Court Opinion

ID: 4473269
Source: CourtListenerOpinion
Date Created: 2020-01-15 01:00:19.527613+00
Date Added: 2024-06-11T08:49:07.836108
License: Public Domain

Case: 19-20042   Document: 00515271572      Page: 1   Date Filed: 01/14/2020

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

                                                                     FILED
                                  No. 19-20042                January 14, 2020
                                                                Lyle W. Cayce
NICOLE J. QUEZADA,                                                   Clerk

             Respondent - Appellee

v.

BECHTEL OG & C CONSTRUCTION SERVICES, INCORPORATED,

             Movant - Appellant

                Appeal from the United States District Court
                     for the Southern District of Texas

Before HIGGINBOTHAM, DENNIS, and HO, Circuit Judges.
JAMES L. DENNIS, Circuit Judge:
      After conclusion of an arbitration proceeding between Bechtel OG&C
Construction Services and its former employee Nicole Quezada on her claims
of disability discrimination, failure to accommodate, and retaliation under the
Americans with Disabilities Act, Bechtel sought to vacate the arbitrator’s
award under the Federal Arbitration Act. Concluding it had jurisdiction over
this request and Quezada’s responsive motion to confirm the award, the
district court determined that no basis existed under the Federal Arbitration
Act on which to vacate the award and it therefore confirmed it. Because the
district court correctly concluded it had jurisdiction to entertain the motions
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                                    No. 19-20042
submitted by both parties and was correct to confirm the arbitration award
here, we AFFIRM.
                                           I
      Nicole Quezada worked for Bechtel OG&C Construction Services
(Bechtel) on a construction project from August 2015 to February 2017. As a
condition of her employment, Quezada was required to agree to participate in
Bechtel’s Employee Dispute Resolution Program (DRP). The DRP requires
arbitration before the American Arbitration Association (AAA) for “resolving
workplace disputes for both employees and the company.” The DRP contained
detailed provisions governing the procedures to be used by the arbitrator. The
DRP also required application of the substantive law that would govern in the
federal district court located where the arbitration occurs.
      In June 2017, Quezada and Bechtel jointly submitted an employment
dispute to the AAA, in which Quezada claimed Bechtel engaged in
discrimination, failure to accommodate, and retaliation in violation of the
Americans with Disabilities Act (ADA). 1 The AAA arbitrator appointed to
preside over the proceedings conducted a three-day evidentiary hearing in
March 2018 in Houston, Texas. The parties submitted post-hearing briefs.
The arbitrator issued an interim award finding that Quezada had shown
discrimination based on Bechtel’s refusal to allow her to work overtime, but
that she could not show discriminatory or retaliatory termination “because she
accepted a voluntary layoff and it was not a constructive discharge.” The
arbitrator found Quezada entitled to $500 in nominal damages for the denial
of overtime opportunities.

      1 Quezada’s arbitration claim under the ADA was that she suffered from peripheral
edema and venous insufficiency, which caused pain, swelling, and numbness in her
extremities and impacted her sleep. Until December 2016, according to the arbitrator, she
was able to perform her job without accommodation, but she later needed frequent restroom
breaks and light duty.
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       Quezada moved for reconsideration of the interim award. The arbitrator
granted reconsideration, setting aside the interim order and finding that it had
overlooked key evidence in its earlier award. The arbitrator then issued a final
award that found Quezada had shown discrimination and failure to
accommodate based on denial of overtime, but that the termination did not
violate the ADA. Despite finding the termination was not actionable, the
arbitrator awarded (1) $41,944 in back pay (pre-hearing earnings since
termination), (2) $50,440 in front pay (projected future earnings), (3) $6,000 for
compensatory damages for “depression, anxiety, trouble sleeping and . . . PTSD
due to Bechtel’s treatment of her,” (4) $500 in “[n]ominal damages arising from
the denial of the opportunity to work overtime,” (5) $197,797.06 in prevailing
party attorneys’ fees and costs, (6) $98,934.25 in pre- and post-judgment
interest. 2
       Bechtel then sought vacatur or, alternatively, modification, of the
arbitration award in the Southern District of Texas, arguing that the
arbitrator exceeded his authority under the parties’ submissions, because its
fact finding that Quezada’s termination was not unlawful precluded its award
of back- and front-pay, compensatory damages, and attorneys’ fees under
governing law. Quezada later moved to confirm the award. The district court
concluded (1) it had subject matter jurisdiction over the action under 28
U.S.C. § 1331 as the action arose under federal law (i.e., a federal question);
and (2) Bechtel was not entitled to vacatur under the narrow grounds for such
relief provided by the Federal Arbitration Act (FAA). Accordingly, the district
court denied Bechtel’s motion to vacate and granted Quezada’s motion to
confirm. Bechtel timely appealed.

