Full opinion text
MEMORANDUM AND OPINION LEE H. ROSENTHAL, District Judge. This dispute involves the secondary market in structured settlement payment rights. Symetra Life Insurance Co. and Symetra Assigned Benefits Service Co. (together, “Symetra”) sued Rapid Settlements, Ltd. (“Rapid”), seeking a preliminary and permanent injunction preventing Rapid from using arbitration to circumvent the requirements of the state structured settlement protection statutes. Specifically, Symetra seeks to prevent Rapid from using arbitration to effect a transfer of an annuitant’s rights to future structured settlement payments under a Symetra-issued annuity, if a state structured settlement protection act applies to require a state court to approve the transfer based on specific findings that the transfer is in the annuitant’s best interest, and if the state court has either disapproved or not approved the transfer. The National Association of Settlement Purchasers (“NASP”) intervened in the suit, also seeking a preliminary and permanent injunction to prevent Rapid from effectuating transfers of future structured settlement payment rights through arbitration. In addition, NASP sought to enjoin Rapid from attempting to enforce rights of first refusal or security interests in future structured settlement payment rights without first obtaining the state court approval required under the applicable state structured settlement protection act. After an evidentiary hearing on Syme-tra’s application for a preliminary injunction, this court entered an order on February 6, 2007 prohibiting Rapid from “using arbitration to resolve disputes between it and any Symetra annuitant, if that arbitration, directly or indirectly, effects a transfer of all or part of the annuitant’s future-payment stream, unless a state court has approved the transfer as required under the applicable state structured settlement protection act.” (Docket Entry No. 84 at 71). On June 4, 2007, 2007 WL 1643211, this court found Rapid in contempt of the February 6, 2007 preliminary injunction because Rapid had failed to obtain state-court approval of a proposed transfer of Symetra annuitant Kenneth Gross’s future-payment stream, obtained an arbitration award effecting such a transfer, and attempted to confirm and enforce that arbitration award against Symetra in Texas state court. Rapid has filed a motion for reconsideration of this court’s June 4, 2007 order of contempt, (Docket Entry No. 175), and a motion for reconsideration of this court’s February 6, 2007 preliminary injunction order, (Docket Entry No. 182). Symetra has responded to both motions. (Docket Entry Nos. 187, 195). Rapid has also submitted a document it styled a “Memorandum on Certain Recent Arbitration Developments.” (Docket Entry No. 227). In addition, Rapid has filed a motion seeking leave to file a motion to confirm arbitration awards it has obtained against Kenneth Gross, (Docket Entry No. 181), and has filed such a motion to confirm, (Docket Entry No. 168). Symetra and NASP have responded to Rapid’s motion for leave. (Docket Entry Nos. 188,189). Symetra has moved to dismiss the claims for tortious interference and civil conspiracy that Rapid asserts as the as-signee of Symetra annuitants Candy Richardson and Abigail Dempsey. (Docket Entry No. 160). Rapid has responded. (Docket Entry No. 172). Symetra has also moved to dismiss claims that Rapid asserts as the assignee of Symetra annuitant Paul Patterson, (Docket Entry No. 222), and Rapid has responded, (Docket Entry No. 224). Based on the motions and replies, the record, the parties’ submissions, and the applicable law, Rapid’s motions for reconsideration of this court’s preliminary injunction order and contempt order are denied. Rapid’s motion to confirm and motion for leave to file a motion to confirm are denied. Symetra’s motions to dismiss are granted. Symetra’s application for a permanent injunction is granted. The reasons for these rulings are set out in detail in the findings of fact and conclusions of law set out below. I. Background A. The Secondary Market in Structured Settlements In the secondary market in structured settlements, tort claimants who settled them claims by entering into structured settlements transfer some or all of their future-payment rights to a “factoring company” in exchange for a discounted lump sum paid in the present. The legislatures of forty-three states, including Texas, saw a potential for abuse in these secondary-market transactions and enacted paternalistic statutes regulating them. These statutes typically require the factoring company fully to disclose the effect of the proposed transfer and require a state-court judge affirmatively to approve the transfer after a hearing as in the best interests of the settling tort claimant. The purpose of the statutes is to protect the claimant/payee from overreaching by factoring companies and to ensure that the decision to give up future-payment streams in exchange for a present discounted lump-sum payment is informed and voluntary. The Texas Structured Settlement Protection Act, for example, requires that before a secondary market transfer can occur, a court must approve the transfer after a hearing by finding that the transfer is in the best interests of the payee, that the payee has been advised in writing to seek independent professional advice regarding the transfer, and that the transfer does not violate any applicable statute or order of any court or other governmental authority. Tex. Civ. PRAC. & Rem.Code § 141.004. The purpose of the “best interests” finding is to make sure that the payee does not give up his or her right to the future-income stream in exchange for a much smaller present payment, unless there is good reason for the transaction. Settlement Capital Corp. v. BHG Structured Settlements, Inc., 319 F.Supp.2d 729, 734 (N.D.Tex.2004). “This maintains the purpose and reason for the structured settlement while at the same time allowing for changed circumstances that may warrant exchanging future income for current income.” Id. State structured settlement protection statutes typically require that the party seeking approval of the transfer serve written disclosures on all interested parties before the hearing to consider whether the proposed transfer is in the best interests of the proposed transferor and meets the other statutory requirements for approval. See, e.g., Tex. Civ. PraC. & Rem. Code § 141.006(b). Interested parties include the annuity issuer and any other party with continuing rights or obligations under the structured settlement. Id. § 141.002(7). Interested parties are entitled to “support, oppose, or otherwise respond to the transferee’s application, either in person or by counsel, by submitting written comments to the court or by participating in the hearing.” Id. § 141.006(b)(5). In 2002, Congress enacted legislation directed at reinforcing the state structured settlement protection acts. Under this legislation, the Internal Revenue Code imposes a forty percent federal excise tax on any party that acquires payment rights in a “structured settlement factoring transaction” that does not receive court approval required by an applicable statute. 26 U.S.C. § 5891(a). The statute exempts from the federal excise tax transactions that are approved in advance by a “qualified order.” 