Ex Parte Jones, 628 So. 2d 316 (Ala. 1993). · Go Syfert
Search
Ex Parte Jones, 628 So. 2d 316 (Ala. 1993). Cases Citing This Book View Copy Cite
G Cite
cited 3× by 3 distinct cases, last quoted 2002 · …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 ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity f… ⚠ not in text
65 citation events (12 in the last 25 years) across 3 distinct courts.
Strongest positive: UHG I LLC v. Shakeena Cox (Appeal from Mobile Circuit Court: CV-23-22). (ala, 2024-11-08)
Treatment trajectory · 1993 → 2026 · click a year to view as-of
1993 2009 2026
Top citers, strongest first. 13 distinct citers. How cited ↗
examined Cited as authority (quoted) UHG I LLC v. Shakeena Cox (Appeal from Mobile Circuit Court: CV-23-22).
Ala. · 2024 · signal: see, e.g. · quote attribution · 1 verbatim quote · confidence low
the federal courts have held that it is not necessarily the inconsistency of a party's actions that decides the issue of waiver, but, rather, the presence or absence of prejudice to the other party resulting from those actions.
examined Cited as authority (quoted) CNU of Alabama, LLC v. Shakeena Cox (Appeal from Mobile Circuit Court: CV-23-22).
Ala. · 2024 · signal: see, e.g. · quote attribution · 1 verbatim quote · confidence low
the federal courts have held that it is not necessarily the inconsistency of a party's actions that decides the issue of waiver, but, rather, the presence or absence of prejudice to the other party resulting from those actions.
cited Cited as authority (rule) Jenkins v. Atelier Homes, Inc.
Ala. · 2010 · confidence medium
Cars, Inc. v. Smith, 727 So.2d 9, 19 (Ala.1998); Ex parte Isbell, 708 So.2d 571, 581 (Ala.1997); Ex parte Jones, 686 So.2d 1166, 1168 (Ala.1996); and Ex parte Jones, 628 So.2d 316, 317 (Ala.1993).
cited Cited as authority (rule) Madasu v. Berry Co. & BellSouth Advertising & Publishing Co.
Ala. Civ. App. · 2006 · confidence medium
Cars, Inc. v. Smith, 727 So.2d 9, 19 (Ala.1998); Ex parte Isbell, 708 So.2d 571, 581 (Ala.1997); Ex parte Jones, 686 So.2d 1166, 1168 (Ala.1996); and Ex parte Jones, 628 So.2d 316, 317 (Ala.1993).
cited Cited as authority (rule) Knepp v. Credit Acceptance Corp. (In Re Roy A.)
Bankr. N.D. Ala. · 1999 · confidence medium
Ex parte Jones, 628 So.2d 316, 317 (Ala.1993).
discussed Cited as authority (rule) Ex Parte Jones
Ala. · 1996 · confidence medium
Thus, [that party] has no standing to seek enforcement of the arbitration provision therein, and it would be error for the trial court to compel arbitration of claims against [it] under this arbitration provision.'" (Quoting Ex parte Jones, 628 So.2d 316, 317 (Ala.1993)).
examined Cited as authority (rule) Lopez v. Home Buyers Warranty Corp. (4×) also: Cited "see"
Ala. · 1993 · confidence medium
"However, for the FAA to apply, the agreement that contains the predispute arbitration provision must involve interstate commerce." Ex parte Jones , supra, 628 So.2d at 317 (emphasis original).
discussed Cited as authority (rule) Ex Parte Jones (2×)
Ala. · 1993 · confidence medium
Although the majority concludes "that Warren represents a more reasoned approach than the Costa standard," 628 So.2d at 318, the majority also recognizes that Warren "had a very limited applicability, as was indicated by the Warren opinion itself and as subsequent cases suggested." 628 So.2d at 318.
discussed Cited "see" McKee v. Hendrix (2×)
Ala. Civ. App. · 2001 · signal: see · confidence high
See Ex parte Jones , 628 So.2d 316 (Ala. 1993), and Delta Constr.
cited Cited "see" Jim Burke Automotive, Inc. v. Beavers
Ala. · 1996 · signal: see · confidence high
See my dissenting opinion in Ex parte Jones, 628 So.2d 316 (Ala.1993) (Maddox, J., dissenting).
discussed Cited "see" Allied-Bruce v. Dobson (2×)
Ala. · 1995 · signal: see · confidence high
See Ex parte Jones , 628 So.2d 316 (Ala. 1993); Continental Grain Co. v. Beasley , 628 So.2d 319 , 321 (Ala. 1993); Lopez v. Home Buyers Warranty Corp. , 628 So.2d 361 , 363 (Ala. 1993).
discussed Cited "see" First Alabama Bank v. Burgess
Ala. Civ. App. · 1994 · signal: see · confidence high
The test for determining whether the FAA compels arbitration is “‘[W]hether at the time [the parties] entered into [the contract] and accepted the arbitration clause, they contemplated substantial interstate commerce.’ ” Ex parte Warren, 548 So.2d 157 (Ala.), cert. denied, 493 U.S. 998 , 110 S.Ct. 554 , 107 L.Ed.2d 550 (1989) (quoting Metro Industrial Painting Corp. v. Terminal Construction Co., 287 F.2d 382 (2d Cir.) (Lumbard, Chief Judge, concurring) (emphasis original), cert. denied, 368 U.S. 817, 82 S.Ct. 31 , 7 L.Ed.2d 24 (1961)); see Ex parte Jones, 628 So.2d 316 (Ala.1993).
cited Cited "see" Continental Grain Co., Inc. v. Beasley
Ala. · 1993 · signal: see · confidence high
See my dissenting opinion in Ex parte Jones, 628 So.2d 316 (Ala.1993) (Maddox, J., dissenting).
Retrieving the full opinion text from the archive…
Ex Parte Bruce M. Jones. (Re: Bruce M. Jones
v.
Charles S. Caldwell III and Automatic Detection Systems, Inc.)
1920249.
Supreme Court of Alabama.
Jul 16, 1993.
628 So. 2d 316
1993 Ala. LEXIS 662
1993 WL 262036
C. Lee Reeves of Sirote Permutt, P.C., Birmingham, for petitioner. George G. Lynn and Thomas W. Thagard III of Maynard, Cooper, Frierson Gale, P.C., Birmingham, for respondents.
Kennedy, Maddox.
Cited by 37 opinions  |  Published
1 passages pin-cited by 2 cases
Pinpoint authority: #47,199 of 633,719
Citer courts: Supreme Court of Alabama (2)

