Maine Community Health Options v. Albertsons Companies , Inc.

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
M AINE COMMUNITY HEALTH
OPTIONS ,
Plaintiff-Appellant,
v.
ALBERTSONS COMPANIES , I NC.,
Defendant-Appellee.
No. 20-35931
D.C. No.
1:19-cv-00448-
JMM
OPINION
Appeal from the United States District Court
for the District of Idaho
James Maxwell Moody, District Judge, Presiding
Argued and Submitted March 22, 2021
Pasadena, California
Filed March 31, 2021
Before: William A. Fletcher, Paul J. Watford, and
Andrew D. Hurwitz, Circuit Judges.
Opinion by Judge Hurwitz;
Concurrence by Judge Watford

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2 MAINE COMMUNITY HEALTH OPTIONS V. ALBERTSONS
SUMMARY*
Subject Matter Jurisdiction
The panel reversed the district court’s dismissal for lack
of subject matter jurisdiction of a motion seeking
enforcement of a third-party subpoena issued by an
arbitrator, and remanded for further proceedings concerning
enforcement of the subpoena.
Maine Community Health Options, an insurer, is
engaged in an underlying arbitration in which the arbitrator
issued a subpoena. Health Options filed this action in federal
district court challenging Albertsons Companies, Inc.’s
objection to the subpoena, and invoking Section 7 of the
Federal Arbitration Act (“FAA”). Because the FAA does
not itself confer federal question jurisdiction, Health Options
asserted diversity jurisdiction, claiming that the parties to the
enforcement action – Health Options and Albertsons – were
citizens of different states and that the amount in controversy
exceeded $75,000.
The panel held that the amount-in-controversy in a FAA
Section 7 enforcement action can be measured by either the
benefit to the plaintiff or the detriment to the defendant that
would result from enforcement of the subpoena. Because
there was a good faith allegation that the benefit to the
plaintiff of obtaining the subpoenaed information in this
controversy exceeded $75,000, the panel reversed the
* This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.

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MAINE COMMUNITY HEALTH OPTIONS V. ALBERTSONS 3
district court’s order dismissing for want of subject matter
jurisdiction.
Judge Watford concurred. He agreed that the district
court erred in holding that it lacked subject matter
jurisdiction to enforce the subpoena at issue here, but arrived
at the conclusion by a different path. In his view, the majority
analysis focused on the wrong dispute – the motion brought
by Health Options against Albertsons, and should have
focused on the dispute between the parties to the underlying
arbitration proceeding – Health Options and Navitus Health
Solutions, LLC. He would conclude that the district court
plainly had subject matter jurisdiction over the underlying
controversy.
COUNSEL
Andrew Gary Pruitt (argued), Laurel Pyke Malson, Stephen
J. McBrady, Zachary Ian Ruby, Brian C. Lewis, and Eli L.
Berns-Zieve, Crowell & Moring LLP, Washington, D.C., for
Plaintiff-Appellant.
Erik F. Stidham (argued) and Philip J. Griffin, Holland &
Hart LLP, Boise, Idaho, for Defendant-Appellee.

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4 MAINE COMMUNITY HEALTH OPTIONS V. ALBERTSONS
OPINION
HURWITZ, Circuit Judge:
This case requires us to determine whether the amount-
in-controversy requirement in 28 U.S.C. § 1332(a) is
satisfied in an action under Section 7 of the Federal
Arbitration Act (“FAA”), 9 U.S.C. § 7, seeking enforcement
of a third-party subpoena issued by arbitrators. Although the
issue is of first impression in this Circuit, we agree with the
Second Circuit that the amount in controversy in a Section 7
enforcement action can be measured by either the benefit to
the plaintiff or the detriment to the defendant that would
result from enforcement of the subpoena. See Wash. Nat’l
Ins. Co. v. OBEX Grp. LLC, 958 F.3d 126, 135 (2d Cir.
2020) (defining the amount in controversy in a nonmonetary
claim as “the value of the object of the litigation”) (cleaned
up); Hunt v. Wash. State Apple Advert. Comm’n, 432 U.S.
333, 347 (1977) (same). Because there is a good faith
allegation that the benefit to the plaintiff of obtaining the
subpoenaed information in this controversy exceeds
$75,000, we reverse the district court’s order dismissing for
want of subject matter jurisdiction and remand for further
proceedings concerning enforcement of the subpoena.
I
Maine Community Health Options (“Health Options”),
an insurer, is engaged in arbitration with Navitus Health
Solutions, LLC, a pharmacy benefits manager, over the
latter’s billings. In the arbitration, Health Options sought to
obtain information from Navitus about billings by
pharmacies within Navitus’s network, including the
Albertsons Companies, alleging the information would show
overcharges. Navitus claimed not to have the information,

