Lower Colorado River Authority v. Papalote Creek II, L.L.C.

By contract, parties can agree to the arbitration of virtually any dispute. The Federal Arbitration Act (the FAA) makes such arbitration agreements “valid, irrevocable, and enforceable.” 9 U.S.C. § 2. It then tells parties that they may turn to “any United States district court which, save for such agreement, would have jurisdiction under Title 28” to compel arbitration. Id. § 4. Here, verifying the requirement of “jurisdiction under Title 28” was easy because the existence of diversity jurisdiction was undisputed. But the court of appeals concluded that § 4 also requires federal district courts to probe the underlying dispute between the parties to ensure that all other measures of justiciability, not just “jurisdiction under Title 28,” would have been satisfied if the parties had never agreed to arbitration. The underlying dispute here, the court concluded, would not have been “ripe” if brought as an original matter and, therefore, the district court lacked subject-matter jurisdiction to compel arbitration of that dispute. The question presented is whether a federal court’s subject-matter jurisdiction to entertain a motion to compel arbitration under § 4 of the FAA can be established by complete diversity without “looking through” the petition to assess whether the underlying dispute would have presented separate “justiciability” concerns (like ripeness) if it had been brought directly in a federal-court lawsuit. (i)