Lead Opinion

This mandamus proceeding stems from a lawsuit involving a dispute over a stock purchase agreement between the plaintiff/petitioner, Bruce M. Jones, and the defendant/respondent Charles S. Caldwell III. Jones seeks a writ of mandamus requiring the Jefferson County Circuit Court to set aside its order directing arbitration as to some of Jones's claims. We grant the writ.

Caldwell is the majority shareholder and president of Automatic Detection Systems, Inc. ("ADS"). ADS is an Alabama corporation that sells, installs, maintains, and monitors security system equipment. ADS is also a defendant in the underlying action.

Jones owned all of the stock in another Alabama corporation, Birmingham Protection Systems, Inc. ("BPS"). In November 1990, Caldwell, individually, entered into a stock purchase agreement with Jones. Under the agreement, Jones, as the sole stockholder of BPS, was to sell Caldwell his BPS stock. This agreement contained an arbitration provision requiring that disputes regarding the stock agreement be arbitrated. Later, such disputes arose and Jones sued.1

The trial court ordered arbitration. At issue in this mandamus proceeding is whether the stock purchase agreement "involves interstate commerce," and thus, invokes the Federal Arbitration Act, which would render the arbitration provision in the contract enforceable.

Predispute arbitration agreements are unenforceable under Alabama law. Ala. Code 1975, § 8-1-41. If, however, an arbitration agreement was voluntarily entered into, and relates to a contract involving interstate commerce, the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (the "FAA") applies, and preempts Alabama law. See Ex parte Alabama Oxygen Co.,433 So.2d 1158 (Ala. 1983) (Maddox, J., dissenting), review after remand from United Supreme Court, 452 So.2d 860 (Ala. 1984) (adopting views expressed in Justice Maddox's original dissent); A.G. Edwards Sons, Inc. v. Syvrud, 597 So.2d 197 (Ala. 1992). Under the FAA, a predispute arbitration agreement — in the context of a contract involving interstate commerce — is enforceable. Id.

At the outset, we note that ADS was not a party to the stock purchase agreement. Thus, ADS has no standing to seek enforcement of the arbitration provision therein, and it would be error for the trial court to compel arbitration of claims against ADS, under this arbitration provision. We do not necessarily read the trial court's order to so require, but we address this question nonetheless, because the parties suggest that they so read the trial court's order.

