In Hale v. Morgan Stanley Smith Barney, LLC (6th Cir., No. 20-3412, 12/15/2020), the Sixth Circuit reversed and remanded the district court’s dismissal of the plaintiff’s petition to vacate an arbitrator’s award. Hale had initiated arbitration against Morgan Stanley for improper discipline and sought $14.5 million in damages. The arbitrator found for the employer and awarded Hale no damages. Hale filed suit in federal district court to set aside the arbitration award pursuant to Sections 10(a)(3) and (4) of the Federal Arbitration Act. Morgan Stanley filed a motion to dismiss on the basis diversity jurisdiction was not met since the arbitrator awarded Hale no damages. The Sixth Circuit reversed, holding that when a party disputes the results of an arbitration and seeks to vacate under Section 10 of the FAA, courts need only look to the relief requested in the complaint to determine the amount in controversy for diversity jurisdiction to attach.
Sixth Circuit Finds District Court Misapplied Diversity Jurisdiction under FAA