       2The arbitrator’s final award also provided that “[t]he administrative fees, expenses,
and costs of the [AAA] totaling $2,750.00 and the compensation of the arbitrator totaling
$29,095.00 shall be borne by Bechtel.”
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                                         II
      We first examine the basis for the district court’s, and our, jurisdiction,
which we must consider despite the parties’ agreement that we have
jurisdiction. Howery v. Allstate Ins. Co., 243 F.3d 912, 919 (5th Cir. 2001)
(noting that “federal courts . . . must consider jurisdiction sua sponte if not
raised by the parties”); United States v. Key, 205 F.3d 773, 774 (5th Cir. 2000)
(“If the district court lacked jurisdiction, our jurisdiction extends not to the
merits but merely for the purpose of correcting the error of the lower court in
entertaining the suit.” (cleaned up)).
      The FAA expresses Congress’s intent that private arbitration
agreements be enforced according to their terms.              Stolt-Nielsen S.A. v.
AnimalFeeds Int’l Corp., 559 U.S. 662, 682 (2010). Under the FAA, arbitration
agreements “shall be valid, irrevocable, and enforceable, save upon such
grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C.
§ 2; see Stolt-Nielsen, 559 U.S. at 682. Additionally, a party to an arbitration
agreement can seek an order from a federal district court compelling
arbitration, 9 U.S.C. § 4; see Stolt-Nielsen, 559 U.S. at 682, and any party to
an arbitration may seek to confirm the final arbitration award, which “the
court must grant . . . unless the award is vacated, modified, or corrected as
prescribed in sections 10 and 11 of [the FAA].” 9 U.S.C. § 9; Hall St. Associates,
L.L.C. v. Mattel, Inc., 552 U.S. 576, 582 (2008).
      “As for jurisdiction over controversies touching arbitration, the [FAA]
does nothing, being ‘something of an anomaly in the field of federal-court
jurisdiction’ in bestowing no federal jurisdiction but rather requiring an
independent jurisdictional basis.” Hall St. Associates, L.L.C. v. Mattel, Inc.,
552 U.S. 576, 581–82 (2008). Such independent bases include diversity of
citizenship under 28 U.S.C. § 1332 or federal question jurisdiction under 28

