# Petition for Writ of Certiorari — Jim Skinner Ford, Inc. v. Warren > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385020_0424%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1989 - **Citation:** 493 U.S. 998 ## Text 89-567 0 | HEED oct 4 1888 F. SPANIOL, JR. CLERK = No. 89- IN THE Supreme Court Of Che United States October Term, 1989 JIM SKINNER FORD, INC., Petitioner, : v. - JACK D. WARREN and JUANITA WARREN, | Respondents. PETITION FOR WRIT OF CERTIORARI TO THE ALABAMA SUPREME COURT WALTER J. SEARS, III Counsel of Record MICHAEL R. PENNINGTON Bradley, Arant, Rose & White 1400 Park Place Tower Birmingham, Alabama 35203 (205) 521-8000 JOHN M. GALESE Galese & Moore 3058 Independence Drive Birmingham, Alabama 35253 (205) 870-0663 i QUESTION PRESENTED FOR REVIEW Given this Court’s express holding in Perry v. Thomas, 482 U.S. 483, 490 (1987), that the Federal Arbitration Act provides “for the enforcement of arbitration agreements within the full reach of the Commerce Clause,” and given that the Commerce Clause enables Congress to regulate intrastate sales of cars, can the Alabama Supreme Court refuse to enforce an arbitration agreement between a new car dealer and a buyer on the ground that the Act does not preempt state anti-arbitration law unless the parties actually “contemplated substantial interstate activity”? PARTIES TO THE PROCEEDINGS BELOW AND LISTING OF PARENT CORPORATIONS, SUBSIDIARIES AND AFFILIATES Plaintiffs Jack D. Warren Juanita Warren Defendants Jim Skinner Ford, Inc. Ford Motor Company First Alabama Bank of Birmingham Only Petitioner Jim Skinner Ford, Inc. and Respondents Jack D. Warren and Juanita Warren have a direct interest in the outcome of this Petition, since they were the only parties to the arbitration agreement at issue. Jim Skinner Ford, Inc. has no parent corporations, subsidiary corporations, or af- filiated corporations. TABLE OF CONTENTS Page ~ QUESTION PRESENTED FOR REVIEW.......... i PARTIES TO THE PROCEEDINGS BELOW AND LISTING OF PARENT CORPORATIONS, SUBSIDIARIES AND AFFILIATES ............... ll PR gg 6 6) ESS lil TABLE OF AUTHORITIES ...................... iV CO EE cc ccc ewer ccncccccnccens 2 RGM SG aoe bes ece sss scccccsccccce 2 CONSTITUTIONAL PROVISIONS AND STATUTES INVOLVED ................... 2 STATEMENT OF THE CASE .................... 2 REASONS FOR GRANTING THE WRIT ......... 6 A. This Case Represents Another Attempt By The Alabama Supreme Court To Limit The Application Of The FAA In Alabama In Dis- regard Of Congressional Intent And Of Prior Decisions Of This Court ..................... 6 B. The Ruling Below Has Important Implications To The Public And To The Uniform Applica- tion Of Federal Law ..................0.. ae 7 C. The Alabama Supreme Court’s Holding That The Sale Of A New Car By A Dealer To A Purchaser Located Within The Same State Does Not Affect Interstate Commerce Con- flicts With Numerous Federal Statttes That Regulate Such Sales ............... Cannan dare 9 es oaks sh wnc esc scensecuccees 11 PER Ruins eaidine vies vnc seen eccsconsess A-1 Opinion of Alabama Supreme Court ............. A-1 - Order of Circuit Court for St. Clair EER ee A-11 Transcript of February 11, 1988 Hearing......... A-13 Federal Arbitration Act, 9 U.S.C. § 1, et seg. ....... A-28 Be er eee A-35 aya iV TABLE OF AUTHORITIES Cases: 3 Page Burke County Public Schools Board of Education v. Shaver, 305 N.C. 408, 279 BE. BA (TIGA) nose 00 sep ccwerece. 7 Cahoon v. Ziman, 298 S.E.2d 729 (N.C. App. 1983), review denied, 301 S.E.2d 388 (N.C. 1983) ............. 7 Ex parte Alabama Oxygen, 433 So.2d 1158 (Ala. 1983), vacated and remanded, 465 U.S. 1016 (1984) ......... 6, 7 Katzenback v. McClung, 379 U.S. 294 (1964) ............. 9 Metro Industriai Painting Corp. v. Terminal Construction Co., 287 F.2d 382 (2d Cir. 1961), cert. demsed, SOB US. GET (ISBT) oa oss occ ep cee cnc c aces 4 Moses H. Cone Memorial Hospital v. Mercury Construction — Conn, SL BiB a tinh waka ha ag one case 8,9 Paramore v. Inter-Regional Financial Leasing Co., 316 S.E.2d 90 (N.C. 1984) .......... 0. cece eee eee 7 Perry v. Thomas, 482 U.S. 483 (1987) ............ 1, 7-9, 11 Prima Paint Corp. v. Flood & Conklin Mfg. Co., ee a er ho ea beau ) ~ Robert Lawrence Co. v. Devonshire Fabrics, Inc., 271 F.2d 402 (2d Cir. 1959), cert. dismissed, re ce eenswnee 7 Snyder v. Smith, 736 F.2d 409 (7th Cir. 1984), cert. denied, 469 U.S. 1037 (1984) .................... 7 Southland Corp. v. Keating, 465 U.S. 1 (1984)..... 1, 5-9, 11 Tenney Engineering, Inc. v. United Electrical Radio &§ Machine Workers of America, Local 437, oe, eee 7 Wells v. Mobile County Board of Realtors, ee Ee SP RG IG As his ding oxen csceaesewar’ 6 Wickard v. Filburn, 317 U.S. 111 (1942) ........2.....4.. 9 Vv TABLE OF AUTHORITIES — (Continued) Statutes: ’ ; Page so ook waa eatabdoemaw ae’ 1 ME PIED oon c dccccccccccacvacccues 1,5 Consumer Credit Protection Act es iiss owes ney beveveseat 10 Consumer Product Safety Act, Pe I hk Sic reecccescesnccevens 10 Federal Arbitration Act. po errr eee eee eee ied ance ae passim Magnuson-Moss Warranty-Federal Trade Commission Improvements Act, Tere e eee e eee Tere 2, 10 Motor Vehicle Information and Cost Savings Act, Bee Re ROE 6 Wis deca bs ohencses acces 9, 10 National Traffic and Motor Vehicle Safety Act, ee eeeeerrrcrrerr er Tre reree 10 Constitutional Provisions: Supremacy Clause of Art. VI of the United States Constitution .................... ] The Commerce Clause of Art. I, Sec. 8 of the United States Constitution ................ passim No. 89- IN THE Supreme Court Of The United States October Term, 1989 JIM SKINNER FORD, INC., Petitioner, ¥. JACK D. WARREN and JUANITA WARREN, Respondents. PETITION FOR WRIT OF CERTIORARI TO THE ALABAMA SUPREME COURT Petitioner Jim Skinner Ford, Inc. respectfully requests this Court to issue a writ of certiorari to review the judgment of the Alabama Supreme Court entered in this action on July 7, 1989. Petitioner submits that the decision of the Court below may be summarily reversed on authority of Perry v. Thomas, 482 U.S. 483 (1987), and Southland Corp. v. Keating, 465 U.S. 1 (1984). 2 OPINIONS BELOW The opinion of the Alabama Supreme Court below has not yet been reported and is set forth in the Appendix to this Petition. (App. at A-1-10). The opinion of the Circuit Court of Si. Clair County, Alabama is unreported and is set forth in the Appendix to this Petition. (App. at A-11-13). JURISDICTION The opinion of the Alabama Supreme Court was filed on July 7, 1989. (App. at A-1-10). This Court has jurisdiction to consider this Petition pursuant to 28 U.S.C. §§ 1257(a).! CONSTITUTIONAL PROVISIONS AND STATUTES INVOLVES The constitutional provisions and statutes involved are: The Commerce Clause of Art. 1, Sec. 8 of the United States Constitution; the Supremacy Clause of Art. VI of the United States Constitution; the Federal Arbitration Act, 9 U.S.C. § 1, et seq.; and the Alabama statute prohibiting specific en- forcement of pre-dispute arbitration agreements, Ala. Code (1975) § 8-1-41(3). Both the Federal! Arbitration Act and Ala. Code (1975) § 8-1-41 have been reproduced in the Appendix to this Petition (App. at A-28-34). STATEMENT OF THE CASE On May 27, 1987, Respondents Jack D. Warren and Juanita Warren purchased a new Ford automobile from Petitioner Jim Skinner Ford, Inc. The contract of sale contained the following arbitration clause: *This Court has held that judgments of state courts which refuse to enforce arbitration agreements sought to be enforced under 9 U.S.C. § 1, et seq., are reviewable as final orders pursuant to 28 U.S.C. § 1257. See, e.g., Southland Corp. v. Keating, 465 U.S. 1, 6-8 (1984). 3 F. The undersigned purchaser and Jim Skinner Ford, Inc. further agree as follows: 1. That the motor vehicle described in this sale document has been heretofore traveling in in- terstate commerce and has an impact upon in- terstate commerce. 2. That in the event any dispute(s) arise under the terms of this contract of sale (including but not limited to the terms of the agreement, the condition of the motor vehicle sold, the conformity of the motor vehicle sold to the contract, the representa- tions, promises, undertakings or covenants made by Jim Skinner Ford, Inc. in connection with the sale of the motor vehicle, or otherwise dealing with the motor vehicle, any terms of financing in connection therewith, or any terms of any credit life and/or disability insurance purchased simultaneously herewith, or extended service or maintenance agreements), that Jim Skinner Ford, Inc. and the purchaser agree to submit such dispute(s) to bind- ing arbitration pursuant to the provisions of 9 U.S.C. § 1, et seq. and according to the commercial rules of the American Arbitration Association then existing in Birmingham, Alabama. On August 20, 1987, the Warrens filed suit in Alabama state court against Jim Skinner Ford, Ford Motor Company, and First Alabama Bank of Birmingham (the bank which financed the Warrens’ purchase of the vehicle). The Warrens asserted claims for breach of contract, breach of warranty, and violation of the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act (“Magnuson-Moss Warranty Act”), 15 U.S.C. §§ 2301-12. Jim Skinner Ford immediately filed a motion to stay the action pending arbi- tration pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1, et seg. (“the FAA”). The trial court granted the motion on October 29, 1987. The Warrens then filed a motion to alter or amend the trial court’s stay and order. At a February 11, 1988, hearing on this motion, counsel for the Warrens and counsel for Jim Skinner Ford stipulated in open court that the Warrens were 4 residents of St. Clair County, Alabama; that Jim Skinner Ford, Inc. was a Delaware corporation with its sole place of business in Jefferson County, Alabama; that the automobile at issue was manufactured outside the State of Alabama by Ford Motor Company, a corporation located in Detroit, Michigan; and that the automobilé was delivered by Ford to Jim Skinner Ford for retail sale and was thereafter purch- ased by the Warrens from Jim Skinner in Alabama. (App. at A-13-15).? On June 29, 1988, the trial court denied the Warrens’ motion to alter or amend and affirmed its previous order’ staying the action pending arbitration. (App. at A-11): On July 5, 1988, the Warrens filed a petition for a writ of; / mandamus with the Alabama Supreme Court. On July 7, 1989, the Alabama Supreme Court issued an opinion granting the writ of mandamus. (App. at A-1-10). The court recognized that the sole issue was whether the contract was one “involving interstate commerce” so as to bring it within the coverage of the FAA, 9 U.S.C. § 2, but concluded that the retail sale of a new automobile manufac- tured outside Alabama to an Alabama resident by an Alabama dealer incorporated in Delaware is not a “transac- tion involving interstate commerce” within the meaning of the FAA. (App. at A-1-5). The Alabama Supreme Court sought to justify its position by stating: We hold that the appropriate standard for mak- ing this determination is set forth in a special opinion in Metro Industrial Painting Corp. v. Terminal Construction Co., 287 F.2d 382 (2d Cir. 1961), cert. denied, 368 U.S. 817 (1961): In its opinion below, the Alabama Supreme Court incorrectly stated that the parties had also stipulated that “all obligations antiapated from the sales contract were to be performed solely within the State of Alabama.” (App. at A-1-10). As shown by the transcript of the February 11, 1988, hearing (App. at A-13-27), there was no such stipulation. Moreover, although the opinion below shows the purported stipulations in quotes, the language used by the Court to frame the stipulations was taken from the Warrens’ brief below and not from the transcript of the hearing itself. (See App. at A-13-15). 