26 U.S.C. § 5891(b). A “qualified order” is defined as a final order, judgment, or decree which (A) finds that the transfer ... (i) does not contravene any Federal or State statute or the order of any court or responsible administrative authority, and (ii) is in the best interest of the payee, taking into account the welfare and support of the payee’s dependents, and (B) is issued (i) under the authority of an applicable State statute by an applicable State court, or (ii) by the responsible administrative authority (if any) which has exclusive jurisdiction over the underlying action or proceeding which was resolved by means of the structured settlement. 26 U.S.C. § 5891(b)(2). The Internal Revenue Code exemption requirements dovetail with and implement the two primary requirements for an effective transfer under the state structured settlement protection acts: the proposed transfer must be in the payee’s best interests and must be affirmatively approved by a state court under the applicable state structured settlement protection statute. Rapid is a factoring company that enters into proposed transfer agreements with structured settlement payees, including payees who have annuities issued by Symetra. Symetra Assigned Benefits Service Co. accepts assignments of structured settlement obligations from defendants in personal injury cases. Symetra Assigned Benefits Service Co. meets its obligations by purchasing annuities from, among others, Symetra Life Insurance Co., which issues annuities to fund structured settlements. B. The Preliminary Injunction Hearing This court held a hearing on Symetra’s preliminary injunction hearing on August 31, 2006. The parties presented arguments on the issue of whether Rapid’s practice of using arbitration to effectuate, directly or indirectly, a transfer of future-payment rights without state-court approval contravenes the state structured settlement protection acts. Symetra presented evidence showing that Rapid had a practice of entering into proposed transfer agreements with structured settlement payees, including Symetra annuitants. After failing to obtain state-court approval of the proposed transfer — either because a state trial court or appellate court had rejected the proposed transfer, or because Rapid did not seek state-court approval under the state structured settlement protection acts — Rapid invoked the arbitration provision in the proposed transfer agreement, alleging breach of some provision in that agreement. The arbitration usually occurred in Houston, Texas, although the annuitant lived in a distant city. The annuitant usually appeared by telephone and usually without a lawyer. Rapid would obtain an award, usually “agreed to,” which would order the transfer of the future-income stream that was the subject of the proposed transfer agreement. The effect of the award would be to require the annuitant to transfer the same payments to Rapid that Rapid would have received if a state court had approved the transfer as required by the applicable state structured settlement protection act. In some of these arbitration awards, the arbitrator would purport to make the “best interests” finding that the state structured settlement protection acts require of a state-court judge. Rapid then often sought confirmation of the award in a court of the state where the arbitration award was entered, without providing notice to Symetra. In the preliminary injunction hearing, Symetra argued that complying with such arbitration awards subjected it to a risk of double liability because the awards conflicted with the applicable state structured settlement protection acts, which require Symetra to make payments to the annuitant identified in the annuity contract unless compelled to do otherwise by a valid court order. (Docket Entry No. 191 at 15-17). Symetra also contended that Rapid’s practice of invoking arbitration violates the state structured settlement protection acts. (Id. at 48). Rapid responded that in invoking arbitration against individuals who have entered into proposed transfer contracts with Rapid, before that transfer has been approved (or even after it has been disapproved) under the applicable state structured settlement protection acts, Rapid is only seeking damages for breach of those contracts, not a transfer that would require approval under the state acts. Rapid also argued that an arbitrator can award such damages under the Federal Arbitration Act without complying with the state structured settlement protection acts. Rapid argued that the FAA preempts the state acts to the extent those acts would preclude Rapid’s use of arbitration, even if that use circumvents the state act requirements of obtaining a state court judge’s approval of the proposed transfer after a hearing is held and specific findings are made. (Docket Entry No. 191 at 28). Rapid also advanced an unclean-hands defense. Rapid argued that Symetra has honored garnishments of future-payment streams from other secondary market companies, but not if Rapid seeks a garnishment of an annuitant’s future-payment stream to recover damages for breach of contract. To the extent that garnishment is an “encumbrance” on a future-payment stream, Rapid argued that Symetra has engaged in unclean hands by honoring garnishments from other parties, but not from Rapid. (Docket Entry No. 191 at 19-22). Rapid also argued that Symetra has engaged in unclean hands by objecting to an annuitant’s proposed transfer to Rapid under antiassignment provisions in annuity contracts, but refraining to object on the same ground to an annuitant’s proposed transfer to a Symetra affiliate or subsidiary. (Id. at 18-19). At the preliminary injunction hearing, Symetra submitted documents relating'to seven of its annuitants who had entered into proposed transfer agreements with Rapid and against whom Rapid invoked arbitration provisions. In these arbitration proceedings, Rapid asserted breaches of the proposed transfer agreements that the had annuitants signed. Before Rapid invoked the arbitration clauses, a state-court judge had expressly refused to approve the proposed transfer under the applicable state structured settlement protection statute or Rapid had simply not pursued the necessary approval. As a result, the annuitant had no enforceable obligation under the proposed transfer agreement to pay Rapid all or part of the future-income stream. In most of the cases, Rapid invoked arbitration based on an allegation that the annuitant had breached the proposed transfer agreement by failing to repay a cash advance, termed a “loan.” To remedy the alleged breach, and to recover the attorneys’ fees and costs it allegedly incurred, Rapid sought “damages,” usually in the same amount that Rapid would have obtained had the proposed transfer agreement been approved under the state protection act. The arbitration award was usually the re-suit of an “agreement” from a telephone hearing with the annuitant in a distant location and unrepresented by counsel. The award required the transfer of all or part of the annuitant’s future-payment rights. Rapid then took the arbitration award to a state court and sought confirmation and the entry of final judgment. The seven annuitants are Candy Ann Richardson, Paul Patterson, Kenneth Gross, Thomas Remedies, Mary Foreman, Leslie Dean, and Robert Hargette. The findings of fact as to these annuitants are set out in this court’s preliminary injunction order and are not repeated here. In its preliminary injunction application, Symetra asked this court to enjoin Rapid from seeking