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U.S.C. § 1331. See Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 26 n.32 (1983).
       In Vaden v. Discover Bank, 556 U.S. 49 (2009), the Supreme Court
addressed the proper standard for determining federal jurisdiction when faced
with a petition to compel arbitration under section 4 of the FAA. 556 U.S. at
62. The Court rejected the standard articulation of the well-pleaded complaint
rule ordinarily used to analyze federal jurisdiction, under which courts would
look to the face of the federal court petition for a basis for federal jurisdiction.
Id. Instead, the Court adopted the so-called “look through” approach. Id.
Under this approach, “[a] federal court may ‘look through’ a § 4 petition to
determine whether it is predicated on an action that ‘arises under’ federal law.”
Id. Thus, whereas the well-pleaded complaint rule would require the section
4 motion to compel itself evinces a federal cause of action, under Vaden, courts
should examine the underlying dispute potentially subject to arbitration to
determine whether that dispute presents a federal question. Id.; see Volvo
Trucks N. Am., Inc. v. Crescent Ford Truck Sales, Inc., 666 F.3d 932, 936 (5th
Cir. 2012) (explaining Vaden).
       In reaching this result, the Supreme Court relied in part on the language
of section 4, which states that a proponent of arbitration may seek an order
compelling arbitration in “any United States district court which, save for [the
arbitration] agreement, would have jurisdiction under title 28, in a civil action
or in admiralty of the subject matter of a suit arising out of the controversy
between the parties.” 9 U.S.C. § 4 (emphasis added); see Vaden, 556 U.S. at
62.   As the Supreme Court held, “[t]he phrase ‘save for [the arbitration]
agreement’ indicates that the district court should assume the absence of the
arbitration agreement and determine whether it ‘would have jurisdiction
under title 28’ without it.” Vaden, 556 U.S. at 62. The Court also held that the
look-through approach was consistent with basic jurisdictional tenets and
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practical considerations, because failure to look through to the arbitration
proceeding’s subject matter “would permit a federal court to entertain a § 4
petition only when a federal-question suit is already before the court, when the
parties satisfy the requirements for diversity-of-citizenship jurisdiction, or
when the dispute over arbitrability involves a maritime contract.” Id. at 65.
Such an “approach would not accommodate a § 4 petitioner who could file a
federal-question suit in (or remove such a suit to) federal court, but who has
not done so.” Id.
      After Vaden, a circuit split developed regarding whether the same look-
through approach also applies to applications to confirm an arbitration award
under section 9, to vacate under section 10, or to modify under section 11. See
27 A.L.R. FED. 3D ART. 4 (2018). On one side of the split are circuits that decline
to apply the look-through approach set out in Vaden to applications to motions
brought under sections 9, 10, or 11, for confirmation, vacatur, or modification,
respectively; the Third and Seventh Circuits take this approach. See Goldman
v. Citigroup Glob. Markets Inc., 834 F.3d 242, 252 (3d Cir. 2016); Magruder v.
Fid. Brokerage Services LLC, 818 F.3d 285, 288 (7th Cir. 2016). On the other
side are courts that extend the look-through approach to motions brought
under these other sections, finding federal subject matter jurisdiction exists
where the underlying arbitration proceeding would have been subject to
federal jurisdiction but for the arbitration clause; the First, Second, and Fourth
Circuits take this view. See Ortiz-Espinosa v. BBVA Sec. of Puerto Rico, Inc.,
852 F.3d 36, 47 (1st Cir. 2017); Doscher v. Sea Port Group Sec., LLC, 832 F.3d
372, 381 (2d Cir. 2016); McCormick v. Am. Online, Inc., 909 F.3d 677, 679 (4th
Cir. 2018). This Circuit has yet to weigh in. The district court recognized the
split, and determined that “[w]hile an especially close question, this [c]ourt is
persuaded by the majority view” that “[f]ederal question jurisdiction over a

