UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

W.C. MOTOR COMPANY, 

Plaintiff,

vs.

REBECCA TALLEY,

Defendant.

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12 C 2307

Judge Feinerman

MEMORANDUM OPINION AND ORDER

Unhappy with an arbitrator’s decision to allow class-wide arbitration of a matter brought 

to the American Arbitration Association by Rebecca Talley, W.C. Motor Company filed this suit 

under the Federal Arbitration Act (“FAA”), 9 U.S.C. 1 et seq., seeking to overturn the 

arbitrator’s ruling. Doc. 1. After the suit was reassigned to the undersigned judge’s calendar, 

Doc. 38, W.C. Motor sought and received leave to file a second amended complaint, Docs. 42-

43. The second amended complaint seeks a declaration that (1) the court, and not the arbitrator, 

is the appropriate tribunal to decide whether the parties’ arbitration agreement permits class 

arbitration, and (2) the arbitration clause in the agreement does not, in fact, permit class 

arbitration. Doc. 43 at 6. Talley, the named plaintiff in the arbitration and the defendant here, 

has moved to dismiss the suit on various grounds. Doc. 53. The suit is dismissed under Federal 

Rule of Civil Procedure 12(b)(1) for want of subject matter jurisdiction.

Background

Talley does not dispute the jurisdictional facts alleged in the complaint, so her challenge 

to subject matter jurisdiction is facial rather than factual. See Apex Digital, Inc. v. Sears, 

Roebuck & Co., 572 F.3d 440, 443-44 (7th Cir. 2009). On a facial challenge to subject matter 

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jurisdiction, the complaint’s well-pleaded factual allegations are assumed to be true, with all 

reasonable inferences drawn in the plaintiff’s favor. See ibid.; Patel v. City of Chicago, 383 F.3d 

569, 572 (7th Cir. 2004). As with a Rule 12(b)(6) motion, the court must also consider 

“documents attached to the complaint, documents that are critical to the complaint and referred 

to in it, and information that is subject to proper judicial notice,” along with additional facts set 

forth in the non-movant’s brief opposing dismissal, so long as those facts “are consistent with the 

pleadings.” Geinosky v. City of Chicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012). To the extent 

an exhibit contradicts the second amended complaint’s allegations, the exhibit takes precedence.

See Forrest v. Universal Savings Bank, F.A., 507 F.3d 540, 542 (7th Cir. 2007). The following 

facts are set forth as favorably to W.C. Motor as these materials allow. See Gomez v. Randle, 

680 F.3d 859, 864 (7th Cir. 2012).

In January 2008, Talley bought a used car from W.C. Motor, which charged her a $130 

“Documentary & Title Preparation Fee.” Doc. 53 at 2. Talley thought that W.C. Motor’s 

charging her that fee amounted to the unauthorized practice of law, see Mo. Rev. Stat. § 484.020,

violated the Missouri Merchandising Practices Act, Mo. Rev. Stat. § 407.010 et seq., and 

unjustly enriched W.C. Motor. Doc. 43 at ¶ 7. Because the sales contract contained an 

arbitration clause, id. at ¶ 8, she filed a “demand for arbitration” in March 2009 with the 

American Arbitration Association, id. at ¶ 6. The demand sought to compel W.C. Motor to 

arbitrate on a class-wide basis. Ibid.; see also Doc. 43-1.

In December 2009, the Chicago-based arbitrator, after stating that the “parties agree that 

this Arbitrator has jurisdiction to decide th[e] threshold issue” of whether the contract permits

class arbitration, Doc. 43-2 at 2-3, issued a “partial final clause construction award” holding that 

“the parties’ arbitration clause permits this arbitration to proceed on behalf of a class,” id. at 8. 

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The arbitrator stayed the award for thirty days to permit either party to seek judicial review, ibid.,

and neither did. A few months passed. Then in April 2010 the United States Supreme Court

issued Stolt-Nielsen S.A. v. Animalfeeds Int’l Corp., 559 U.S. 662 (2010), which held that “a 

party may not be compelled under the FAA to submit to class arbitration unless there is a 

contractual basis for concluding that the party agreed to do so.” Id. at 684. W.C. Motor filed a 

motion to reconsider based on Stolt-Nielsen, which the arbitrator denied. Doc. 43-3.

