Jottings By An Employer's Lawyer

Tuesday, February 10, 2004

FAA Not A Jurisdictional Statute - For Diversity Jurisdiction, Amount of Award Controls

The 9th Circuit, not usually a good place for employers with arbitration agreements, nevertheless deals with the first question a court of limited jurisdiction must ask (Professor Ward again): do we have jurisdiction? For jurisdiction based on diversity, the amount in controversy must be $75,000. Here the claim in the underlying arbitration was for more than that amount, but the award being challenged was zero. It was the latter amount that the Court found controlled, thus no diversity jurisdiction. Luong v. Circuit City Stores, Inc. (9th Cir. 1/30/04) [pdf]. The Court dodged a tougher question as to whether the statutes that were the basis for the arbitration claim (ADA, Title VII) created federal question jurisdiction. If the employee had argued there was a manifest disregard, then that question would have been presented, but it did not. Clearly even though arbitration may be clearly accepted, there is going to be plenty of litigation around the issue.


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