Nitro-Lift Technologies, L. L. C. v. Howard

Cite as: 568 U. S. ____ (2012) 1
Per Curiam
SUPREME COURT OF THE UNITED STATES
NITRO-LIFT TECHNOLOGIES, L. L. C. v. EDDIE LEE
HOWARD ET AL.
ON PETITION FOR WRIT OF CERTIORARI TO THE SUPREME
COURT OF OKLAHOMA
No. 11–1377. Decided November 26, 2012
PER CURIAM.
State courts rather than federal courts are most fre­
quently called upon to apply the Federal Arbitration Act
(FAA), 9 U. S. C. §1 et seq., including the Act’s national
policy favoring arbitration. It is a matter of great im­
portance, therefore, that state supreme courts adhere to a
correct interpretation of the legislation. Here, the Okla­
homa Supreme Court failed to do so. By declaring the
noncompetition agreements in two employment contracts
null and void, rather than leaving that determination to
the arbitrator in the first instance, the state court ignored
a basic tenet of the Act’s substantive arbitration law. The
decision must be vacated.
* * *
This dispute arises from a contract between petitioner
Nitro-Lift Technologies, L. L. C., and two of its former
employees. Nitro-Lift contracts with operators of oil and
gas wells to provide services that enhance production.
Respondents Eddie Lee Howard and Shane D. Schneider
entered a confidentiality and noncompetition agreement
with Nitro-Lift that contained the following arbitration
clause:
“ ‘Any dispute, difference or unresolved question be­
tween Nitro-Lift and the Employee (collectively the
“Disputing Parties”) shall be settled by arbitration by
a single arbitrator mutually agreeable to the Disput­
ing Parties in an arbitration proceeding conducted in
2 NITRO-LIFT TECHNOLOGIES, L. L. C. v. HOWARD
Per Curiam
Houston, Texas in accordance with the rules existing
at the date hereof of the American Arbitration Associ­
ation.’ ” Pet. for Cert. 5.
After working for Nitro-Lift on wells in Oklahoma, Texas,
and Arkansas, respondents quit and began working for
one of Nitro-Lift’s competitors. Claiming that respondents
had breached their noncompetition agreements, Nitro-Lift
served them with a demand for arbitration. Respondents
then filed suit in the District Court of Johnston County,
Oklahoma, asking the court to declare the noncompetition
agreements null and void and to enjoin their enforcement.
The court dismissed the complaint, finding that the con­
tracts contained valid arbitration clauses under which an
arbitrator, and not the court, must settle the parties’
disagreement.
The Oklahoma Supreme Court retained respondents’
appeal and ordered the parties to show cause why the
matter should not be resolved by application of Okla.
Stat., Tit. 15, §219A (West 2011), which limits the en­
forceability of noncompetition agreements. Nitro-Lift
argued that any dispute as to the contracts’ enforceability
was a question for the arbitrator. It relied for support—
as it had done before the trial court—upon several of this
Court’s cases interpreting the FAA, and noted that under
Buckeye Check Cashing, Inc. v. Cardegna, 546 U. S. 440,
446 (2006), “this arbitration law applies in both state and
federal courts.” Record in No. 109,003 (Okla.), p. 273.
The Oklahoma Supreme Court was not persuaded. It
held that despite the “[U. S.] Supreme Court cases on
which the employers rely,” the “existence of an arbitration
agreement in an employment contract does not prohibit
judicial review of the underlying agreement.” 2011 OK 98,
¶15, n. 20, ¶16, 273 P. 3d 20, 26, n. 20, 27. For that prop­
osition, the court relied on the “exhaustive overview of
the United States Supreme Court decisions construing the
Federal Arbitration Act” in Bruner v. Timberlane Manor
Cite as: 568 U. S. ____ (2012) 3
Per Curiam
Ltd. Partnership, 2006 OK 90, 155 P. 3d 16, which found
Supreme Court jurisprudence “not to inhibit our review
of the underlying contract’s validity.” 273 P. 3d, at 26.
Finding the arbitration clauses no obstacle to its review,
the court held that the noncompetition agreements were
“void and unenforceable as against Oklahoma’s public
policy,” expressed in Okla. Stat., Tit. 15, §219A. 273 P. 3d,
at 27.
The Oklahoma Supreme Court declared that its decision
rests on adequate and independent state grounds. Id., at
23–24, n. 5. If that were so, we would have no jurisdiction
over this case. See Michigan v. Long, 463 U. S. 1032,
1037–1044 (1983). It is not so, however, because the
court’s reliance on Oklahoma law was not “independent”—
it necessarily depended upon a rejection of the federal
claim, which was both “ ‘properly presented to’ ” and “ ‘ad­
dressed by’ ” the state court. Howell v. Mississippi, 543
U. S. 440, 443 (2005) (per curiam) (quoting Adams v.
Robertson, 520 U. S. 83, 86 (1997) (per curiam)). Nitro-
Lift claimed that the arbitrator should decide the con­
tract’s validity, and raised a federal-law basis for that
claim by relying on Supreme Court cases construing the
FAA. “ ‘[A] litigant wishing to raise a federal issue can
easily indicate the federal law basis for his claim in a
state-court petition or brief . . . by citing in conjunction
with the claim the federal source of law on which he relies
or a case deciding such a claim on federal grounds . . . .’ ”
Howell, supra, at 444 (quoting Baldwin v. Reese, 541 U. S.