5 “[W]hether at the time [the parties] entered into [the contract] and accepted the arbitration clause, they contemplated substantial interstate activity.” 287 F.2d at 387 (Lumbard, Chief Judge, concur- ring) (emphasis original). Therefore, the standard here applicable is not the “regulating standard” of “affecting interstate com- merce”; rather the test for determining whether the transaction involves interstate commerce is a distinct standard unique to the application of the FAA . (App. at A-4) (emphasis in_ original) (citations as In the instant case, the court held that Jim Skinner Ford and the Warrens had not actually contemplated substantial in- terstate activity at the time the car was purchased: The contract in the present case served to trans- fer title to an automobile, already located in Ala- bama, to a resident consumer. Even using the (“slightest nexus with interstate commerce”] stan- dard ...., we must conclude that such a transaction does not have a sufficient nexus with interstate commerce activity to bring the contract within the FAA. (App. at A-5). The court then reversed the order staying the action pending arbitration based upon the following princi- ples of Alabama law: “The enforcement of predispute arbitration agreements, while approved in the federal court system ..., is specifically prohibited by Ala. Code (1975) § 8-1-4168)? This federal policy does not preempt the differing Alabama policy in the pres- ent case because an issue of purely state law is in question .... “The public policy of this state ... *Ala. Code (1975) § 8-1-41(3) provides that “An agreement to submit a controversy to arbitration . . . cannot be specifically enforced”, whereas the FAA, 9 U.S.C. § 2, provides that arbitration agreements must be specifii- cally enforced as a matter of federal substantive law. See Perry v. Thomas, 482 U.S. 483 (1987); Southland Corp. v. Keating, 465 U.S. 1 (1984). 6 holds void an agreement in advance to oust or defeat the jurisdiction of the courts... .’.” (App. at A-4) (quoting Wells v. Mobile County Board of Realtors, 387 So.2d 140, 144 (Ala. 1980) ). Petitioner herein seeks a writ of certiorari to the Alabama Supreme Court and a summary reversal of the ruling below. REASONS FOR GRANTING THE WRIT A. This Case Represents Another Attempt By The Alabama Su- preme Court To Limit The Application Of The FAA In Alabama In Disregard Of Congressional Intent And Of Prior Decisions Of This Court. — This Court has recently observed Alabama’s historical hostility toward arbitration and the FAA in Ex parte Alabama Oxygen, 433 So.2d 1158 (Ala. 1983), vacated and remanded, 465 U.S. 1016 (1984). There, the Alabama Supreme Court held that the FAA did not preempt state law; that the FAA applied only in federal courts; and that in any event the FAA “does not reach activity which merely ‘affects’ interstate commerce,” but only activity that “has a substantial effect on that commerce.” 433 So.2d at 1163 (emphasis in original). This Court summarily vacated these holdings and remanded Ex parte Alabama Oxygen for disposition in accordance with Southland Corp. v. Keating, 465 U.S. 1, 10-16 (1984) (holding that the FAA does preempt state law and that in enacting the FAA, “Congress intended to foreclose state legislative at- tempts to undercut the enforceability of arbitration agree- ments.”). : Having failed in its earlier attempt to limit the reach of the FAA in Ex parte Alabama Oxygen, the Alabama Supreme Court now holds that “the test for determining whether the transaction involves interstate commerce is a distinct stan- dard unique to the application of the FAA.” (App. at A-4). (emphasis supplied). In other words, in the FAA Congress did not intend to use the full reach of its power to regulate interstate commerce, but only intended to enforce arbitra- tion agreements in those contracts with respect to which the i 7 parties actually “contemplated substantial interstate activity.” This standard is virtually identical to the “substantial effect on commerce” standard rejected by this Court in Ex parie Alabama Oxygen, and it conflicts directly with decisions of this Court. In Southland Corp. v. Keating, this Court held that the FAA is an exercise of “Congress’ broad power to fashion substan- tive rules under the Commerce Clause.” 465 U.S. at 10, 11. In Perry v. Thomas, 482 U.S. 483, 490 (1987), this Court held that the FAA is a statute of “general applicability” which “embodies Congress’ intent to provide for the enforcement of arbitration agreements within the full reach of the Com- merce Clause.” Congress itself, in passing the FAA, em- phasized that the act “reaches not only the actual physical interstate shipment of goods but also contracts relating to interstate commerce.” H. R. Rep. No. 96, 68th Cong., Ist Sess., 1-2 (1924). Thus, the decision below erects a substantial barrier to arbitration never intended by Congress or this Court. oo B. The Ruling Below Has Important Implications For The Public And For The Uniform Application Of Federal Law. If the Alabama Supreme Court’s ruling is allowed to stand, the federal law of arbitration will be frustrated and ignored in the state courts of Alabama and in any other state that tries to revive the common law hostility toward arbitration. In fact, the Alabama Supreme Court is apparently not alone in purporting to limit the FAA to contracts as to which the parties specifically “contemplate substantial interstate activ- ity.” The court below relied upon Burke County Public Schools Board of Education v. Shaver, 303 N.C. 408, 279 S.E.2d 816, 822 (1981), which endorsed the same standard.‘ This stan- dard conflicts not only with this Court’s holdings in Southland and Perry v. Thomas, but also with decisions of several federal *The North Carolina Supreme Court has continued to apply the Burke standard in subsequent cases. See, e.g., Cahoon v. Ziman, 298 S.E.2d 729, 730 (N.C. App. 1983), review denied, 301 S.E.2d 388 (N.C. 1983); Paramore v. Inter-Regional Financial Leasing Co., 316 S.E.2d 90, 92 (N.C. 1984). 8 appellate courts which have held that the FAA extends to the full reach of Congress’ power under the Commerce Clause.°® While the federal district courts in Alabama and any other state following the standard adopted below would apply the FAA in accordance with the broad principles announced by this Court, the trial courts of those states will now apply the FAA only if the parties contemplated substantial interstate activity in the performance of their contract. Thus, forum- shopping could well determine whether a party is entitled to assert his federal arbitration rights. Such a result is what Congress sought to avoid through the FAA. Southland Corp. v. Keating, 465 U.S. 1, 14-16 (1984); Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 26, n.34 (1983). In addition, the standard adopted below is purely subjec- tive. It requires an analysis of the contracting parties’ subjec- tive intent — whether they contemplated substantial inter- state activity — rather than the objective analysis of whether the contract evidences a transaction within the broad reach of the Commerce Clause. 9 U.S.C. § 2; Perry v. Thomas, 482 U.S. 483, 490 (1987). This subjective analysis poses a signifi- cant danger of drastically reducing the reach of the FAA and of defeating the congressional declaration of a “national policy favoring arbitration and withdrawing the power of the states to require a judicial forum for the resolution of clairns which the contracting parties agreed to resolve by arbitra- tion.” Southland, 465 U.S. at 10. The obvious factual disputes and difficulties inherent in such a subjective analysis also undermine the very policies arbitration is intended to promote — simpler, speedier, and less costly resolution of contract disputes. See H. R. Rep. No. 96, 68th Cong., Ist Sess., 1-2 (1924) (FAA is intended to reduce congestion in courts and to avoid “the costliness and *See, e.g., Robert Lawrence Co. v. Devonshire Fabrics, Inc., 271 F.2d 402, 406 (2d Cir. 1959), cert. dismissed, 364 U.S. 801 (1960); Tenney Engineering, Inc. v. United Electrical Radio & Machine Workers of America, Local 437, 207 F.2d 450, 454 (3d Cir. 1953); Snyder v. Smith, 736 F.2d 409, 417-19 (7th Cir. 1984) (dicta), cert. denied, 469 U.S. 1037 (1984). 9 delays of litigation” through enforcement of arbitration agreements). See also Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404 (1967); Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 22} 29 (1983); Southland Corp. v. Keating, 465 U.S. 1, 7 (1984) _ (accord). C. The Alabama Supreme Court’s Holding That The Sale Of A New Car By A Dealer To A Purchaser Located Within The Same State Does Not Affect Interstate Commerce Confficts With Numerous Federal Statutes That Regulate Such Sales. The power of Congress to regulate interstate commerce is “plenary,” extending even to the regulation of a farmer's crop of wheat for his own personal consumption. Wickard v. Filburn, 317 U.S. 111 (1942). Accord, Southland Corp. v. Keating, 465 U.S. 1, 11 (1984). Congress has “broad and sweeping” power under the Commerce Clause to regulate any activity that may affect interstate commerce, whether directly or indirectly. Wickard v. Filburn, 317 U.S. at 120-25; Katzenback v. McClung, 379 U.S. 294 (1964). Moreover, even if the transaction or activity of one individual has no impact on interstate commerce standing alone, that transaction or activity may nevertheless be regulated by Congress under its commerce power if the cumulative effect of others engaging in the same type of activity or transaction could have an impact upon interstate commerce. Wickard v. Filburn, 317 U.S. at 127-28. ‘ There is perhaps no type of consumer transaction that triggers the applicability of more Congressional regulation under the Commerce Clause than a contract for the sale of a motor vehicle. For example, in the Motor Vehicle Informa- tion and Cost Savings Act (i.e., the “Odometer Act”), 15 U.S.C. §§ 1981, et seg., Congress found that “motor vehicles move in the current of interstate and foreign commerce or affect such commerce....” 