Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 15 (1995)

Page:   Index   Previous  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  Next



Thomas, J., dissenting

We so held in Volt because we concluded that the FAA does not force arbitration on parties who enter into contracts involving interstate commerce. Instead, the FAA requires only that "arbitration proceed in the manner provided for in [the parties'] agreement." 9 U. S. C. 4. Although we will construe ambiguities concerning the scope of arbitrability in favor of arbitration, see Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U. S. 1, 24-25 (1983), we remain mindful that "as with any other contract, the parties' intentions control," Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S. 614, 626 (1985). Thus, if the parties intend that state procedure shall govern, federal courts must enforce that understanding. "There is no federal policy favoring arbitration under a certain set of procedural rules; the federal policy is simply to ensure the enforceability, according to their terms, of private agreements to arbitrate." Volt, 489 U. S., at 476.


In this case, as in Volt, the parties agreed to mandatory arbitration of all disputes. As in Volt, the contract at issue here includes a choice-of-law clause. Indeed, the language of the two clauses is functionally equivalent: Whereas the choice-of-law clause in Volt provided that "[t]he Contract shall be governed by the law of [the State of California]," id., at 470 (citation and internal quotation marks omitted), the one before us today states, in paragraph 13 of the Client's Agreement, App. to Pet. for Cert. 44, that "[t]his agreement . . . shall be governed by the laws of the State of New York." New York law prohibits arbitrators from awarding punitive damages, Garrity v. Lyle Stuart, Inc., 40 N. Y. 2d 354, 353 N. E. 2d 793 (1976), and permits only courts to award such damages. As in Volt, petitioners here argue that the New York rule is "antiarbitration," and hence is pre-empted by the FAA. In concluding that the choice-of-law clause is am-

Page:   Index   Previous  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  Next

Last modified: October 4, 2007