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United States Court of Appeals for the Ninth Circuit
March 22, 2021, Argued and Submitted, Pasadena, California; March 31, 2021, Filed
Subject Matter Jurisdiction
The panel reversed the district court’s dismissal for lack of subject matter jurisdiction of a motion seeking enforcement of a third-party subpoena issued by an arbitrator, and remanded for further proceedings concerning enforcement of the subpoena.
Maine Community Health Options, an insurer, is engaged in an underlying arbitration in which the arbitrator issued a subpoena. Health Options filed this action in federal district court challenging Albertsons Companies, Inc.’s objection to the subpoena, and invoking Section 7 of the Federal Arbitration Act (“FAA”). Because the FAA does not itself confer federal question jurisdiction, Health Options asserted diversity jurisdiction, claiming that the parties to the enforcement action – Health Options and Albertsons – were citizens of different states and that the amount in controversy exceeded $75,000.
The panel held that the amount-in-controversy in a FAA Section 7 enforcement action can be measured by either the benefit to the plaintiff or the detriment to the defendant that would result from enforcement of the subpoena. Because there was a good faith allegation that the benefit to the plaintiff of obtaining the subpoenaed information in this controversy exceeded $75,000, the panel reversed the district court’s order dismissing for want of subject matter jurisdiction
Judge Watford concurred. He agreed that the district court erred in holding that it lacked subject matter jurisdiction to enforce the subpoena at issue here, but arrived at the conclusion by a different path. In his view, the majority analysis focused on the wrong dispute – the motion brought by Health Options against Albertsons, and should have focused on the dispute between the parties to the underlying arbitration proceeding – Health Options and Navitus Health Solutions, LLC. He would conclude that the district court plainly had subject matter jurisdiction over the underlying controversy.
HURWITZ, Circuit Judge:
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993 F.3d 720 *; 2021 U.S. App. LEXIS 9382 **; 2021 WL 1205006
MAINE COMMUNITY HEALTH OPTIONS, Plaintiff-Appellant, v. ALBERTSONS COMPANIES, INC., Defendant-Appellee.
Subsequent History: As Corrected April 5, 2021.
Counsel Amended April 5, 2021.
Prior History: [**1] Appeal from the United States District Court for the District of Idaho. D.C. No. 1:19-cv-00448-JMM. James Maxwell Moody, District Judge, Presiding.
Me. Cmty. Health Options v. Albertsons Cos., 2020 U.S. Dist. LEXIS 205506 (D. Idaho, Oct. 9, 2020)
Disposition: REVERSED AND REMANDED.
arbitration, subpoena, district court, parties, subject-matter, federal court, subject matter jurisdiction, amount in controversy, diversity, enforcement proceeding, authorizes, jurisdictional amount, good faith, arbitration proceedings, amount-in-controversy, proceedings, third-party, supervise, cleaned
Business & Corporate Compliance, Arbitration, Federal Arbitration Act, Arbitration Agreements, Scope, Orders to Compel Arbitration, Civil Procedure, Discovery & Disclosure, Discovery, Subpoenas, Jurisdiction, Subject Matter Jurisdiction, Amount in Controversy, Constitutional Law, Evidence, Burdens of Proof, Allocation, Diversity Jurisdiction, Amount in Controversy, Challenges, Determination, Pleadings, Complaints, Requirements for Complaint