Dist. Ct. erred in dismissing instant claim by plaintiffs alleging that defendant breached contract to arbitrate plaintiffs’ dispute with third party, even though Dist. Ct. found that defendant was entitled to arbitral immunity. Record showed that defendant had remanded instant state-court breach of contract action to Dist. Ct., but that defendant had failed to establish that Dist. Ct. had jurisdiction to consider merits of case, where defendant had failed to establish requisite $75,000 amount in controversy threshold for diversity jurisdiction. Specifically, instant state-court complaint merely asserted that plaintiffs sought in excess of $50,000 in damages, and defendant could not point to fact that plaintiffs had alleged in underlying arbitration proceeding that they were entitled to $1 million in damages to satisfy $75,000 threshold, because amount at issue in arbitration proceeding did not count toward amount in controversy in instant breach of contract lawsuit between party to arbitration and arbitrator. Also, plaintiffs paid defendant only $1,800 to conduct underlying arbitration, and defendant could not point to legal fees plaintiffs paid during arbitration or in preparing instant lawsuit to satisfy $75,000 amount in controversy requirement for diversity jurisdiction. Moreover, mere presence of issue of federal securities law did not transform instant state-law contract claim into case arising under federal law, since federal question was not central to resolving whether defendant had breached instant contract.
Federal 7th Circuit Court
Civil Court
Jurisdiction