law-interstate-commerce-as-basis-for-FAA applicability of Federal Arbitration Act to arbitration of dispute between
partie 9 U.S.C.S. §§ 1-307 | TAA Tex. Civ. Prac. & Rem. Code Ann. § 171.001-.098 TAA vs. FAA | preemption of TAA by FAA | Appeals
from suits to confirm arbitration awards in the Houston Courts of Appeals | Houston Arbitration Cases |law-arbitration-non-signatory
| valid and enforceable arbitration agreement | enforcing arb clause against nonsignatory | modification of arbitration award |
challenging arbitration | FAA Federal Arbitration Act | FAA-applicability 9 U.S.C.S. §§ 1-307 | TAA Tex. Civ. Prac. & Rem. Code Ann. §
171.001-.098 | confirmation of arbitration award under FAA | grounds for vacature under the FAA | TAA vs. FAA | preemption of TAA by
FAA | preemption of state TAA by Federal Arbitration Act | Appeals from suits to confirm arbitration awards in the Houston Courts of
Appeals | Houston Arbitration Cases |
The FAA provides:
A written provision in . . . 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 be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in
equity for the revocation of any contract.
9 U.S.C. § 2. Although the act requires that an agreement to arbitrate must be in writing, no signature is needed
to satisfy the FAA's written agreement requirement. However, there must be sufficient proof that the parties
actually agreed to arbitrate."
Arbitration clauses may be enforced under Texas common law, the Texas Arbitration Act, or the FAA. With a few
exceptions not applicable to this proceeding, the FAA applies to all contracts "evidencing a transaction involving
commerce." Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 269-70 (Tex.1992). The FAA "preempts state statutes
to the extent they are inconsistent with that Act." Id. at 272. The FAA defines "commerce" as:
commerce among the several States or with foreign nations, or in any Territory of the United States or in the
District of Columbia, or between any such Territory and another, or between any such Territory and any State or
foreign nation, or between the District of Columbia and any State or Territory or foreign nation, but nothing herein
contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers
engaged in foreign or interstate commerce.
9 U.S.C.S. § 1 (LEXIS 2008). Because Congress intended the FAA to extend jurisdiction 600 to the maximum
extent permissible under the Commerce Clause, the FAA applies to written arbitration provisions in contracts
evidencing a transaction that "substantially affects" interstate commerce. See In re FirstMerit Bank, N.A., 52 S.W.
3d 749, 754 (Tex.2001); In re Turner Bros. Trucking Co., 8 S.W.3d 370, 375 (Tex.App.-Texarkana 1999, orig.
INTERSTATE COMMERCE AS BASIS FOR FAA TO APPLY
The FAA applies to all suits in state or federal court when the dispute concerns a
"contract evidencing a transaction involving commerce." Jack B. Anglin Co., Inc. v. Tipps, 842 S.W.
2d 266, 269-70 (Tex. 1992) (orig. proceeding). When there is no express agreement to arbitrate under the
FAA, a party may establish the applicability of the FAA by showing that the transaction affects or involves
interstate commerce. See Stewart Title Guar. Co. v. Mack, 945 S.W.2d 330, 333 (Tex. App.--Houston [1st Dist.]
1997, writ dism'd w.o.j.). Under the FAA, "interstate commerce" is not limited to the interstate shipment of goods,
but includes all contracts "relating to" interstate commerce. In re FirstMerit Bank, 52 S.W.3d 749, 754 (Tex. 2001)
(orig. proceeding). Interstate commerce may be shown in several ways, including: (1) location of headquarters in
another state; (2) transportation of materials across state lines; (3) manufacture of parts in a different state; (4)
billings prepared out of state; and (5) interstate mail and phone calls in support of a contract. See Tipps, 842 S.W.
2d at 270; Mack, 945 S.W.2d at 333.
Rapid Settlements, Ltd v. Green (Tex.App.- Houston [1st Dist.] Jun. 18, 2009)(Op. By Alcala) (transfer of
structured settlement rights, grounds for vacature of arbitration award entered under the Federal Arbitration Act
(FAA), applicability of FAA, does the FAA preempt the TAA?, nonexistence of arbitration agreement between the
parties, when are nonsignatories bound to by arbitration agreement? nonparties to the agreement,
nonsignatories)(arbitrator exceeded his authority in issuing the award. See 9 U.S.C.S. § 10(a)(4).
AFFIRM TC JUDGMENT DENYING CONFIRMATION OF ARB AWARD: Opinion by Justice Alcala
Before Justices Jennings, Alcala and Higley
01-08-00109-CV Rapid Settlements, Ltd. v. Jerry M. Green
Appeal from County Civil Court at Law No 3 of Harris County
Trial Court Judge: Hon. Linda Storey
The sale of securities affects interstate commerce. See Am. Med. Technologies, Inc. v. Miller, 149 S.W.3d 265,
269 (Tex.App.-Houston [14th Dist.] 2004, no pet.)(combining mandamus and interlocutory appeal); In re Merrill
Lynch, Pierce, Fenner & Smith Inc., 131 S.W.3d 709, 712 (Tex.App.-Dallas 2004, orig. proceeding).
Generally, the Federal Act applies to a written provision in a contract “evidencing a transaction involving
commerce" to settle a dispute by arbitration. 9 U.S.C.A. §2 (West 2009). The parties do not dispute that the
Federal Act governs this matter. When, as in this case, the parties expressly agree that their arbitration
agreement shall be governed by the Federal Act, the parties are not required to establish that the
transaction at issue involves or affects interstate commerce. See In re Choice Homes, Inc., 174 S.W.3d 408, 412
(Tex. App.- Houston [14th Dist.] 2005, orig. proceeding).
FIA Card Services, NA f/k/a MBNA America Bank, NA v. Horn (Tex.App.- Houston [14th Dist.] Jun. 23, 2009)(Frost)
(suit to confirm arb award under FAA permitted in county court at law, invocation of FAA not jurisdictionally
barred) (federal courts not given exclusive jurisdiction over such actions by Congress)
Decision: TRIAL COURT REVERSED AND CASE REMANDED:
Opinion by Justice Frost
Panel members: Justices Frost, Brown and Boyce
14-08-00024-CV FIA Card Services, N.A. fka MBNA America Bank, N.A. v. Valicia M. Horn
Appeal from County Civil Court at Law No 1 of Harris County
Trial Court Judge: Hon. Jack Cagle
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