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MAINE COMMUNITY HEALTH OPTIONS V. ALBERTSONS 5
and the arbitrators issued a subpoena directing Albertsons to
provide the requested documents.
After Albertsons objected to the subpoena, Health
Options filed this action in federal district court, invoking
Section 7, which authorizes district courts to enforce third-
party arbitration subpoenas. But the FAA does not itself
confer federal question jurisdiction, see Moses H. Cone
Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 n.32
(1983), so a party seeking to enforce a subpoena under
Section 7 must establish a basis for subject matter
jurisdiction, see, e.g., Stolt-Nielsen, SA v. Celanese AG,
430 F.3d 567, 572 (2d Cir. 2005); Am. Fed’n of Television
& Radio Artists v. WJBK-TV, 164 F.3d 1004, 1007–08 (6th
Cir. 1999); Amgen, Inc. v. Kidney Ctr. of Del. Cnty., Ltd.,
95 F.3d 562, 567 (7th Cir. 1996).1 Health Options asserted
diversity jurisdiction, claiming that the parties to the
enforcement action (Health Options and Albertsons) were
citizens of different states and that the amount in controversy
exceeded $75,000.
After allowing supplemental filings, the district court
found that Health Options failed to show the amount in
controversy exceeded $75,000 and dismissed the action for
want of subject matter jurisdiction. Because it is undisputed
that there is diversity of citizenship, the only issue raised by
Health Options on appeal is whether the amount-in-
controversy requirement was satisfied. Reviewing de novo,
1 We do not today address an “embedded proceeding,” in which the
district court exercised original jurisdiction in compelling the parties to
arbitrate. See Amgen, 95 F.3d at 567 (stating that “no difficulties with
subject matter jurisdiction arise” with respect to a Section 7 enforcement
action in those circumstances).

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6 MAINE COMMUNITY HEALTH OPTIONS V. ALBERTSONS
see Tijerino v. Stetson Desert Project, LLC, 934 F.3d 968,
971 (9th Cir. 2019), we find that it was.
II
In a diversity case originally filed in federal court, the
“sum claimed” in the complaint “controls if the claim is
apparently made in good faith. It must appear to a legal
certainty that the claim is really for less than the
jurisdictional amount to justify dismissal.” Wash. Nat’l Ins.,
958 F.3d at 135 (cleaned up); see Naffe v. Frey, 789 F.3d
1030, 1040 (9th Cir. 2015) (same). When a complaint seeks
nonmonetary relief, “the amount in controversy is measured
by the value of the object of the litigation.” Hunt, 432 U.S.
at 347. The “party asserting federal jurisdiction bears the
burden of proving the case is properly in federal court.” In
re Ford Motor Co./Citibank (S. Dakota), N.A., 264 F.3d 952,
957 (9th Cir. 2001).
When determining the amount in controversy in a non-
class-action setting, this Court applies the “either viewpoint”
rule. See Ridder Bros. Inc., v. Blethen, 142 F.2d 395, 399
(9th Cir. 1944) (“The value of the thing sought to be
accomplished by the action may relate to either or any party
to the action.”) (cleaned up). In suits not seeking monetary
relief, “if the value of the thing to be accomplished [is] equal
to the dollar minimum of the jurisdictional amount
requirement to anyone concerned in the action, then
jurisdiction [is] satisfied.” Id. at 398; see also Hunt,
432 U.S. at 347 (“[T]he amount in controversy is measured
by the value of the object of the litigation.”). Albertsons says
that its anticipated cost of compliance with the subpoena is
approximately $1,400, and Health Options does not

