Opinion ID: 1763556
Heading Depth: 2
Heading Rank: 1

Heading: Categories One, Two, and Three

Text: The Bank argues that the overall nature of its business operations, those of Alafabco, and the course of dealings of the parties supports arbitrability. We disagree with this argument. Indeed, these factors are largely irrelevant to an FAA interstate-commerce analysis. The FAA renders enforceable any 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 an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal.... 9 U.S.C. § 2 (emphasis added). Thus, on its face, the FAA applies only to transactions, contracts, and controversies. The FAA defines transactions in the maritime context, as including charter parties, bills of lading of water carriers, agreements relating to wharfage, supplies furnished vessels or repairs to vessels, collisions, or any other matters ... which, if the subject of controversy, would be embraced within admiralty jurisdiction. 9 U.S.C. § 1 (emphasis added). The FAA focuses on the narrow concepts of acts, omissions, or agreements, not on the broader concepts on which the Bank focuses, such as the nature of the parties' businesses or the general course of dealings between the parties. Thus, the facts that the Bank routinely conducts business in interstate commerce; that Alafabco owns and uses materials manufactured outside the state of Alabama; and that Alafabco operates its business with funds borrowed from the Bank cannot support arbitrability of this dispute. Moreover, under §§ 1 and 2, the FAA applies only where the transaction affecting interstate commerce is the subject of [the] controversy. The relevant transactions in this case are the debt restructurings of May 1999 and December 1999, evidenced by the renewal notes and the attendant Arbitration Agreements. Indeed, the Bank characterizes the dispute as whether Alafabco was in default on the contract[s] between it and the Bank. Appellees' Brief, at 4. Thus, testimony regarding loans to Alafabco cannot support arbitrability, absent a showing thatat a minimumthey were part of the restructured debt, that is, that they were somehow involved in this dispute. For these reasons, the recitations related to categories one, two, and three do not establish that the transaction had a substantial effect on interstate commerce.