Moses H. Cone Memorial Hospital v. Mercury Construction Corp.

Moses Cone Mem. Hosp. v. Mercury Constr. Corp.
Supreme Court of the United States
Argued November 2, 1982 Decided February 23, 1983
Full case name	Moses H. Cone Memorial Hospital v. Mercury Constr. Corp.
Citations	460 U.S. 1 (more) 103 S. Ct. 927, 74 L. Ed. 2d 765
Case history
Prior	80 CvS. 6787, North Carolina General Court of Justice, Greensboro Division; 656 F.2d 933 (4th Cir. 1981)
Holding
District Court stay of petition seeking to compel arbitration pending resolution of action in state court was properly appealable as final since its sole purpose and effect were the surrender of jurisdiction to a state court; stay itself was improper abstention since Colorado River exceptional circumstances did not apply. Fourth Circuit affirmed.
Court membership
Chief Justice Warren E. Burger Associate Justices William J. Brennan Jr. · Byron White Thurgood Marshall · Harry Blackmun Lewis F. Powell Jr. · William Rehnquist John P. Stevens · Sandra Day O'Connor
Case opinions
Majority	Brennan, joined by White, Marshall, Blackmun, Powell, Stevens
Dissent	Rehnquist, joined by Burger, O'Connor
Laws applied
Federal Arbitration Act, Federal Rules of Civil Procedure

Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983), commonly cited as Moses Cone or Cone Hospital, is a United States Supreme Court decision concerning civil procedure, specifically the abstention doctrine, as it applies to enforcing an arbitration clause in a diversity case. By a 6–3 margin, the justices resolved a complicated construction dispute by ruling that a North Carolina hospital had to arbitrate a claim against the Alabama-based company it had hired to build a new wing, even though it meant that it could not consolidate it with ongoing litigation it had brought in state court against the contractor and architect.

Justice William Brennan wrote for the majority that a district court's stay of the contractor's petition to compel arbitration was an "abuse of discretion". It had not properly applied the Court's prior ruling in Colorado River Water Conservation District v. United States. Since the net effect of the stay was to force the contractor to litigate in state court, Mercury's appeal to the Fourth Circuit was proper, and the appeals court properly reversed the stay. Since the contract was covered by the Federal Arbitration Act (FAA), the hospital had no way to avoid arbitration, which the contractor could not be assured of getting under existing state law.

William Rehnquist's dissent, joined by Chief Justice Warren E. Burger and Sandra Day O'Connor, accused the majority of misreading the case in order to get the contractor into arbitration. He argued that another case, Will v. Calvert Fire Insurance Co., permitted the district court's action, which in any case was routine docket management practiced by many district judges.

While arbitration was not the main issue in the case, it had a profound effect on future cases concerning the FAA. Two of Brennan's passing dicta, that the FAA applied to actions in state court and that it enacted a national policy in favor of arbitration, became the central holdings of Southland Corp. v. Keating the following year, a case from which O'Connor and Rehnquist dissented. Those holdings have been challenged, even by some other justices, as fundamentally at odds with the language and legislative history of the FAA, even as the Court has continued to expand its scope since then.