to enforce the arbitration awards or the judgments confirming those awards against Symetra with respect to these seven annuitants pending the permanent injunction hearing. Symetra also asked this court to enjoin Rapid from pursuing any additional arbitrations with Symetra annuitants to effect a transfer of all or part of the future-payment stream if state-court approval under the applicable state protection act has not been obtained, pending the permanent injunction hearing. On February 6, 2007, this court entered detailed findings and conclusions and issued a preliminary injunction order against Rapid. The order enjoined Rapid from using arbitration, directly or indirectly, to effect a transfer of all or part of a Symetra annuitant’s structured settlement future-payment stream unless a state court had previously approved the transfer as required under the applicable state structured settlement protection act. (Docket Entry No. 98). C. The Permanent Injunction Hearing On September 21, 2007 and October 9, 2007, this court held a two-day permanent injunction hearing at which the parties submitted evidence and presented witnesses. Symetra presented Kim McSheri-dan, Vice President of Symetra, who testified about Symetra’s business practices in the structured settlement industry, both as a structured settlement annuity issuer and as a structured settlement annuity repur-chaser in the secondary market. As a structured settlement annuity issuer, Symetra enters into annuity contracts with a tort defendant’s insurance company. Under these contracts, Symetra receives funds from the insurance company in exchange for assuming the long-term payout obligations of the structured settlement. McSheridan testified that Symetra entered the secondary market in structured settlements and began repurchasing future-payment rights from structured settlement payees in early 2005. Symetra periodically sends solicitation letters to its structured settlement annuitants, offering repurchasing services. (Docket Entry No. 207 at 51-52). McSheridan testified that as an annuity issuer, Symetra has objected to all Rapid’s proposed transfers with Symetra annuitants when Rapid seeks state-court approval under the state structured settlement protection acts or when Rapid seeks to confirm in a state court arbitration awards that redirect payments from a Symetra annuitant to Rapid. Symetra does not participate in the arbitration proceedings between Rapid and Symetra annuitants because Symetra is not a party to these arbitrations and has no arbitration agreement with Rapid. McSheridan testified that Symetra objects to Rapid’s proposed transfers “because Rapid doesn’t follow the [state structured settlement protection acts].” (Docket Entry No. 207 at 58). Symetra does not object to transfers proposed by other factoring companies, including transfers proposed by its own subsidiaries or affiliates that repurchase structured settlements, that comply with Symetra’s requirements and comply with the state structured settlement protection acts. (Id. at 62). McSheridan testified that Rapid’s failure to comply with the state structured settlement protection acts exposes Symetra to a risk of double payment because Symetra is contractually obligated by its annuity contracts, and legally obligated by the state structured settlement protection acts, to make payments to the structured settlement payees identified in the annuity contracts unless compelled to do otherwise by a valid court order. (Id. at 88). Because Rapid’s arbitration awards purport to require Symetra to send structured settlement payments to Rapid, rather than the annuitant, without the state-court approval required by the state structured settlement protection acts, Symetra’s compliance with such an arbitration award would violate its contractual and legal obligations and expose it to liability. When asked what Rapid needed to do so that Symetra would honor a proposed Rapid transfer, McSheridan testified as follows: If Rapid were to comply with the [state structured settlement protection acts] when they purchased these payments, if Rapid were to comply with our other requirements to make sure that we’re protected in those final orders, then, like every other factoring company out there who is purchasing payments and following all of those requirements, those transfers would go through. (Id. at 125). McSheridan also testified that Symetra charges all external factoring companies, including Rapid, an administrative fee of $3,000 for transfers involving life-contingent payments. (Docket Entry No. 207 at 145-46). Symetra charges all external factoring companies, including Rapid, lower fees of $650 to $800 for purchases of payment rights limited to a set period. (Id. at 192). The fees cover Symetra’s costs for reviewing documents, providing a change of address, tracking the necessary information, and other expenses that Symetra did not anticipate when it determined the price for the annuity contract. (Id. at 152). Symetra charges a higher fee for life-contingent payments because such payments require additional work to verify the living status of the individual to mitigate the greater risk of overpayments associated with life-contingent payments. (Id. at 147-48). Symetra does not charge its subsidiaries any administrative fees for any type of transfer. At the permanent injunction hearing, Rapid presented Harry Fleming, a lawyer who formerly worked for Rapid on structured settlements. Fleming testified about Rapid’s business practices as a structured settlement annuity repurchaser, including Rapid’s practice of initiating arbitration against structured settlement payees who had allegedly breached proposed transfer agreements with Rapid. Fleming testified that Rapid has invoked arbitration in approximately five to seven percent of Rapid’s proposed transfer agreements over the past three and a half years. (Docket Entry No. 213 at 13-14). Rapid invokes arbitration in its proposed transfer agreements when the proposed transferor — the structured settlement payee — allegedly breaches transfer agreement obligations, even if the transfer itself has not been approved under the applicable state structured settlement protection act. A breach can occur when the payee attempts to transfer future payments that the payee has already sold to another factoring company. A breach can also occur when the payee fails to repay amounts of money that Rapid has loaned or advanced to the payee before the applicable state structured settlement protection act court has been asked to consider whether to approve .the transfer. Fleming testified that initially, Rapid’s goal in initiating arbitration proceedings was essentially to circumvent the structured settlement protection acts. Fleming testified that Rapid used arbitration “to really do a transfer under whatever state [structured settlement protection act] applied to the customer” because “[i]t was our belief that we could do a transfer in arbitration.” (Docket Entry No. 213 at 20-21). Fleming testified that after “receiving] a surprising amount of push back from the [insurance] carriers on this way of doing arbitrations,” Rapid amended its practices to “just do a straight arbitration for lost profits and then a garnishment on any payments [the annuitant] may have to cover the damages award.” (Id. at 21, 23). Fleming testified that Rapid now seeks arbitration awards based on its lost profits from whatever breach it asserts and