Doctor's Associates, Inc. and Nick Lombardi v. Paul Casarotto et Ux. (517 U.S. 681)
U.S. Supreme Court · decided May 20, 1996 · Supreme Court Database (Spaeth)
- Citation
- 517 U.S. 681 · 116 S. Ct. 1652
- Decided
- May 20, 1996
- Term
- October Term 1995
- Vote
- 8–1
- Majority author
- Justice Ginsburg
- Issue area
- Federalism
- Disposition
- Reversed and remanded
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
Opinion excerpt
Justice Ginsburg delivered the opinion of the Court. This case concerns a standard form franchise agreement for the operation of a Subway sandwich shop in Montana. When a dispute arose between parties to the agreement, franchisee Paul Casarotto sued franchisor Doctor’s Associates, Inc. (DAI), and DAI’s Montana development agent, Nick Lombardi, in a Montana state court. DAI and Lombardi sought to stop the litigation pending arbitration pursuant to the arbitration clause set out on page nine of the franchise agreement. The Federal Arbitration Act (FAA or Act) declares written provisions for arbitration “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U. S. C. § 2. Montana law, however, declares an arbitration clause unenforceable unless “[n]otice that [the] contract is subject to arbitration” is “typed in underlined capital letters on the first page of the contract.” Mont. Code Ann. §27-5-114(4) (1995). The question here presented is whether Montana’s law is compatible with the federal Act. We hold that Montana’s first-page notice requirement, which governs not “any contract,” but specifically and solely contracts “subject to arbitration,” conflicts with the FAA and is therefore displaced by the federal measure. I Petitioner DAI is the national franchisor of Subway sandwich shops. In April 1988, DAI…
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