Court Opinion

ID: 4089420
Source: CourtListenerOpinion
Date Created: 2016-10-13 18:01:00.243263+00
Date Added: 2024-06-11T09:19:17.804331
License: Public Domain

Case: 16-20047      Document: 00513716468         Page: 1    Date Filed: 10/13/2016

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                            United States Court of Appeals

                                    No. 16-20047
                                                                                     Fifth Circuit

                                                                                   FILED
                                  Summary Calendar                           October 13, 2016
                                                                              Lyle W. Cayce
SILVIA ROMAN; ALEJANDRO ROMAN,                                                     Clerk

              Plaintiffs–Appellees,

v.

AUTONATION FORD GULF FREEWAY,

              Defendant–Appellant.

                   Appeal from the United States District Court
                        for the Southern District of Texas
                             USDC No. 4:15-CV-3161

Before HIGGINBOTHAM, PRADO, and HAYNES, Circuit Judges.
PER CURIAM:*
       Defendant–Appellant AutoNation Ford Gulf Freeway (“AutoNation”)
appeals the district court’s order denying its Motion to Compel Arbitration and
for Stay or Dismissal of Litigation. Because it is not clear that the district court
had subject matter jurisdiction, we VACATE and REMAND to the district

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
    Case: 16-20047     Document: 00513716468     Page: 2   Date Filed: 10/13/2016

                                  No. 16-20047
court to determine whether subject matter jurisdiction exists and to dismiss if
it finds the parties are not diverse.
      Plaintiffs–Appellees, Silvia Roman and Alejandro Roman (collectively,
the “Romans”), originally filed their lawsuit in federal court alleging that the
Defendants, Ford Motor Company (“Ford”) and AutoNation, designed,
manufactured, sold, and warranted a defective vehicle, and that such actions
breached express and implied warranties under the Texas Business &
Commerce Code and violated the Texas Deceptive Trade Practices Act
(“DTPA”). The Defendants denied the allegations and AutoNation filed a
Motion to Compel Arbitration and for Stay or Dismissal of the Litigation.
AutoNation contends that Plaintiffs signed a valid arbitration agreement
subject to the Federal Arbitration Act (“FAA”) when they purchased their
vehicle and that arbitration should be ordered because the agreement covered
the parties’ dispute. The district court denied the motion and AutoNation
appeals.
      In their original Complaint, the Romans asserted that subject matter
jurisdiction is proper under 28 U.S.C. § 1332 because the parties are diverse
and the amount in controversy exceeds $75,000. The Romans are Texas
residents, residing in Harris County, Texas, but they do not allege their
citizenship. Ford responded that it is a Delaware corporation with its principal
place of business in Michigan, but that it had insufficient information to
determine if the district court had diversity jurisdiction over the case. In
AutoNation’s Answer, it admitted to being an entity conducting business in
Houston, Texas, but did not otherwise address its citizenship for purposes of
subject matter jurisdiction. AutoNation’s full entity name is Charlie Thomas
Ford, Ltd. d/b/a AutoNation Gulf Freeway. In its brief, AutoNation does not
include a statement of jurisdiction. By contrast, the Appellees’ Brief asserts
that this Court has jurisdiction because the lawsuit originated in the U.S.
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    Case: 16-20047     Document: 00513716468    Page: 3   Date Filed: 10/13/2016

                                 No. 16-20047
district court and because the FAA confers jurisdiction to this Court to consider
the district court’s denial of a Motion to Compel Arbitration. Neither party has
otherwise addressed how the district court had subject matter jurisdiction
pursuant to 28 U.S.C. § 1332 or any other statute.
      It is well-established that the FAA does not independently create subject
matter jurisdiction. See Vaden v. Discover Bank, 566 U.S. 49, 59 (2009). Indeed,
      “[t]he Arbitration Act is something of an anomaly in the field of
      federal-court jurisdiction. It creates a body of federal substantive
      law establishing and regulating the duty to honor an agreement to
      arbitrate, yet it does not create any independent federal-question
      jurisdiction under 28. U.S.C. § 1331 or otherwise. Section 4
      provides for an order compelling arbitration only when the federal
      district court would have jurisdiction over a suit on the underlying
      dispute; hence, there must be diversity of citizenship or some other
      independent basis for federal jurisdiction before the order can
      issue.”
Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 n.32
(1983).
      This case presents no federal question. The Romans’ breach of warranty
and DTPA claims arise solely under Texas law. Therefore, the parties were
required to establish jurisdiction under 28 U.S.C. § 1332 before the district
court could rule on the Motion to Compel Arbitration and for Stay or Dismissal
of Litigation. This Court is not satisfied, based on the record before it, that
AutoNation does not share citizenship with the Romans. For that reason, we
VACATE the district court’s order and REMAND for a determination of subject
matter jurisdiction. If diversity is not established, the district court must
dismiss the parties’ suit.

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