We turn to the dispositive issue before us, whether the agreement between Caldwell and Jones involved "interstate commerce." In this regard, Caldwell, citing Ex parte Costa Head (Atrium), Ltd., 486 So.2d 1272, 1275 (Ala. 1986), argues that even the "slightest nexus" of an agreement with interstate commerce will bring the agreement within the scope of the FAA. See Ex parte Brice Building Co., 607 So.2d 132 (Ala. 1992). Caldwell discusses, in this regard, ADS and BPS's interstate connections outside the agreement. Caldwell concedes that the stock purchase agreement between himself and Jones makes no reference to any interstate matters. However, for the FAA to apply, the agreement that contains the predispute arbitration provision must involve interstate commerce.

Our review of the record indicates that the agreement relates to the sale of all the stock in an Alabama corporation (located solely within Alabama), between two Alabama businessmen, negotiating within Alabama to create an agreement consisting of duties and obligations to be performed within *Page 318 Alabama. Based on these facts, we hold that the FAA does not apply.

Although one could reasonably conclude that the agreement had not even the "slightest nexus" with interstate commerce, we reach our holding by applying the standard set out inEx parte Warren, 548 So.2d 157 (Ala. 1989), for determining whether a contract involves interstate commerce, rather than the Costa "slightest nexus" standard. The Warren standard is "[W]hether at the time, [the parties] entered into [the contract] and accepted the arbitration clause, theycontemplated substantial interstate activity." 548 So.2d at 160 (quoting Metro Industrial Painting Corp. v. Terminal Constr.Co., 287 F.2d 382, 387 (2d Cir. 1961) (emphasis in Metro), cert. denied, 368 U.S. 817, 82 S.Ct. 31, 7 L.Ed.2d 24 (1961).

In Warren the Court declined to apply the Costa "slightest nexus" standard and implicitly overruled it in a "narrow" set of circumstances. Warren, 548 So.2d at 160. Warren, which involved a retail automobile sales contract, had a very limited applicability, as was indicated by the Warren opinion itself and as subsequent cases suggested. Noting this, we observed inEx parte Brice Bldg. Co., 607 So.2d 132 (Ala. 1992):

"The Warren case was expressly addressed by this Court with regard to its 'narrow factual context.' . . .

"In H.L. Fuller Constr. Co. v. Industrial Dev. Bd. of [the] Town of Vincent, 590 So.2d 218 (Ala. 1991), decided after Warren, we restated the Costa standard. H.L. Fuller Constr. involved a construction contract. . . . We restated the Costa standard, but did not go on to apply it. . ..

"In Roscoe v. Jones, 571 So.2d 1043 (Ala. 1990), another construction contract case, we reemphasized that Warren has a 'narrow application.' Id. at 1046."

607 So.2d at 134. (Emphasis original.)

To resolve any inconsistency or confusion generated by the existence of two different standards, and determining, as we now do, that Warren represents a more reasoned approach than the Costa standard, we overrule any case inconsistent withWarren, to the extent that it states a different standard for determining the involvement of interstate commerce.

In this case, because the FAA does not apply, Alabama law renders the arbitration provision unenforceable. Ala. Code 1975, § 8-1-41; Wells v. Mobile County Bd. of Realtors, Inc.,387 So.2d 140 (Ala. 1980).

WRIT GRANTED.

HORNSBY, C.J., and ALMON, SHORES, HOUSTON and STEAGALL, JJ., concur.

MADDOX and INGRAM, JJ., dissent.

1 There are also disputes between the parties as to an "independent consulting agreement" between ADS and Jones, but the issues here relate solely to the trial court's order requiring the arbitration of claims arising under the stock purchase agreement.

Dissent

I respectfully dissent. I disagree with the majority as to the applicable test for determining whether a transaction involves interstate commerce for purposes of the FAA. I also believe that the stock purchase agreement containing an arbitration clause involves interstate commerce and, therefore, that the trial court properly granted the motion to compel arbitration.

I.
In determining whether a transaction involves interstate commerce, I believe that the "slightest nexus" test set forth in Ex parte Costa Head (Atrium), Ltd., 486 So.2d 1272 (Ala. 1986), and not the "contemplation" test set forth in Ex parteWarren, 548 So.2d 157 (Ala.), cert. denied sub nom. Jim SkinnerFord, Inc. v. Warren, 493 U.S. 998, 110 S.Ct. 554,107 L.Ed.2d 550 (1989), provides the proper analysis. See Warren, 548 So.2d at 160-63 (Maddox, J., dissenting). Although the majority concludes "that Warren represents a more reasoned approach than the Costa standard," 628 So.2d at 318, the majority also recognizes that Warren "had a very limited applicability, as was indicated by the Warren opinion itself and as subsequent cases suggested." 628 So.2d at 318.