15 U.S.C. § 1981. In that Act, Congress prohibited false odometer readings or representa- tions by any person selling a new or used automobile, with no limitation on whether the buyer and seller reside in the same or different states. 15 U.S.C. § 1981, et seg. 10 Similarly, under the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301, et seq., Congress has regulated the warranty obligations arising out of the typical sale of a car by an instate dealer to an instate buyer, such as the transaction in this case. 15 U.S.C. § 2301(1),(3),(5),(13),(14). The Act also authorizes the establishment of informal dispute settlement procedures that can apply to a car dealer and a buyer. 15 U.S.C. § 2310(a). Other examples of Congressional regulation of intrastate motor vehicle sales include the National Traffic and Motor Vehicle Safety Act, 15 U.S.C. §§ 1381, et seq.; and the Consumer Credit Protection Act, 15 U.S.C. §§ 1601, et seq. | Of course, virtually every new car buyer would normally be expected to purchase his automobile from a dealership located in his own state. If Congress can reach into such a transaction and regulate odometer readings, warranty obli- gations and informal dispute settlement procedures, then Congress, in exercising the full reach of the Commerce Clause under the FAA, can surely render enforceable arbi- - tration agreements entered into as part of the same transac- tion. Ironically, in this very case, the Warrens seek recovery under the Magnuson-Moss Warranty Act, but contend that Congress’ exercise of its commerce power in the enactment of the FAA does not reach the contract of sale which forms the basis of their Magnuson-Moss claim. After’/holding that Congress in the FAA did not intend to utilize the full reach of its Commerce Clause power, the Alabama Supreme Court then held that even if the FAA applied whenever there is the “slightest nexus with interstate commerce,” the sale of an automobile by a dealer to a purchaser located within the same state “does not have a sufficient nexus with interstate commerce activity to bring the contract within the coverage of the FAA.” (App. at A-5). Under that rationale, it logically follows that Congress did not have the Commerce Clause power to extend the applica- tion of the Odometer Act, the Magnuson-Moss Warranty Act, and the other federal statutes discussed above to auto- mobile sales between dealers and purchasers where both are 11 located in the same state. Such a conclusion is bizarre, but it flows directly from the anti-arbitration stance of the court below. CONCLUSION For the reasons set forth above, this Court should grant a writ of certiorari to review the judgment of the Alabama Supreme Court on these important issues of federal and constitutional law. Petitioner respectfully submits that this matter may best be disposed of by summary reversal on the authority of Perry v. Thomas, 482 U.S. 483 (1987), and Southland Corp. v. Keating, 465 U.S. 1 (1984). Respectfully Submitted, Walter J. Sears, III Counsel of Record Michael R. Pennington BRADLEY, ARANT, Rose & WHITE 1400 Park Place Tower Birmingham, Alabama 35203 (205) 521-8000 John M. Galese GALESE & MOORE 3058 Independence Drive Birmingham, Alabama 35253 (205) 870-0663 Se ee ae eee ae APPENDIX A-1 THE STATE OF ALABAMA JUDICIAL DEPARTMENT THE SUPREME COURT OF ALABAMA SPECIAL TERM, 1989 Ex Parte Jack D. Warren and Juanita Warren 87-1179 PETITION FOR WRIT OF MANDAMUS (In Re: Jack D. Warren and Juanita Warren v. Jim Skinner Ford, Inc., a Corporation, et al.) ‘CV-87-126) PER CURIAM. Jack D. Warren and Juanita Warren petitioned this Court for a writ of mandamus directed to the Honorable H. E. Holladay of the Circuit Court for St. Clair County, Alabama. The writ is due to be granted. On May 27, 1987, the Warrens, residents of St. Clair County, purchased a vehicle from Jim Skinner Ford, Inc. (“Jim Skinner”), a corporation organized in the State of Delaware and having its sole place of business in Jefferson County, Alabama. The sale of the vehicle was solicited, transacted, and executed wholly within the State of Alabama. The sales contract contained an arbitration clause, which is set out here verbatim: “F. The undersigned purchaser and Jim Skinner Ford Inc. further agree as follows “1. That the motor vehicle described in this sale document has been heretofore traveling in in- terstate commerce and has an impact upon in- terstate commerce. “2. That in the event any dispute(s) under the terms of this contract of arise (including but not limited to the terms of the agreement, the condition of the motor vehicle sold, the conformity of the motor vehicle sold, to the contract, the representa- tions, promises, undertakings or covenants made by Jim Skinner Ford, Inc., in connection with the sale of the motor vehicle, or otherwise dealing with the A-2 motor vehicle, any terms of financing in connection therewith, or any terms of any credit life and/or disability insurance purchased simultaneously herewith, or extended service or maintenance agreements), that Jim Skinner Ford Inc. and the purchaser agree to submit such dispute(s) to bind- ing arbitration, pursuant to the provisions of 9 USC § 1, et seq. and according to the commercial rules of the American Arbitration Association then existing in Birmingham, Alabama.” After the sale, the Warrens experienced numerous prob- ~ lems with the vehicle and they filed a breach of contract and warranties action pursuant to state law and the Magnuson- Moss Warranty — Federal Trade Commision Improvement Act, 15 U.S.C. §§ 2301-12, in St. Clair Circuit Court, naming Jim Skinner, Ford Motor Company (“Ford”), and First Alabama Bank of Birmingham as defendants. Jim Skinner filed a motion to stay the action pending arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1 through 4 (the “FAA”), which the trial court granted. The Warrens then filed a motion to alter or amend the court’s order. Oral argument was heard on this motion on February 11, 1988, after which Ford filed a motion to stay the proceedings pending arbitration. The trial court on June 29, 1988, denied the Warrens’ motion to alter or amend and affirmed its previous order staying the action pending arbitration. The Warrens, on July 5, 1988, filed their petition with this Court for a writ of mandamus. During the February 11, 1988, hearing, the following facts were stipulated by the parties: “1. The Warrens are residents of St. Clair County, Alabama. “2. Jim Skinner is a Delaware Corporation with its sole and principal place of business in the State of Alabama. “3. The sale of the vehicle which is the subject of this action occurred within the State of Alabama. “4. The vehicle which is the subject of this action was previously owned by Jim Skinner and [was] sold ee ee et: A-3 to the Warrens pursuant to a contract entered into and executed in the State of Alabama. re “5. All obligations anticipated from the sales con- tract were to be performed solely within the State of Alabama.” The threshold inquiry in the present case is whether the sale of a motor vehicle manufactured outside of Alabama to an Alabama resident, who is buying it as a consumer and not for commercial purposes, is a contract involving “interstate commerce,” as that term is used in the Federal Arbitration Act, where the seller has its only place of business in Alabama, the vehicle is delivered to the buyer in Alabama, and all obligations arising out of the contract of sale are to be performed in Alabama. Alabama employs a two-pronged test to determine whether the FAA applies to a transaction within the state. This standard was announced by Justice Maddox’s dissenting opinion in Ex parte Alabama Oxygen Co., 433 So.2d 1158 (Ala. 1983), and was later adopted by this Court at 452 So.2d 860 (Ala. 1984). That standard is that the FAA applies to a contract if: 1) the contact (sic) was one involving interstate commerce; and 2) the contract contained an arbitration agreement voluntarily entered into by the parties. It is undisputed that there was an arbitration clause in the contract involved in this case; therefore, the only question is whether the contract was one involving interstate commerce. In discussing the commerce requirement of the FAA, this Court has stated: “The requirement of the FAA that an arbitration agreement ‘involve commerce’ has been construed very broadly so that the slightest nexus of the agreement with interstate commerce will bring the agreement within the ambit of the FAA.” Ex parte Costa & Head (Atrium), Ltd., 486 So.2d 1272, 1275 (Ala. 1986). Although we note that the language quoted from Ex parte Costa & Head is very broad, we find, nonetheless, that, under the particular facts of this case, the transaction in question A-4 does not involve interstate commerce, as contemplated by the FAA; and, therefore, we hold that the provisions of the federal legislation are not controlling. We hold that the appropriate standard for making this determination is set forth in a special opinion in Metro Industrial Painting Corp. v. Terminal Construction Co., 287 F.2d 382 (2d Cir. 1961), cert. denied, 368 U.S. 817 (1961): “[W)hether at the time [the parties] entered into [the contract} and accepted the arbitration clause, they contemplated substantial interstate activity.” 