27, 32 (2004); emphasis added). The Oklahoma Supreme
Court acknowledged the cases on which Nitro-Lift relied,
as well as their relevant holdings, but chose to discount
these controlling decisions. Its conclusion that, despite
this Court’s jurisprudence, the underlying contract’s valid­
ity is purely a matter of state law for state-court deter­
mination is all the more reason for this Court to assert
jurisdiction.
4 NITRO-LIFT TECHNOLOGIES, L. L. C. v. HOWARD
Per Curiam
The Oklahoma Supreme Court’s decision disregards this
Court’s precedents on the FAA. That Act, which “de­
clare[s] a national policy favoring arbitration,” Southland
Corp. v. Keating, 465 U. S. 1, 10 (1984), provides that a
“written provision in . . . a contract evidencing a transac­
tion involving commerce to settle by arbitration a contro­
versy thereafter arising out of such contract or transaction
. . . shall be 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. It is well settled that
“the substantive law the Act created [is] applicable in state
and federal courts.” Southland Corp., supra, at 12; see
also Buckeye, supra, at 446. And when parties commit to
arbitrate contractual disputes, it is a mainstay of the Act’s
substantive law that attacks on the validity of the con­
tract, as distinct from attacks on the validity of the arbi­
tration clause itself, are to be resolved “by the arbitrator
in the first instance, not by a federal or state court.”
Preston v. Ferrer, 552 U. S. 346, 349 (2008); see also Prima
Paint Corp. v. Flood & Conklin Mfg. Co., 388 U. S. 395(1967). For these purposes, an “arbitration provision is
severable from the remainder of the contract,” Buckeye,
supra, at 445, and its validity is subject to initial court
determination; but the validity of the remainder of the
contract (if the arbitration provision is valid) is for the
arbitrator to decide.
This principle requires that the decision below be va­
cated. The trial court found that the contract contained a
valid arbitration clause, and the Oklahoma Supreme
Court did not hold otherwise. It nonetheless assumed the
arbitrator’s role by declaring the noncompetition agree­
ments null and void. The state court insisted that its
“[own] jurisprudence controls this issue” and permits
review of a “contract submitted to arbitration where one
party assert[s] that the underlying agreement [is] void and
unenforceable.” 273 P. 3d, at 26. But the Oklahoma
Cite as: 568 U. S. ____ (2012) 5
Per Curiam
Supreme Court must abide by the FAA, which is “the
supreme Law of the Land,” U. S. Const., Art. VI, cl. 2, and
by the opinions of this Court interpreting that law. “It
is this Court’s responsibility to say what a statute means,
and once the Court has spoken, it is the duty of other
courts to respect that understanding of the governing rule
of law.” Rivers v. Roadway Express, Inc., 511 U. S. 298,
312 (1994). Our cases hold that the FAA forecloses pre­
cisely this type of “judicial hostility towards arbitration.”
AT&T Mobility LLC v. Concepcion, 563 U. S. ___, ___
(2011) (slip op., at 8).
The state court reasoned that Oklahoma’s statute “ad­
dressing the validity of covenants not to compete, must
govern over the more general statute favoring arbitration.”
273 P. 3d, at 26, n. 21. But the ancient interpretive prin­
ciple that the specific governs the general (generalia spe-
cialibus non derogant) applies only to conflict between
laws of equivalent dignity. Where a specific statute, for
example, conflicts with a general constitutional provision,
the latter governs. And the same is true where a specific
state statute conflicts with a general federal statute.
There is no general-specific exception to the Supremacy
Clause, U. S. Const. Art. VI, cl. 2. “ ‘[W]hen state law
prohibits outright the arbitration of a particular type of
claim, the analysis is straightforward: The conflicting rule
is displaced by the FAA.’ ” Marmet Health Care Center,
Inc. v. Brown, 565 U. S. ___, ___–___ (2012) (per curiam)
(slip op., at 3–4) (quoting AT&T Mobility LLC, supra, at
___–___ (slip op., at 6–7)). Hence, it is for the arbitrator to
decide in the first instance whether the covenants not to
compete are valid as a matter of applicable state law. See
Buckeye, 546 U. S., at 445–446.
For the foregoing reasons, the petition for certiorari is
granted. The judgment of the Supreme Court of Oklaho­
ma is vacated, and the case is remanded for proceedings
not inconsistent with this opinion.
It is so ordered.