Tesla Motors v. Balan, 134 F.4th 558 (4th Cir. 2025) is an appeal from an effort by Tesla to confirm an arbitration award against Balan. Balan made a defamation claim and received $0. Tesla sued to confirm and the District Court confirmed the award. The Fourth Circuit reversed on the ground that there was no diversity jurisdiction. The court explained:
Because a “look through” approach is prohibited under Badgerow [v. Walters, 596 U.S. 1, 142 S.Ct. 1310 (2022)] the facts establishing a jurisdictional basis must be present on the face of the application or petition to confirm an arbitration award. See id. at 16-17, 142 S.Ct. 1310. Put differently, facts establishing that the amount in controversy exceeds $75,000 must be present on the face of a Section 9 petition to confirm an arbitration award before a district court can assert diversity jurisdiction over the action. Id. at 9, 142 S.Ct. 1310; see also Sky-Med, Inc. v. Fed. Aviation Admin., 965 F.3d 960, 965 (9th Cir. 2020).
That requirement is not satisfied in this case. Appellees went to the district court to confirm a zero-dollar award dismissing Balan’s libel claims. On its face, a petition to confirm a zero-dollar award cannot support the amount in controversy requirement. Consequently, because jurisdictional facts establishing the amount in controversy requirement are not found on the face of the petition, and a court cannot “look through” the petition to the underlying substantive controversy under Section 9, we hold that the district court did not have subject matter jurisdiction.
Comment: under the decision Tesla can confirm the award in a state court with jurisdiction over Balan. Diversity jurisdiction requirements are technical and lawyers are often surprised by just how technical they are.
Ed Clinton, Jr.