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Legal Update

Supreme Court Issues Decision in Vaden v. Discover Bank

10 March 2009
Mayer Brown Legal Update
Section 4 of the Federal Arbitration Act (“FAA”), 9 U.S.C. § 4, authorizes a district court to rule on a petition to compel arbitration if, “save for [the arbitration] agreement” at issue, the court would have jurisdiction of “a suit arising out of the controversy between the parties.” On March 9, 2009, the Supreme Court held in Vaden v. Discover Bank, No. 07-773 (previously discussed in the March 17, 2008 Docket Report) that § 4 confers jurisdiction if the underlying, substantive “controversy between the parties” arises under federal law, rejecting the contention that “the parties’ discrete dispute over the arbitrability of their claims” must itself provide a jurisdictional basis for the petition.

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