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                                  No. 19-20042
petition filed under Section 9, 10, or 11 exists if, looking through the petition,
the underlying controversy between the parties arises under federal law.”
      The minority view held by the Third and Seventh Circuits maintains
that the absence of the “save for [the arbitration] agreement” language found
in section 4 compels a different jurisdictional analysis for the various motions
that can be brought after an arbitration award has been issued under the FAA.
See Goldman, 834 F.3d at 253 (“Section 10 lacks the critical ‘save for such
agreement’ language that was central to the Supreme Court’s Vaden opinion.”);
Magruder, 818 F.3d at 288 (“Neither § 9 nor § 10 has any language comparable
to that on which the Supreme Court relied in Vaden.”). The majority view,
however, reasons that although this “save for” language is in fact absent in
these other sections, the Supreme Court’s guidance in Vaden and the
background principles animating its jurisdictional analysis under the FAA
require the use of the same look-through approach for post-award motions as
those brought pre-award under section 4. See Ortiz-Espinosa, 852 F.3d at 45–
47; Doscher, 832 F.3d at 381–86; McCormick, 909 F.3d 682–84. Indeed, courts
have consistently noted that “[t]he [FAA] was enacted as a single,
comprehensive statutory scheme.” Commercial Metals Co. v. Balfour, Guthrie,
& Co., Ltd., 577 F.2d 264, 268–69 (5th Cir. 1978) (citing Bernhardt v.
Polygraphic Co., 350 U.S. 198, 201 (1956); Robert Lawrence Company v.
Devonshire Fabrics, Inc., 271 F.2d 402 (2d Cir. 1959); Bangor and Aroostock R.
Co. v. Main Central R. Co., 359 F. Supp. 261 (D.D.C.1973)); see also WRIGHT &
MILLER, 13D FED. PRAC. & PROC. JURIS. § 3569 (3d ed.) (noting that the lack of
jurisdictional grant arising out of the FAA has been interpreted uniformly
among the various sections of the statute, despite varying degrees of clarity
that certain sections do not provide a jurisdictional grant). As the majority
view holds, this principle of uniformity dictates using the same approach for
determining jurisdiction under each section of the statute.             See, e.g.,
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McCormick, 909 F.3d at 684 (“[O]ur holding has the added virtue of applying
a uniform jurisdictional approach to the FAA as an integrated whole.”).
      The rule that the FAA is not an independent basis for federal jurisdiction
and does not enlarge existing grounds for jurisdiction also dictates a uniform
jurisdictional approach. See Hall St., 552 U.S. at 581–82. As the Second
Circuit pointed out, “if § 4 of the FAA does not enlarge federal-court
jurisdiction, . . .how can a federal court’s jurisdiction under the same
jurisdictional statute differ between § 4 and all other remedies under the Act?”
Doscher, 832 F.3d at 383. To provide a different jurisdictional rule for section
4 would be, in essence, to expand jurisdiction for section 4 motions,
contravening the FAA’s non-expansion rule. See id. at 384. “The only way to
avoid this contradictory result,” as the Second Circuit put it, is “to conclude
that the ‘ordinary’ jurisdictional inquiry under § 1331 looks to the underlying
substantive dispute with respect to all remedies under the [FAA], not just § 4.”
Id.; see also McCormick, 909 F.3d at 682 (“Indeed, subscribing to such a reading
would suggest that § 4 expands federal jurisdiction, a proposition that has been
rejected by the Supreme Court.”).
      Finally, the practical considerations that animated the Supreme Court’s
use of the look-through approach in Vaden apply with equal force to all other
sections authorizing a specific form of a motion under the FAA. The Court
noted in Vaden that failing to use the look-through approach would have the
“curious practical consequences” of “permit[ting] a federal court to entertain a
§ 4 petition only when a federal-question suit is already before the court, when
the parties satisfy the requirements for diversity-of-citizenship jurisdiction, or