attorneys’ fees. (Id. at 26-27). Fleming acknowledged that such lost-profits damages awards had the same financial effect that the proposed (but not approved) transfer of the future-income stream would have had because the lost profits and fees Rapid seeks are the amount that the annuitant would have transferred to Rapid, minus the lump-sum payment Rapid would have paid to the annuitant. (Id. at 34, 50). Fleming testified that Rapid obtains court orders confirming the awards and then obtains writs of garnishment to enforce the- transfers of the annuity payments, despite the absence of state court approval under the applicable protection act. Fleming testified that Symetra objected to every case in which Rapid seeks state-court approval of a proposed transfer. Fleming also stated that of all annuity issuers in the primary structured settlement market, Symetra charges the highest administrative fees for life-contingent transfers. (Id. at 156-57). Symetra also submitted documents relating to three additional Symetra annuitants, Abigail Dempsey, Robert Ayars, and Troy Walker, who entered into proposed transfer agreements with Rapid. In these cases, Rapid invoked the arbitration provisions in the agreements the annuitants signed, asserting breaches of the agreements. The resulting arbitration award required the Symetra to pay Rapid the same payments that Rapid would have received under the proposed transfer. Before Rapid invoked the arbitration clauses, a state-court judge had expressly refused to approve the proposed transfer under the applicable state structured settlement protection statute or Rapid had simply not pursued such approval. The relevant facts as to these three additional annuitants are described below. 1. Abigail Dempsey On March 28, 2005, Rapid and Abigail Dempsey entered into a proposed transfer agreement, under which Rapid would receive a portion of Dempsey’s future Syme-tra annuity payments. Dempsey’s annuity payments consisted of $850 per month for life with twenty years of guaranteed payments beginning on November 25, 1990. (Symetra Binder 2, Ex. 7.1). Under the proposed transfer agreement, Rapid would receive 120 monthly payments of $800 from November 2011 through October 2020. (Id.) These payments had an aggregate value of $96,000 and a discounted present value of $64,016. (Docket Entry No. 208 at 6). In exchange, Rapid was to pay Dempsey a lump sum of $9,000. On May 5, 2005, Rapid applied for approval of the proposed transfer in Texas state court under the Texas structured settlement protection act. Dempsey is a Texas resident. Symetra filed an objection to the proposed transfer. After conducting a hearing on the proposed transfer, at which Symetra appeared, the state court in Nacogdoches County rejected the transfer on the grounds that it would contravene the Texas structured settlement protection act and was not in the payee’s best interests. On August 13, 2005, Rapid sent an arbitration demand to Dempsey, invoking the arbitration clause in the proposed transfer agreement. Rapid alleged that Dempsey breached that agreement by failing to “complet[e] actions required by the Court considering approval” and by refusing to repay $2,000 Rapid had advanced. (Symetra Binder 2, Ex. 7.5). Although Rapid alleges that Dempsey breached the agreement by failing to comply with requirements imposed by the state court as conditions for approving the proposed transfer under the Rapid agreement, a transcript of the hearing reflects that the state-court judge only determined that the transfer violated the Texas structured settlement protection act and was not in Dempsey’s best interests. Dempsey wished to transfer her future payments in order to use the lump-sum payment she would receive in exchange to buy special medical equipment for her grandson. The court suggested that Dempsey seek financial aid from charitable organizations to take care of her grandson’s medical needs but neither ordered Dempsey to take any action nor promised to approve the transfer if Dempsey met certain conditions. (Symetra Binder at 7.2). Rapid had given Dempsey a $1,000 advance before the state-court hearing on the proposed transfer and another $1,000 advance after the state court had rejected the proposed transfer. In the arbitration, Rapid sought recovery of the $2,000 advance along with its attorney’s fees and costs or, in the alternative, enforcement of the transfer of all the future-income rights that had been proposed in the disapproved transfer agreement. (Symetra Binder 2, Ex. 7.4). The arbitrator scheduled a hearing, for which Symetra received notice. Symetra did not participate in the arbitration. Dempsey took part in the arbitration by telephone and without counsel. On October 7, 2005, the arbitrator awarded Rapid the payments that Dempsey would have transferred to Rapid under the parties’ proposed agreement. The award provided that the “transfer pursuant to the transfer agreement” was “approved.” (Symetra Binder 2, Ex. 7.5). The arbitrator found that he had “jurisdiction to consider this matter both as to a breach of contract action and alternatively as a transfer under the Chapter 141 of the Texas Civil Practice & Remedies Code.” (Id.). The award provided that the proposed transfer agreement “complies with all substantive and procedural requirements” of the Texas structured settlement protection act. (Id.). The arbitrator found that Symetra’s interest in the arbitration was “in the nature of a stakeholder similar to that in an interpleader action. [Symetra does not] hold any substantive right to the proceeds.” (Id). The arbitrator also found that Symetra will “bear no relevant or material burden whatsoever by changing the address on its computer records and paying the monies as ordered herein to Rapid’s assignee rather than to Dempsey.” (Id). The award ordered Symetra to pay to Rapid 120 monthly payments of $800 from November 2010 to October 2020, “regardless of whether Dempsey is living.” (Id). On October 31, 2005, Rapid filed a petition against Dempsey in state court in Harris County, Texas seeking a final judgment confirming the arbitration award. Symetra filed suit in Nacogdoches County, Texas court, arguing that under the Texas structured settlement protection act, jurisdiction and venue were in Nacogdoches County, where Dempsey resides. The Harris County court abated its case on November 29, 2006. Symetra sought in-junctive relief in the Nacogdoches County court to prevent Rapid from seeking to enforce or confirm the arbitration award. The Nacogdoches court enjoined Rapid from attempting to enforce or confirm the arbitration award in any other court. Rapid appealed to the Texas Court of Appeals in Tyler, which affirmed the trial court’s preliminary injunction on August 31, 2007. 