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MAINE COMMUNITY HEALTH OPTIONS V. ALBERTSONS 7
seriously dispute that estimate.2 Thus, if the jurisdictional
amount requirement is to be satisfied, it must be from Health
Options’ viewpoint.
In considering the value to the plaintiff of obtaining
compliance with a third-party arbitration subpoena, the
Second Circuit found it persuasive that “the summonses . . .
are relevant to whether [petitioner] is entitled to all or part
of” the arbitral award. Wash. Nat’l Ins., 958 F.3d at 135.
Under that approach, the amount in controversy can be
established by a “good faith” allegation of the value of the
subpoenaed information to the plaintiff in the underlying
arbitration dispute. See id. We agree. We therefore focus
on how enforcement of the subpoena will affect the claims
and the relief available to Health Options in the arbitration.
Health Options does not allege that the information
subpoenaed from Albertsons will lead to the recovery of the
entire $17 million it seeks against Navitus in the arbitration.
Nor does it even claim that it will lead to the recovery of the
$1.7 million in billings made by Albertsons to Navitus on
behalf of Health Options’ insureds. But Health Options does
plausibly allege that the subpoenaed information will likely
affect more than $75,000 of its claims against Navitus. The
jurisdictional amount requirement is but 4 percent of the
total relevant billings from Albertsons to Navitus. In its
supplemental pleading, Health Options provided an expert
declaration that the subpoenaed information will likely
document more than $75,000 in Health Options’ alleged
2 Health Options now argues on appeal that Albertsons spent far
more than $1,400 resisting this subpoena. But it is well settled that the
jurisdictional amount is established “from the face of the pleadings,”
Singer v. State Farm Mut. Auto Ins. Co., 116 F.3d 373, 375 (9th Cir
1997), “at the time a complaint is filed,” Wash. Nat’l Ins., 958 F.3d
at 135 n.4.

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8 MAINE COMMUNITY HEALTH OPTIONS V. ALBERTSONS
damages. See id. (finding that even if the subpoenaed
information supports only a “small fraction of the award
sought,” that value would exceed the jurisdictional amount)
(cleaned up). Given Health Options’ plausible good faith
allegations, it does not “appear to a legal certainty that the
claim is really for less than the jurisdictional amount.” Id.
(cleaned up).3
III
The district court’s order of dismissal for want of subject
matter jurisdiction is reversed, and the case is remanded for
further proceedings consistent with this opinion.
REVERSED AND REMANDED.
WATFORD, Circuit Judge, concurring:
I agree that the district court erred in holding that it
lacked subject-matter jurisdiction to enforce the subpoena at
issue here, but I arrive at that conclusion by a different path.
Maine Community Health Options filed this motion
under § 7 of the Federal Arbitration Act (FAA), 9 U.S.C. § 7,
to enforce a third-party subpoena issued by a panel of
arbitrators. The FAA itself does not provide a basis for
subject-matter jurisdiction in federal court. Moses H. Cone
Memorial Hospital v. Mercury Construction Corp., 460 U.S.
3 Because the amount in controversy in the federal action between
Health Options and Albertsons is sufficient, we need not today consider
whether federal jurisdiction in the Section 7 enforcement action could be
established by determining that there is federal jurisdiction to compel
arbitration in the underlying dispute.