287 F.2d at 387 (Lumbard, Chief Judge, concurring) (em- phasis original). See, also, Burke County Public Schools Board of Education v. Shaver, 303 N.C. 408, 279 S.E.2d 816, 822 (1981) (applying the Metro Industrial test). Therefore, the standard here applicable is not the “reg- ulating standard” of “affecting interstate commerce”; rather the test for determining whether the transaction involves interstate commerce is a distinct standard unique to the application of the FAA. See Burke, supra, at 822 (footnote 11). Applying the FAA standard to the facts of this case, we perforce must conclude that the parties did not contemplate substantial interstate activity. Indeed, the stipulation of fact precludes, beyond any doubt, a finding that any interstate: commercial activity would arise from the retail sale of the automobile. Having determined that the FAA does not apply in the present case, we must next look to state law to determine what effect should be given to the contractual provision calling for arbitration. The enforcement of predispute arbi- tration agreements, while approved in the federal court system (see Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987) ), is specifi- cally prohibited by Ala. Code 1975, § 8-1-41(3). This federal policy does not preempt the differing Alabama policy in the present case, because an issue of purely state law is in question. See International Longshoremen’s Ass'n, AFL-CIO v. Davis, 476 U.S. 380, 106 S.Ct. 1904, 90 L.Ed.2d 389 (1986); see, also, Riverfront Properties, LTD. v. Max Factor III, 460 So.2d 948, 953 (Fla. 1984). eS eee ae a ee eae ee ee epee ee ee Se! ae ee, ee eg ee ee eee ee ee ee 4) , s . A-5 In discussing the policy behind Alabama’s nonenforce- ment of predispute arbitration clauses, this Court has stated: “The public policy of this state is to encourage arbitration and amicable settlements of differences between parties; but public policy also holds void an agreement in advance to oust or defeat the jurisdic- tion of all courts, as to all differences between the parties.” Wells v. Mobile County Bd. of Realtors, 387 So.2d 140, 144 (Ala. 1980). : The contract in the present case served to transfer title to an automobile, already located in Alabama, to a resident consumer. Even using the broad interstate commerce stan- dard found in Ex parte Costa & Head, we must conclude that such a transaction does not have a sufficient nexus with interstate commerce activity to bring the contract within the coverage of the FAA. Thus, we hold that, under the narrow factual context of this case, there is no basis for invoking the FAA, and the arbitration clause contained in the contract cannot be enforced under Alabama law. The writ of man- damus, therefore, is due to be granted. WRIT OF MANDAMUS GRANTED. Hornsby, C. J., znd Jones, Almon, Shores, Houston, Steagall, and Kennedy, JJ., concur. Maddox and Adams, JJ., dissent. Ex parte Jack D. Warren and Juanita Warren MADDOX, JUSTICE (Dissenting). The majority finds that “under the particular facts of this case, the transaction in question does not involve interstate commerce, as contemplated by the FAA; and, therefore, the provisions of the federal legislation are not controlling.” In my opinion, the question is not whether “interstate com- merce” was involved — clearly it was, and the parties so A-6. stated in the sales agreement;' the real question, however, is whether Congress intended to preempt the field where the contract containing an agreement to arbitrate is one involv- ing the retail sale of an automobile. The majority is of the opinion that Congress did not intend to cover such a con- tract. 1 cannot come to that conclusion, because I cannot make a distinction between a contract to buy stock? and a contract to buy an automobile, and I find myself having to dissent once again, as I did in Ex parte Alabama Oxygen Co., 433 So.2d 1158 (Ala. 1983). In short, I believe that this transaction sufficiently involves interstate commerce so as to be controlled by the Federal Arbitration Act; therefore, I must respectfully dissent, as 1 have before. The issue addressed in this case is whether the sale of a motor vehicle by a Delaware corporation from its sole place of business which is in the State of Alabama, to consumer/ residents of Alabama is a transaction controlled by the FAA. Alabama employs a two-pronged test to determine whether the Act applies to transactions within the state. This standard was announced in my dissent in Ex parte Alabama Oxygen Co., 433 So.2d 1158 (Ala. 1983), and later adopted by the Court at 452 So.2d 860 (Ala. 1984), after, of course, the Supreme Court of the United States had vacated our judg- ment and remanded the cause to this Court for further consideration in light of Southland Corp. v. Keating, 465 U.S. 1, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984). That standard is: 1. That the contract was one involving interstate com- merce; and 4s 2. That the contract contained an arbitration agreement voluntarily entered into by the parties. 'The sales agreement for the automobile itself states: “F. The undersigned purchaser and Jim Skinner Ford Inc. further agree as follows “1. That the motor vehicle described in this sale document has been heretofore traveling in interstate commerce and has an impact upon interstate commerce.” ? Arbitration clauses contained in contracts involving stock purchases are enforceable. Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 107 S.Ct. 2332, 96 L-Ed-2d- 185 (1987). (tats v~ 7 - [ere Pe Pre Maat peak A-7 The Warrens first argue that the appropriate standard for determining what constitutes a “transaction involving in- terstate commerce” as contemplated in the Act is whether the contract is one in which substantial interstate activity was contemplated by the parties as they entered into the contract that included the arbitration clause. They cite in support of this contention the following cases: Metro Industrial Painting Corp. v. Terminal Construction Co., 287 F.2d 382 (2d Cir. 1961), cert. denied, 368 U.S. 817 (1961); Burke County Public Schools Bd. of Ed. v. Shaver Partnership, 303 N.C. 408, 279 S.E.2d 816, 822 (1981); Ex parte Alabama Oxygen Co., supra, at 1175. The Warrens argue that substantial interstate activity was clearly not contemplated, because: 1. The contract was solicited and executed in the State of Alabama. 2. The vehicle was not shipped to Alabama from an- other state as part of the contract of sale, and all activity in the performance of the sales contract was anticipated to be __ performed in Alabama. The Warrens concede that Jim Skinner acquired the vehicle from out-of-state, but argue that the contract contemplated a sale of a vehicle located on the lot. Conversely, Jim Skinner urges the application of the test announced in Ex parte Costa S Head (Atrium) Lid., 486 So.2d 1272 (Ala. 1986), which is: “The requirement of the FAA that an arbitration agreement ‘involve commerce’ has been construed very broadly so that the slightest nexus of the agreement with interstate commerce will bring the- agreement within the ambit of the FAA.” 486 So.2d at 1275. Jim Skinner cites Mesa Operating Limited Partnership v. Louisiana Intrastate Gas Corp., 797 F.2d 238 (5th Cir. 1986), in support of the trial court’s order. In Mesa Operating, the court held that citizens of different states engaged in the perform- ance of contractual operations in one of those states are engaged in a contract under the Act. Jim Skinner points out A-8 that the United States Congress has enacted laws that regu- late the effects of the manufacture, distribution, financing, warranty, and sale of motor vehicles in interstate commerce, and it directs our attention to the following: the Motor Vehicle Information and Cost Savings Act, 15 U.S.C. § 2051 et seq.; the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq.; the Automobile Dealers Suits Against Manufacturers Act, 15 U.S.C. § 1221 et seq.; the National Traffic and Motor Vehicle Safety Act, 15 U.S.C. § 1381 et seq.; and the Con- sumer Credit Protection Act, 15 U.S.C. § 1601 et seq. The petitioners attempt to distinguish Ex parte Costa & Head (Atrium) Ltd. from the facts of the present case. They argue that in Costa & Head, 1) there existed a limited partnership with partners from several states; 2) one party to the contract had an out-of-state principal place of business and was obligated under the contract to perform work in this state; 3) out-of-state workmen were employed to perform the contract; 4) materials incorporated into the project in this state were manufactured and transported into this state from out-of-state as part of the actual performance of the contract. Also, in Costa & Head, petitioners contend, the transactions were all of a commercial nature between businessmen of equal bargaining strength, whereas in this case, petitioners argue, the purchasers are ordinary consumers contracting with a large corporation to purchase a consumer good for family use. I am not persuaded that Congress intended the application of the provisions of the Act to be determined on a case by case basis because of the bargaining power of the parties. In Costa & Head, this Court held that the Act will be applied in regard to any agreement that has the “slightest nexus” with interstate commerce. Applying this standard, it is inconceivable to me that this particular contract did not meet that test. In fact, the parties expressly stated that it did in the contract itself. Unquestionably, the subject vehicle was not manufactured in Alabama, but was manufactured out- side the state and shipped into the state for sale within the State. A-9 I agree with Jim Skinner’s assertion that motor vehicles have an inherent effect on interstate commerce, as exemplified by the great volume of federal legislation re- garding motor vehicles. I am not persuaded by the Warrens’ argument that all of the parties are residents of the State of Alabama and that that is the controlling factor. In the recent decision of Ex parte McKinney, 515 So.2d 693 (Ala. 1987), this Court held that Alabama resident citizens who purchased annuities from an Alabama stock brokerage firm and pyr- suant to that transaction signed agreements containing arbi- tration clauses were bound by those arbitration clauses. I think the trial court ruled correctly. The Warrens pre- sent no evidence that they were fraudulently induced to enter into this agreement to arbitrate, nor is there any evidence that they were coerced or that they were ignorant of the provisions of the contract upon entering into it. In short, there is substantial evidence to support the judgment of the trial court that this arbitration agreement was voluntarily entered into. The majority is of the opinion that the public policy and statutory law of this state, which refuse to enforce pre-dispute agreements to arbitrate, should prevail. If there were no conflicting provisions of federal law, state policy and statutory law in this respect would have to be honored. In this case, the majority bottoms its decision upon a finding that this contract does not involve “interstate commerce.” The decision cannot rest on this premise.