Opinion ID: 2139849
Heading Depth: 1
Heading Rank: 5

Heading: Federal Arbitration Act Applies to Contracts at Issue.

Text: We must first address whether the Federal Arbitration Act [4] (FAA) applies to this case. The FAA created a body of federal substantive law that applies to certain arbitration agreements. [5] The FAA applies to a contract evidencing a transaction involving commerce. [6] Commerce as defined in the FAA includes commerce among the several States. [7] The U.S. Supreme Court has given the FAA an expansive scope by broadly construing the phrase `a contract evidencing a transaction involving commerce.' [8] The Court has held that the phrase `involving commerce' requires a broad interpretation in order to give effect to the FAA's basic purpose, which is to put arbitration provisions on the same footing as a contract's other terms. [9] The Court has further explained that the word `involving,' like `affecting,' signals an intent to exercise Congress' commerce power to the full. [10] The statutory phrase `evidencing a transaction' has been construed by the Court to include transactions involving interstate commerce even where the parties did not contemplate an interstate commerce connection. [11] Given this broad interpretation of the phrase involving commerce in 9 U.S.C. § 2, it is clear that the contracts at issue in this case come within the scope of the FAA. The undisputed evidence in the record reflects that in order for Good Samaritan to meet its contractual obligations to LaRue, Good Samaritan had to purchase coffee beans from sources outside of the continental United States. And once the coffee beans were purchased, the beans were shipped to Good Samaritan in Nebraska, where Good Samaritan processed and sold the beans to LaRue. Thus, the FAA applies and questions relating to LaRue's motion to compel arbitration implicate federal law.