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MAINE COMMUNITY HEALTH OPTIONS V. ALBERTSONS 9
1, 25 n.32 (1983). So, to invoke the district court’s
jurisdiction, Maine Community Health Options had to
establish an independent basis for jurisdiction (diversity,
federal-question, or admiralty). My colleagues analyze the
motion as though it were a freestanding lawsuit brought by
Maine Community Health Options against Albertsons, and
they ask whether there is a basis for exercising subject-
matter jurisdiction over the dispute between those two
parties. In my view, that analysis focuses on the wrong
dispute. The relevant controversy under the FAA is the one
between the parties to the underlying arbitration proceeding:
Maine Community Health Options and Navitus Health
Solutions, LLC.
Sections 3 and 4 of the FAA are key to understanding
why that is so, as they provide the jurisdictional anchor for
all of the provisions that follow. Section 3 authorizes a
district court to stay proceedings in an action pending before
it if the action involves a controversy that the parties have
agreed to resolve through arbitration. 9 U.S.C. § 3. The
court has the power to grant such relief, of course, only if it
has subject-matter jurisdiction over the controversy in the
first place. Section 4 likewise focuses on the court’s
jurisdiction over the underlying controversy between the
parties who have agreed to arbitrate. It states that a district
court may grant a petition to compel arbitration if, absent the
parties’ agreement, the court “would have jurisdiction under
title 28 . . . of the subject matter of a suit arising out of the
controversy between the parties.” § 4; see also Vaden v.
Discover Bank, 556 U.S. 49, 62–63 (2009) (holding that
federal courts may “look through” a § 4 petition to determine
whether “the parties’ underlying substantive controversy”
gives rise to subject-matter jurisdiction). I read these two
provisions as defining the range of controversies that
Congress deemed important enough, from a federalism

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10 MAINE COMMUNITY HEALTH OPTIONS V. ALBERTSONS
standpoint, to warrant federal courts interceding to ensure
that agreements to arbitrate such controversies “are enforced
according to their terms.” Volt Information Sciences, Inc. v.
Board of Trustees of Leland Stanford Junior University,
489 U.S. 468, 479 (1989).
The rest of the provisions of the FAA authorize district
courts to take actions necessary to ensure that the parties’
underlying controversy is successfully resolved through
arbitration. Section 5 authorizes the court to appoint the
arbitrators who will decide the dispute if for some reason the
parties fail to do so themselves. 9 U.S.C. § 5. Section 7, the
provision at issue here, authorizes district courts to enforce
subpoenas compelling witnesses to testify at the arbitration
hearing and to bring with them records or documents “which
may be deemed material as evidence in the case.” Section 8
authorizes district courts, in cases in which subject-matter
jurisdiction is founded upon admiralty, to assume in rem
jurisdiction over a vessel or other property that has been
seized and to supervise enforcement of any resulting
arbitration award against the res. Sections 9, 10, and 11
authorize district courts to supervise entry of judgment on
any resulting arbitration award by entering an order to
confirm, vacate, modify, or correct the award.
Considering the structure of the FAA as a whole, it
seems evident to me that Congress envisioned a § 7 petition
not as a freestanding lawsuit, but as an adjunct to the
“underlying substantive controversy” between the parties in
arbitration. Vaden, 556 U.S. at 62. Thus, if the district court
would have been able to exercise subject-matter jurisdiction
over that controversy, it necessarily has jurisdiction to
enforce a subpoena issued in connection with the ongoing
arbitration proceeding. And, by the same token, if the
district court would not have been able to exercise subject-

