agreement. If the
court applied the Texas statute, it would void the agreement. This, the court decided, would
undermine the declared federal policy of rigorous enforcement of arbitration agreements. And the
FAA, as a federal law, preempted the Texas statute under the supremacy clause.
Why do you think that Levco did not want its claim decided by arbitration?
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