when the dispute over arbitrability involves a maritime contract,” which fails
to “accommodate a § 4 petitioner who could file a federal-question suit in (or
remove such a suit to) federal court, but who has not done so.” Vaden, 556 U.S.
at 65. The virtues of the look-through approach, on the other hand, include
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permitting such a petitioner “to ask a federal court to compel arbitration
without first taking the formal step of initiating or removing a federal-question
suit—that is, without seeking federal adjudication of the very questions it
wants to arbitrate rather than litigate.” Id.
      Applying this same reasoning to the post-award motions at issue here,
parties would be required to go through a similarly inefficient and formalistic
process as that noted in Vaden. That is, a litigant would be able to preserve
federal jurisdiction over a motion to vacate, modify, or confirm an arbitration
award by first filing a motion to compel arbitration under section 4, which
benefits from the look-through approach. See McCormick, 909 F.3d at 684. As
the Second Circuit put it, “there is a certain absurdity to an interpretation that
permits parties to file motions to compel arbitration in any case where the
underlying dispute raises a federal question but precludes them from seeking
the same federal court’s aid under the [FAA’s] other remedial provisions
related to the same dispute.” Doscher, 832 F.3d at 387. According to that court,
such a “bizarre jurisdictional triangle” would “produce the exact opposite of the
[FAA’s] goals,” creating a perverse incentive for cautious practitioners to first
file in federal court and be referred or compelled to arbitration, all for the sole
purpose of preserving federal jurisdiction to later review the award. See id.
      We find the majority view persuasive and now join the First, Second, and
Fourth Circuits in concluding that motions brought under sections 9, 10, and
11, each of which provides the ability to seek a different remedy in district
court following an arbitration award, are subject to the look-through approach
endorsed in Vaden.
      Here, the underlying dispute between Quezada and Bechtel arises out of
the ADA, a federal statute. Because the arbitration claims would thus be
subject to federal-question jurisdiction absent the arbitration agreement, the
district court had authority to resolve the parties’ motions under sections 9, 10,
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and 11 of the FAA. See McCormick, 909 F.3d at 684 (holding jurisdiction
existed where “underlying claim arises out of alleged violations of the Stored
Communications Act, a federal statute”). We thus affirm the district court’s
finding of jurisdiction, and move to the merits of Bechtel’s appeal.
                                       III
      Bechtel argues on appeal that (1) the back and front pay awards the
arbitrator awarded to Quezada violate Fifth Circuit law and the arbitrator
exceeded its authority by ignoring that law; and (2) the arbitrator exceeded its
authority in reconsidering its earlier denial of back and front pay. These
arguments lack merit.
      We review confirmation or vacatur of an arbitration award de novo.
PoolRe Ins. Corp. v. Organizational Strategies, Inc., 783 F.3d 256, 262 (5th Cir.
2015). However, “review of the arbitration award itself ‘is very deferential.’”
Id. (quoting Timegate Studios, Inc. v. Southpeak Interactive, L.L.C., 713 F.3d
797, 802 (5th Cir. 2013)). Even if we disagree with the arbitrator’s conclusions,
the award should be confirmed “as long as the arbitrator’s decision draws its
essence from the contract.”     Timegate Studios, 713 F.3d at 802 (quoting
Executone Info. Sys., Inc. v. Davis, 26 F.3d 1314, 1320 (5th Cir. 1994)).
      Title 9 U.S.C. § 10(a)(4) provides that an arbitration award may be
vacated “where the arbitrator[] exceeded [its] powers, or so imperfectly
executed them that a mutual, final, and definite award upon the subject matter