Four weeks later, W.C. Motor filed suit in the U.S. District Court for the Eastern District 

of Missouri, seeking to vacate the arbitrator’s decision and to compel Talley to arbitrate the

dispute on an individual basis. West County Motor Co. v. Talley, No. 4:10-cv-01698-AGF (E.D. 

Mo. filed Sept. 13, 2010) (complaint reproduced at Doc. 14-1). Talley moved to dismiss the 

complaint on two grounds: that the dispute did not satisfy the amount in controversy requirement 

of 28 U.S.C. § 1332(a), and, alternatively, that W.C. Motor’s complaint was untimely under the 

FAA. Doc. 14-3. The court agreed with the timeliness argument and dismissed the case. Docs. 

14-4, 14-5. Meanwhile, the arbitration continued on, and in February 2012 the arbitrator 

certified a class of up to 1,950 individuals who, like Talley, had paid the $130 fee to W.C. 

Motor. Doc. 43-4. The arbitrator again entered a 30-day stay to allow either side to seek judicial 

review, id. at 11, and W.C. Motor filed this suit, Doc. 1.

As noted above, W.C. Motor’s original complaint in this suit sought to vacate the 

arbitrator’s decision allowing class-wide arbitration, which is the same relief it had 

unsuccessfully sought in its previous federal suit. Doc. 1. But when the United States Supreme 

Court in December 2012 granted certiorari in Oxford Health Plans LLC v. Sutter, 133 S. Ct. 786 

(2012), W.C. Motor requested a stay in this case on the ground that the question on which the 

Court had granted certiorari “is identical to the primary issue set forth in this case,” Doc. 27 at 1. 

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And indeed the arbitration clause at issue in Oxford Health Plans is very similar to the contract

here. Compare Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064, 2067 (2013) (noting that the 

arbitration clause read: “No civil action concerning any dispute arising under this Agreement 

shall be instituted before any court, and all such disputes shall be submitted to final and binding 

arbitration ... pursuant to the rules of the American Arbitration Association ....”), with Doc. 43-2 

at 2 (the arbitration clause in this case reads: “Any controversy or claim arising out of or relating 

to this contract ... shall be settled by arbitration administered by the American Arbitration 

Association in accordance with its Commercial Arbitration Rules ....”). Unfortunately for W.C. 

Motor, Oxford Health Plans held that the arbitrator in that case did not exceed his powers in 

deciding that the parties’ contract permitted class-wide arbitration. 133 S. Ct. at 2071. 

Undeterred, W.C. Motor sought and received leave to file a second amended complaint, 

which does not explicitly seek to vacate the arbitrator’s decision, but instead seeks a declaration 

that whether the parties’ contract permits class arbitration is a “gateway matter which is reserved 

for judicial determination.” Doc. 43 at 6. The merits of that issue remain an open question in the 

Supreme Court. See Oxford Health Plans, 133 S. Ct. at 2068-69 n.2 (“We would face a different 

issue if Oxford had argued below that the availability of class arbitration is a so-called ‘question 

of arbitrability.’ Those questions—which ‘include certain gateway matters ...’—are 

presumptively for courts to decide. ... [T]his Court has not yet decided whether the availability 

of class arbitration is a question of arbitrability.”) (quoting Green Tree Financial Corp. v. Bazzle, 

539 U.S. 444, 452 (2003) (plurality opinion)). 

Discussion

Talley raises four alternative grounds for dismissing this suit: (1) the suit is barred by res 

judicata, based on the Missouri federal court’s decision dismissing the earlier suit; (2) the suit is 

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untimely under the FAA; (3) this court lacks subject matter jurisdiction; and (4) the complaint 

fails to state a viable FAA claim. Doc. 53 at 1. Subject matter jurisdiction must be addressed 

first. See McCready v. White, 417 F.3d 700, 702 (7th Cir. 2005) (“Ensuring the existence of 

subject-matter jurisdiction is the court’s first duty in every lawsuit.”). Only if the court has 

subject matter jurisdiction may it address whether the suit is barred by res judicata or whether it

states a viable and timely claim under the FAA, which are merits issues. See Taylor v. Fed. Nat’l 

