Yesterday’s published decision in Hale v. Morgan Stanley Smith Barney LLC established the law of the circuit on a nifty issue of subject matter jurisdiction in the context of arbitration. Where a plaintiff from one state has initiated arbitration against a defendant from another state, seeking millions, but has then received an arbitral award of zero, does a federal court have diversity jurisdiction to entertain the plaintiff’s motion under 9 U.S.C. § 10(a) to vacate the arbitral award? Yes, it does. In an opinion by Judge Donald for a panel that also included Chief Judge Cole and Judge Readler, the Sixth Circuit revisited its last published opinion germane to the issue (decided over 25 years ago!) and explained that its conclusion “was not that the amount of the arbitrator’s award should be considered when calculating the amount in controversy in this context, but that in making such determinations, it is necessary to look to the amount alleged to be in controversy in the complaint.”
Assessing the Amount in Controversy When Seeking to Vacate an Arbitral Award
Wednesday, December 16, 2020
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