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In dismissing a vacatur lawsuit for lack of subject matter jurisdiction, a federal district court in Ohio explained that the Federal Arbitration Act (FAA) does not create federal jurisdiction but instead requires an independent basis for the exercise of federal jurisdiction.
In Svete v. Peltier, No. 4:06-CV-2000, 2007 WL 1724921 (N.D. Ohio June 12, 2007), Svete filed a motion to vacate an NASD arbitration award in Peltier's favor. In response, Peltier moved for dismissal on the ground that the Court lacked subject matter jurisdiction.
In ruling on the motion to dismiss, the Court explained that the FAA is not an independent source of federal jurisdiction. Instead, there must be some other basis for federal jurisdiction, either by virtue of a federal question or diversity of citizenship. Since Svete's motion for vacatur did not raise a federal question or allege diversity of citizenship, the Court dismissed the matter for lack of subject matter jurisdiction.
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