Mortg. Ass’n, 374 F.3d 529, 535 n.4 (7th Cir. 2004) (“we may not consider the issue of res 

judicata because we lack the subject matter jurisdiction to do so”); Countrywide Home Loans, 

Inc. v. Mortgage Guar. Ins. Corp., 642 F.3d 849, 854 (9th Cir. 2011) (“[i]n order for a court to 

adjudicate an FAA claim, ... it must have proper jurisdiction over the conflict”).

W.C. Motor premises subject matter jurisdiction on the Declaratory Judgment Act, 28 

U.S.C. § 2201, and the diversity statute, 28 U.S.C. § 1332. Doc. 43 at ¶ 4; Doc. 56 at 7-10. The 

Declaratory Judgment Act “is not an independent grant of federal subject-matter jurisdiction.” 

DeBartolo v. Healthsouth Corp., 569 F.3d 736, 741 (7th Cir. 2009). (Nor is the FAA, and W.C. 

Motor correctly refrains from premising subject matter jurisdiction under that statute. See Vaden 

v. Discovery Bank, 556 U.S. 49, 59 (2009); Yasuda Fire & Marine Ins. Co. of Europe, Ltd. v. 

Continental Casualty Co., 37 F.3d 345, 352 n.1 (7th Cir. 1994).) That leaves the diversity 

statute, and because the parties are of diverse citizenship, Doc. 43 at ¶¶ 2-3 (properly alleging 

that W.C. Motor is a Missouri citizen and Talley an Illinois citizen), the only dispute here 

concerns whether the amount in controversy exceeds $75,000.

As the proponent of subject matter jurisdiction, W.C. Motor bears the burden on that 

issue. See Travelers Property Cas. v. Good, 689 F.3d 714, 722 (7th Cir. 2012). “The rule 

governing dismissal for want of jurisdiction in cases brought in the federal courts is that ... the 

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sum claimed by the plaintiff controls if the claim is apparently made in good faith. It must 

appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify 

dismissal.” St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938)

(footnotes omitted); see also El v. AmeriCredit Fin. Servs., Inc., 710 F.3d 748, 752 (7th Cir. 

2013). W.C. Motor advances two grounds, and only two grounds, for holding that the $75,000 

jurisdictional minimum is satisfied. Both are without merit.

First, W.C. Motor contends that it may “aggregate claims of the class” to satisfy the 

jurisdictional amount. Doc. 56 at 8. If that contention were correct, the amount in controversy 

would exceed $75,000 because there are 1,950 class members who each lost $130, yielding more 

than $250,000 in compensatory damages. But the contention is wrong. With exceptions not 

pertinent here—such as where certification is sought under the Class Action Fairness Act, see 28 

U.S.C. § 1332(d), or where the class members have a “common and undivided interest” in a 

“single title or right”—the class members’ damage claims in Talley’s arbitration cannot be 

aggregated to meet the $75,000 jurisdictional threshold; instead, at least one class member must 

have a $75,000 claim all by herself. See Snyder v. Harris, 394 U.S. 332, 335 (1969); Travelers 

Property Cas., 689 F.3d at 717-22 (citing cases); 14AA Charles Alan Wright, Arthur R. Miller, 

& Edward H. Cooper, Federal Practice & Procedure § 3704, pp. 575-76 (4th ed. 2011) (noting 

“the long-standing and seemingly well-settled rule ... that the claims of several plaintiffs cannot 

be aggregated for purposes of determining the amount in controversy”).

