Court Of Appeals Vacates Ruling Applying EFAA Without Commerce Clause Analysis, Remands For Threshold Determination
Opinion Published: March 17, 2026 (Wallace, P.J., Garrett and Ackerman, J.J.)
COA Docket No. 372831
Macomb County Circuit Court
Holding: The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) only applies to invalidate arbitration provisions in contracts "evidencing a transaction involving commerce."
Facts: Jane Doe alleged that Dr. John Pispidikis, a nurse practitioner and chiropractor at Spinal Recovery Center, touched her inappropriately for sexual gratification during medical treatment. She sued for battery and sexual battery. Defendant moved for summary disposition, arguing Doe had signed an arbitration agreement covering "any dispute" arising from her treatment. Doe responded that the arbitration agreement was void under the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), 9 USC 402(a). The trial court denied the motion, holding the EFAA applied without requiring any showing of a connection to interstate commerce. Defendant appealed.
Key Appellate Ruling:
The EFAA operates within the FAA's commerce framework. Although § 402(a) says it applies "[n]otwithstanding any other provision of this title," the Court held this language means the EFAA overrides the FAA's general rule of enforceability — not the FAA's threshold commerce requirement. The EFAA was added as chapter 4 of title 9, and chapters 1 and 2 (particularly 9 USC 2) define the entire field in which Congress was legislating. The EFAA operates as an exception to § 2's general rule, and therefore applies no more broadly than § 2 itself — meaning only to contracts "evidencing a transaction involving commerce."
The Court grounded its holding in foundational constitutional principles. The federal government is one of enumerated powers and can only legislate within those bounds. The FAA rests on the Commerce Clause, and absent an interstate commerce connection, there is no identifiable enumerated power authorizing federal regulation of purely intrastate sexual assault or harassment arbitration agreements. Requiring a commerce nexus keeps the statute within constitutional limits.
The Court emphasized that the Supreme Court has interpreted "involving commerce" under 9 USC 2 expansively — as the functional equivalent of "affecting commerce," the broadest permissible exercise of Congress's Commerce Clause power. A specific effect on interstate commerce need not be shown in any individual case; aggregate economic activity is sufficient. Parties need not have even contemplated an interstate connection. That said, some factual inquiry is still required — the trial court cannot simply skip the question.
Because the trial court applied the EFAA without first determining whether the underlying contract involved a "transaction involving commerce" under 9 USC 2, its denial of summary disposition was vacated and the case remanded for that threshold determination to be made. Doe had argued, independent of the EFAA, that the arbitration agreement was unenforceable because it did not bind the defendant personally and because it violated public policy. Because the trial court never reached those arguments, the Court of Appeals declined to address them, expressly preserving Doe's right to raise them on remand.