submitted was not made.” 9 U.S.C. § 10(a)(4). The grounds established for
vacatur under § 10(a) are exclusive and may not be expanded by contract.
Citigroup Glob. Markets, Inc. v. Bacon, 562 F.3d 349, 358 (5th Cir. 2009) (citing
Hall St., 552 U.S. at 586). An arbitrator’s legal or factual error ordinarily does
not warrant vacatur. See United Paperworkers Intern. Union, AFL-CIO v.
Misco, Inc., 484 U.S. 29, 38 (1987) (“Courts . . . do not sit to hear claims of
factual or legal error by an arbitrator as an appellate court does in reviewing
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decisions of lower courts.”); Hamel-Schwulst v. Country Place Mortg. Ltd., 406
F. App’x 906, 914 (5th Cir. 2010) (“It has been the rule for some time that courts
do not vacate an arbitration award based on the merits of a party’s claim.”).
Moreover, “[w]here the arbitrator is ‘even arguably construing or applying the
contract or acting within the scope of his authority the fact that a court is
convinced he committed serious error does not suffice to overturn that
decision.’” Am. Eagle Airlines, Inc. v. Air Line Pilots Ass’n, Intern., 343 F.3d
401, 405 (5th Cir. 2003) (quoting Eastern Associated Coal Corp. v. United Mine
Workers of America, 531 U.S. 57, 62 (2000)). Where “there is ambiguity as to
whether an arbitrator is acting within the scope of his authority, that
ambiguity must be resolved in favor of the arbitrator.” Id.
      Bechtel’s first argument, that the arbitrator exceeded his authority by
misapplying Fifth Circuit law, misunderstands the limited review of
arbitration awards under the FAA. Although federal courts may vacate an
award “[w]here an arbitrator exceeds his contractual authority,” Delta Queen
Steamboat Co. v. Dist. 2 Marine Engineers Beneficial Ass’n, AFL-CIO, 889 F.2d
599, 602 (5th Cir. 1989), this ground for vacatur is not implicated here.
Instead, the arbitrator was well within the scope of his authority, because the
parties agreed that “the [DRP] will be the exclusive means of resolving
workplace disputes for both employees and the company, including disputes
concerning legally protected rights, such as freedom from discrimination,
retaliation, or harassment.” Given that the underlying dispute here is plainly
a workplace dispute, Bechtel’s contention that the arbitrator failed to follow
the law of this Circuit amounts to nothing more than a freestanding claim of
manifest disregard for the law, a ground for vacatur this court has squarely
rejected. See Citigroup, 562 F.3d at 358 (“[M]anifest disregard of the law as an
independent, nonstatutory ground for setting aside an [arbitration] award
must be abandoned and rejected.”); see WRIGHT & MILLER, 13D FED. PRAC. &
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PROC. JURIS. § 3569 (3d ed.) (“Five courts of appeals—the First, Fifth, Seventh,
Eighth, and Eleventh Circuits—conclude that manifest disregard has not
survived the Hall Street decision as a basis for vacating an arbitration
award.”).   The district court was thus correct in denying vacatur on this
ground.
      Bechtel’s second argument fares no better. Bechtel contends that the
arbitration rules agreed to by the parties required the arbitrator to follow the
Federal Rules of Civil Procedure, which, according to Bechtel, did not authorize
the arbitrator to reconsider its interim award that only granted $500 in
nominal damages. But Bechtel’s argument ignores the fact that the DRP also
contains a provision stating that “[e]ither party . . . may file a motion for
reconsideration with the Arbitrator.” Bechtel points to another provision of
the DRP relating to motions to dismiss and motions for summary judgment in
arguing that the district court erred in denying its motion to vacate on this
ground. But that provision says nothing about motions to reconsider, which
are specifically provided for elsewhere in the DRP. Accordingly, the district
court was correct to deny vacatur here as well.
                                      ***
      For these reasons, the judgment of the district court is AFFIRMED.

