# United States Court of Appeals **for the Fifth Circuit**

____________ No. 23-11026

____________ Ascension Data & Analytics, L.L.C.; Rocktop Partners, L.L.C.; Rocktop Holdings, II, L.L.C., Plaintiffs—Appellants ,

versus Pairprep, Incorporated, doing business as OpticsML, Defendant—Appellee

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______________________________ Appeal from the United States District Court for the Northern District of Texas USDC No. 3:23-CV-552

______________________________ Before Smith, Wiener, and Douglas, Circuit Judges

. Jacques L. Wiener, Jr., Circuit Judge : Plaintiffs-Appellants Ascension Dat a & Analytics, L.L.C., Rocktop Partners, L.L.C., and Rocktop Holdings II, L.L.C. (collectively, “Ascension”) appeal the district court’s dismis sal of their applicat ion to vacate an arbitral award made under Section 10 of the Federal Arbitration Act (“FAA”), for want of jurisdic tion. Finding no error, we AFFIRM. United States Court of Appeals Fifth Circuit 

### FILED June 25, 2024 Lyle W. Cayce Clerk Case: 23-11026 Document: 107-1 Page: 1 Date Filed: 06/25/2024No. 23-11026

2 I. Background This appeal arises from a contra ctual dispute between Ascension and Defendant-Appellee Pairprep, Inc. (“Pairprep”). Under the parties’ contract, Pairprep was obligated to pr ovide data extraction services to Ascension. However, that contract was terminated because of an alleged data breach involving Pairprep’s servers and Pairprep’s “f ailure to extract reliable data.” Ascension subsequently contra cted with another vendor, Altada Technologies Solutions, Ltd. (“Altada ”), for data extraction services, but that contract “was terminated early af ter Altada suffered a crippling financial crisis.”
Ascension then initiated arbitratio n proceedings against Pairprep in Dallas, pursuant to the pa rties’ contract, in an attempt to recover “the remediation costs incurred as a resu lt of [Pairprep’s] data breach.” Thereafter, Pairprep brought an action 1 against Ascension, Rocktop Partners, LLC, and their affiliates, in th e Eastern District of Texas, in which Pairprep asserted claims for, inter alia , breach of contract and violation of the federal Defend Trade Secrets Act (“ DTSA”). The district court referred that action to the Ascension arbi tration, where Pairprep “asserted counterclaims in the Arbitration with nearly verbatim allegations and essentially the same claims” as those a sserted in the complaint previously filed in the Eastern District of Texas. However, Pairprep attempted to name Altada and its domestic subsidiary, Alta da U.S., Inc., (together, “Altada”) as additional counter-respondents in the arbitration, alleging that Ascension and Altada “operated as a joint enterpri se.” But, “[d]espi te naming Altada as a party to the Arbitratio n, Pairprep never effectua ted service on Altada in

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1 Pairprep, Inc. d/b/a OpticsML v. Ascension Data & Analytics, LLC, No. 2:21-CV00057-JRG (E.D. Tex.). Case: 23-11026 Document: 107-1 Page: 2 Date Filed: 06/25/2024No. 23-11026

3 the Arbitration proceeding.” 2 Instead, Pairprep brought another action 3 in the Eastern District of Texas, this time against Altada, “asserting nearly verbatim the same claims based on the same allegations in the Arbitration.” Pairprep and Altada settled that litigation, and the district court dismissed Pairprep’s claims against Altada wi th prejudice. During the arbitration proceedings, Ascension learned of the dismissal of Pairprep’s claims against Altada and asserted a res judicata defense to Pairprep’s DTSA and breach of contract claims. The arbitration pane l ultimately rejected Ascension’s defenses to Pairprep’s counterclaims, “including res judicata, and granted Pairprep a monetary award.” Consequently, Ascension filed an a pplication under the FAA to vacate the arbitration award in the Northern District of Texas, arguing that “Pairprep’s [counter]cl aims are barred by res judicata arising from its dismissal with prejudice of identical clai ms brought against Altada in federal court based on the same common nucleus of operative facts.” 4 Shortly thereafter, Pairprep filed an applicat ion to confirm the arbitral award in Texas state court in Dallas County. On October 31, 2023, the state court confirmed the award and entered judgment in favor of Pairpr ep. In the federal proceeding, Ascension filed a motion for a preliminary injunction of the state court proceeding pursuant to the Re litigation Exception of the AntiInjunction Act, while Pairprep argued that Ascension’s application should be dismissed for lack of subject matter ju risdiction. The district court agreed

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2 Altada, as a non-signatory to the arbit ration agreement, refused to consent to arbitration.

