High Court Hears Debate on Federal Question Jurisdiction

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Federal Question Jurisdiction
T
          he U.S. Supreme Court                     BY JUSTIN KELLY
          heard oral argument on Oct.
          6 in Betty E. Vaden v. Discover   Chief Justice John Roberts called this
Bank (No. 07-773, review granted            argument a “tough sell,” although he
March 17, 2008). The Court is ex-           agreed that the “save for” language in
pected to decide an important juris-        Section 4 seemed to direct the court
dictional question: whether a district      to decide if, without the arbitration
court may “look through” to the un-         agreement, the case could be brought
derlying complaint in a case in order       in federal court.
to decide whether it has “federal              Associate Justice Ruth Bader Gins-
question” jurisdiction to hear a mo-        burg asked Ortiz whether Section 2
tion to compel arbitration under the        of the FAA took care of the ouster
Federal Arbitration Act (FAA). Also         doctrine. He responded that Section
before the Court is “whether a com-         2 was insufficient to declare the
pletely preempted state-law counter-        ouster doctrine dead, so Congress
claim can supply subject matter juris-      “took the extra step in Section 4” to
                                            make sure that the ouster doctrine            Roberts pointed out that the issue
diction” to a federal court. (The DRJ                                                  could be framed to avoid federal law,
previously reported on this case in the     would not be a problem.
                                               Ortiz also argued that allowing         which would put the case in state
August-October 2008 issue.)                                                            court. Both Ginsburg and Associate
   The parties construe Section 4 of        courts to look through to the un-
                                            derlying complaint would undermine         Justice David Souter observed that a
the FAA differently. Discover Bank                                                     state court is competent to apply fed-
argued that the FAA clearly autho-          getting the parties into arbitration
                                            rapidly so arbitrators could decide the    eral law.
rizes the “look through” approach                                                         But Phillips expressed a preference
because Section 4 says that a district      issues.
                                               Discover Bank’s counsel, Carter         for federal court, saying, “We have
court is authorized to compel arbitra-                                                 serious doubts as to whether or not in
tion when, “but for” the arbitration        Phillips, an attorney with Sidley
                                            Austin in Washington, D.C., argued         fact we will 
				
DOCUMENT INFO
Description: The US Supreme Court heard oral argument on October 6 in Betty E. Vaden v. Discover Bank. The Court is expected to decide an important jurisdictional question: whether a district court may "look through" to the underlying complaint in a case in order to decide whether it has "federal question" jurisdiction to hear a motion to compel arbitration under the Federal Arbitration Act. Discover Bank's counsel, Carter Phillips, an attorney with Sidley Austin in Washington, DC, argued that the issue in this case -- whether Section 4 authorizes a district court to compel arbitration when it determines it would have jurisdiction over the underlying dispute -- is a question of federal law.
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