Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 4 (2003) (per curiam)

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Cite as: 539 U. S. 52 (2003)

Per Curiam

The Supreme Court of Alabama reversed over Justice See's dissent. Applying a test it first adopted in Sisters of the Visitation v. Cochran Plastering Co., 775 So. 2d 759 (2000), the court held that the debt-restructuring agreements were the relevant transactions and proceeded to determine whether those transactions, by themselves, had a "substantial effect on interstate commerce." 872 So. 2d, at 801, 803. Because there was no showing "that any portion of the restructured debt was actually attributable to interstate transactions; that the funds comprising that debt originated out-of-state; or that the restructured debt was inseparable from any out-of-state projects," id., at 805, the court found an insufficient nexus with interstate commerce to establish FAA coverage of the parties' dispute.

Justice See in dissent explained why, in his view, the court had erred by using the test formulated in Sisters of the Visitation, in which the Supreme Court of Alabama read this Court's opinion in United States v. Lopez, 514 U. S. 549 (1995), to require that "a particular contract, in order to be enforceable under the Federal Arbitration Act must, by itself, have a substantial effect on interstate commerce." 872 So. 2d, at 808. Rejecting that stringent test and assessing the evidence with a more generous view of the necessary effect on interstate commerce, Justice See would have found that the bank's loans to Alafabco satisfied the FAA's "involving commerce" requirement.


The FAA provides that a

"written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall


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