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MAINE COMMUNITY HEALTH OPTIONS V. ALBERTSONS 11
matter jurisdiction over the underlying controversy, then it
lacks jurisdiction to enforce a subpoena arising out of the
arbitration, regardless of any arguments that could be made
for the existence of diversity jurisdiction with respect to the
parties to the subpoena enforcement proceeding itself. The
enforcement of an arbitration subpoena under § 7 “brings
before the court one aspect of enforcing the parties’
agreement to arbitrate—not the right to arbitrate itself, but
the enjoyment of a key procedural attribute of the arbitration
the parties bargained for.” George A. Bermann et al., A
Model Federal Arbitration Summons to Testify and Present
Documentary Evidence at an Arbitration Hearing, 26 Am.
Rev. Int’l Arb. 157, 173 (2015). Looking through the § 7
petition to the underlying substantive controversy to
determine subject-matter jurisdiction, as with § 4 petitions,
follows naturally.
Analyzing subject-matter jurisdiction in § 7 enforcement
proceedings in this fashion avoids two anomalies that arise
under the majority’s approach. First, assume that the parties’
underlying substantive controversy provides a basis for
subject-matter jurisdiction in federal court and that the
district court either grants a motion to stay proceedings
under § 3 or grants a motion to compel arbitration under § 4.
Most courts appear to agree that, in these circumstances, if
one of the parties in arbitration subsequently files a § 7
petition to compel enforcement of a subpoena, the district
court has jurisdiction to act on the petition, without any need
to engage in a fresh jurisdictional analysis focused solely on
the parties to the § 7 enforcement proceeding. See, e.g.,
Stolt-Nielsen SA v. Celanese AG, 430 F.3d 567, 572–73 (2d
Cir. 2005); Amgen, Inc. v. Kidney Center of Delaware
County, Ltd., 95 F.3d 562, 567 (7th Cir. 1996). If that view
is correct, though, it must be because the § 7 enforcement
proceeding is simply an adjunct to the underlying

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12 MAINE COMMUNITY HEALTH OPTIONS V. ALBERTSONS
controversy between the parties in arbitration. Why should
the nature of the jurisdictional analysis change if the § 7
petition is the first matter filed in federal court related to the
underlying controversy? From a federalism standpoint, the
interest in having federal courts supervise the arbitration and
ensure that it is successfully completed is no different in
either scenario.
Second, and conversely, assume that the district court
would not have had subject-matter jurisdiction over the
underlying substantive controversy. Thus, the court would
not have been able to compel arbitration under § 4, would
not have been able to appoint arbitrators under § 5, and
ultimately won’t be able to supervise entry of judgment on
any resulting arbitration award under §§ 9–11. Assume
further that one of the parties in arbitration files a § 7 petition
to enforce a subpoena, the parties to this enforcement
proceeding are of diverse citizenship, and a credible
argument can be made that more than $75,000 could change
hands depending on whether the subpoena is enforced or not.
Why would Congress have wanted federal courts to
intervene to enforce a subpoena issued in an arbitration
proceeding involving a controversy that itself is not
important enough, from a federalism standpoint, to warrant
federal-court oversight? And to do so when the federal
courts will not (and cannot) have any other involvement in
supervising the conduct of the arbitration? It seems far more
likely that Congress intended parties seeking to enforce
arbitration subpoenas in such circumstances to pursue
whatever remedies are available to them in state court, where
all other action related to the arbitration proceeding must
occur anyway.
Grounding the jurisdictional analysis on the underlying
controversy between the parties in arbitration has the added

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MAINE COMMUNITY HEALTH OPTIONS V. ALBERTSONS 13
virtue of avoiding the tortured amount-in-controversy
inquiry that federal courts will otherwise be forced to make.
We have an established body of case law to help us
determine whether the amount-in-controversy requirement
has been met when one party is suing another on actual
claims for relief. We have very little case law to guide us in
determining whether enforcement of an arbitration subpoena
against a third party will enable someone to recover more
than $75,000 in an arbitration dispute with a different party.
See Bermann et al., supra, 26 Am. Rev. Int’l Arb. at 172–73.
From the standpoint of administrative feasibility, it is more
sensible to ground the jurisdictional analysis on whether the
district court would have been able to exercise subject-
matter jurisdiction over the underlying controversy, even in
first-in-time § 7 enforcement proceedings like this one.
In this case, the district court plainly would have been
able to exercise subject-matter jurisdiction over the
underlying controversy between Maine Community Health
Options and Navitus. It is undisputed that the parties are of
diverse citizenship and that Maine Community Health
Options has alleged in good faith that the underlying
controversy involves a potential recovery in excess of
$17 million. I therefore agree with my colleagues that the
district court erred by dismissing this § 7 enforcement
proceeding for lack of subject-matter jurisdiction. But I
would reach that result by the path described above.

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