Indeed, Warren's "contemplation" test has been applied in only two contexts — those involving automobile sales contracts between dealers and consumers, see Warren and Ex parteWilliams, 555 So.2d 146 (Ala. 1989), and those, like this present case, involving stock purchase agreements. See Ex parteClements, *Page 319 587 So.2d 317 (Ala. 1991). That this Court has applied the "contemplation" test sparingly indicates "thatWarren has a 'narrow application.' " Ex parte Brice BuildingCo., 607 So.2d 132, 134 (Ala. 1992) (quoting in part Roscoe v.Jones, 571 So.2d 1043, 1046 (Ala. 1990)). In contrast, in addition to cases involving construction contract disputes, such as Brice Building Co., this Court has also recently applied the "slightest nexus" test in a number of other contexts. See First Real Estate Corp. of Alabama, Inc. v. BrownMarx Tower Ltd., 620 So.2d 648 (Ala. 1993) (real estate management agreement); Circle "S" Industries, Inc. v. Berryman,613 So.2d 329 (Ala. 1993) (consent judgment involving agreement not to compete); Garikes, Wilson, Atkinson, Inc. v. EpiscopalFoundation of Jefferson County, Inc., 614 So.2d 447 (Ala. 1993) (contract for architectural services); and A.J. Taft Coal Co.v. Randolph, 602 So.2d 395 (Ala. 1992) (mining lease).

Because this Court had already adopted the "slightest nexus" test in Costa Head, its adoption of the "contemplation" test in Warren has been criticized as "creating a double standard." Stanley D. Bynum J. David Pugh, EnforcingArbitration Agreements in Alabama: A Double Standard Dilemma, 54 Ala. Law. 38, 43 (January 1993). Bynum and Pugh wrote thatCosta Head "brought Alabama law generally in line with the majority of other jurisdictions" but that Warren "is inconsistent with all other jurisdictions that have addressed the issue." Id. at 38-39 and 41. The authors particularly criticized Warren's "contemplation" test for its subjectivity.Id. at 43.

I do not think that the United States Supreme Court's denial of the petition for certiorari in Warren should be viewed as that Court's imprimatur of the "contemplation" test, because a denial of a petition for certiorari review has no significance in regard to the merits. Parker v. Ellis,362 U.S. 574, 576, 80 S.Ct. 909, 911, 4 L.Ed.2d 963 (1960).2

Based on the foregoing, I believe that the "slightest nexus" test gives more effect to Congress's intent in enacting the FAA, which was "to provide for the enforcement of arbitration agreements within the full reach of the Commerce Clause." Perry v. Thomas, 482 U.S. 483, 490,107 S.Ct. 2520, 2525-26, 96 L.Ed.2d 426 (1987). I am unwilling to overrule recent, well-reasoned cases applying the test this Court adopted in Costa Head.

II.
Regarding whether the arbitration agreement in this case is enforceable, I note that "[a]rbitration clauses contained in contracts involving stock purchases are enforceable."Warren, 548 So.2d at 161 n. 2 (Maddox, J., dissenting) (citingShearson/American Express, Inc. v. McMahon, 482 U.S. 220,107 S.Ct. 2332, 96 L.Ed.2d 185 (1987)). I believe that the stock purchase agreement in this case had at least the "slightest nexus" with interstate commerce, so that the arbitration agreement is specifically enforceable pursuant to the FAA. Consequently, I must respectfully dissent.

INGRAM, J., concurs.

2 For example, last year the United States Supreme Court denied a petition for certiorari review raising the issue of whether the principle of Batson v. Kentucky, 476 U.S. 79,106 S.Ct. 1712, 90 L.Ed.2d 69 (1986), applies to gender-based peremptory strikes, Murphy v. State, 596 So.2d 42 (Ala.Cr.App. 1991),cert. denied, ___ U.S. ___, 113 S.Ct. 86, 121 L.Ed.2d 49 (1992), but in another case that Court has recently granted a certiorari petition raising the same issue. J.E.B. v. State,606 So.2d 156 (Ala.Civ.App. 1992), cert. granted, ___ U.S. ___, 113 S.Ct. 2330, 124 L.Ed.2d 242 (1993).