* The automobile industry is one of the most highly regulated industries in the country. I believe Congress intended to make contracts for the retail sale of automobiles containing arbitration clauses subject to the provisions of the Act, and, there being no evidence to show that the agreement was not voluntarily entered into, I would not find it contrary to the public policy or statutory law of this state. *Logically extended, the result of this holding, that the retail sale of an automobile by a dealer who is a resident of this state to a resident of this state does not involve interstate commerce, would mean that the myriad of cases authorizing Alabama residents to sue out-of-state manufacturers and hale them into Alabama courts may need to be reexamined. A-10 This court, Ex parte Warrior Basin Gas Co., 512 So.2d 1364 (Ala. 1987), quoted from Seaboard Coast Line R. R. v. Trailer Train Co., 690 F.2d 1343 (11th Cir. 1982), the statement that “[a] determination by a trial court of what was intended by the parties in their agreement is a question of fact, not to be disturbed by this court unless clearly erroneous.” 1 am of the opinion that Judge Holladay’s findings of fact are not clearly erroneous and that he has correctly applied federal law’as it relates to the subject contract. I would deny the writ of-mandamus. A-11 IN THE CIRCUIT COURT OF ST. CLAIR COUNTY ALABAMA SOUTHERN JUDICIAL DIVISION AT PELL CITY JACK D. WARREN and JUANITA WARREN Plaintiffs Vs. Case No. CV87-126 JIM SKINNER FORD, INC., corporation, FORD MOT OR COMPANY, a corporation, and FIRST ALABAMA BANK OF BIRMINGHAM, a corporation *eee###e#te##&t&#t&€ & &@ &@ OF Defendants Re: Motion to Dismiss or in the Alternative to Stay — filed February 19, 1988 Motion for hearing on Motion to Reconsider — filed March 11, 1988 Motion for hearing on Motion to Reconsider — filed April 20, 1988 Defendant Jim Skinner's Motion for Ruling — filed June 24, 1988 ORDER This Court has considered all of the above styled motions. This Court has previously conducted a hearing on Motion for Reconsideration of the court’s order staying prosecution under the Federal Arbitration Act and has had the matter under advisement pending the filing of briefs and consider- ation thereof by this Court. This Court can see no reason for having any additional hearing with regard to Motion for Reconsideration. This Court has found ample authority, in the opinion of this Court, to substantiate the ruling hereto- fore entered by this Court on 10-29-87. A-12 Therefore, be it ORDERED that Motion for Reconsidera- tion is hereby denied and the Plaintiff and Defendant shall submit the matters to arbitration under the authority of the Federal Arbitration Act, 9 U.S.C. § 1. Dated this the 29th day of June, 1988 /s/ H. E. Holladay CIRCUIT JUDGE A-13 JACK D. WARREN, et als., IN THE CIRCUIT COURT ST. CLAIR COUNTY, ALABAMA Plaintiffs, PELL CITY VS. CIVIL ACTION NO: CV-87-126 JIM SKINNER FORD, INC., et als., Defendants. Notice of Appeal: Motion in the above-styled cause being heard before the HON. H. E. HOLLADAY, Circuit Judge, 30th Judicial Circuit, at the St. Clair County Courthouse, Pell City, Alabama beginning on February 11, 1988. APPEARANCES: HON. WM. TRUSSELL, Attorney of Record for the plaintiffs, Pell City, Alabama. HON. JOHN GALESE, Attorney of Record for the de- fendants, Birmingham, Alabama. ; HON. STEVE ROE, Attorney for First Alabama Bank, Birmingham, Alabama. THE COURT: Court come to order. MR. TRUSSELL: Mr. Galese advised me that he forwarded a brief to the Court. I haven’t received a brief. There are a couple of stipulations that we have discussed dealing with the residence of the parties of the transaction. MR. GALESE: Yes, sir. We can stipulate that the plaintiffs are now and were at the time of the transaction residents of this County. MR. TRUSSELL: And in addition, Jim Skinner’s dealership where this automobile was purchased is located in Jef- ferson County, Alabama, Birmingham. MR. GALESE: Well, Jim Skinner Ford is a Delaware Corpo- ration located in Jefferson County, Alabama. nO. ek a Pees are, pee se a ER Re re Raat ee wed a on Re Ae a a ke ka a A-14 MR. TRUSSELL: I understand that they are incorporated in the State of Delaware. We can stipulate to that, and, also, that the dealership where Mr. Warren bought this vehicle is located in Jefferson County, Alabama. MR. GALESE: There is a problem with that because when this matter was under motion to transfer, it was your decision that the transaction was consummated in this County, so we are not going to back off that. The dealership is located solely within Jefferson County. MR. TRUSSELL: That is all I was getting at. MR. GALESE: And the Ford came from Detroit. MR. TRUSSELL: The Ford from Detroit, yes. MR. GALESE: And the car was manufactured outside the State of Alabama. MR. TRUSSELL: We can stipulate the car was manufactured outside the State of Alabama, and the Ford Motor Company is located in Detroit, Michigan, and that Jim Skinner Ford is a Delaware Corporation, and the dealer- ship where this particular automobile was purchased is ; located in Jefferson County, and the plaintiffs were residents of St. Clair County. THE COURT: What about the stipulation that the defen- dant was doing business in St. Clair County? MR. TRUSSELL: Well, that issue is not before the Court. There was a motion, a venue motion, which we — THE COURT: Has that been ruled on? MR. TRUSSELL: That was ruled on by agreement. MR. GALESEF: Yes, sir. THE COURT: Okay. MR. GALESE: As I understand it, Judge, the only issue under the Federal Arbitration Act is, No. 1, whether there was an agreement to arbitrate, and, No. 2, whether or not the contract has an impact upon, or effect upon interstate commerce. If it is, Alabama law and the Federal law says the action is to be arbitrated. And Your Honor has already ruled that and granted the motion to arbitrate. THE COURT: All right. Are you ready to proceed? MR. TRUSSELL: Yes, sir, Your Honor. A-15 THE COURT: All right. MR. TRUSSELL: I think that we can probably agree in this motion that, really, the issue before the Court is whether this particular transaction is governed by the Federal Arbitration Act. Of course, it is governed by the State Arbitration Law. The State Arbitration Law prohibits the specific enforcement of an arbitration contract. The Federal law is different. The Federal law, the courts can specifically enforce an arbitration agreement under the Federal Arbitration Act. However, I have submitted to the Court three cases which, I think, are squarely on point in this case. Shearson Hayden Stone versus Liang, 493 Fed 2nd — excuse me — Fed. Supp. 104. Morse versus Swank Incornorated, 493 F. Supp. 110. Bryant- Durham Electric Company, Inc. versus Durham Durham County Hospital Corporation, 256 Southeast- ern 2nd 529. And Paramore versus Inter-Regional Bank through the leasing company, 316 Southeastern 2nd 90. Your Honor, each of these cases hold that in order to determine whether a particular transaction is governed by the Federal Arbitration Law, you have to look at the transaction itself and determine whether the transaction involves interstate commerce. Each of these cases held that, basically, you look to the purchase of the transac- tion, my clients bought this vehicle in Jefferson County, Alabama. The place of incorporation of the defendant has absolutely nothing to do with whether or not the transaction involves interstate commerce. It has to do with where the purchase was made and where the order for the purchase was made. You look at that sort of thing to determine whether you have a transaction involving interstate commerce. These cases hold that, and they are very similar cases. Basically, when a transaction does not involve interstate commerce, you can’t contract Federal ‘intervention you can’t put in your document and say this is going to be governed by Federal Law. It, in fact, has to involve interstate coinmerce. If it does, then, you can’t obviously rely on the Federal Arbitration Law. I know Mr. Galese is going to make a big point that he is A-16 - incorporated in a foreign state, therefore, that makes people who go down to Birmingham and buy a car from ——- Jim Skinner somehow impact.interstate commerce, and that is just not the law. It also is not the law that part of . the transaction you paid Ford Motor Credit, or someone else outside the State, that doesn’t make the transaction interstate commerce. One of these cases deals squarely on that. In fact, it is a lease contract, a lease payment was being made out of state to some financial company located out of state. I think the law is quite clear that you do look to the transaction. The purpose of stipulating stipulations here, as I wanted it in the record, without any debate or argument that this transaction occurred in Birmingham, Alabama, that is, my client went down — excuse me — that’s not what happened here. Actually, this particular transaction was consummated in St. Clair County, that is why we did have a problem with venue. But the purchase was from a dealership, which is located - in Jefferson County, Alabama, Jim Skinner Ford. The actual consummation of the contract occurred within the State of Alabama, that is, St. Clair County. There is nothing to impact interstate commerce as far as this transaction is concerned, and therefore, it is governed by State Law. Under the State Law, arbitration is not specifically enforced. That is basically what those three cases hold. THE COURT: Have you furnished Mr. Galese with these? MR. TRUSSELL: Yes, sir. MR. GALESE: May it please the Court. I did have a chance to read the cases he submitted about a week or so ago. Your Honor has correctly ruled in this case already. Alabama has changed its posture regarding the applica- bility of the Federal Arbitration Act in matters arising within the State, and that happened as the result of a case of Ex parte Alabama Oxygen, which I know that Your Honor is familiar with. The Alabama Supreme Court refused to enforce the Federal Arbitration Act in that case. THE COURT: Which one? A-17_ ~ ~ MR. GALESE: It’s in the brief, Ex parte Alabama Oxygen. That was the first case in Alabama under the Federal Arbitration Act. Historically and statutorily, Alabama has encouraged arbitration, but has found as void pre judgment dispute arbitration agreements. In Ex parte Alabama Oxygen, the Supreme Court again refused to enforce an arbitration agreement under the FAA. That went up to the United States Supreme Court, and the United States Supreme Court said that irrespective of any State laws to the contrary, the Federal Arbitration Act precmpts all state statutes and state common law in connection with claims that arise under the act. The case law since Ex parte Alabama Oxygen in this State is without contradiction. Every case without exception that has been presented to the Supreme Court of Alabama since Ex parte Alabama Oxygen — there have been six of them through yesterday's date — I ran that back up on West aw to see — without exception all six cases in Alabama that are cited in the brief all say that the Federal Arbitration Act, No. 