In so holding, the court acknowledges Meridian Security Insurance Co. v. Sadowski, 441 

F.3d 536 (7th Cir. 2006), which states that “the anti-aggregation rule does not apply to a federal 

declaratory-judgment action between a single plaintiff and a single defendant, just because the 

unitary controversy between these parties reflects the sum of many smaller controversies.” Id. at 

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539. This case is styled as a declaratory judgment action between a single plaintiff and a single 

defendant. But the dispute in Meridian was truly between one plaintiff and one defendant—an 

insurance company sought a declaration that it was not obliged to defend or indemnify its 

insured in a state court class action where each class member could recover only $1500 but 

where the aggregate damages to the class would well exceed $75,000. Ibid. In that 

circumstance, it made sense to consider the entire amount that the insured would have to pay the 

class if it lost in state court, because that is the amount that the federal plaintiff (the insurance 

company) would have had to pay the federal defendant (the insured) if the insurance policy 

applied. Here, by contrast, the dispute here is not actually between W.C. Motor and Talley

alone, but rather pits W.C. Motor against the nearly two thousand members of the class certified 

by the arbitrator. As Travelers Property Casualty explains, the anti-aggregation rule applies in 

these circumstances. See 689 F.3d at 718 (distinguishing Meridian Security and holding that the 

anti-aggregation rule applied because the case “had become a multi-party dispute between 

Travelers and thousands of class claimants”); see also Del Vecchio v. Conseco, Inc., 230 F.3d 

974, 978 (7th Cir. 2000) (holding that “the amount in controversy from the defendants’ point of 

view is the amount they risk paying [the named plaintiff], not the amount they might have to pay 

the entire class,” even though the named plaintiff sought a constructive trust over the entire class 

award, because “each of the insureds [that the named plaintiff] wants to represent is entitled to 

his or her own separate recovery”).

Second, and in the alternative, W.C. Motor argues that Talley’s claim alone is worth at 

least $75,000, once punitive damages and attorney fees are included. Doc. 56 at 9-10. The 

Missouri merchandising practices statute, one of the two statutes under which Talley brought her 

arbitration, permits prevailing plaintiffs to recover punitive damages and attorney fees. See Mo. 

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Rev. Stat. § 407.025.1. Punitive damages count towards the amount in controversy. See Hunt v 

DaVita, Inc., 680 F.3d 775, 777-78 (7th Cir. 2012); Del Vecchio, 230 F.3d at 978. So do 

attorney fees where, as here, they are “sought as part of an underlying claim, rather than pursuant 

to a separate post-judgment right to ‘costs’ or ‘fees’ incurred in the litigation.” El, 701 F.3d at 

753; see also Mo. State Life Ins. Co. v. Jones, 290 U.S. 199, 202 (1933); Gardynski-Leschuck v. 

Ford Motor Co., 142 F.3d 955, 958 (7th Cir. 1998). The trouble with W.C. Motor’s argument is 

that Talley’s recovery, even including punitive damages and attorney fees, could not possibly 

exceed $75,000.

If she prevails in the arbitration, Talley’s compensatory damages would be $130, the 

amount of the allegedly improper “Documentary & Title Preparation Fee.” Talley may seek to 

treble her damages under the Missouri unauthorized practice of law statute, see Mo. Rev. Stat. 

§ 484.020.2, which brings the total to $390. That statute does not provide for attorney fees or

punitive damages.

The anti-aggregation rule would apply to any punitive damages awarded by the arbitrator

under the Missouri merchandising practices statute, so Talley would be credited with only her 

pro rata share of the overall award for purposes of calculating the amount in controversy. See In 

re Brand Name Prescription Drugs Antitrust Litig., 123 F.3d 599, 608-09 (7th Cir. 1997); 

Everett v. Verizon Wireless, Inc., 460 F.3d 818, 827-28 (6th Cir. 2006); In re Ford Motor 

Co./Citibank (South Dakota), N.A., 264 F.3d 952, 963 (9th Cir. 2001); Gilman v. BHC Securities, 

Inc., 104 F.3d 1418, 1430 (2d Cir. 1997). The court will assume in W.C. Motor’s favor that

Talley’s actual damages would be considered to be $390 rather than $130, even though the 

statute providing for punitive damages (the merchandising practices statute) does not allow for 

trebling, while the statute providing for treble damages (the unauthorized practice of law statute) 

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does not allow for punitive damages. Compare Mo. Rev. Stat. 407.025.1 with Mo. Rev. Stat. 

