Legal Document

489 U.S. 468 109 S.Ct. 1248 103 L.Ed.2d 488 VOLT INFORMATION SCIENCES, INC., Appellant,v.BOARD OF TRUSTEES the LELAND STANFORD JUNIOR UNIVERSITY. No. 87-1318. Argued Nov. 30, 1988. Decided March 6, 1989. Syllabus A construction contract between appellant and appellee contained an agreement to arbitrate all disputes arising out of a choice-of-law clause providing that would be governed by law "the place where Project is located." When dispute arose under contract, made formal demand for arbitration. In response, filed action against in California Superior Court alleging fraud breach contract; same action, sought indemnity from two other parties involved project, with whom it did not have arbitration agreements. The trial court denied appellant's motion compel granted appellee's stay Cal.Civ.Proc.Code Ann. § 1281.2(c), which allows such pending resolution related litigation party third bound it. State Appeal affirmed, holding (1) specifying located," incorporated rules arbitration, including into parties' agreement, (2) application 1281.2(c) was preempted Federal Arbitration Act (FAA or Act), even though interstate commerce. Held: 1. Appeal's conclusion intended incorporate their question state law, this will set aside. Pp. 474-476. (a) Appellant's contention court's effect finding had "waived" its federally guaranteed right waiver whose validity must judged reference federal rather than fundamentally misconceives nature rights created FAA. Section 4 does confer absolute but only obtain order directing "arbitration proceed manner provided [the parties'] agreement." (Emphasis added.) Here, found that, incorporating agreed situations within scope 1281.2(c). This FAA-guaranteed no first place, because require situation. 474-475. (b) Also without merit argument aside violates settled rule questions arbitrability contracts subject FAA resolved healthy regard policy favoring See Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 1, 24-25, 927, 941-942, 74 765. There certain procedural rules; simply ensure enforceability, according terms, private agreements arbitrate. Interpreting make applicable rules—which are manifestly designed encourage resort arbitral process—does offend liberal construction. 475-476. 2. Application contains express preemptive provision, nor reflect congressional intent occupy entire field Moreover, since FAA's principal pur ose enforced cannot said here undermine Act's goals policies. matter consent, coercion, generally free structure as they see fit. Just may limit issues arbitrate, Mitsubishi Motors Corp. Soler Chrysler-Plymouth, Inc., 473 614, 628, 105 3346, 3354, 87 444, so too specify conducted. Where, here, abide rules, enforcing those terms fully consistent goals, if result stayed when otherwise permit go forward. 476-479. Affirmed. REHNQUIST, C.J., delivered opinion Court, WHITE, BLACKMUN, STEVENS, SCALIA, KENNEDY, JJ., joined. BRENNAN, J., dissenting opinion, MARSHALL, joined, post, p. 479. O'CONNOR, took part consideration decision case. James E. Harrington, San Francisco, Cal., petitioner. David M. Heilbron, respondent. Chief Justice REHNQUIST Court. 1 Unlike counterpart, Act, 1280 et seq. (West 1982), provision allowing litigation. We hold statute pre-empted 9 U.S.C. seq., case California. 2 Appellant Volt Information Sciences, Inc. (Volt), Board Trustees Leland Stanford Junior University (Stanford) entered install system electrical conduits on campus. "arising relating thereof."1 also "[t]he Contract shall App. 37. During course developed regarding compensation extra work, responded filing companies petitioned dispute.2 turn moved pursuant permits it, "there possibility conflicting rulings common issue fact."3 Volt's proceedings outcome authority 59-60. 3 affirmed. acknowledged commerce, governs permitting involving agreement. 64-65. However, held " 'the project located,' Id., at 65. Finally, rejected nonetheless 68-80. reasoned purpose 'not [to] mandate claims, merely enforcement . privately negotiated agreements.' 70 (quoting Dean Witter Reynolds Byrd, 470 213, 219, 1238, 1242, 84 158 (1985)). While therefore pre-empts laws render unenforceable, "[i]t follow, however, has preclusive chosen [arbitration] rules." 71. To contrary, thrust strictly contract," ibid., should "at liberty choose arbitrate." 72. prevent actually "inimical policies underlying law," id., 73, "force contrary Supreme petition discretionary review. 