Alternative Financial Solutions, LLC v. Colburn; Money Service Centers, LLC v. Harris

Summary

The Alabama Supreme Court affirmed orders denying motions to compel arbitration in consolidated payday-loan cases. The court held that the lenders failed to establish that the transactions substantially affected interstate commerce, as required to invoke the Federal Arbitration Act. The court therefore did not reach the parties' other arguments concerning the legality of the transactions or the arbitrability of those issues.

Holdings

1. The defendants failed to prove that the payday-loan transactions substantially affected interstate commerce. The transactions were primarily intrastate, and the evidence concerning out-of-state ownership, Internet transmission, loan funds, and the mobility of money was insufficient to establish a substantial effect on interstate commerce.

Questions Presented

1. Whether the defendants established that the payday-loan transactions substantially affected interstate commerce so as to trigger application of the Federal Arbitration Act.
2. Whether the trial courts properly denied the defendants' motions to compel arbitration.

Disposition

affirmed