In the case of Doctor's Associates, Inc. and Nick Lombardi v. Paul Casarotto et ux., 1995, the U.S Supreme Court was asked to consider whether a Montana state law that required franchisors to disclose certain information before enforcing arbitration clauses in their contracts violated the Federal Arbitration Act (FAA). The plaintiffs were Doctor's Associates Inc., who are operators of Subway sandwich shops, and one of their franchisees, Nick Lombardi. They sought to enforce an arbitration clause against defendants Paul Casarotto and his wife after they sued for fraud in relation to opening a Subway franchise. However, under Montana law at that time - known as "notice statute" - such clauses could only be enforced if specific notice requirements were met. The Supreme Court ruled in favor of Doctor’s Associates Inc., stating that this provision within Montana law directly conflicted with Section 2 of FAA which aimed at placing arbitration agreements on equal footing with other contracts rather than subjecting them to additional regulatory burdens or restrictions. Therefore it was preempted by federal legislation.

In the dissenting opinion for Doctor's Associates, Inc. and Nick Lombardi v. Paul Casarotto et ux., Justice Ginsburg disagreed with the majority’s decision to invalidate a Montana statute that required conspicuous disclosure of arbitration clauses in contracts. She argued that this law did not undermine the Federal Arbitration Act (FAA) as it didn't single out or discriminate against arbitration agreements but rather applied to all contract terms that waive constitutional rights or remedies under state law. The FAA was designed to put arbitration agreements on an equal footing with other contracts, she noted, not to elevate them above all other forms of agreement. Therefore, she believed Montana's requirement for clear notice about such significant waivers should be upheld because it promotes informed consent without undermining federal policy favoring arbitration.