87. postponed our jurisdiction hearing merits. 485 976, 108 1268, 99 480 (1988). now we appellate jurisdiction4 affirm. 5 devotes bulk convincing us erred interpreting mean Brief 66-96. acknowledges, must, interpretation ordinarily sit 26, 29. But maintains particular contractual reasons. 6 suggests "federally guara teed dispute," law. 17, 30-36. "to overrule judiciary's longstanding refusal enforce arbitrate," supra, U.S., 219-220, S.Ct., 1241-1242, 'upon footing contracts,' Scherk Alberto-Culver Co., 417 506, 511, 94 2449, 2453, 41 270 (1974) H.R.Rep. 96, 68th Cong., 1st Sess., (1924)). declares written any commerce maritime transaction "shall valid, irrevocable, enforceable, save upon grounds exist equity revocation 2, "petition United States district 7 time; confers (emphasis added). Here fell Calif.Code Civ.Proc.Ann. 1982). dispute, Accordingly, presented involves "waiver" merit. 8 Second, argues 49-52; 92-96, citing 765 (1983) (§ "create[s] body substantive arbitrability, coverage Act," requires "questions addressed arbitration," "any doubts concerning arbitrable favor arbitration"); 626, 3353, 444 (1985) (in construing FAA, "as intentions control, generously construed arbitrability"). These cases establish applying general state-law principles Perry Thomas, 482 483, 493, n. 9, 107 2520, 2527, 96 426 (1987), due given ambiguities itself do think offended principle includin apply governing conduct arbitration—rules process—simply forth Cone, embodied FAA.5 10 remains whether, assuming meant what mean, extent used It undisputed falls authorizing Appellee contends, §§ specific sections claimed conflict state-court proceeding thus pre-empt statute. 43-50. some merit,6 need resolve decide case, conclude proceedings, where, accordance 11 pre-emptive Bernhardt Polygraphic 350 198, 76 273, 100 L.Ed. 199 (1956) (upholding covered FAA). Congress completely displaced regulation area, conflicts law—that is, "stands obstacle accomplishment execution full purposes objectives Congress." Hines Davidow tz, 312 52, 67, 61 399, 404, 85 581 (1941). before us, therefore, whether itself, not. 12 long-standing 2453 doubt aware expeditious disputes, passage "was motivated, foremost, desire entered." 220, 1242. recognized so, 1241 (the "does claims"), who agree excluding claims 3354 (citing Prima Paint Flood & Conklin Mfg. 388 395, 406, 1801, 1807, 18 1270 (1967)). courts like contracts, terms. Paint, 12, 1806 enforceable more so"). 13 recognition Congress' ensuring "require judicial forum contracting arbitration." Southland Keating, 465 10, 104 852, 858, 79 (1984). See, e.g., 10-16, 858-861 (finding rendered franchise unenforceable); 490, 2525 unenforceable wage collection claims). follow prevents different itself. Indeed, quite inimical primary Mitsubishi, By "rigorously enforce" 221, give expectations parties, doing violence behind judgment Appeals 14 15 O'CONNOR 16 MARSHALL joins, dissenting. 17 litigants were obligating them making obligation specifically enforceable. provisions standard form prepared American Institute Architects endorsed Associated General Contractors America; among these 7.1.1: "The located."1 invoked clause, while attempted avoid (apparently contractors agreements). (FAA), ante, 474. reliance circumstances presented, permitted Volt, surprisingly, suggested Supremacy Clause compelled result. found, solely California, exclusion law.2 reaching relied extrinsic evidence intent, language 'law located' govern. 66-67.3 19 declines review holding, denies important statute, apparently finds involved. I can accept neither unusual Court's unwillingness reverse Appeal.4 20 * Contrary view, reviewable independent A. 21 appears based review." Ante, quarrel proposition ending analysis level generality, overlooks well-established precedent guard arbitrary denials way preclude immune "adequacy." 22 Many involve, understandably enough, Clause. Appleby City New York, 271 364, 46 569, 992 (1926), example, petitioners alleged city unconstitutionally impaired deeding submerged lands harbor. Taft stated follows: 23 determine are, first, there second, proper effect, and, third, subsequent legislation court? answer independently state] court. Of weight judgment, perform duty guaranty Constitution inviolability legislative unless consideration." 379-380, 573. 