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PostPosted: Mon Jan 15, 2007 11:25 pm 
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Borrower sued bank that financed automobile purchase alleging bank converted cash found in automobile upon repossession. The Circuit Court, Calhoun County, R. Joel Laird, Jr., J., granted borrower's motion to set aside prior order compelling arbitration in accordance with loan agreement. Bank appealed. The Court of Civil Appeals, L. Charles Wright, Retired Appellate Judge, held that: (1) test for whether Federal Arbitration Act (FAA) compels arbitration is whether at time parties entered into loan contract and accepted arbitration clause, they "contemplated substantial interstate commerce," and not "slightest nexus" test; (2) parties did not "contemplate substantial interstate activity" in entering into loan agreement for purchase of automobile so as to require mandatory arbitration under FAA; and (3) mere fact that bank was regulated by federal government did not establish that parties "contemplated substantial interstate activity" during their dealings. Affirmed.

First Alabama Bank v. Burgess, 681 So.2d 134, Ala.Civ.App., Jul 08, 1994.

David Szwak
Chairman, Consumer Protection Section, Louisiana State Bar Association
Bodenheimer, Jones & Szwak
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Mid South Tower
Shreveport, Louisiana 71101
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