Justice Sandra Day O'Connor dissented, along with William Rehnquist, arguing that the legislative history of the FAA strongly suggested it was intended to apply only to contracts executed under federal law.

"[1] Its legal foundation has been examined and disputed, and some critics have found the FAA's legislative history directly contradicts the court's holding.

New York City merchants, who had embraced arbitration as a method of alternative dispute resolution in the early 20th century, persuaded Congress to pass the FAA in 1925.

After they had persuaded New York to pass a state law allowing for the results of an arbitration to be considered binding on both parties, that statute became the model for the FAA.

"[I]f Section 2 were read otherwise... [t]hat would lead to forum shopping and would destroy the predictability in interstate commercial dealings that is so important," he told the justices.

If the enforceability of arbitration agreements, which common law had long been skeptical of, were a problem only in federal court, he reasoned, Congress would have been less likely to take action.

A past Supreme Court, in Paramount Famous Lasky Corp. v. United States,[15] had voided arbitration agreements among parties where it found they served to restrain trade.

"The Court's decision is impelled by an understandable desire to encourage the use of arbitration, but it utterly fails to recognize the clear congressional intent underlying the FAA.

Prima Paint, in her view, resolved concerns that Bernhardt problematized the FAA's constitutionality in such cases, but carefully avoided the question of whether it could be applied to state courts as well.

The first, that § 2 of the FAA created substantive rights that state courts were bound to enforce, she called "unquestionably wrong as a matter of statutory construction."

Its sponsor in the House had assured his colleagues the bill's sole goal was to make arbitration agreements enforceable; committee reports and American Bar Association (ABA) briefs on it repeatedly described it as purely procedural.

"[18] The hearing transcripts and other records of the FAA's passage also stated clearly that Congress relied on its power to regulate the federal courts and not the Commerce Clause, she pointed out.

The one sentence Burger had quoted directly for the majority referring to "contracts involving commerce" was definitely resolved by other statements in the legislative history, she added.

His contention that holding the FAA applicable in state proceedings "would flout the intention of the framers of the Act" had not been challenged in Justice Fortas's majority opinion in that case, she noted.

[21] "Today's decision is unfaithful to congressional intent, unnecessary, and, in light of the FAA's antecedents and the intervening contraction of federal power, inexplicable," she concluded.

Both reiterated their previous opinions and incorporated the others, O'Connor citing Stevens' belief that states should be entitled to restrict some arbitrations as a matter of public policy as a reason she would have upheld the California statute even if she agreed the FAA was applicable to state-level actions.

After certiorari was granted, 20 state attorneys general filed amici briefs calling for the court to take the occasion to overturn Southland.

When the decision was handed down, as Allied-Bruce Terminix Cos. v. Dobson, a 7-2 Court not only declined to do so but also expanded the FAA's reach further, to include transactions such as the one under review, since they affected interstate commerce.

Justice Stephen Breyer, writing for the majority, read the use of "involving" to be equivalent to "affecting," a word that he said indicated congressional intent for the statute to have the widest possible reach.

[33] O'Connor voted with the majority this time, writing in a separate concurrence that although her opinion had not changed since her Southland dissent a decade before, stare decisis dictated that she uphold that case since too many contracts would be voided if it was overturned.

Scalia, noting that he had joined majorities in Perry and Volt, which relied on Southland, said that nevertheless he felt that case had been wrongly decided and, with the question of FAA preemption before the Court again, he voted to overturn it, not seeing stare decisis as an impediment.

As Stevens had in Perry, he noted the 35 years between the act's passage and the first suggestion (in Robert Lawrence) that it applied in state courts as well.

"[36] He reviewed the act's passage, noting sources, including a New York Court of Appeals interpretation by Benjamin Cardozo of the state statute the FAA was modeled on, that described it as purely procedural.

This conclusion is far more plausible...."[39] Along with Stevens and Scalia, he echoed O'Connor's point that even if the FAA unambiguously applied to state courts it did not follow that it imposed the same procedural requirements on them.

In a fair number of the remaining cases, the party seeking to enforce an arbitration agreement will be able to get into federal court, where the FAA will apply.

And even if access to federal court is impossible (because § 2 creates no independent basis for federal-question jurisdiction), many cases will arise in States whose own law largely parallels the FAA.

"[48] Margaret Moses, an international arbitration scholar at Loyola University Chicago School of Law, has traced Southland to a series of misreadings in its predecessor decisions that make the original FAA "unrecognizable" in its current judicial incarnation.

Bernhardt had raised that question, but the Court avoided it by holding that an employment contract, even across state lines, did not constitute interstate commerce for FAA purposes, while noting that the outcome-determinative test would have produced the same result.

That language had been added in an amendment offered by Senator Thomas J. Walsh, whose intent was to limit the scope of the act, not expand it, so it could not be applied to employment and insurance contracts.

[52] David Schwartz of Wisconsin Law School, author of an amicus filed in Bazzle, has argued that the reach Southland gives the FAA is unconstitutional even if it were clearly intended to apply to state courts "and no one has noticed."