24 Similarly, Indiana ex rel. Anderson Brand, 303 95, 58 443, 82 685 (1938), State's repeal teacher tenure petitioner's employment. reversed notwithstanding rested ground petitioner continued employment: "On question, one primarily accord respectful great views highest but, constitutional become dead letter, ourselves made, conditions, has, later legislation, obligation." 100, 446. Phelps Education West 300 319, 322-323, 57 484-485, 81 674 (1937); Irving Trust Co. Day, 314 556, 561, 62 398, 401, 86 452 (1942). 25 arisen solel brought Memphis Gas Beeler, 315 649, 857, 1090 (1942), Commerce challenge tax dependent operated. sustained Tennessee (and reach issue), emphasized "meaning contract" "local conclusively performance safeguard asserted right, inquire rests fair substantial basis." 654, 861. 26 ability decisions limited contracts. Rogers Alabama, 192 226, 257, 48 (1904), noted 27 "necessary well exercise protect declined plain deny rights. known been impaired. illustration rule." 230, 258 (citation omitted). 28 accordingly dismissal, "prolixity," quash indictment returned him grand jury blacks excluded.5 29 statutory, constitutional, one, antecedent same. Where existence turns logically essential function ancillary consider question. could nullified manipulation law." Wechsler, Appellate Jurisdiction Court: Reflections Law Logistics Direct Review, 34 Wash. Lee L.Rev. 1043, 1052 (1977). Hill, Inadequate Ground, 65 Colum.L.Rev. 943 (1965). 30 No less cited cases, instant readily circumvented having exclude applicability deference court, "clearly differently [we] state's court." 1052.6 B 31 course, "a required submit he submit." Steelworkers Warrior Gulf 363 574, 582, 80 1347, 1353, 1409 (1960). so." 478. Since to, moreover, wish write outside Such rule, govern done so. And clear past, 32 Not agreements, establishes consulted determining (or extent) provides most clearly (1983): 33 "Section [of FAA] declaration contrary. section create Act. [T]he Courts consistently concluded agree. problem hand allegation waiver, delay, defense arbitrability." More recently, (1985), "by 'federal arbitrability.' quoting 24, 941. 35 recognizes relevance unoffended decision, which, suggests, determines procedura apply. 476.7 disagree emphatically frustrated here. Applying stays goes forward, means litigated arbitrated. Thus, say arguably implicates erroneously arbitrate.8 36 appearing recognize raise refuses misconstrued warrant failing stop intentions, take account command "those [be] Motors, 3354. below both thoroughly intertwined. rest "adequate ground" bar Enterprise Irrigation Dist. Farmers Mutual Canal 243 157, 164, 37 318, 320, 644 (1917) ("But non-federal interwoven plain"). With might different, barred. Cf. Ake Oklahoma, 68, 74-75, 1087, 1091-1092, 53 ("[W]hen depends ruling, prong precluded"). II Construed t e Appeal, yet "with 941, bear assigned 38 discerning intent. recall, rely drafted themselves. Rather, portions commonly industry. That makes unlikely variance clauses interpreted. 39 seems me beyond normal another applicable; speak interaction cursory glance texts confirms observation: contain relation discussions clauses. R. Weintraub, Commentary Conflict Laws 7.3C (2d ed. 1980); Scoles P. Hay, 632-652 (1982); Leflar, L. McDougal, Felix, Conflicts 147 (4th 1986). true codifications. Uniform Commercial Code 1-105(1) (1978); Restatement (Second) 187 (1971). Indeed notes expressly deal ever-present respective spheres nation member States." Comment c. Decisions impression state-federal issue. On least occasions called vel non containing similar Despite adverting contexts opinions, ascribed significance whatever connection (1974); (1956).9 lower similarly rejects notion renders inapplicable.10 Choice-of-law never dealing relationship basis believing 40 literal contract—"the place"—gives indication intention normally something taking location. supremacy, includes Claflin Houseman, 93 130, 136, 833 (1876); Hauenstein Lynham, 628 (1880) ("[T]he Constitution, laws, treaties much every own local Constitution"). As judge noted, "under matters cognizable definitively spoken." (opinion Capaccioli, J.). mere choice selection over ." 