Volt Info. Scis. v. Bd. of Trs.

Case Summary

Procedural Posture

Appellant challenged a decision of the Court of Appeal of California, which affirmed a lower court order that denied appellant's motion to compel arbitration and that stayed the arbitration proceedings pending the outcome of related litigation, on authority of Cal. Code Civ. Proc. § 1281.2(c). The Court exercised jurisdiction pursuant to 28 U.S.C.S. § 1257(2) because a state statute's constitutionality was at issue.

Overview

Appellant and appellee entered into a construction contract. The contract contained an agreement to arbitrate all disputes between the parties "arising out of or relating to this contract or the breach thereof." It also contained a choice-of-law clause providing that the contract shall be governed by the law of the place where the project was located. A dispute developed, and appellee sued appellant and others in state court. Appellant sought a stay of the proceedings and to compel arbitration. The court refused to stay the proceedings and stayed the arbitration pursuant to Cal. Civ. Proc. Code § 1281.2(c) because third parties were involved who were not bound by the arbitration agreement. The state appellate court affirmed. The Court had jurisdiction because the validity of the statute was at issue. The Court affirmed the state court and held that, while the Federal Arbitration Act enforced arbitration agreements in interstate commerce matters, it was not preemptive of state law where the parties agreed in their contract to be bound thereby.

Outcome

The Court affirmed the state appellate court.

LexisNexis^® Headnotes

Business & Corporate Compliance > ... > Pretrial Matters > Alternative Dispute Resolution > Judicial Review

Civil Procedure > ... > Alternative Dispute Resolution > Arbitration > General Overview

HN1  Alternative Dispute Resolution, Judicial Review

Unlike its federal counterpart, the California Arbitration Act, Cal. Civ. Proc. Code § 1280 et seq., contains a provision allowing a court to stay arbitration pending resolution of related litigation.

Business & Corporate Compliance > ... > Contracts Law > Contract Conditions & Provisions > Arbitration Clauses

Civil Procedure > ... > Alternative Dispute Resolution > Arbitration > General Overview

Constitutional Law > Supremacy Clause > General Overview

Civil Procedure > ... > Arbitration > Federal Arbitration Act > General Overview

Business & Corporate Compliance > ... > Arbitration > Federal Arbitration Act > Arbitration Agreements

Business & Corporate Compliance > ... > Contracts Law > Types of Contracts > Construction Contracts

Education Law > Administration & Operation > School Property > Construction & Repair

International Trade Law > Dispute Resolution > International Commercial Arbitration > Arbitration

HN2  Contract Conditions & Provisions, Arbitration Clauses

Application of the California Arbitration Act, Cal. Civ. Proc. Code § 1280 et seq., is not preempted by the Federal Arbitration Act, 9 U.S.C.S. § 1 et seq., in a case where the parties have agreed that their arbitration agreement will be governed by the law of California.

Business & Corporate Compliance > ... > Contracts Law > Contract Conditions & Provisions > Arbitration Clauses

Business & Corporate Compliance > ... > Pretrial Matters > Alternative Dispute Resolution > Judicial Review

HN3  Contract Conditions & Provisions, Arbitration Clauses

See Cal. Code Civ. Proc. § 1281.2(c).