The Fifth Circuit recently addressed a hard question: what should the court consider when determining the amount in controversy for purposes of federal jurisdiction over an arbitration award? The court decided to rely on the amount originally sought by the claimant in the demand for arbitration. Pershing, LLC v. Kiebach, __ F.3d __, 2016 WL 1375874 (5th Cir. April 6, 2016).
In Pershing, the claimants demanded $80 million in damages from their broker. The arbitration panel rejected their claims, but awarded them $10,000 for expenses. The broker moved to confirm the award in federal court, and the customers sought to have the confirmation suit dismissed for lack of federal jurisdiction. (Why? So they could move to vacate in Louisiana state court, which they must have thought would be more friendly.)
