Maine Community Health Options v. Albertsons Companies, Inc.
993 F.3d 720
| 9th Cir. | 2021Background
- Maine Community Health Options (Health Options) was arbitrating with Navitus over alleged overbilling by pharmacies; Health Options sought Albertsons’ network billing records via an arbitration subpoena.
- Albertsons objected to the subpoena; Health Options filed a § 7 FAA enforcement action in federal court to compel compliance.
- FAA § 7 does not itself confer federal-question jurisdiction, so Health Options invoked diversity jurisdiction against Albertsons, alleging the amount in controversy exceeded $75,000.
- The district court dismissed for want of subject-matter jurisdiction, finding Health Options had not shown the $75,000 threshold.
- The Ninth Circuit reversed: it held the amount in controversy for a § 7 enforcement action may be measured by the benefit to the plaintiff (or detriment to the defendant) and found Health Options’ good-faith allegation—supported by an expert declaration—that the subpoenaed records would likely affect more than $75,000 satisfied the jurisdictional amount.
- A concurrence argued a separate ground: courts should “look through” a § 7 petition to the underlying arbitration to assess jurisdiction, and because the arbitration itself alleged >$17 million, jurisdiction would exist on that basis as well.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 7 enforcement suit satisfied the § 1332 amount-in-controversy requirement | Health Options: the value of the subpoenaed information to its arbitration exceeds $75,000 (supported by expert) | Albertsons: anticipated compliance cost is only ~$1,400, well below $75,000 | Held: satisfied — plaintiff’s viewpoint (benefit) may establish amount; allegations plausible and in good faith |
| How to measure amount in controversy for nonmonetary relief | Health Options: measure by value of object to plaintiff (benefit) | Albertsons: measure by defendant’s detriment (cost) or argue plaintiff’s benefit is speculative | Held: Court applies the “either viewpoint” rule—either plaintiff’s benefit or defendant’s detriment can suffice |
| Pleading standard for establishing amount in controversy | Health Options: good-faith allegation controls; need not prove exact value at filing | Albertsons: plaintiff must show actual >$75,000, not speculative projections | Held: Good-faith allegation governs; dismissal only if it appears to a legal certainty claim is <jurisdictional amount |
| Whether courts should instead "look through" a § 7 petition to the underlying arbitration to assess jurisdiction | Health Options/concurring judge: look through to the arbitration’s claims (underlying dispute here alleges >$17M) | Albertsons: § 7 enforcement may be treated as a freestanding action requiring its own jurisdictional showing | Held: Majority did not decide; concurrence endorsed the look-through approach and would find jurisdiction on that basis |
Key Cases Cited
- Wash. Nat’l Ins. Co. v. OBEX Grp. LLC, 958 F.3d 126 (2d Cir. 2020) (measuring amount-in-controversy by value of subpoenaed information to plaintiff)
- Hunt v. Wash. State Apple Advert. Comm’n, 432 U.S. 333 (1977) (amount in controversy for nonmonetary relief measured by value of the object of the litigation)
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (FAA does not itself supply federal-question jurisdiction)
- Ridder Bros., Inc. v. Blethen, 142 F.2d 395 (9th Cir. 1944) (either-viewpoint rule: value may relate to any party)
- Vaden v. Discover Bank, 556 U.S. 49 (2009) (courts may "look through" certain FAA petitions to the underlying controversy for jurisdictional analysis)
- Stolt-Nielsen SA v. Celanese AG, 430 F.3d 567 (2d Cir. 2005) (discussing jurisdictional prerequisites for FAA enforcement actions)