Moses H. Cone Memorial Hospital v. Mercury Construction Corporation

PETITIONER: Moses H. Cone Memorial Hospital
RESPONDENT: Mercury Construction Corporation
LOCATION: U.S. Court of Appeals for the Fifth Circuit

DOCKET NO.: 81-1203
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Fourth Circuit

CITATION: 460 US 1 (1983)
ARGUED: Nov 02, 1982
DECIDED: Feb 23, 1983

ADVOCATES:
A.H. Gaede, Jr. - on behalf of Respondent
Jack W. Floyd - on behalf of Petitioner

Facts of the case

Question

Media for Moses H. Cone Memorial Hospital v. Mercury Construction Corporation

Audio Transcription for Oral Argument - November 02, 1982 in Moses H. Cone Memorial Hospital v. Mercury Construction Corporation

Audio Transcription for Opinion Announcement - February 23, 1983 in Moses H. Cone Memorial Hospital v. Mercury Construction Corporation

Warren E. Burger:

The judgment and opinion of the Court in Moses Cone Memorial Hospital against Mercury will be announced by Justice Brennan.

William J. Brennan, Jr.:

This case is here on certiorari to the Court of Appeals for the Fourth Circuit.

The petitioner, a hospital contracted with the respondent building contractor for the building of additions to the hospital.

And that contract called for arbitration of disputes arising out of any breach.

And the contractor presented several arbitrable cut claims to the hospital or increases in construction costs due to delay or inaction by the hospital, and the hospital refused to pay the claims.

Instead, the hospital filed an action in North Carolina state court, seeking a declaration that the contractor had no right to arbitration and also seeking an injunction forbidding the contractor from taking any steps directed toward arbitration.

The contractor thereupon brought a diversity action.

And the United States District Court for North Carolina, seeking an order compelling arbitration, an order he sought under Section 4 of the United States Arbitration Act of 1925.

And Section 4 provides.

That a party aggrieved by the refusal of another to arbitrate as provided by an agreement between them may petition the District Court,? and I quote from the statute, ?For an order directing that such arbitration proceed in the manner provided for in such agreement.?

Well, instead of proceeding with the suit, the District Court stayed the federal action, pending decision of the hospital's state court suit on the ground that the two suits involved the identical issue namely the arbitrability any of the contractor's claims.

The Court of Appeals for the Fourth Circuit reversed the District Court's stay order and remanded with instructions to the District Court to enter an order to arbitrate.

And we affirm the judgment of the Court of Appeals.

Seven years ago, in a case called Colorado River Conservation District versus the United States, we held that, and I quote from that opinion, ?the pendency of an action in the state court is no bar to proceedings concerning the same matter in the federal court having jurisdiction this on the ground that federal courts have a, ?Virtually unflagging obligation to exercise the jurisdiction given them.

We recognized, however, that exceptional circumstances might permit the dismissal of federal suit due to the presence of a concurrent state proceeding if justified by reasons of wise judicial administration.

In the opinion we have filed today examines in detail the reasons argued to constitute exceptional circumstances in this case, and we have concluded that such exceptional circumstances have not been established and therefore affirm the judgment of the Court of Appeals.

Justice Rehnquist joined by the Chief Justice and Justice O'Connor has filed a dissenting opinion.

Warren E. Burger:

Thank you Justice Brennan.