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                                 No. 19-20042
JAMES C. HO, Circuit Judge, dissenting:
      The district court lacked jurisdiction to decide this case. So I would
vacate the judgment and dismiss for lack of jurisdiction. I respectfully dissent.
                                      ***
      Arbitration agreements are contracts—and contracts are ordinarily a
matter of state law. See, e.g., Rent-A-Center, West, Inc. v. Jackson, 561 U.S.
63, 67 (2010) (“[A]rbitration is a matter of contract.”); Stolt-Nielson S.A. v.
AnimalFeeds Int’l Corp., 559 U.S. 662, 681 (2010) (“[T]he interpretation of an
arbitration agreement is generally a matter of state law.”).
      Disputes arising out of arbitration thus belong in state court.
Arbitration disputes may also be brought in federal court, if Congress so
authorizes.
      Arbitrations between diverse parties may of course be brought in federal
court under the general diversity jurisdiction statute. 28 U.S.C. § 1332. For
arbitration disputes between non-diverse parties, however, federal courts must
point to statutory authority conferring jurisdiction over such matters.
      The Supreme Court has held that the Federal Arbitration Act confers no
federal jurisdiction. See, e.g., Hall Street Associates, LLC v. Mattel, Inc., 552
U.S. 576, 581–82 (2008) (“[The FAA is] something of an anomaly in the field of
federal-court jurisdiction” in that it “bestow[s] no federal jurisdiction but
rather require[es] an independent jurisdictional basis.”) (quotations omitted).
      Section 4 of the FAA, however, allows federal courts to exercise
jurisdiction over certain arbitration disputes under 28 U.S.C. § 1331, the
general federal question jurisdiction statute.        Specifically, § 4 confers
jurisdiction on federal courts over motions to compel arbitration, if the
arbitration resolves federal questions. It does so by authorizing district courts
to compel arbitration when federal jurisdiction would exist “save for [the
arbitration agreement].” 9 U.S.C. § 4. In other words, a federal court may
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“look through” the arbitration agreement to determine if it could have
exercised jurisdiction over the underlying controversy.      Vaden v. Discover
Bank, 556 U.S. 49, 53 (2009).
      This case, however, involves not a motion to compel arbitration under
§ 4, but a motion to vacate an arbitration award under § 10. Sections 9–11 of
the Federal Arbitration Act authorize motions to confirm, vacate, and modify
arbitration awards. None of those sections contain the “look through” language
found in § 4. Compare 9 U.S.C. § 4 (“A party . . . may petition any United
States district court which, save for such agreement, would have jurisdiction
. . .”) (emphasis added), with §§ 9–11 (lacking any similar language).
      Fidelity to text thus compels me to conclude that the district court lacked
jurisdiction in this case. Notably, neither the panel majority nor the parties
claim any textual support for federal jurisdiction. Instead, they observe that
there is a circuit split on the issue—and that under the “majority” view, the
district court has jurisdiction despite the lack of textual support in §§ 9–11 of
the FAA. I say “majority” view in quotes because it’s only a 3-2 split—so it
remains a “majority” view only because of our decision today.            Compare
McCormick v. America Online, Inc., 909 F.3d 677, 682 (4th Cir. 2018) (choosing
to “look through”); Ortiz-Espinosa v. BBVA Sec. of P.R., Inc., 852 F.3d 36, 40
(1st Cir. 2017) (same); and Doscher v. Sea Port Grp. Sec., LLC, 832 F.3d 372,
373 (2nd Cir. 2016) (same), with Magruder v. Fid. Brokerage Servs. LLC, 818
F.3d 285, 287–89 (7th Cir. 2016) (declining to “look through”); and Goldman v.
Citigroup Glob. Mkts. Inc., 834 F.3d 242, 252–55 (3rd Cir. 2016) (same).
      Rather than count circuits, I would follow the text wherever it leads. The
panel majority responds that the text is absurd—that it makes no sense that
Congress would confer federal jurisdiction over motions to compel under § 4,
but not over motions to confirm, vacate, and modify under §§ 9–11. But there
is nothing absurd about this dichotomy. Section 4 commences the arbitration
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process. Sections 9–11, by contrast, operate only after the issuance of the
arbitration award. This difference between a motion to compel arbitration and
one to confirm or change its outcome “parallels the distinction . . . between an
original federal claim and a dispute about its contractual resolution.”
Goldman, 834 F.3d at 255 (quoting Magruder, 818 F.3d at 288).
      This approach is also consistent with how we treat settlements.
Magruder, 818 F.3d at 288.         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. See id. (“[I]f parties settle litigation that arose under federal law,
any contest about that settlement needs an independent jurisdictional basis.”)
(citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 381–82 (1994));
see also, e.g., Hospitality House, Inc. v. Gilbert, 298 F.3d 424, 434 (5th Cir.
2002) (finding no jurisdiction in a dispute arising from a settlement of federal
claims). There is no reason to treat arbitration differently.
      The panel majority also warns that my reading would create perverse
incentives. The majority worries that a careful litigant would “preserve federal
jurisdiction” over a §§ 9–11 motion by first filing a motion to compel under § 4.
But the majority cites no case law that would permit such a stratagem. See
also Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161, 1163 (5th Cir. 1992)
(allowing dismissal of a case following a motion to compel). And if it is a
problem, it is one that Congress can address.
      Finally, the majority asserts that my approach would violate the “non-
expansion rule” of the FAA, by giving § 4 a more expansive reading than §§ 9–
11. The majority contends that such an expansive approach “has been rejected
by the Supreme Court”—namely, Vaden. But Vaden instructs us to faithfully

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    Case: 19-20042    Document: 00515271572         Page: 16   Date Filed: 01/14/2020

                                  No. 19-20042
follow the text of the FAA, including the unique language of § 4. See 556 U.S.
at 62 (“The text of § 4 drives our conclusion.”).
      I respectfully dissent.

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