Arbitration & Mediation

8th Circuit Declines to Use "Look Through" Approach in Certain Federal Arbitration Disputes

By Christopher B. Hopkins, Esq.

The Eighth Circuit took on a procedurally complex issue regarding federal court jurisdiction over petitions to compel arbitration in the consolidated cases of Northport Health Services of Arkansas v. Wayne Rutherford and Tresa Robinson.

Factually, these cases involve underlying state court claims relating to alleged nursing home resident rights violations. The plaintiffs named both the out-of-state facility owner/operator and the local administrators thereby defeating federal diversity jurisdiction. The facility, alone, filed a federal court action to compel arbitration under sect. 4 of the FAA.

Last year, in Vaden v. Discover Bank, the U.S. Supreme Court held that a federal court entertaining a petition to compel arbitration based upon federal question jurisdiction should determine its jurisdiction by looking through a section 4 petition to the underlying substantive controversy.

Herein, the court noted that federal jurisdiction was triggered by diversity, not a federal question, and that the Vaden "look through" analysis was not required. Instead, the court simply needed to confirm diversity of the parties (and any indispensable parties) and the amount in controversy.

Full post as published by Florida Arbitration Law on May 22, 2010 (boomark / email).