In the case of Allied-Bruce Terminix Companies, Inc., and Terminix International Company v. G. Michael Dobson et al., 1994, the U.S Supreme Court was tasked with interpreting a clause in the Federal Arbitration Act (FAA). The dispute arose when Dobson sued Terminix for breach of contract and fraud over termite damage to his home. Despite having an arbitration agreement in their contract, Dobson filed suit in state court instead of seeking arbitration as stipulated by their agreement. In response, Terminix sought to compel arbitration under FAA but faced opposition from lower courts which interpreted that FAA only applied if commerce was involved directly not indirectly. The Supreme Court ruled 7-2 in favor of Terminix stating that Congress intended for the FAA's reach to be broad when it used 'involving commerce' phraseology; thus any transaction affecting interstate commerce even indirectly would fall within its purview regardless whether or not parties contemplated an interstate-commerce connection at formation time. This ruling effectively compelled Dobson into contractual obligation towards arbitration rather than litigation.

The dissenting opinion in the case of Allied-Bruce Terminix Companies, Inc., and Terminix International Company v. G. Michael Dobson et al., 1994 was written by Justice Thomas, joined by Chief Justice Rehnquist and Justice Scalia. They disagreed with the majority's interpretation of Section 2 of the Federal Arbitration Act (FAA), arguing that it should only apply to contracts involving interstate commerce directly rather than those merely affecting it indirectly. The dissenters believed that Congress intended for a narrower application when they enacted FAA in 1925, as per their understanding from historical context and legislative history. They argued that this narrow interpretation would not undermine arbitration but simply limit federal courts' involvement in enforcing such agreements leaving state law to govern them instead.