3 Pairprep, Inc. d/b/a OpticsML v. Altada Tech. Sols., Ltd. , No. 2:22-CV-00251-JRG (E.D. Tex.).

4 In addition to the application to va cate, Ascension also sought a declaratory judgment pronouncing Pairprep’s counterclaims to be “barred by res judicata .” Ascension, however, has abandoned its action fo r a declaratory judgment on appeal. Case: 23-11026 Document: 107-1 Page: 3 Date Filed: 06/25/2024No. 23-11026

4 that it lacked subject ma tter jurisdiction, dismisse d Ascension’s application without prejudice, and denied its motion for preliminary injunctive relief as moot. Ascension timely appealed. In a pending post-briefing motion to dismiss the appeal as moot, Pairprep contends that we should dismiss the appeal because a Texas state court has already confirmed the arbitral award at issue. 5
II. Discussion
This court reviews a dismissal for lack of subject ma tter jurisdiction de novo. Pershing, L.L.C. v. Kiebach , 819 F.3d 179, 181 (5th Cir. 2016). The central issue on appeal concerns a district court’s subject matter jurisdiction to consider applications to confirm, modify, or vacate arbitral awards under the FAA. The FAA “aut horizes a party to an arbitration agreement to seek several kinds of a ssistance from a federal court.” Badgerow v. Walters , 596 U.S. 1, 4 (2022). “[U]nder Sections 9 and 10 [of the FAA], a party may apply to the court to confirm, or alternatively to vacate, an arbitral award.” Id. But, although the FAA permits a pa rty to apply to a district court for this type of relief, “the federal cour ts . . . may or may not have jurisdiction to decide such a request.” Id. This is because the FAA’s “authorization of a petition does not itself create jurisdic tion. Rather, the federal court must have . . . an ‘independent jurisdiction al basis’ to resolve the matter.” Id. (quoting Hall St. Assocs., L.L.C. v. Mattel, Inc. , 552 U.S. 576, 582 (2008)). Accordingly, “an applicant seeking, for example, to vacate an arbitral award under Section 10 [of the FAA] must id entify a grant of jurisdiction, apart from Section 10 itself, conferri ng ‘access to a federal forum.’” Id. at 8

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5 One additional motion remains pending: (1) Pairprep’s motion for the court to take judicial notice of the state court filings re levant to its application to confirm the arbitral award. We GRANT Pairprep’s motion for judicial notice. Case: 23-11026 Document: 107-1 Page: 4 Date Filed: 06/25/2024No. 23-11026

5 (quoting Vaden v. Discover Bank , 556 U.S. 49, 59 (2009)). If the applicant “cannot, the action belongs in state court.” Id. Indeed, “state courts have a prominent role to play as enforce rs of agreements to arbitrate.” Vaden , 556 U.S. at 59; see also Badgerow , 596 U.S. at 18 (“‘[E]nforcement of the Act,’ we have understood, ‘is left in large part to the stat e courts.’” (alteration in original) (quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp. , 460 U.S. 1, 25 n.32 (1983))). The question becomes what may a distri ct court look to in establishing an independent basis for its jurisdicti on over an application to modify, confirm, or vacate an arbitral award under Sections 8, 9, or 10 of the FAA. Prior to the Supreme Cour t’s recent decision in Badgerow v. Walters , we permitted district courts to “look through” the application to the underlying arbitration proceeding to establish jurisdiction. See Quezada v. Bechtel OG & C Constr. Servs., Inc. , 946 F.3d 837, 843 (5th Cir. 2020), rev’d, Badgerow , 596 U.S. at 6–7. That changed after Badgerow , which concluded that the “look through” approach does not apply to applications to modify, confirm, or vacate arbitral awards. 596 U.S. at 5-6. Instead, “a court ma y look only to the application actually submitted to it in assessing its jurisdiction.” Id. (emphasis added). 6 As the Badgerow Court explained: If [the vacatur application] sh ows that the contending parties are citizens of different States (with over $75,000 in dispute), then §1332(a) gives the court diversity jurisdiction. Or if it alleges that federal law (beyond Section 9 or 10 itself) entitlesthe applicant to relief, then § 1331 gives the court federalquestion jurisdiction.

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6 This was the view of the dissent in Quezada

. See 946 F.3d at 845–47 (Ho, J., dissenting). Case: 23-11026 Document: 107-1 Page: 5 Date Filed: 06/25/2024No. 23-11026

6 Id. at 9. Applying this standard to th e vacatur application at issue, the Supreme Court in Badgerow concluded that the district court lacked subject matter jurisdiction, notwit hstanding the existence of “a federal-law claim satisfying § 1331” in the underlying arbitration. Id. This is because, to establish jurisdiction based on the federal-law claim, the district court “had to proceed downward to Badgerow’s employment action.” Id. Stated differently, it could find an independent basis for juri sdiction only by looking through the vacatur application. Here, Ascension asks us to engage in the exact analysis precluded by Badgerow , viz., to find that the district court had subject ma tter jurisdiction based on (1) Pairprep’s DTSA counterc laims asserted in the arbitration proceeding, and (2) Ascension’s defense of res judicata. Ascension neither asserts that the parties are diverse nor persuasively suggests “that federal law . . . entitles [it] to relief.” 7 Id. Thus, a straightforward application of Badgerow compels the conclusion that the districtcourt lacked subj ect matter jurisdiction over the vacatur application and wa s correct in granting Pairprep’s motion to dismiss. This conclusion ho lds notwithstanding Ascension’s contention that Pairprep’s DTSA counterclaim s were originally asserted in federal court, and that its defense to those counterclaims in the arbitration was based on the purportedly preclu sive effect of a separate federal judgment (Pairprep’s settled federal action against Altada). The Court in Badgerow explained it best:

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7 The closest that Ascension gets is its contention that the district court had independent jurisdiction to determine the prec lusive effect of a federal judgment. But Ascension’s argument is unpersuasive because it is no more than an a ttempt to relitigate a res judicata defense that was first raised—and rejected—during the arbitration proceeding. Necessarily, the district court would have had to look through the application to vacate to the res judicata defense in the underlying arbit ration to establish its jurisdiction on this basis. It correctly declined to do so. See Badgerow , 596 U.S. at 9. Case: 23-11026 Document: 107-1 Page: 6 Date Filed: 06/25/2024No. 23-11026

7 Recall that the two are now contesting not the legality of Badgerow’s firing but the enforceability of an arbitral award.That award is no more than a contractual resolution of the parties’ dispute—a way of settling legal claims. And quarrels about legal settlements— even settlements of federal claims —typically involve only state law, like disagreements about other contracts. So the District Court here, as Walters recognizes, had to go beyond the face of th e Section 9 and 10 applications to find a basis for jurisdiction. It had to proceed downward to Badgerow’s employment action, where a federal-law claim satisfying § 1331 indeed exists. In other words, the court had to look through the Section 9 and 10 applications to the underlying substantive dispute, although that dispute was not before it.
Id. (emphasis added) (internal citation s omitted). Similarly, on the procedural posture here, neither Pairprep’s DTSA counterclaims nor Ascension’s res judicata defense to those counterclaims was before the district court. The only dispute properly before the distri ct court was the enforceability of the arbitral award. Because the parties conced e that they are not diverse, and because Ascension offers no other federal l aw entitling it to the relief that it seeks—vacatur of the award—the enfor ceability of the arbitral award must be litigated in state court. See id. ; see also Quezada , 946 F.3d at 846 (Ho, J.,dissenting) (“Like arbitration agreements, settlement agreements are matters of contract, designed to resolve disputes outside of the courtroom. The enforcement of settlements is ordinarily a matter for state courts, not federal courts—even when a settlement happens to resolve federal questions.”). 8

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8 Ascension’s invocation of our unpublished decision in Rodgers v. United Services Automotive Association , No. 21-50606, 2022 WL 2610234, at *5 (5th Cir. July 8, 2022), does not undermine our conclusion. There, the iss ue of the district court’s jurisdiction to consider the parties’ competing vacatur and co nfirmation applications was not in dispute. Instead, the issue on appeal was whether the dist rict court substantively erred in confirming the award, which involved employment claims based on federal law. This distinction is Case: 23-11026 Document: 107-1 Page: 7 Date Filed: 06/25/2024No. 23-11026

8 Finally, Ascension suggests that the All Writs Act, as well as the Relitigation Exception to the Anti-Injunct ion Act, provided the district court with subject matter jurisdiction over it s vacatur application. However, “[t]he Anti-Injunction Act is not a jurisdictional statute, but goes only to the granting of a particular form of equitable relief.” In re Mooney Aircraft, Inc. , 730 F.2d 367, 372–73 (5th Cir. 1984) (citat ion omitted)). Similarly, “the All Writs Act does not confer jurisdicti on on the federal courts.” Syngenta Crop Prot., Inc. v. Henson , 537 U.S. 28, 33 (2002). Thus, th e district court was again correct to dismiss the application to vacate for want of jurisdiction. And, because the vacatur application did not establish an independent justification for subject matter jurisdiction, there was no error in the district court’s denial of Ascension’s request to enjoin the pa rallel state court proceeding under the All Writs Act.
III. Conclusion
Under Badgerow , when a party applies to a dist rict court to confirm, modify, or vacate an arbitral award, it must establish on the face of the application a basis for subject matter juri sdiction separate and apart from the FAA. To accomplish this, it must be shown that (1) there is complete diversity among the parties and the amou nt in controversy exceeds $75,000, or (2) that “federal law . . . en titles the applicant to relief.” Badgerow , 596 U.S. at 9. Here, Ascension seeks to relitigate issues underpinning an unfavorable arbitral award. Without an independent basis for subject matter jurisdiction, it cannot do so in federal court.
AFFIRMED. 9

_____________________ especially apparent when considering that our decision in Rodgers neither applied nor cited to the appropriate analysis established in Badgerow

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9 Pairprep’s motion to dismiss the appeal is thus DENIED AS MOOT. Case: 23-11026 Document: 107-1 Page: 8 Date Filed: 06/25/2024