484.020.2. Even then, Talley’s punitive damages probably could not constitutionally exceed 

$3,900, a multiplier of ten, which the Seventh Circuit has recognized as the outer limit of what 

due process, as understood by State Farm Mutual Automobile Insurance Co. v. Campbell, 538 

U.S. 408 (2003), allows. 

In Munro v. Golden Rule Insurance Co., 393 F.3d 720 (7th Cir. 2004), the Seventh 

Circuit held that the amount in controversy was not met, even considering the possibility of 

punitive damages, where the plaintiff sustained actual damages of only $7,215.01. The court 

explained: “We are unconvinced that the amount in controversy exceeds $75,000. Even if we 

were to accept as accurate the parties’ total compensatory damages figure of $7,215.01, the 

punitive damages award would need to be more than ten times that amount to meet the statutory 

threshold. The Supreme Court, however, has set constitutional limits on the punitive damages 

multiplier in simple economic-loss cases, such as nonpayment of insurance.” Id. at 721-22

(citing State Farm Mut. Auto. Ins. Co., 538 U.S. at 410); see also Anthony v. Security Pac. Fin.

Servs., Inc., 75 F.3d 311, 317-18 (7th Cir. 1996) (in holding that the amount in controversy was 

not satisfied, reasoning that a punitive damage multiplier of 17.35, which would have satisfied 

the amount in controversy, was too large); cf. LM Ins. Co. v. Spaulding Enters. Inc., 533 F.3d

542, 552 (7th Cir. 2008) (holding that a multiplier of 2.75 is within constitutional limits). These 

precedents apply here, where the underlying proceeding is an arbitration, even though arbitral 

awards are not subject to judicial review for excessiveness. See Am. Bankers Life Assur. Co. of 

Fla. v. Evans, 319 F.3d 907, 910 (7th Cir. 2003) (“Enforcement of the statutory limits on federal 

court jurisdiction is no less important when the underlying claim involves arbitration; 

excessiveness cases therefore provide courts with a helpful benchmark in those cases as well.”).

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The court recognizes that W.C. Motor has cited state and federal decisions from Missouri 

permitting punitive damages of up to 34 times actual damages in cases brought under the 

Missouri merchandising practices statute. See Grabinski v. Blue Spring Ford Sales, Inc., 203 

F.3d 1024, 1026 (8th Cir. 2000) (affirming a jury award of $210,000 in punitive damages on 

$7,835 in actual damages, a ratio of “approximately 27:1”); Krysa v. Payne, 176 S.W.3d 150, 

160 (Mo. App. 2005) (affirming a jury award of $500,000 in punitive damages on $18,449.53 in 

compensatory damages, a ratio of 27.1 to 1); cf. Scott v. Blue Springs Ford Sales, Inc., 215 

S.W.3d 145 (Mo. App. 2006) (declining to review whether a punitive-to-compensatory damages 

ratio of 34:1 on a common law fraud claim was excessive, pending the outcome of a further jury 

trial on damages), overruled in part on other grounds by Badahman v. Catering St. Louis, 395 

S.W.3d 29 (Mo. 2013) (en banc). The court further recognizes that in determining the amount of 

punitive damages that might be awarded in the arbitration, the court must consider punitive 

damage awards allowed by Missouri tribunals. See Keeling v. Esurance Ins. Co., 660 F.3d 273, 

275 (7th Cir. 2011); Del Vecchio, 230 F.3d at 979. That said, the Missouri decisions appear at 

odds with the above-cited Seventh Circuit cases, which hold that a multiplier of ten is at the outer 

limits of what due process allows, and, in particular, with Anthony, which held that a 17.35 

multiplier would be unconstitutionally excessive. In any event, even a generous multiplier of 34, 

the maximum in the cases cited by W.C. Motor, would result in punitive damages of $13,260,

which when added to $390 would bring Talley’s recovery only to $13,650.

