Document: 539 U.S. 52 THE CITIZENS BANKv.ALAFABCO, INC., ET AL. No. 02-1295. Supreme Court of United States. Decided June 2, 2003. Respondents Alafabco, Inc., and its officers filed suit in Alabama Circuit Court, alleging that Alafabco had incurred massive debt because petitioner bank unlawfully reneged on an agreement to provide capital sufficient complete a specific building project. The moved compel arbitration as provided the parties' debt-restructuring agreements. court ordered respondents submit arbitration, but State reversed, finding that, agreements no substantial effect interstate commerce, there was insufficient nexus with such commerce establish Federal Arbitration Act (FAA) coverage dispute. Held: There is make provision enforceable under FAA. By applying contract "evidencing transaction involving commerce," 9 U. S. C. § FAA provides for "the enforcement within full reach Commerce Clause," Perry v. Thomas, 482 483, 490. It thus perfectly clear encompasses wider range transactions than those actually "in commerce." Although were executed by residents, they nonetheless satisfy FAA's "involving commerce" test. First, engaged business throughout southeastern States, using loans from renegotiated redocumented Second, restructured secured all Alafabco's assets, including inventory goods assembled out-of-state parts raw materials. Third, commercial lending has broad impact national economy. Court's cramped view Congress' Clause power appears rest misreading States Lopez, 514 549, which does not suggest limits regulate are breached disputes arising out loan these. Certiorari granted; reversed remanded. ON PETITION FOR WRIT OF CERTIORARI TO SUPREME COURT ALABAMA PER CURIAM. 1 question presented whether "a evidencing meaning (FAA). 2. As we concluded Allied-Bruce Terminix Cos. Dobson, 513 265 (1995), enforceable, pursuant FAA, included agreement. 2 * Petitioner Citizens Bank—an institution—seeks financial dispute Inc.—an fabrication construction company—and officers. According complaint state court, among parties arose series made over decade-long course dealings. In 1986, alleges, entered into quasi-contractual relationship agreed operating necessary secure contracts. That began sour 1998, when allegedly encouraged bid large Courtland, Alabama, refused order compensate bank's alleged breach implied agreement, completed Courtland project funds would otherwise have been dedicated repaying existing obligations bank. turn became delinquent obligations. 3 On two occasions, attempted resolve outstanding debts. May 3, 1999, "`renewal notes'" previous redocumented. 872 So. 2d 798 (Ala. 2002). arrangement covering "`all disputes, claims, or controversies.'" "`shall apply [its] construction, interpretation, enforcement.'" Id., at 799. defaulted renewal notes sought bankruptcy protection federal September 1999. 4 return dismissal petition, renegotiate second December 10, new documents encompassing entire debt, approximately $430,000, mortgage real estate owned individual respondents, accounts receivable, inventory, supplies, fixtures, machinery, equipment, house one respondents. 800. part functionally identical 5 Within year 1999 restructuring, brought Lawrence County, against alleged, other causes action, contract, fraud, fiduciary duties, intentional infliction emotional distress, interference contractual relationship. Essentially, detrimentally "`incur[red] debt'" Invoking agreements, accordance 6 Justice See's dissent. Applying test it first adopted Sisters Visitation Cochran Plastering Co., 775 759 (2000), held relevant proceeded determine transactions, themselves, "substantial 2d, 801, 803. Because showing "that any portion attributable transactions; comprising originated out-of-state; inseparable projects," id., 805, found 7 See dissent explained why, his view, erred formulated Visitation, read this opinion 549 require particular be must, itself, 808. Rejecting stringent assessing evidence more generous satisfied requirement. II 8 "written maritime settle controversy thereafter transaction, refusal perform whole thereof, writing refusal, shall valid, irrevocable, save upon grounds exist law equity revocation contract." (emphasis added). statute further defines "commerce" include "commerce several States." 1. Echoing dissenting opinion, contends decision below gives inadequate breadth language statute. We agree. 10 interpreted term functional equivalent familiar "affecting commerce"—words art ordinarily signal broadest permissible exercise power. Cos., S., 273-274. 490 (1987), commerce"—that is, "within flow supra, 273 (internal quotation marks, citation, emphasis omitted). 11 therefore misguided search "portion transactions" "originated out-of-state" projects." 805. Such might required if restricted "`in commerce,'" Gulf Oil Corp. Copp Paving 419 186, 195-196 (1974), but, explained, limit reach. 12 Nor application defeated taken alone, did "may exercised cases without aggregate economic activity represent general practice . subject control." Mandeville Island Farms, Inc. American Crystal Sugar 334 219, 236 (1948). also Perez 402 146, 154 (1971); Wickard Filburn, 317 111, 127-128 (1942). Only need bear way. Maryland Wirtz, 392 183, 196-197, n. 27 (1968); NLRB Jones & Laughlin Steel Corp., 301 1, 37-38 (1937). 13 This case well our pronouncements extent least three reasons. south-eastern Indeed, gravamen state-court "`massive keep afloat, submitted affidavits establishing used finance projects North Carolina, Tennessee, Alabama. 14 If Congress local establishments purchasing quantities Katzenbach McClung, 379 294, 304-305 (1964), necessarily reaches goods. 15 residual doubt about magnitude caused engaged, dissipate consideration "general practice" represent. 236. No elaborate explanation needed evident economy Clause. Lewis BT Investment Managers, 447 27, 38-39 (1980) ("[B]anking related activities profound concern. Nonetheless, follow these same lack important attributes"); Perez, 154-155 ("Extortionate credit though purely intrastate, may judgment affect commerce"). 16 adheres improperly announced (1995). Lopez restrict implicitly overrule Cos.—indeed, discuss Lopez. purport announce rule governing concededly before us now. 561. To sure, indeed, limits," 196, nothing suggests case. 17 Accordingly, petition writ certiorari granted, remanded proceedings inconsistent opinion. 18 so ordered.

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