White v. U.S. Center for SafeSport

[3] 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA [6] 7 CHARLES WHITE, Case No. 22-cv-04468-JD 8 Petitioner, SECOND ORDER RE DISMISSAL v. [9] 10 U.S. CENTER FOR SAFESPORT, Respondent. [12] 13 Petitioner Charles White has had several opportunities to establish subject matter 14 jurisdiction over his petition to vacate an arbitration award. After the last occasion, when White 15 filed an amended petition with revised jurisdictional allegations, the parties essentially stopped 16 litigating the case. The Court directed the parties to make a decision about their course of action, 17 Dkt. No. 51, which resulted in further litigation of the jurisdictional question, see Dkt. Nos. 52, 55, 18 57. The parties’ familiarity with the record is assumed, and the case is dismissed for lack of 19 subject matter jurisdiction. 20 The reasons for dismissal are straightforward. Congress designated respondent United 21 States Center for SafeSport (SafeSport) to investigate and adjudicate allegations of sexual abuse 22 and misconduct within U.S. Olympic and Paralympic organizations. See 36 U.S.C. § 220541 (a). 23 After conducting an investigation, SafeSport determined that White, a horse trainer and riding 24 instructor, had engaged in sexual misconduct for three decades with minors and adult women in 25 equestrian sports. Dkt. No. 9-4.1 SafeSport imposed a lifetime ban on White’s participation in 26 Olympic and Paralympic activities. Id. SafeSport’s rules gave White the opportunity to request a [27] 1 review of the lifetime ban by an arbitrator, see Dkt. No. 7 at ECF pp. 55-68, which he elected to 2 do. The arbitrator agreed with the lifetime ban. Dkt. No. 9-3. 3 White filed a petition to vacate the arbitration decision under Section 10 of the Federal 4 Arbitration Act (FAA), 9 U.S.C. § 10 . Dkt. No. 1 ¶ 8. The petition alleged traditional diversity 5 jurisdiction as the grounds for being in federal court. Id. ¶ 9 . The problem for White was that the 6 petition sought only to vacate the arbitrator’s decision or otherwise remand it for reconsideration. [7] Id. ¶ 5 . Nothing in the petition demonstrated that the amount in controversy exceeded $75,000 as 8 required to establish diversity jurisdiction. 28 U.S.C. § 1332 (a). Consequently, the Court ordered 9 White to show cause why the case should not be dismissed for lack of subject matter jurisdiction. 10 See Dkt. No. 42. 11 White’s response did not allay the jurisdiction concern. White filed a declaration alleging 12 that he had lost more than $75,000 in income as a hay dealer and horse stable operator “as a direct 13 result” of the arbitration decision. Dkt. No. 44 ¶ 4. But White did not amend the petition to 14 vacate with these allegations, and so the Court dismissed the petition with leave to “articulate the 15 basis for his claim that the amount-in-controversy requirement is satisfied for purposes of diversity 16 jurisdiction,” among other possible amendments. Dkt. No. 47. 17 White filed an amended petition to include the hay dealer and stable operator losses 18 mentioned in his declaration. Dkt. No. 48 ¶ 10. White again contends that the losses were “a 19 direct result of [the arbitrator’s] decision, which upheld the sanction of lifetime ineligibility to 20 participate in sport.” Id. 21 White’s use of “upheld” captures the flaw in his allegation of subject matter jurisdiction. 22 SafeSport imposed the lifetime ban on White. Dkt. No. 9-4. Vacating the arbitration decision or 23 remanding for new arbitration proceedings, which is the sole relief White seeks in the amended 24 petition, see Dkt. No. 48 ¶ 5, might start the arbitration process anew, but it would not overrule or 25 otherwise reverse the ban imposed by SafeSport. The SafeSport ban remains in full effect unless 26 an arbitrator were to decide otherwise, which has not happened. 27 It necessarily follows that vacating the arbitration decision would not restore to White the 1 in place even if White prevailed on his petition, he would not get a penny out of vacating the 2 arbitration decision. 