The Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 1982, was a case that revolved around the interpretation of the Federal Arbitration Act (FAA). The hospital had entered into a contract with Mercury for construction work, which included an arbitration clause to resolve any disputes arising from the contract. When disagreements arose regarding payment and delays in construction, both parties filed lawsuits - Mercury seeking arbitration as per their agreement and the hospital filing suit in state court claiming breach of contract. The Supreme Court ruled in favor of Mercury Construction Corporation stating that federal law under FAA strongly favored arbitration agreements and should be upheld unless there were grounds for revocation of such clauses under general contractual principles like fraud or unconscionability. This ruling reinforced the enforceability of arbitration clauses within contracts.

In the dissenting opinion for Moses H. Cone Memorial Hospital v. Mercury Construction Corp., Justice Rehnquist disagreed with the majority's decision to allow federal courts to stay proceedings in favor of state court litigation under Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976). He argued that this ruling was an exception and should not be expanded beyond its original intent - cases involving concurrent jurisdiction over property rights where both federal and state courts have authority over the same matter at the same time. The case between Cone Memorial Hospital and Mercury Construction did not involve such circumstances, as it was a contractual dispute rather than one concerning property rights or land use issues which typically invoke concurrent jurisdiction principles. Justice Rehnquist also expressed concern about potential abuse of discretion by lower courts if they were given too much leeway in deciding whether to defer to state court proceedings, potentially leading to inconsistent results across different jurisdictions based on subjective assessments by individual judges rather than clear legal standards. He concluded that unless there is a compelling reason for deferring action due to exceptional circumstances like those present in Colorado River case, federal courts should fulfill their duty under Erie R.R Co v Tompkins (304 US 64) principle: applying substantive law of states while providing procedural safeguards inherent within Federal Judiciary system itself when adjudicating diversity cases brought before them instead of staying actions pending resolution elsewhere unnecessarily prolonging litigation process overall thereby undermining judicial efficiency goals underlying abstention doctrines generally speaking from his perspective anyway ultimately disagree