1, has deliberately con- strued in favor of arbitration, and, No. 2, preempts state law so that the arbitration agréement is given full faith and full force. Now, as I understand it, the only issue presented today by Mr. Trussell isn’t that, in fact, there is a written contract, but it is only whether or not the contract has impact upon or affects interstate commerce. Because if it doesn’t have an impact upon interstate commerce, then the Federal Government can’t regulate it under the Federal Arbitration Act. I don’t dispute that. As I understand, that is the only issue presented. First of all, Jim Skinner Ford is a foreign corporation. Ford Motor Company, a defendant in this case, is a foreign corporat.on. The vehicle was manufactured in a different state. It was transported to this State. It was sold and it traveled on interstate highways. If there ever has been an industry that is regulated by the Federal - Government under the strength of the commerce clause, it is the automobile industry. They regulate — they being the U.S. Government through the Federal A-18 Statutes — regulate every aspect of a motor vehicle transaction from its design, its manufacture, its assem- bly, its transportation across interstate highways, its sale by the selling dealer, its financing charge, the odometer certification, every aspect of a motor vehicle sale is regulated by Federal Statute under the powers that Congress has in connection with matters effecting in- terstate commerce. Now, the cases cited by Mr. Trussell, first of all, two of the three cases are North Carolina Civil Court of Appeals cases, not even the highest jurisdictional court of that state. Those cases say that in viewing whether or not a transaction involves, affects or deals with interstate commerce, the Court takes a strict and narrow view. That is contradictory of Alabama Law. In the case that is cited to Your Honor, the case of Ex parte Costa and Head (Atrium) (Ltd) a Birmingham Organization, the Alabama Supreme Court in 1986 says the requirement of the Federal Arbitration Act that the agreement involved commerce has been construed very broadly so that the slightest nexus of the agreement with interstate commerce will bring you within the Federal Arbitration Act. Mr. Trussell would rather, Your Honor, take North Carolina’s view back in 1980, or ’83, that you have to strictly determine whether the contract affects commerce. I submit to you that the Alabama Supreme Court in Ex parte Costa and Head said just the contrary. We abandon the strict view, and we take the broad view so that if the Court finds the slightest nexus, and I am quoting the Supreme Court, the slightest nexus under the agreement with interstate commerce, the Court then must bring it within the ambit of the Federal Arbitration Act. To suggest that the sale of a new motor vehicle, manufactured out of state by a foreign corporation, doesn’t involve in some fashion commerce would be to ignore about eleven Federal Statutes that regulate my client’s business and industry in connection with the sale of vehicles. In light of the Supreme Court’s determination and direction to Your Honor that you should take the most broad view to A-19 enforce the Federal Arbitration Act and find only the slightest nexus to do so, Your Honor has to come to the conclusion realistically that Your Honor’s first decision in this case was well thought out, sound, and proper. And for that reason, we submit that his motion to reconsider should be overruled. THE COURT: The Alabama Oxygen Ex parte, what was involved in that as far as factual situation? MR. GALESE: It was a contract that dealt with canisters, as I recall, dealt with canisters of oxygen that were sold within the State of Alabama, but in fact had come across State lines. That reminds me of one thing, the classic case we studied in law school, Catsenback (sic) versus McClone. They held Ollie’s Restaurant in compliance — THE COURT: That is what I was about to say, the old Ollie’s MR. GALESE: Like bread and toilet paper that was sold and used in their restaurant was sufficient to uphold — THE COURT: That case involved the fact that the product of food was shipped across the State line. MR. GALESE: Yes, sir, that’s all it involved. And they said that that is a contract effecting interstate commerce. And, of course, we stipulated, and there is no question that the vehicle involved in this case was manufactured by Ford Motor Company in a different state, shipped in here, and sold as a — never having previously been sold vehicle. Even if it wasn’t for the Catsenback case, Your Honor has to know that there is more legislation affect- ing the sale of motor vehicles than probably any other single product. And it could only have been done by Congress under the guise of and strength of the Com- merce Laws. MR. TRUSSELL: Your Honor, I would like to respond to two or three points. There is no question that the car was manufactured outside the State and shipped to Ala- bama. As far as I know, they don’t have any Ford plants located in the State of Alabama. Mr. Galese is correct about that. There is also no doubt that a dispute arose between the dealer who bought the car and the man- A-20 ufacturer who sold the dealer the car. If the contract provides for Federal Arbitration of disputes arising under that contract, I don’t think there would be any question that the Arbitration Law would apply. This is not a sale by Ford of Detroit to Mr. Warren. This is a sale by Jim Skinner. Now, what is the slightest nexus he is referring to? He is talking about manufacturer of the vehicle. Well, that has nothing to do with that vehicle being manufactured out of state then brought into Alabama and then it is resold in Alabama. So I submit to you that the manufacturer of a vehicle that is shipped into Alabama, this all occurred prior to this transaction in connection with the purchase by Jim Skinner, is irrelevant. Now, the second thing I point out, there are a line of cases, in fact, I think almost all of them distin- guish the interpretation of commerce under this statute from the commerce in civil rights cases. There is no question in civil rights cases that they look for the slightest nexus, but there is a lot of authority, and I think the prevailing view is, that commerce is not quite so broad, either. If Mr. Galese has his way, then every contract, almost, the purchase of any goods, if I go down to TG&Y and purchase a fork, that little fork was probably manufactured in Korea or something, and they can put in their contract, in their little bill of sale document to me, this is going to be governed by the Federal Arbitration Law. The import of what he is saying is that we can take 80 or 90 percent of the sale cases out of this court, or out of Alabama law in any event, and make Federal questions out of them. I feel like that — well, I just don’t think there is any question that the transaction here involved was an intrastate transaction. The purchase by a St. Clair County indi- vidual of an automobile from a dealership located in Birmingham is an intrastate transaction. I don’t think there is any slightest nexus with any interstate com- merce. Therefore, I think the motion is due to be — THE COURT: Have you read the Ex parte Alabama Oxygen Company? A-21 MR. TRUSSELL: First of all, Your Honor, I haven’t received Mr. Galese’s brief until this morning. Secondly, I didn’t understand Mr. Galese to say that that case held that Federal Law controlled. I thought he said, and I may be mistaken of what he said, but I thought he said that the Supreme Court in that case held-hat Alabama Law. MR. GALESE: That is what the Alabama Supreme Court held, and it was appealed to the U. S. Supreme Court, and they reversed the Alabama Supreme Court. MR. TRUSSELL: Let me say this. You have to look at the fact situation. If this involved the purchase of canisters outside the State of Alabama by someone in the State of Alabama, then I don’t have any doubt that the Federal Arbitration Law. What you are going to have to do is look at some transaction itself and each specific fact situation. THE COURT: What was the last statement you made about you were having problems with? MR. TRUSSELL: If somebody sold canisters that were out of state through the mail, or shipped them into the State of Alabama to an Alabama resident, then I have no doubt that if in those contracted documents, you could prob- ably contract that Federal Law applies. My point is that it turns on fact situations. Where was the contract entered into? Where was the seller located? Where was the buyer located? A bunch of cases that my research indicated -- THE COURT: In other words, you are distinguishing there that on the basis that the product in the Oxygen Com- pany case was sold through interstate commerce to an Alabama purchaser? MR. TRUSSELL: Yes, sir. ‘THE COURT: Shipped in here to the purchaser? MR. TRUSSELL: That’s the whole key. THE COURT: If that be the case, I have not read this case at this time, then it would be distinguished from the Warren Case. MR. GALESE: Well, Judge, | wouldn’t want you to think that 1 am relying solely on the Ex parte. Costa and Head is the case that — A-22 THE COURT: I take that because you cited a lot of other cases here, this ’84 case that has been decided since then. MR. GALESE: Yes, sir. The first case in Alabama upholding Federal Arbitration came in the Ex parte Alabama Oxygen as a result of the U. S. Supreme Court so holding. Subsequent to that, 100 percent of the appel- late decisions in Alabama have upheld the Federal Arbitration. And all of them say exactly what Costa and Head said, that you must interpret broadly so that it is enforced, and you only must find the slightest nexus. THE COURT: What was the fact situation in the Costa and Head case? MR. GAEESE: Costa and Head was a dispute between a contractor and a sub-contractor for the construction of some improvements on the old Lovemans’ building downtown Birmingham, that’s all. It didn’t involve con- tractors across state lines. THE COURT: The contractor and sub-contractors were residents of Alabama? MR. GALESE: Yes, sir. THE COURT: And the work was done in Alabama? MR. GALESE: Yes, sir. THE COURT: What was the factual situation that brought it under the Arbitration? MR. GALESE: There was a contract that said the parties were to arbitrate under that Act. And the Court found that because an aspect of the contract was involved, the use of materials — THE COURT: The contract itself provided? MR. GALESE: Yes, sir. The contract in this case provides it. We have a written contract that has been attached to the motion in which the parties agree to submit — THE COURT: One of the basis of originally