2. Robert Ayars Robert Ayars is a Georgia resident. On September 28, 2005, Rapid and Ayars entered into a proposed transfer agreement under which Rapid would receive a portion of Ayars’s future annuity payments. Ayars’s annuity payments consisted of a lump-sum payment of $25,000 paid on September 13, 2006; a lump-sum payment of $30,000 paid on September 13, 2001; and monthly payments of $425 beginning on September 13, 1991, payable for life, with thirty years of payments guaranteed. (Symetra Binder 2, Ex. 8.1). Under the proposed transfer agreement, Rapid would receive 120 monthly payments of $425 from October 2005 through October 2015. (Id.) These payments had an aggregate value of $51,000 and a discounted present value of $40,042. (Docket Entry No. 208 at 7). In exchange, Rapid was to pay Ayars a lump sum of $28,000. Ayars subsequently tried to cancel the proposed transfer agreement by sending Rapid a letter on January 1, 2006. In the letter, Ayars stated that if he had known that Rapid and Symetra were currently in litigation, he “would never have signed” the proposed transfer agreement. (Syme-tra Binder 2, Ex. 8.1). On January 25, 2006, Rapid sent Ayars a demand invoking the arbitration clause in the proposed transfer agreement, seeking to garnish the future-income payments. In the demand, Rapid stated “that the amount of the garnishment and the payments garnished yield the same economic result for Rapid as the originally contemplated transaction, after accounting for attorneys’ fees and other collection costs.” (Id.). Ayars did not appear at the arbitration, which took place in Houston, Texas. Symetra received notice of the arbitration but did not participate. On May 27, 2006, the arbitrator awarded Rapid all the payments that Ayars would have transferred to Rapid under the parties’ proposed agreement. The arbitrator found that he had “jurisdiction to consider this matter both as to a breach of contract action and alternatively as a transfer under the Official Code of Georgia, 51-12-70 through 51-12-77.” (Symetra Binder 2 at 8.2). The award stated that the proposed transfer agreement “complies with all substantive and procedural requirements” of the Georgia structured settlement protection act. (Id.). The arbitrator found that Symetra’s interest in the arbitration was “in the nature of a stakeholder similar to that in an interpleader action. [Symetra does not] hold any substantive right to the proceeds.” (Id.). The arbitrator also found that Symetra will “bear no relevant or material burden whatsoever by changing the address on its computer records and paying the monies as ordered herein to Rapid’s assignee rather than to Ayars.” (Id.). The award ordered Symetra to pay to Rapid “the amounts due under the contract,” or, in the alternative, the arbitration award “shall have the effect of the garnishment of the Assigned Payments as the remedy for Ayars’ breach of contract, with Rapid entitled to specific performance of the contract.” (Id.). Rapid filed suit against Ayars in state court in Harris County, Texas to confirm the arbitration award on June 1, 2005. Symetra received no notice of the state-court confirmation proceeding. However, on March 7, 2007, a Georgia state court found that under the Georgia structured settlement protection act, a transferor “has an irrevocable right to cancel any proposed transfer of structured settlement payment rights within 21 days of execution of the Transfer Agreement or at any hearing with respect thereto.” (Symetra Binder 2, Ex. 8.4). Because Ayars “has effectively exercised his right to cancel the Transfer Agreement in open court,” the Georgia court found that the transfer agreement “has been properly cancelled and is void and of no effect.” (Id.). Rapid has moved to abate the Harris County court confirmation proceeding until Symetra’s request for a permanent injunction in this court is resolved. 3. Troy Walker On September 21, 2004, Walker and Rapid entered into a proposed transfer agreement under which Rapid would receive a portion of Walker’s future annuity payments. Walker’s annuity payments consisted of 360 monthly payments of $1,750, beginning on October 1, 2000. (Symetra Binder 2, Ex. 9.2). Under the proposed transfer agreement, Rapid would receive 120 monthly payments of $1,750 from January 2013 through December 2022. (Id.) These payments had an aggregate value of $210,000 and a discounted present value of $108,864. (Docket Entry No. 208 at 8). In exchange, Rapid was to pay Walker a lump sum of $30,000. Walker is a Tennessee resident. On October 26, 2004, Rapid filed an application for approval of the proposed transfer in Tennessee state court. On February 23, 2005, a Tennessee state court rejected the proposed transfer on the grounds that it failed to comply with the Tennessee structured settlement protection act, the proposed transfer was not in Walker’s best interests, and rights under the original settlement agreement were not assignable. The court found that the Rapid — Walker proposed transfer agreement failed to make full disclosure and transferred rights without court approval, in violation of the Tennessee act. The court also found that the original settlement agreement was nonassignable. (Symetra Binder 2, Ex. 9.1). On October 6, 2005, Rapid sent a demand to Walker invoking the arbitration clause in the proposed transfer agreement on the ground that Walker had breached the agreement by attempting to cancel it. In the demand, Rapid sought “the enforcement of the contract as a whole.” (Syme-tra Binder 2, Ex. 9.3). Walker appeared at the arbitration, which was held in Houston, by telephone and without counsel. Symetra received notice of the arbitration but did not participate. On December 5, 2005, the arbitrator awarded Rapid the payments that Walker would have transferred to Rapid under the parties’ proposed transfer agreement. The award provided that the “transfer pursuant to the transfer agreement” was “approved” and “in the best interest of Walker and his one dependent.” (Symetra Binder 2, Ex. 9.4). The arbitrator found that he had “jurisdiction to consider this matter both as to a breach of contract action and alternatively as a transfer under the Structured Settlement Protection Act, Tennessee Code Annotated Section 47-18-2601.” (Id.) The award provided that the proposed transfer agreement “complies with all substantive and procedural requirements” of the Tennessee structured settlement protection act. (Id.). The award ordered Symetra to pay Rapid all “the assigned payments.” (Id.). Rapid filed suit against Walker in state court in Harris County, Texas to confirm the arbitration award on December 28, 2005. Symetra received no notice of the state-court confirmation proceeding. A hearing on the confirmation was continued until Symetra’s request for a permanent injunction in this court is resolved. D. The Evidence as to How Rapid Uses Arbitration Rapid enters into proposed transfer agreements with structured settlement payees. Under a proposed agreement, Rapid receives a portion of the payee’s future annuity payments in exchange for a lump-sum payment. The agreement contains a broad arbitration clause that requires the parties to arbitrate “[a]ny dispute or disagreement arising under this Agreement of any nature whatsoever including but not limited to those sounding-in constitutional, statutory, or common law theories as to the performance of any obligations, the satisfaction of any rights, and/or the enforceability hereof.” (Syme-tra Binder 2, Ex. 7.4). Disputes with a customer payee arise under a variety of circumstances. A customer may wish to cancel his or her contract, which may have a limited rescission period that is permitted under state law. (Docket Entry No. 213 at 17). Some customers — innocently or otherwise — attempt to sell the same future-payment rights to multiple factoring companies. (Id. at 17). Several of the customers discussed at the permanent injunction hearing failed to repay money that Rapid advanced them before Rapid obtained the necessary court approval of the proposed transfer, and on occasion even after a court has refused such approval. (Id. at 58-60). Other