## Facts

- A motion picture distributor licensed films to an exhibitor under two exhibition contracts.
- The contracts contained an arbitration clause of a type previously held unlawful under federal antitrust law.
- The exhibitor refused to perform and asserted the contracts were invalid.
- The distributor sued in Minnesota state court for damages for breach of the two contracts.
- The exhibitor defended on two theories: (1) the contracts violated the Sherman Act, and (2) the arbitration clause was unlawful and rendered the entire contracts void because it was inseverable.
- The Minnesota trial court dismissed the action, concluding the arbitration clause was inseparable from the contracts and therefore the entire agreements were unenforceable; it also found a Sherman Act violation.
- The Minnesota Supreme Court affirmed and later entered a final judgment reaffirming that the severability determination was dispositive.
- The U.S. Supreme Court granted certiorari to review the final state-court judgment.

## Issues

1. Whether the U.S. Supreme Court has jurisdiction to review a state-court judgment that rests on both a federal ground and a nonfederal ground when the nonfederal ground is adequate and independent.
2. Whether the state court’s holding that an invalid arbitration clause was inseverable from the rest of the contracts constituted a nonfederal, adequate, independent basis for the judgment.

## Decision

- The Court dismissed the writ of certiorari for want of jurisdiction.
- It held that when a state-court judgment rests on two grounds—one federal and one nonfederal—the Court lacks jurisdiction if the nonfederal ground is independent of the federal ground and adequate to support the judgment.
- The state court’s severability ruling was treated as a question of general contract law, sufficient on its own to sustain the judgment.
- The case was not one in which the nonfederal ground was so interwoven with the federal issue that the former could not be decided without reaching the latter.

## Legal Principles

- The Supreme Court cannot review a state-court judgment that rests on an adequate and independent nonfederal ground, even if a federal question is also presented.
- A nonfederal ground is “independent” when it does not require resolving the federal issue to sustain the judgment.
- A nonfederal ground is “adequate” when it is sufficient, by itself, to support the result.
- Whether an invalid contractual provision is severable from the remainder of the contract is a matter of general contract law; when a state court rests its judgment on inseverability, that ground may bar Supreme Court review.

## Conclusion

The Court dismissed for lack of jurisdiction because the state court’s inseverability holding, grounded in general contract law and sufficient to void the contracts, independently supported the judgment regardless of any federal antitrust question.


Fox Film Corp. v. Muller, 296 U.S. 207 (1935)