granting your motion — MR. GALESE: — was the written contract. Let me answer something Mr. Trussell said. He said where is the slightest nexus in this case? Even if there was no Federal Law regulating the sale of motor vehicles to retail purchasers, and there is, the Federal Odometer Act. His A-23 client got an odometer statement pursuant to that Act. The fact is, he sued Ford Motor Company in this case. He sued them under a Federal Statute, the Magnuson- Moss Act. He sued them for breach of warranty in connection with the vehicle. He even, irrespective of all the other law, has created that which could be consid- ered as the slightest nexus in the case. There is much more than a slight nexus in the case. MR. TRUSSELL: Now, he is submitting that by filing my lawsuit, some allegation made in my lawsuit, invokes interstate commerce, Your Honor, that ridiculous. MR. GALESE: That’s not what I said at all. The point is that he brings claim in this action against a foreign corpora- tion, which is Ford Motor Company, who extend the warrant. He brings claim under the Magnuson-Moss Act, which is an Act that was passed because of the impact of interstate commerce of goods that travel interstate commerce. Mr. Trussell would like to have it both ways. MR. TRUSSELL: Your Honor, Magnuson-Moss provides — Mr. Galese knows that he would remove this case to Federal Court in a minute if he could. So there is no question that the Federal jurisdiction is not invoked here. MR. GALESE: We are not talking about Federal jurisdiction. MR. TRUSSELL: We are talking about — MR. GALESE: Excuse me. I didn’t interrupt you, did I? MR. TRUSSELL: Excuse me. MR. GALESE: Judge, we are not talking about Federal jurisdiction. We are talking about whether or not this contract has any slightest nexus to interstate commerce. That is the only issue. The Magnuson-Moss Act does provide a forum in the State or Federal Court, but that Act was passed by the Federal Government on the strength that the sale of consumer goods flowed to interstate commerce. The very precise issue we are talking about, Judge. MR. TRUSSELL: One last question, and I will shut up and you can talk. A-24 Your Honor, if Mr. Galese is correct in this case, from now on, we won'thave to worry about any automobile cases in the State court, because he has come up with a way, and I will promise you this, I haven't read his cases, but this will be the first time in the history of the Alabama courts that an Alabama State Court has held that an arbitration agreement involving the sale of an auto- mobile is specifically enforced. If he is correct, then he is changing the law of this State. And I’m sure all of the automobile dealers in this State will be glad to hear it, because they are all going to put this provision in their contracts. But it will be a novel point, and we will just have to see what the Appellate Court says about it. MR. GALESE: Wel, I’m not — Judge, I don’t represent all the dealers. I represent a lot. And I can tell you Judge Cook in Bessemer has upheld this on at least ten occasions, the precise same language, involving the document. Judge Bryan has upheld it in connection with other car clients I represent, Eastwood Ford and others. I have had it upheld in two other counties. I’m not saying that you should even consider that, but I’m responding to what he said. I didn’t create this law, the Government did. I didn’t interpret it, the Alabama Supreme Court did. They are the ones that say intrastate transactions that have any impact at all on interstate commerce, if there is a contract to arbitration under the FAA, it must be arbitrated. It sounds like he has me out here on the point, and if you agree with me, you are out here on the point, and he is threatening this great appeal. MR. TRUSSELL: I’m not — MR. GALESE: Excuse me. I didn’t interrupt you, Bill. MR. TRUSSELL: Yes, you did interrupt me, and I’m going to interrupt you now. I didn’t threaten any appeal. I’m just saying that is a novel point. If this Court rules that, I am not aware of any written opinion issued by any appellate court in the State of Alabama that would require specific arbitration in products automobile cases. A-25 THE COURT: Assuming that the fact situation in the Oxygen Company case, and also in the Costa and Head are as he states, what distinguishing factors as far as the product is concerned, what difference does it make whether it is an automobile or an oxygen tank or — MR. TRUSSELL: I would say this, Your Honor, and I haven’t read Mr. Galese’s cases, but I would go out on a limb and say that there is no case that he cited that held that a pure intrastate purchase by a local seller and local buyer is governed by the Federal Arbitration Law, without even reading those cases. If those cases hold what he says they hold, then I think that the Court will have to follow that, but I am confident that they don’t. MR. ROE: Your Honor, I was sitting here reading the cases while we were arguing. I’m Steve Roe for First Alabama Bank. We support his motion by the way. One of the cases that he cited was McKinley versus E. F. Hutton where the plaintiffs were customers of E. F. Hutton in Mobile. Their account executive was a person in Mobile, and they lived in Mobile, and they purchased a product, in this case, a single premium deferred annuity. They went over to their broker and bought something. And the annuity was issued by E. F. Hutton on some com- pany that later turned out to be a bad company. They sued E. F. Hutton. They sued their broker in Mobile. They went into a brokerage house in Mobile, and they bought a product in Mobile. They didn’t like the prod- uct. They didn’t sue the person that issued the product. They sued the person who sold it to them, the salesman in Mobile. There was an arbitration clause in the con- tract they had with E. F. Hutton, and the Supreme Court said that’s controlled by arbitration. There is one exam- ple of something that is between two people in Alabama over something they bought that they didn’t like. The Supreme Court held that that was subject to arbitration. In another one, Shamrock Food Services versus Bir- mingham — in re Shamrock Food Services involved a contract between Shamrock Food Services — THE COURT: Is that cited in the brief? A-26 MR. GALESE: Yes, sir. MR. ROE: I am sure we could provide Your Honor with a copy. : MR. TRUSSELL: I would like to be provided with copies of it, too, since I feel at somewhat a disadvantage having to MR. ROE: That one involved a dispute between Birming- ham Southern and Shamrock Food Services, Inc. over a contract between them for the providing of food services by Shamrock to Birmingham Southern. Although the case is somewhat cryptic in what happened, it doesn’t say anything about where the services were provided. I have to assume it was Birmingham Southern, which is located in Birmingham, that it arose in Birmingham. They make the statement that the Federal Arbitration Act was intended to reverse centuries of judicial hostility to arbitration agreements. While I as a lawyer might hate to see the day coming where all these things are going to be arbitrated, that seems clearly the way the Supreme Court is headed. ‘ MR. TRUSSELL: May I respond to the Hutton case, Your Honor. Hutton was selling a broker. You can, of course, sue a broker directly without suing the person he is selling for. This was to purchase insurance from an out-of-state company through a broker. The broker not being the owner, but sued the broker. I think negli- gence, malpractice and misrepresentation. But the point is that the item being sued, the subject of the contract, was something coming from out of state. This is a pure intrastate transaction. The only, quote, nexus is the fact that it was manufactured and previously came in from out of state. But it was owned in Alabama and sold to someone else in Alabama. Now, if the nexus is the fact that it was manufactured way back in its history and sent into Alabama, then it is going to take — the Federal Law would assume the State law in this matter. Almost all items sold in Alabama, 99 percent, I would hazard a guess, are manufactured elsewhere. A-27 THE COURT: What is your response to the factual provi- sions in the contract that would be submitted for arbi- tration? MR. TRUSSELL: Unless the transaction effects intrastate commerce, and I think we are all in agreement in this, the contract provision is not binding. It has to effect interstate commerce to be governed by Federal Law. Once it is governed by Federal Law, you look to the contract. And the Federal Law is that arbitration is specific enforcement. But if it is not a transaction involving interstate commerce, then you never get to the point of applying Federal Law, you apply Alabama law. Alabama law says it is not specific enforcement. The issue here in this case is whether this specific fact situation, if this transaction involved or effects interstate commerce. There are a gillion cases, and I would like to see — THE COURT: I think the Federal Court can bring in the commerce provision — I mean involve interstate com- merce. It’s been pointed out always, I thirik right after I got out of law school, in the Ollie Barbecue case, which I thought at that time was ridiculous. Still, as you say, it was a Civil rights question, but still, that is what the courts held at that time that it involved — interstate commerce was one of the last things that Ollie Barbecue at that time ever imagined would be brought into Federal Court. Gentlemen, I think I understand the issues clearly enough. I will take this under advisement. I will be frank with you, I have not read your cases, Mr. Galese, that you cited in the brief, which did not arrive until late yester- day afternoon. ' MR. GALESE: Judge, these are not yet published opinions of the Alabama Supreme Court. I will be happy to give you copies. AK KK KK * A-28 Federal Arbitration Act, 9 U.S.C. §§ 1-13 § 1. “Maritime transactions” and “commerce” defined; ex- ceptions to operation of title “Maritime transactions”, as herein defined, means charter parties, bills of lading of water carriers, agreements relating to wharfage, supplies furnished vessels or repairs to vessels, collisions, or any other matters in foreign commerce which, if the subject of controversy, would be embraced within admi- ralty jurisdiction; “commerce”, as herein defined, means commerce among the several States or with fureign 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. § 2. Validity, irrevocability, and enforcement of agreements to arbitrate A 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 the refusal to perform the whole or any part thereof, of 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 