Free Memorandum and Order - District Court of Delaware - Delaware

Case 1:06-cv-00004-SLR Document 16 Filed 09/22/2006 Page 1 of 3
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
REMOTE SOLUTION CO., LTD., )
Petitioner, g
v. 5 Civil Action No. 06-004-KAJ
FGH LIOUIDATING CORP. flkla ;
CONTEC CORPORATION, )
Respondent. g
MEMORANDUM ORDER
I. INTRODUCTION
Before me is a Motion to Vacate or Modify Arbitration Award, filed by Remote
Solution Co., Ltd. ("Remote Solution"). (Docket Item ["D.l."] 1; the "Motion".) The
respondent, FGH Liquidating Corp. flkla Contec Corporation ("Contec"), opposed the
Motion and requested a confirmation of the arbitration award. (D.l. 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 matterjurisdiction. See Employers Ins. of Wausau v. Crown Cork &
Seal Co., 905 F.2d 42, 45 (3d Cir. 1990) (explaining that the court is "obliged to
consider, sua sponte, whether the district court had subject matterjurisdiction ").
Remote Solution claims that the court has subject matterjurisdiction over the Motion
pursuant to the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (D.I. 1 atjj 5.) However,
the U.S. Supreme Court has held that the Federal Arbitration Act "does not create any
independent federaI—question jurisdiction under 28 U.S.C. § 1331 Moses H. Cone

Case 1:06-cv-00004-SLR Document 16 Filed 09/22/2006 Page 2 of 3
Mem'! Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 26 n.32 (1983).1 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 matterjurisdiction necessary for a district court to issue an order
vacating or modifying an arbitration award. See Baltin v. A/aron Trading Corp., 128
F.3d 1466, 1471 (11th Cir. 1997); Hany Hoffman Printing, Inc. v. Graphic Commc'ns
/nt’/ Union, Local 261, 912 F.2d 608, 611 (2d Cir. 1990).
Remote Solution did not plead diversityjurisdiction or any independent basis for
federal jurisdiction otherthan the Federal Arbitration Act. (D.l. 1 at ii 5.) Afederal court
may, however, "sustain jurisdiction when an examination of the entire complaint reveals
a proper basis for assuming subject matterjurisdiction other than one that has been
improperly asserted by the pleader " 5 Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 1206 at 114-15 (3d ed. 2004); see also Davis v. Ohio
Barge Line, Inc., 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. § 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. § 16(b)(1) "upsets the principal holding of Moses Cone"). However, that is
not relevant to the present point.
2

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demonstrate that the amount in controversy requirement is satisfied.2 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 ij
7.g.) Specifically, the arbitrator found the offset to be $620,038.00, and Remote
Solution argues that it should have been $692,512.27. (ld.) 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. § 1331, and the Motion fails to establish
the elements of diversityjurisdiction under 28 U.S.C. § 1332, I will deny the Motion.
lll. CONCLUSION
Accordingly, for the foregoing reasons, IT IS HEREBY ORDERED that the
Motion is DENIED.
I /,/‘ M F if .,j if
n A j _ -f
U ITE STAT TDI TRIC: JUDGE
September 22, 2006 ''''
Wilmington, Delaware
2In noting this conclusion, I do not imply that other requisites of 28 U.S.C. § 1332
have been met.
3