Volvo Trucks North America, Inc. v. Crescent Ford Truck Sales, Inc.
666 F.3d 932
5th Cir.2012Background
- Crescent and Volvo entered a Dealer Sales and Services Agreement incorporating arbitration, mediation, and AAA-administered final arbitration.
- Volvo sought to compel arbitration under FAA §4 after Crescent challenged non-renewal of Crescent’s Volvo franchise.
- LMVC issued a cease-and-desist order delaying termination and refocusing proceedings under Louisiana law.
- Volvo filed federal suit seeking arbitration and declaratory relief under ADDCA and related provisions.
- District court held lack of diversity jurisdiction and analyzed jurisdiction under Prudential-Bache and the FAA, then granted summary judgment for arbitration.
- This court vacates and remands to dismiss for lack of subject-matter jurisdiction under look-through approach from Vaden and related cases.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court had subject-matter jurisdiction to compel arbitration | Crescent argues no federal jurisdiction absent a federal-law dispute | Volvo contends §4 petitions look through to the underlying controversy | No jurisdiction; look-through shows lack of federal basis independent of arbitration. |
| Whether the ADDCA declaratory-relief claims establish federal jurisdiction | Volvo sought ADDCA-based declaratory relief tied to merits/rights | ADDCA claims provide independent federal questions | No independent federal jurisdiction; ADDCA claims do not arise under federal law. |
| Whether §1226 declaratory-judgment issue supports federal jurisdiction | Volvo claimed §1226 applicability affects arbitration rights | §1226 defenses are federal questions but improper here | Incorrect; §1226 applicability is defense-based and cannot sustain jurisdiction. |
Key Cases Cited
- Vaden v. Discover Bank, 556 U.S. 49 (Supreme Court 2009) (look-through jurisdiction for §4 petitions; determine jurisdiction without arbitration agreement)
- Prudential-Bache Sec., Inc. v. Fitch, 966 F.2d 981 (5th Cir. 1992) (jurisdiction for petition to compel arbitration must be determined from the face of the petition)
- Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667 (Supreme Court 1950) (Declaratory Judgment Act is procedural; limits on federal jurisdiction)
- Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for S. Cal., 463 U.S. 1 (Supreme Court 1983) (federal jurisdiction not conferred by declaratory relief where core claim is state law)
- Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149 (Supreme Court 1908) (well-pleaded complaint rule; federal jurisdiction not based on defense)