That leaves attorney fees, which must exceed $61,350 to bring Talley over the $75,000 

threshold, even assuming (contrary to Seventh Circuit precedent) that a punitive damages

multiplier of 34 would be permitted. Like punitive damages, attorney fees must be divided pro 

rata among Talley and the absent class members to compute the amount in controversy. See 

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Crawford v. F. Hoffman-La Roche Ltd., 267 F.3d 760, 766-67 (8th Cir. 2001); Martin v. 

Franklin Capital Corp., 251 F.3d 1284, 1293 (10th Cir. 2001); Coghlan v. Wellcraft Marine 

Corp., 240 F.3d 449, 455 & n.5 (5th Cir. 2001); Morrison v. Allstate Indemnity Co., 228 F.3d 

1255, 1268 (11th Cir. 2000); Wright et al., supra, § 3704.2, pp. 649-50; 2 William B. 

Rubenstein, Newberg on Class Actions § 6:9, pp. 525-26 (5th ed. 2012). The Seventh Circuit has 

not directly addressed whether attorney fees are subject to the anti-aggregation rule, but it has 

unequivocally adopted the anti-aggregation rule as stated by the cases just cited. See Travelers 

Property Cas., 689 F.3d at 721-22. And so the court concludes that the Seventh Circuit would 

require attorney fees to be divided pro rata among the class members, particularly given that no 

federal appeals court has held otherwise. See Andrews v. Chevy Chase Bank, 545 F.3d 570, 576 

(7th Cir. 2008) (noting “that creating a circuit split generally requires quite solid justification” 

and that “we do not lightly conclude that our sister circuits are wrong.”). Divided among 1,950 

class members, even a wildly unrealistic $100 million attorney fee would amount to just $51,282

per class member. Even then, the jurisdictional amount would not be reached in this case.

For these reasons, both of W.C. Motor’s jurisdictional arguments fail. It bears mention 

that W.C. Motor has not argued that the Missouri federal court’s decision regarding subject 

matter jurisdiction is res judicata here. Remember that Talley sought to dismiss W.C. Motor’s 

earlier suit on both jurisdictional and timeliness grounds, and the Missouri federal court chose 

the latter. Doc. 14-4. That court reached the timeliness issue only because it found that “a close 

question is presented here as to whether [W.C. Motor] has met its burden to show that the 

jurisdictional amount is met here,” making the court “reluctant to hold that it would be a ‘legal 

impossibility’ for Talley to recover more than $75,000” if punitive damages and attorney fees 

were included. Id. at 6. W.C. Motor might have argued that the Missouri decision precludes 

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Talley from disputing the amount in controversy here, for when “the question of subject-matter 

jurisdiction ha[s] been fully litigated in the original forum, the issue c[an]not be retried in a 

subsequent action between the parties.” Durfee v. Duke, 375 U.S. 106, 112 (1963). By not 

making that preclusion argument, W.C. Motor forfeited it.

This is so even though the forfeiture involves a question of subject matter jurisdiction. 

Settled precedent holds that “[n]o party can waive or forfeit a lack of subject-matter jurisdiction, 

which [the court] must enforce even if everyone else has ignored it.” United States v. Adigun, 

703 F.3d 1014, 1022 (7th Cir. 2012) (emphasis added, internal quotation marks omitted); see 

also Travelers Property Cas., 689 F.3d at 718 (“Jurisdictional objections cannot be forfeited or 

waived, of course, for this court has an independent obligation to satisfy itself that federal subject 

matter jurisdiction exists.”) (emphasis added, internal quotation marks omitted); Dexia Credit 

Local v. Rogan, 602 F.3d 879, 883 (7th Cir. 2010) (“neither the parties nor their lawyers may 

waive arguments that the court lacks jurisdiction”) (emphasis added). By contrast, the proponent

of subject matter jurisdiction, as with any party that bears the burden on a particular point, may 

forfeit an argument that could have been made to support jurisdiction. See Travelers Property 

Cas., 689 F.3d at 718 (“[t]he court need not bend over backwards to construct alternative 

theories to persuade itself that subject matter jurisdiction exists”); NetworkIP, LLC v. FCC, 548 

F.3d 116, 120 (D.C. Cir. 2008) (“arguments in favor of subject matter jurisdiction can be waived 

by inattention or deliberate choice”); Cicero-Berwyn Elks Lodge No. 1510 v. Philadelphia Ins. 

