Free Redacted Document - District Court of Delaware - Delaware

Case 1:06-cv-00004-SLR

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE REMOTE SOLUTION CO., LTD., Petitioner, v. FGH LIQUIDATING CORP. flkla CONTEC CORPORATION, Respondent.

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Civil Action No. 06-004-KAJ

MEMORANDUM ORDER 1. INTRODUCTION Before me is a Motion to Vacate or Modify Arbitration Award, filed by Remote Solution Co., Ltd. ("Remote Solution"). (Docket Item ["D.I."] I ; the "Motion".) The respondent, FGH Liquidating Corp. f/k/a Contec Corporation ("Contec"), opposed the Motion and requested a confirmation of the arbitration award. (D.I. 10 at 1-2.) For the reasons that follow, the Motion will be denied in all respects. II. DISCUSSION Before reaching the merits of the parties' arguments, I am obliged to address the question of subject matter jurisdiction. See Employers Ins. of Wausau v. Crown Cork & Seal Co., 905 F.2d 42, 45 (36 Cir. 1990) (explaining that the court is "obliged to consider, sua sponte, whether the district court had subject matter jurisdiction ... "). Remote Solution claims that the court has subject matter jurisdiction over the Motion pursuant to the Federal Arbitration Act, 9 U.S.C. 5 1 et seq. (D.I. 1 at 7 5.) However, the U.S. Supreme Court has held that the Federal Arbitration Act "does not create any independent federal-question jurisdiction under 28 U.S.C.

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Moses H. Cone

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Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 26 n.32 (1983).' Rather, "there must be diversity of citizenship or some other independent basis for federal jurisdiction." Id. Therefore, contrary to Remote Solution's assertion, the Federal Arbitration Act does not confer the subject matter jurisdiction necessary for a district court to issue an order vacating or modifying an arbitration award. See Baltin v. Alaron Trading Corp., 128 F.3d 1466, 1471 ( I l t h Cir. 1997); Harry Hoffman Printing, Inc. v. Graphic Commc'ns Int? Union, Local 261, 912 F.2d 608, 61 1 (2d Cir. 1990). Remote Solution did not plead diversity jurisdiction or any independent basis for federal jurisdiction other than the Federal Arbitration Act. (D.I. 1 at 7 5.) A federal court may, however, "sustain jurisdiction when an examination of the entire complaint reveals a proper basis for assuming subject matter jurisdiction other than one that has been improperly asserted by the pleader ... " 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure 5 1206 at 114-15 (3d ed. 2004); see also Davis v. Ohio Barge Line, lnc., 697 F.2d 549, 552 (3d Cir. 1983) (holding that the court can independently ascertain whether the complaint sets forth any basis for subject matter jurisdiction). Under 28 U.S.C. 5 1332(a), a federal district court has original jurisdiction in cases between "citizens of a State and citizens or subjects of a foreign state" in which the amount in controversy exceeds $75,000.00. However, the Motion fails to

'One of the holdings of the Moses H. Cone Mem? Hosp. case has been called into question based on subsequent Congressional action. See Bradford-Scott Data Corp. v. Physician Computer Network, Inc., 128 F.3d 504, 506 (7th Cir. 1997) (noting that 9 U.S.C. 5 16(b)(l) "upsets the principal holding of Moses Cone"). However, that is not relevant to the present point.

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demonstrate that the amount in controversy requirement is satisfied.* The Motion only sets forth a specific amount in controversy with regard to the claim that the arbitrator incorrectly determined the offset to which Remote Solution was entitled. (D.I. 1 at 7.9.) Specifically, the arbitrator found the offset to be $620,038.00, and Remote Solution argues that it should have been $692,512.27. (Id.) Therefore, the alleged amount in controversy is only $72,474.27, which is not sufficient to satisfy the requirements of diversity jurisdiction. Since the Federal Arbitration Act does not create federal question jurisdiction under 28 U.S.C.

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the elements of diversity jurisdiction under 28 U.S.C. § 1332, 1 will deny the Motion.
Ill.

CONCLUSION Accordingly, for the foregoing reasons, IT IS HEREBY ORDERED that the

Motion is DENIED.

September 22, 2006 Wilmington, Delaware

21n noting this conclusion, I do not imply that other requisites of 28 U.S.C. § 1332 have been met.