In the case of Arnold M. Preston v. Alex E. Ferrer, the U.S Supreme Court ruled in favor of Preston, holding that when parties agree to arbitrate all questions arising under a contract, state laws lodging primary jurisdiction in another forum are superseded by the Federal Arbitration Act (FAA). The dispute began when television personality Judge Alex Ferrer entered into an agreement with talent manager Arnold Preston which included an arbitration clause for any disputes related to their contract. When disagreements arose about fees owed under this agreement, Ferrer sought relief from California Labor Commissioner arguing that Preston violated California’s Talent Agencies Act and thus his management services were voided ab initio (from inception). However, because their original agreement contained an arbitration clause governed by FAA rules which favors enforcement of private arbitration agreements; it was determined that even issues concerning contractual validity are subject to arbitrator's decision first rather than courts or other tribunals like labor commissioner as per section 4 of FAA.

In the dissenting opinion for Arnold M. Preston v. Alex E. Ferrer, Justice Ruth Bader Ginsburg argued that the majority's decision to allow an arbitrator to decide on a dispute over contract validity was incorrect and inconsistent with previous case law. She contended that it is typically a court's role, not an arbitrator’s, to determine whether or not a contract is valid before any arbitration can proceed under its terms. In her view, this principle should have applied in this case as well because there were serious questions about the legality of the agreement between Preston and Ferrer due to potential violations of California talent agency regulations. Furthermore, she believed that by allowing an arbitrator rather than a state labor commissioner to make these determinations first-hand could undermine important state protections for artists.