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A federal court in Florida reminded parties that federal courts in the 11th Circuit – unlike the majority of circuits – do not have subject matter jurisdiction to decide motions to compel arbitration in diversity actions because the amount in controversy cannot be determined.
In Terminix International Co., L.P. v. Palmer Ranch Limited Partnership, No. 8:04-CV-574-T-24MAP, 2006 WL 2167187 (M.D. Fla. July 26, 2006), Palmer filed a state court complaint against Terminix, and Terminix then petitioned in federal court to compel arbitration of the dispute, claiming subject matter jurisdiction based on diversity.
However, the Court held that it did not possess the requisite subject matter jurisdiction because Terminix did not allege the required amount in controversy and could not rely on the value of Palmer’s state court claim to establish jurisdiction. See Ericcson GE Mobile Commc’ns, Inc. v. Motorola Commc’ns & Elecs., Inc., 120 F.3d 216, 218-220 (11th Cir. 1997).
The Court noted that “at least one district court in [the 11th] circuit has twice held that it is impossible to quantify with any degree of certainty the value of the right to have a claim decided by an arbitrator.” Fidelity Warranty Servs., Inc. v. Kidd, 45 F.Supp.2d 1284, 1287 (N.D. Ala.), aff’d, 196 F.3d 1262 (11th Cir. 1999), see also Bronson & Migliaccio, LLP v. Kinsey, 228 F.Supp.2d 1315, 1317 (N.D. Ala. 2002).
Therefore, since Terminix’s claim in federal court was only to compel arbitration, and the Court could not determine the value of having an arbitration decide the dispute, the Court lacked subject matter jurisdiction and dismissed the claim.
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