customers failed to repay advances that Rapid had given them after a state trial court had approved the proposed transfer but before a state appellate court had rejected the transfer on appeal. (Id. at 37-39, 42-43). In the cases of at least two customers, Candy Ann Richardson and Abigail Dempsey, Rapid asserted breach of contract based on the customer’s failure to perform actions that Rapid alleges a state court required as a condition precedent to approving the proposed transfer, although the evidence did not support this allegation. In the disputes that go to arbitration, Rapid has not obtained state-court approval of the proposed transfer as required under the state structured settlement protection acts. The arbitrations usually take place in Houston, Texas, where Rapid is located, regardless of where the customer resides. The same arbitrators, selected by Rapid, usually preside. Most of the customers are in a distant location, usually out of state. As a result, the customer often appears in the arbitration by telephone. (Docket Entry No. 213 at 30). Symetra does not participate in the arbitration on the ground that it has no obligation to arbitrate with Rapid. (Docket Entry No. 207 at 196). In most arbitrations, Rapid reaches an agreement with the customer and prepares an agreed award for the arbitrator’s signature. (Id. at 216). Rapid drafts the agreed arbitration award to contain language similar or identical to the language found in court orders approving transfers. (Docket Entry No. 213 at 180-81). In arbitration, it was originally Rapid’s practice to request the same transfer as in the parties’ proposed transfer agreement, which the state court had failed to approve as required under the applicable state structured settlement protection act. (Docket Entry No. 213 at 59). Arbitration awards from these older arbitrations have some variation in language, but generally purport to approve the transfer and require the annuity issuer to pay Rapid the same payments that Rapid would have received under the parties’ proposed transfer agreement if the necessary approval had been obtained. The awards contain the following (or similar) language: Based on the foregoing findings and being satisfied that the proposed transfer satisfies all applicable statutory requirements, it is hereby, ORDERED, ADJUDGED, AND DECREED that the transfer agreement and the Application is GRANTED, and the transfer pursuant to the transfer agreement ... is APPROVED. (Rapid Binder 3, Ex. 121; see also Syme-tra Binder 2, Ex. 7.5). In July 2006, after meeting resistance from annuity issuers and after this litigation began, Rapid stopped requesting a transfer of the same payments it would have received under the proposed transfer agreements. Instead, Rapid termed the relief it sought in arbitration as damages for lost profits based on breach of the proposed transfer agreement and fees and costs incurred in collecting the damages. (Docket Entry No. 213 at 59). Because Rapid’s damages calculation determines lost profits based on the assumption that a state court would have approved the proposed transfer, the lost-profits damages award usually has the same financial effect as the parties’ proposed transfer. (Id. at 34, 50). Although styled as awards of damages for breach of contract, Rapid’s newer arbitration awards still require the annuity issuer to pay Rapid the same payments that Rapid would have received under the proposed transfer had the necessary state-court approval been obtained under the applicable protection act. The more recent arbitration awards Rapid obtained state: It is further ORDERED that the Assigned Payments shall be made payable to and delivered to [Rapid] .... It is further ORDERED that, in the alternative, on account of [the customer’s] breach of contract, this Order shall have the effect of the garnishment of the Assigned Payments as the remedy for [the customer’s] breach of contract, with Rapid entitled to specific performance of the contract in exchange for the called for consideration to be paid to [the customer] less damages caused by him. (Symetra Binder 2, Ex. 8.3). The arbitration awards Rapid obtained, whether approving a transfer or awarding lost-profits damages for breach of contract, also state: The transfer of the Assigned Payments ... as described in the petition in this matter complies with all substantive and procedural requirements of the [applicable state structured settlement protection act] (recognizing that this matter is being heard in arbitration) and does not contravene any applicable law. Notice of this hearing was sent to all interested parties in compliance with the [applicable state structured settlement protection act]. The transfer also satisfies the Internal Revenue Code Section 5891, especially so if this order is then confirmed and domesticized of this judgment, and does not contravene any Federal or State statute or the order of any court or responsible administrative authority. (Id.). Rapid thus attempts to obtain the federal income-tax benefits that are linked to state court approval under the state structure-settlement protection acts, despite the fact that such approval has either been refused or simply not obtained. Rapid then takes the arbitration awards to the state court and seeks confirmation and the entry of final judgment. In the past, Symetra received no notice of such filings until the time for challenging the award was effectively over. More recently, Rapid has provided Symetra notice of such filings, and Symetra has succeeded in challenging the awards. II. Rapid’s Motion for Reconsideration Rapid moves for reconsideration of this court’s order issuing the preliminary injunction. Rapid argues that the Federal Arbitration Act (FAA) preempts the state structured settlement protection acts to the extent that acts “ ‘undermine’ or ‘limit’ or ‘restrict’ ” the FAA’s application. (Docket Entry No. 182 at 3). Rapid also contends that state structured settlement protection acts define “transfers” as “voluntary actions by a payee for consideration,” such that the awards entered in arbitration proceedings and judgments confirming those awards are not “transfers” that require state-court approval under the state structured settlement protection acts. Finally, Rapid argues that the state structured settlement protection acts “seem[ ] to contemplate the availability of arbitration” and that this court should “give meaning” to this language. (Id. at 5). These legal arguments were fully addressed in the January 10, 2007, 2007 WL 114497, preliminary injunction order. Rapid raises one new legal argument based on a recent Supreme Court case, which is fully explored below in analyzing the reasons for denying Rapid’s motion for reconsideration, taking into account the expanded factual record and developments in the case law. A. Preemption Rapid cites Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001), for the proposition that the FAA preempts laws “which restrict or limit the ability of [parties] to enter into arbitration agreements,” (Docket Entry No. 182 at 8), and notes that the Circuit City Court reaffirmed Southland Corp. v. Keating, 465 U.S. 1, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984). Rapid argues that under Southland, the FAA preempts state structured settlement protection acts to the extent that the acts conflict with the arbitration right set out in Rapid’s transfer agreements. In Southland, the Court found