anv contract. § 3. Stay of proceedings where issue therein referable to arbitration If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the A-29 issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration. § 4. Failure to arbitrate under agreement; petitionto United States court having jurisdiction tor order to compel arbitra- tion; notice and service thereof; hearing and determination A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under Title 28 [28 USCS], in a civil action or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitra- tion proceed in the manner provided for in such agreement. Five days’ notice in writing of such application shall be served upon the party in default. Service thereof shall be made in the manner provided by the Federal Rules of Civil Procedure [USCS Rules of Civil Procedure]. The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. The hearing and proceedings, under such agreement, shall be within the district in which the petition for an order directing such arbitration is filed. If the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof. If no jury trial be demanded by the party alleged to be in default, or if the matter in dispute is within admiralty jurisdiction, the court shall hear and determine such issue. Where such issue is raised, the party alleged to be in default may, except in cases of admiralty, on or before the return day of the notice of application, demand a jury trial of such issue, and upon such demand the court shall make an order referring the issue or | A-30 issues to a jury in the manner provided by the Federal Rules of Civil Procedure [USCS Rules of Civil Procedure], or may specially call a jury for that purpose. If the jury find that no agreement in writing for arbitration was made or that there is no default in proceeding thereunder, the proceeding shall be dismissed. If the jury find that an agreement for arbitra- tion was made in writing and that there is a default in proceeding thereunder, the court shall make an order sum- marily directing the parties to proceed with the arbitration in accordance with the terms thereof. -§ 5. Appointment of arbitrators or umpire If in the agreement provision be made for a method of naming or appointing an arbitrator or arbitrators or an umpire, such method shall be followed; but if no method be provided therein, or if a method be provided and any party thereto shall fail to avail himself of such method, or if for any other reason there shall be a lapse in the naming of an arbitrator or arbitrators or umpire, or in filling a vacancy, then upon the application of either party to the controversy the court shall designate and appoint an arbitrator or arbi- trators or umpire, as the case may require, who shall act under the said agreement with the same force and effect as if he or they had been specifically named therein; and unless otherwise provided in the agreement the arbitration shall be by a single arbitrator. § 6. Application heard as motion Any application to the court hereunder shall be made and heard in the manner provided by law for the making and hearing of motions, except as otherwise herein expressly provided. § 7. Witnesses before arbitrators; fees; compelling atten- dance The arbitrators selected eithe. as prescribed in this title or otherwise, or a majority of them, may summon in writing any person to attend before them or any of them as a witness and A-31 in a proper case to bring with him or them any book, record, document, or paper which may be deemed material as evidence in the case. The fees for such attendance shall be the same as the fees of witnesses before masters of the United States courts. Said summons shall issue in the name of the arbitrator or arbitrators, or a majority of them, and shall be signed by the arbitrators, or a majority of them, and shall be directed to the said person and shall be served in the same manner as subpoenas to appear and testify before the court; if any person or persons so summoned to testify shall refuse or neglect to obey said summons, upon petition the United States district court for the district in which such arbitrators, or a majority of them, are sitting may compel the attendance of such person or persons before said arbitrator or arbi- trators, or punish said person or persons for contempt in the same manner provided by law for securing the attendance of witnesses or their punishment for neglect or refusal to attend in the courts of the United States. § 8. Proceedings begun by libel in admiralty and seizure of vessel or property If the basis of jurisdiction be a cause of action otherwise justiciable in admiralty, then, notwithstanding anything herein to the contrary, the party claiming to be aggrieved may begin his proceeding hereunder by libel and seizure of the vessel or other property of the other party according to the usual course of admiralty proceedings, and the court shall then have jurisdiction to direct the parties to proceed with the arbitration and shall retain jurisdiction to enter its decree upon the award. § 9. Award of arbitrators; confirmation; jurisdiction; proce- dure If the parties in their agreement have agreed that a judg- ment of the court shall be that a judgment of the court shall be entered upon the award made pursuant to the arbitration, and shall specify the court, then at any time within one year after the award is made any party to the arbitration may A-32 apply to the court so specified for an order confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected as pre- scribed in sections 10 and 11 of this title. If no court is specified in the agreement of the parties, then such applica- tion may be made to the United States court in and for the district within which such award was made. Notice of the application shall be served upon the adverse party, and thereupon the court shall have jurisdiction of such party as though he had appeared generally in the proceeding. If the adverse party is a resident of the district within which the award is made, such service shall be made upon the adverse party or his attorney as prescribed by law for service of notice of motion in an action in the same court. If the adverse party shall be a nonresident, then the notice of the application shall be served by the marshal of any district within which the adverse party may be found in like manner as other process of the court. § 10. Same, vacation; grounds; rehearing In either of the following cases the United States court in and for the district wherein the award was made may make an order vacating the award upon the application of any party to the arbitration — (a) Where the award was procured by corruption, fraud, or undue means. (b) Where there was evident partiality or corruption in the arbitrators, or either of them. (c) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced. (d) Where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and defi- nite award upon the subject matter submitted was not made. A-33 (e) Where an award is vacated and the time within which the agreement required the award to be made has not expired the court may, in its discretion, direct a rehearing by the arbitrators. § 11. Same; modification or correction; grounds; order In either of the following cases the United States court in and for the district wherein the award was made may make an order modifying or correcting the award upon the applica- tion of any party to the arbitration — (a) Where there was an evident material miscalculation of figures or an evident material mistake in the description of any person, thing, or property referred to in the award. (b) Where the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the decision upon the matter submitted. (c) Where the award is imperfect in the matter of form not affecting the merits of the controversy. The order may modify and correct the award, so as to effect the intent thereof and promote justice between the parties. § 12. Notice of motions to vacate or modify; service; stay of proceedings Notice of a motion to vacate, modify, or correct an award must be served upon the adverse party or his attorney within three months after the award is filed or delivered. If the adverse party is a resident of the district within which the award was made, such service shall be made upon the adverse party or his attorney as prescribed by law for service of notice of motion in an action in the same court. If the adverse party shall be a nonresident then the notice of the application shall be served by the marshal of any district within which the adverse party may be found in like manner as other process of the court. For the purposes of the motion any judge who might make an order to stay the proceedings in an action brought in the same court may make an order, to be served with the notice of motion, staying the proceedings of the adverse party to enforce the award. A-34 § 13. Papers filed with order on motions; judgment; dock- eting; force and effect; enforcement The party moving for an order confirming, modifying, or correcting an award shall, at the time such order is filed with the clerk for the entry of judgment thereon, also file the following papers with the clerk: (a) The agreement; the selection or appointment, if any, of an additional arbitrator or umpire; and each written extension of the time, if any, within which to make the award. (b) The award. (c) Each notice, affidavit, or other paper used upon an application to confirm, modify, or correct the award, and a copy of each order of the court upon such an application. The judgment shall be docketed as if it was rendered in an action. The judgment so entered shall have the same force and effect, in all respects, as, and be subject to all the provisions of law relating to, a judgment in an action; and it may be enforced as if it had been rendered in an action in the court in which it is entered. A-35 Ala. Code (1975) § 8-1-41 § 8-1-41. Obligations which cannot be specifically enforced. The following obligations cannot be specifically enforced: (1) An obligation to render personal service; (2) An obligation to employ another in personal service; (3) An agreement to submit a controversy to arbitra- tion; (4)An agreement to perforin an act which the party has not power lawfully to perform when required to do so; (5) An agreement to procure the act or consent of the wife of the contracting party or of any other third persons; or (6) An agreement, the terms of which are not suffi- ciently certain to make the precise act which is to be done clearly ascertainable. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385020_0424%3A1. Public record. Not legal advice.