4th Circuit: White v. Title Max- Federal Arbitration Act alone does not provide federal jurisdiction

Summary:

Once through the  captions and parties (which constitute the first  37 out of 39 pages of this decision),  this appeal concerns the confirmation of arbitration awards by the district court under Section 9 of the Federal Arbitration Act (FAA)  against TitleMax of Virginia, Inc., which argued that the applications did not identify an independent jurisdictional basis.

The appeals court agreed with TitleMax, referencing the Supreme Court's decision in Badgerow v. Walters, which requires an independent jurisdictional basis for a district court to confirm or vacate an arbitration award under Sections 9 or 10 of the FAA. The applications in question did not provide a non-FAA basis for federal question jurisdiction, did not meet the amount in controversy requirement for diversity jurisdiction, and did not invoke the court's supplemental jurisdiction.

Accordingly, as the district court lacked the necessary subject matter jurisdiction to grant the applications, its judgment was vacated  and remanded the case for further proceedings consistent with this opinion.

Commentary:

Creditors love arbitration, except when suddenly  borrowers use it against them. Federal courts also love arbitration,  except, it seems, when borrowers suddenly use it against creditors. 

Shocking.