that the FAA preempted a state statute prohibiting arbitration. Southland, 465 U.S. at 10, 104 S.Ct. 852. In that case, the California Supreme Court had interpreted the California Franchise Investment Law “to require judicial consideration of claims brought under the State statute” and to preclude arbitration of such claims. Id. (emphasis added). Such an interpretation “directly conflicts with § 2 of the Federal Arbitration Act and violates the Supremacy Clause.” Id. FAA preemption occurs under Southland only if the state statute in question prohibits the arbitration of claims. Because the state structured settlement protection acts do not prohibit or limit arbitration, and this court did not apply those acts to preclude Rapid from arbitrating any of its claims with individuals with whom it enters proposed transfer agreements, preemption does not invalidate this court’s order. Rapid is free to arbitrate disputes with Symetra annuitants who signed proposed transfer agreements with Rapid, within the scope of the arbitration agreements. The only effect of this court’s injunction is to prevent Rapid from using the arbitration process to effect a transfer of that individual’s future-payment rights when that transfer has not been approved as required under the applicable state structured settlement protection act. The conflict between the FAA and the state statute that led the Court to find preemption in Southland is not present in the state structured settlement protection acts. A Texas appellate court confronted with the same argument that Rapid reiterates also found: None of the court findings required by section 141.004 [of the Texas state structured protection act] prohibits the creation of arbitration rights in a transfer agreement.... Nothing in the statute prohibits parties from including an arbitration provision in the transfer agreement. ... Section 141.004 of the SSPÁ requires prior court approval of the transfer agreement, not the arbitration clause, and is therefore not pre-empted by the FAA. In re Rapid Settlements, 202 S.W.3d 456, 460 (Tex.App.-Beaumont 2006, pet. denied); see also Allstate Life Ins. Co. v. Rapid Settlements, Ltd., No. CIV. A. 3:06cv00629DPJ, 2007 WL 2745806 (S.D.Miss. Sept. 20, 2007) (adopting the reasoning of this court’s preliminary injunction); Allstate Settlement Corp. v. Rapid Settlements, Ltd., No. 06-4989, 2007 WL 1377667, at *5 n. 4 (E.D.Pa. May 8, 2007) (“Pennsylvania’s Protection Act does not prohibit arbitration let alone even mention the issue of arbitrability. Nothing in this statute prohibits parties from including an arbitration provision in a transfer agreement.... Moreover, the court approval required by the Act is of the transfer agreement, not of the arbitration provision within it. Therefore, the FAA does not preempt the court approval requirement of the Pennsylvania Protection Act.” (internal citations omitted)); Rapid Settlements, Ltd. v. Symetra Life Ins. Co., 234 S.W.3d 788 (Tex.App.-Tyler 2007, no pet.) (adopting the reasoning of the Beaumont court and finding no preemption). Rapid cites no cases holding that the FAA preempts state structured settlement protection acts or similar statutes that do not conflict with the FAA. Rapid relies on In re David’s Supermarkets, Inc., 43 S.W.3d 94 (Tex.App.-Waco 2001, no pet.), and Commerce Park at DFW Freeport v. Mardian Constr. Co., 729 F.2d 334 (5th Cir.1984), for the proposition that the FAA preempts state statutes that “undercut” the enforceability of arbitration agreements or “prohibit or restrict an arbitrator’s fashioning relief in a reward.” (Docket Entry No. 182 at 9-10). Neither case that Rapid cites is similar to the current case. Both involve purported absolute prohibitions on arbitration. In compelling the plaintiff to submit to arbitration with his employer, the David’s Supermarkets court rejected the plaintiffs argument that “Texas public policy as manifested in the workers’ compensation statutes prohibits the arbitration of his claims.” 43 S.W.3d at 99 (emphasis added). Similarly, in Commerce Park, the Fifth Circuit rejected the plaintiffs argument that the Texas Deceptive Trade Practices Act (DTPA), which prohibited any waiver of a consumer’s DTPA cause of action, precluded arbitration of DTPA claims. 729 F.2d 334. The Fifth Circuit found that such an application of the DTPA’s no-waiver provision “would abrogate section 2 of the Arbitration Act” and “violate the supremacy clause.” Id. at 338. The state structured settlement protection acts do not prohibit arbitration of the disputes that Rapid has pursued with individuals who sign transfer agreements. Rapid has arbitrated disputes such as whether individuals signing transfer agreements breached by failing to return an advance payment or by seeking to sell the same future-payment stream twice. This court’s preliminary injunction did not prohibit Rapid from arbitrating such disputes. Rather, this court’s preliminary injunction prohibited Rapid only from using arbitration to effect a transfer of an annuitant’s future-payment stream “unless a state court has approved the transfer as required under the state structured settlement protection act.” (Docket Entry No. 84 at 70). The preliminary injunction did not “block litigants from entering into ... arbitration agreements involving structured settlement payment rights.” (Docket Entry No. 227 at 5). Arbitration is available to both Rapid and the proposed transferor as long as Rapid does not use arbitration to effect a transfer, directly or indirectly, of the transferor’s future-payment stream without obtaining the necessary state-court approval of the transfer under the state structured settlement protection act. The Supreme Court’s recent decision in Preston v. Ferrer, — U.S.-, 128 S.Ct. 978, 169 L.Ed.2d 917 (2008), does not change the result. In that case, the Court held that the FAA supersedes the California Talent Agencies Act (TAA) to the extent that the TAA vested exclusive original jurisdiction to resolve disputes arising under the act in the Labor Commissioner of California. The TAA regulates talent agents and talent agency agreements and requires any person providing the services of a talent agency to an artist to have a license. The TAA provides that any contract between an unlicensed agent and an artist is illegal and void. The challenged TAA provision required controversies arising under that Act to be referred to the Labor Commissioner, who hears and resolves the dispute. The Commissioner’s decision is appealable to a California superior court, which considers the dispute de novo. Preston, a California attorney, invoked the arbitration provision in his contract with Ferrer, who appears as “Judge Alex” on a television network program. Preston sought management fees that he was allegedly owed under the contract. Ferrer responded by filing a petition with the California Labor Commission, alleging that the contract was invalid and unenforceable under the TAA because Preston had acted as a talent agent without the license required by the TAA. Ferrer argued that Preston’s unlicensed status made the entire contract void. The Supreme Court held that “[w]hen parties agree to arbitrate all questions arising under a contract, the FAA supersedes state laws lodging primary jurisdiction in another forum, whether judicial or administrative.” 