Co., 2013 WL 1385675, at *2 (N.D. Ill. Apr. 4, 2013) (same). Thus, by not making the res 

judicata argument in favor of subject matter jurisdiction, W.C. Motor, the party with the burden 

of establishing jurisdiction, forfeited it.

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The res judicata argument would have failed in any event. First, the Missouri court did 

not hold that the amount in controversy had been satisfied; it merely found that the issue 

presented “a close question” and that it was “reluctant to hold” that W.C. Motor had not met its 

burden. Preclusion cannot be grounded on a non-ruling like that. See Bd. of Ed. of Okla. City v. 

Dowell, 498 U.S. 237, 244-45 (1991) (“[P]etitioner contends that the 1977 order bars 

respondents from contesting the 1987 order. We disagree, for ... the District Court’s [1977]

finding was too ambiguous to bar respondents from challenging later action by the Board.”); 

Aiken v. Peck, 22 Vt. 255, 260 (1850) (“If, from the record ... it should appear possible, that the 

question was left undecided, then there would be no estoppel; for an estoppel, in the language of 

Lord Coke, ‘must be certain to every intent.’”), cited in Russell v. Place, 94 U.S. 606, 610 

(1876); 18 Charles Alan Wright, Arthur R. Miller, & Edward H. Cooper, Federal Practice & 

Procedure § 4420, pp. 513-16 & n.12 (2d ed. 2002). Second, the arbitrator had not yet certified 

the class when the Missouri case was filed, so there were no class members among whom to

divide the estimated attorney fees, which easily could exceed $75,000. Now there is a class and, 

as shown above, any attorney fee award must be allocated among the class members.

Before concluding, the court will briefly note that even if there were subject matter 

jurisdiction, W.C. Motor would face an uphill battle on the merits. Although it attempts to 

rescue its claim by raising in the second amended complaint the issue (whether the question 

whether a contract permits class arbitration is a “gateway” matter reserved for judicial 

determination) that Oxford Health Plans said remained open, W.C. Motor appears to have fallen 

into the same trap that ensnared the petitioner in that case. The Supreme Court did not reach that 

open question in Oxford Health Plans because the petitioner “agreed that the arbitrator should 

determine whether its contract with Sutter authorized class procedures.” 133 S. Ct. at 2069 n.2; 

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see also id. at 2071 (“Oxford agreed with Sutter that an arbitrator should determine what their 

contract meant, including whether its terms approved class arbitration.”). According to the 

arbitrator, W.C. Motor did the same thing. Doc. 43-2 at 3 (stating that the “parties agree that this 

Arbitrator has jurisdiction to decide th[e] threshold issue” of whether the contract permits class

arbitration). Even absent that explicit concession, it would appear that W.C. Motor contractually 

agreed to let the arbitrator decide class arbitrability, as the parties’ contract authorizes 

“arbitration administered by the American Arbitration Association in accordance with its 

Commercial Arbitration Rules,” and AAA Supplementary Rule 3, cited by the arbitrator, 

provides that “the arbitrator shall determine as a threshold matter ... whether the applicable 

arbitration clause permits the arbitration to proceed on behalf of or against a class.” Doc. 43-2 at 

2. But a ruling to that effect is unnecessary, and in fact is prohibited, because the court lacks 

subject matter jurisdiction. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998); 

Leibovitch v. Islamic Republic of Iran, 697 F.3d 561, 572-73 (7th Cir. 2012).

Conclusion

For the foregoing reasons, Talley’s motion to dismiss this suit for lack of subject matter 

jurisdiction is granted. The dismissal is without prejudice. See In re IFC Credit Corp., 663 F.3d 

315, 320 (7th Cir. 2011) (“dismissal for want of jurisdiction, not being an adjudication on the 

merits, is without prejudice”).

August 7, 2014

United States District Judge

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