3 Consequently, White has not carried his burden of demonstrating that the amount in 4 controversy satisfies the statutory requirement of $75,000 for diversity jurisdiction. See Agustin v. 5 Su, No. 23-CV-02131-JD, 2024 WL 308261 , at *2 (N.D. Cal. Jan. 26, 2024) (“Once challenged, 6 the party asserting subject matter jurisdiction has the burden of proving its existence.”) (quoting 7 Rattlesnake Coal. v. E.P.A., 509 F.3d 1095 , 1102 n.1 (9th Cir. 2007)). As the Court stated in its 8 order to show cause, Dkt. No. 42 at 2-3, when the goal of an action is nonmonetary relief, “the 9 amount in controversy is measured by the value of the object of the litigation.” Maine Cmty. 10 Health Options v. Albertsons Cos., Inc., 993 F.3d 720, 723 (9th Cir. 2021) (quoting Hunt v. 11 Washington State Apple Advert. Comm’n, 432 U.S. 333, 347 (1977)). Because a remand for 12 further arbitration proceedings would not terminate or reverse the SafeSport ban, and would not 13 restore the lost income White alleges, White cannot demonstrate that the amount in controversy 14 meets the statutory threshold for diversity jurisdiction. See Maine Cmty., 993 F.3d at 723 (“In 15 suits not seeking monetary relief, if the value of the thing to be accomplished is equal to the dollar 16 minimum of the jurisdictional amount requirement to anyone concerned in the action, then 17 jurisdiction is satisfied.”) (cleaned up). 18 This is enough to dismiss the case for lack of subject matter jurisdiction. The parties 19 debated the application of Badgerow v. Walters, 596 U.S. 1 (2022), in which the Supreme Court 20 held that the determination of subject matter jurisdiction over petitions to vacate under the FAA 21 looks only to “the face of the application itself.” Id. at 9 . It is true, as White says, that Badgerow 22 involved federal question jurisdiction, but there is no good reason why an FAA petition based on 23 diversity jurisdiction should be treated any differently. White certainly did not present one. 24 But the Court need not decide that question because, as discussed, White’s petition comes 25 up short under established principles of diversity jurisdiction. White’s citation to Theis Research, 26 Inc. v. Brown & Bain, 400 F.3d 659 (9th Cir. 2005), does not lead to a different conclusion. In 27 Theis, the plaintiff arbitrated a malpractice claim against its lawyers arising out of a patent case 1 The arbitrator denied monetary recovery to both sides. Jd. The plaintiff filed in federal court an 2 || “application and notice of motion” to vacate the arbitration decision, and a complaint seeking 3 damages against the law firm in excess of $200 million. /d. The law firm filed a motion to 4 confirm the arbitration decision. Id. The district court denied vacatur, granted confirmation, and 5 entered summary judgement in favor of the law firm on the damages claim. Jd. 6 For reasons not germane here, the circuit court called sua sponte for briefing on whether 7 the amount in controversy satisfied the diversity jurisdiction threshold, an issue neither party had 8 || raised. Id. at 662-63 . The circuit court concluded that diversity jurisdiction should be determined 9 || by “the amount at stake in the underlying litigation.” Jd. at 662-65. Because the plaintiff “sought 10 || to obtain by its district court complaint substantially what it had sought to obtain in the 11 arbitration,” the circuit court had no trouble concluding that the prayer for more than $200 million 12 || in damages established the required amount in controversy. Jd. 5 13 None of this has much to do with the situation here. This is not a case where there the 14 arbitration involved damages claims vastly exceeding $75,000. It is also not clear that Theis 3 15 survives Badgerow and its rejection of the “look-through” approach to subject matter jurisdiction. 16 See Badgerow, 596 U.S. at 9 . 3 17 White has had three opportunities to establish subject matter jurisdiction, starting with the 18 original petition. Further opportunity to amend is unwarranted. The case is dismissed on 19 || jurisdictional grounds without prejudice to a vacatur proceeding in state court, as circumstances 20 || might permit. 21 IT IS SO ORDERED. 22 || Dated: September 18, 2024 [24] 25 JAMES JPONATO United fates District Judge