128 S.Ct. at 987. This holding does not alter the preemption analysis in this case. The state structured settlement protection acts do not lodge primary jurisdiction over disputes arising under a proposed transfer contract in another forum, either judicial or administrative, as the TAA did. Nor do the state structured settlement protection acts limit the parties’ ability to arbitrate disputes if they have entered into an otherwise enforceable arbitration agreement. The Supreme Court held in Preston that the FAA supersedes state laws lodging primary jurisdiction over the dispute that is subject to arbitration in another forum, whether judicial or administrative. 128 S.Ct. at 987. In holding that the FAA supersedes the TAA to the extent that the TAA required parties first to bring disputes to the Labor Commissioner, the Court emphasized that this holding addressed a situation in which the arbitration clause directed the parties to submit a dispute to arbitration and state law directed the parties to submit the same dispute to an administrative agency. The state structured settlement protection acts differ from the TAA in that they do not vest primary jurisdiction over disputes between a factoring company and an annuitant arising out of a proposed transfer agreement in a nonarbitral forum. Nor do the state structured-settlement protection acts allow parties who have contracted to arbitrate their disputes to “escape resolution of those rights in an arbi-tral forum.” Preston, 128 S.Ct. at 987. Under the state structured settlement protection acts, parties entering into a proposed transfer agreement are free to agree that an arbitrator will have exclusive original jurisdiction to resolve disputes that arise under the parties’ agreement. The protection acts require only that the parties must obtain state-court approval of the proposed transfer of the future-income payment right, based on a hearing and certain findings, before the obligation to make the transfer is effective. Because a court must approve a proposed transfer before the parties’ transfer obligations under the agreement become effective, Rapid has not sought arbitration based on the claim that an annuitant’s failure to make the transfer is a breach of the agreement if the state court has not approved the proposed transfer under the applicable state structured settlement protection act. Rather, Rapid has sought arbitration of other disputes, such as the annuitant’s failure to repay a cash advance made before a state court denied approval. Nothing in this court’s order precludes such arbitra-tions. In requiring a state court to approve a proposed transfer from a structured settlement payee to a third-party factoring company such as Rapid, the state structured settlement protection acts do not prohibit arbitration and are not in conflict with, or preempted by, the FAA. State-court approval of the transfer is a condition precedent to Rapid’s obligation to pay the assignment price and to the annuitant’s ability and obligation to make the assignment, but not a condition precedent to the existence of the proposed transfer agreement containing the arbitration clause. Contrary to Rapid’s argument, neither this court’s preliminary injunction nor the state structured settlement protection acts block arbitration of disputes involving structured settlements without advance court approval of the contract. Under the state structured settlement protection acts, Rapid is free to initiate arbitration proceedings against a structured settlement payee with whom Rapid has an arbitration agreement and to pursue damages awards for enforceable claims under that agreement. The state protection acts require only that a state court approve any proposed transfer of structured settlement payment rights before the transfer is valid and effective. Rapid may seek in arbitration any kind of money damages that does not require a diversion of an annuitant’s future-payment stream to Rapid without first obtaining the necessary state-court approval as required by the state structured settlement protection acts. The effect of this court’s order is not to prevent Rapid from arbitrating claims with its proposed transferors or from obtaining damages awards. The only effect of this court’s order is to prevent Rapid from using arbitration to effect a transfer of structured settlement payment rights if that transfer has not been approved under the applicable state structured settlement protection act. Rapid’s motion for reconsideration based on FAA preemption is denied. B. The Definition of “Transfer” Rapid argues that the language of the state structured settlement protection acts “does not and cannot encompass an arbitration proceeding.” (Docket Entry No. 182 at 14). Rapid contends that a “transfer” under the state structured settlement protection act must be “made by a payee for consideration” and that a payee must be the person “proposing” to make a transfer. This court addressed this argument in its June 4, 2007, contempt order, (Docket Entry No. 84), and Rapid raises no new arguments. The state structured settlement protection acts require state-court approval of a proposed “transfer.” The evidence shows that Rapid uses arbitration awards to obtain a payee’s future-payment rights without the necessary state-court approval. The fact that an arbitrator orders the payee to have the payments made to Rapid does not obscure the basis for the order. Rapid and the payee entered into a contract in which the payee “proposed to make the transfer” to Rapid, for consideration. Rapid also gives the payee money immediately, calling it a “loan” or “advance.” If the arbitrator awards Rapid all or part of the payee’s future-payment stream as “lost-profits” or “damages” made the basis of “garnishment,” Rapid receives the same payments that the payee would transfer to Rapid if a state court had approved the proposed transfer agreement under the state structured settlement protection act. And in calculating the damages or lost profits, the arbitrator makes findings that Rapid has subtracted an amount that is “fair value” as consideration for the future-payment stream. In entering into the proposed transfer agreement with Rapid, the payee proposed a transfer of the future-payment stream for consideration. The fact that Rapid has obtained such a transfer by an arbitration award purporting to award “lost profits” or “damages” for a breach of the agreement does not change the fact that it is a transfer under the applicable state structured settlement protection act. Rapid argues that an arbitration award that effects a transfer of a future-payment stream to pay for a damages award for breach of contract falls outside the scope of the state structured settlement protection acts, just like federal tax liens, child-support orders, bankruptcy court orders, and other court orders that require an annuity issuer to redirect structured settlement payments from the original payee to a third party. The state structured settlement protection acts do not apply to federal tax liens, child-support payments, and similar orders because they are not “transfers” under the state structured settlement protection act definitions. Rapid’s attempt to equate a “breach of contract” arbitration award that effectuates a transfer of structured settlement payments to tax liens, domestic-relations orders, and bankruptcy court orders is unpersuasive. Federal tax liens, child support liens, and turnover orders do redirect structured settlement payments to a third party. But such orders are not based on an agreement