84. absence assumed precisely once previously confronted virtually Fidelity Savings Loan Assn. De la Cuesta, 458 141, 102 3014, 73 664 (1982), stated: "This Deed Property 148, 5, 3020, 5. Rejecting thereby held: "Paragraph deed jurisdiction' property located; 3024, 12. inapplicable contract. III 42 Most commercial country clauses, Stanford-Volt Laws, 632-633 ("Party autonomy select limitations. They usually contract"). Were construe expression virtual nullity presently existing believe intend consequences flow insertion clause. Even powerless effectively nullify vital piece legislation. respectfully dissent. read "All thereof, decided Industry Rules Association then prevailing mutually [sic] otherwise. 40. 4, parallel 1281.2 1982); Acts authority, placed. 45-46. asked until completed, presumably 3, 1281.2(c)(3) provides, pertinent part, "[a] special party, series transactions fact[,] refuse intervention joinder single proceeding; issues; (3) (4) proceeding." Under 1257(2), final "where drawn being repugnant States, validity." explicitly drew 1982) grounds, contending applied invalid Because upheld challenge, seem assured. Longshoremen Davis, 476 380, 387, 8, 106 1904, 1910, 90 389 (1986) 1257(2) exists claim facts law); McCarty McCarty, 453 210, 101 2728, 2734-2735, 69 589 (1981) (same). directly address "simply uph[eld] agreement," 4. "statute," argues, appeal lie. 4-5. disagree. Our meaning holds grounds." Japan Line, Ltd. County Los Angeles, 441 434, 441, 1813, 1817, 60 336 (1979) Cohen 403 15, 17-18, 91 1780, 1784-1785, 284 (1971); Warren Trading Post Arizona Tax Comm'n, 380 685, 686, 1243, 165 (1965); Bantam Books, Sullivan, 372 58, 61, 83 631, 634, 584 (1963); Dahnke-Walker Milling Bondurant, 257 282, 288-290, 106, 107-108, 66 239 (1921)), regardless reasons [state court's] put." 289, 108. contended conflicted progeny, sufficient bring premised dissent, post 486-487, foster indicated, practical problems arise multiparty include taken lead fashioning response problem, giving consolidate minimize potential contradictory judgments. Calif.Civ.Proc.Code "substantive" 2—are 859, (1984), appear (referring "brought States"); court"), 16, 861 (expressly reserving "§§ courts"); 29, 867 (O'CONNOR, dissenting) (§§ court). Document A201, Conditions 7.1.1 (1976). correctly applicable, 1982): "[I]t apparent apply, granted." attempts cast arguing provide orders "state courts, obliged grant 942, (1983); nn. 34-35, immaterial "apply." 470, 2—which indisputably (1984)—requires (Indeed, stand 31, 20, 868 dissenting).) issues, compatible arbitrate—which unless—as held—the somehow play role word 'place' state." 66. added: "We find reasonable located America." 67. 477-479, Rogers, frequently prevented Davis 263 22, 44 13, 14, 68 143 (1923); Brown Western Ala., 338 294, 295-297, 105, 106-107, (1949); NAACP Alabama Patterson, 357 449, 454-458, 78 1163, 1167-1170, 1488 (1958); Kentucky, 466 341, 348-349, 1830, 1835-1836, 346 recent years willing examine rulings, Henry Mississippi, 379 564, 408 (1965), study historically shown decisions. 943, 991 cf. 25, 14. adequacy ruling clear, poses difficult employed wide range standards, ranging de novo review, 573, (1926) ("[W]e present inquiry"), inquiring "fair basis," 861, (1942); Demorest Bank 321 36, 42, 64 384, 388, 88 526 (1944), "palpably erroneous," 323, 485, (1937). narrow settle precise formulation. below, employed. Some suggest applies ("[A]mbiguities [must be] arbitration"). reading flatly contradicted Cone. omits quotation, 475, "whether Hospital, Whether 476, relevant California's likely i.e., induce entirely. up Congress, "fashio[n] response," ___, meantime substitute notions good currently written. Scherk, following clause: Illinois, U.S.A. performance." 509, 2452, discussing context, 519, 2457, Illinois. York Vermont 205, 277, Huber, Hunt Nichols, Architectural Stone 625 F.2d 25-26, (CA5 1980 ; Commonwealth Edison Oil 541 1263, 1268-1271 (CA7 1976); Burke Public Schools Shaver Partnership, N.C. 408, 420-424, 279 S.E.2d 816, 823-825 (1981); Episcopal Housing Ins. 269 S.C. 637, 647, 650, (1977); River Pulp Paper Eichleay 637 S.W.2d 853, 857-858 (Tenn.1982); Mamlin Susan 490 636-637 (Tex.Civ.App.1973); Liddington Energy Group, Cal.App.3d 1520, 238 Cal.Rptr. 202 (1987) (reversing specified law). Garden Grove Community Church Pittsburgh-Des Moines Steel 140 251, 262, 191 Standard Orleans, Elliott So.2d 671, 677 (La.1978). contends antedated informed used. 31-32; Tr. Oral Arg. 35. greater force negotiated, industry-wide impossible foreign failed explicitly.

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