Allied-Bruce Terminix Cos., Inc. v. Dobson

Summary

The Court, in an opinion by Justice Breyer joined by Chief Justice Rehnquist and Justices Stevens, O'Connor, Kennedy, Souter, and Ginsburg, held that § 2 of the Federal Arbitration Act reaches the full extent of Congress' commerce power and requires an interstate-commerce connection in fact, not one contemplated by the contracting parties. It declined to reconsider Southland's holding that the Act applies in state courts and preempts conflicting state law. Because the termite-protection transaction concededly involved interstate commerce, the Court reversed and remanded. Justice O'Connor concurred separately, accepting Southland under stare decisis despite continuing to believe it wrongly decided. Justice Scalia dissented separately, arguing that reliance interests did not justify retaining Southland, and also joined Justice Thomas's dissent. Justice Thomas would have affirmed because the Act does not apply in state courts and, alternatively, § 2 does not require state courts to specifically enforce arbitration agreements.