Vernon Vu Luong v. Circuit City Stores, Inc.

Opinion by Judge RYMER; Dissent by Judge KOZINSKI.

We must decide whether there is an independent basis for federal jurisdiction to hear a challenge to an arbitration award of zero dollars.

Vernon Vu Luong filed a petition in federal district court to vacate an arbitration award in favor of Circuit City Stores, Inc., on his claim that Circuit City violated his rights under the Americans with Disabilities Act, 42 U.S.C. §§ 12101-12213 (ADA). The court dismissed the action as the award was less than the jurisdictional amount ($75,000) required for diversity jurisdiction under 28 U.S.C. § 1332 (a). The court also held that even though the petition alleges that the arbitrator acted in manifest disregard of federal law, Luong’s petition does not raise a federal question, 28 U.S.C. § 1331 , because the presence of federal questions in *1190 the underlying arbitration is insufficient to confer jurisdiction under Garrett v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 7 F.3d 882 (9th Cir.1993).

We agree that the amount in controversy for purposes of diversity jurisdiction over a petition to vacate an arbitral award is the amount awarded in the arbitration proceeding, not the sum…

dissenting.

In American Guaranty Co. v. Caldwell, 72 F.2d 209 (9th Cir.1934), we held that it is the “amount in controversy which determines jurisdiction, not the amount of the award.” Id. at 211 . The majority today holds directly to the contrary. See Maj. op. at 1194. The opinion recognizes what American Guaranty said, but dismisses it on the ground that “it is unlikely that we meant to hold that jurisdiction turns on the amount in controversy rather than the amount of the award given the posture in which the issue arose and the context in which the remark was made. Certainly jurisdiction did not turn on any such distinction in that case.” Id. at 1192. With all due respect to my colleagues, they are mistaken. American Guaranty says very clearly that it is “the amount in controversy which determines jurisdiction.” 72 F.2d at 211 (emphasis added). The statement is phrased as a rule of law, not idle chatter; if this is not a holding, I’m not sure what is.

What we can say about American Guaranty is that the court there also had an alternative ground for decision, based on the fact that the district court had retained jurisdiction over the case when it sent the parties to…

356 F.3d 1188 Vernon Vu LUONG, Petitioner-Appellant, v. CIRCUIT CITY STORES, INC., Respondent-Appellee. No. 02-56522. United States Court of Appeals, Ninth Circuit. Argued and Submitted July 7, 2003. Filed January 30, 2004. As Amended February 19, 2004. Mai D. Wells, Infinity Law Group, Anaheim, CA, for the petitioner-appellant. Rex Darrell Berry, Livingston & Mattesich, Sacramento, CA, for the respondent-appellee. Appeal from the United States District Court for the Central District of California, Gary L. Taylor, District Judge, Presiding. D.C. No. CV-02-00593-GLT. Before: KOZINSKI, FERNANDEZ, and RYMER, Circuit Judges. Opinion by Judge RYMER; Dissent by Judge KOZINSKI. RYMER, Circuit Judge. 1 We must decide whether there is an independent basis for federal jurisdiction to hear a challenge to an arbitration award of zero dollars. 2 Vernon Vu Luong filed a petition in federal district court to vacate an arbitration award in favor of Circuit City Stores, Inc., on his claim that Circuit City violated his rights under the Americans with Disabilities Act, 42 U.S.C. §§ 12101-12213 (ADA). The court dismissed the action as the award was less than the jurisdictional amount…