When Does a Contract ''Involve'' Interstate Commerce ?
The Federal Arbitration Act applies to any contract which "involves" interstate commerce.
A contract "involves" interstate commerce if it "affects" interstate commerce, within the broadest meaning of the word approved by the United States Supreme Court. Allied-Bruce Terminix Co. v. Dobson, 513 U.S. 265, 273-74, 115 S. Ct. 834, 839, 130 L. Ed. 2d 753 (1995).
Both Texas and Federal public policy strongly favor the submission of disputes to arbitration. D. Wilson Constr. Co. v. Cris Equip. Co., Inc., 988 S.W.2d 388, 393 (Tex. App.--Corpus Christi 1999, orig. proceeding). Both governing bodies have established specific statues to govern arbitration disputes. 9 U.S.C.A. 1, et seq. (West 1999); TEX. CIV. PRAC. & REM. CODE ANN. 171.001, et seq. (Vernon Supp. 2000).
Which statute applies to this contract has several implications.
The "happenstance of whether the parties happened to think to insert a reference to interstate commerce in the document" is not determinative of whether the contract is governed by the FAA. Dobson, 513 U.S. at 278, 115 S. Ct. at 842.
Rather, the United States Supreme Court "insists that the 'transaction' in fact 'involve' interstate commerce" to fall within the coverage of the act. Id., 513 U.S. at 281, 115 S. Ct. at 843.
Although the United States Supreme Court requires that the transaction reflected in the contract involve interstate commerce in fact, it has also allowed the parties to "specify by contract the rules under which that arbitration will be conducted." Volt Info. Sciences v. Board of Trustees, 489 U.S. 468, 479, 109 S. Ct. 1248, 1256, 103 L. Ed. 2d 488 (1989).
On that basis, "the parties may designate which arbitration act they wish to control proceedings under the contract, and the courts will honor that choice." Russ Berrie and Co. v. Gantt, 998 S.W.2d 713, 715 n.6 (Tex. App.--El Paso 1999, no pet.).