United States District Court, E.D. Tennessee, Greeneville Division
Jordan United States District Judge.
matter is before the Court on Defendants' Motion to
Dismiss the Amended Complaint and Compel Arbitration [doc.
13], Defendants' Brief [doc. 14], Plaintiff's
Response and Affidavits in Opposition to the Motion [docs.
19, 19-1, 19-2, & 19-3], Defendants' Reply [doc. 24],
Defendants' Motion to Strike Plaintiff's Affidavits
[doc. 22], Defendants' Brief [doc. 23], Plaintiff's
Response [doc. 26], and Defendants' Reply [doc. 27]. For
the reasons herein, the Court will deny the motions as moot
and dismiss this action, without prejudice, for lack of
subject matter jurisdiction.
pharmacist supervisor formerly in Defendants' employment,
Plaintiff DaOnda Payne pleads that Defendants adopted a
“Metrics” system that was illegal and forced its
pharmacists to choose between meeting the system's
directives and violating Tennessee law and professional
regulations governing the industry. [Am. Compl., doc. 2,
¶¶ 9, 11, 12-13, 15]. Specifically, she claims that
the Metrics system's directives required her to prepare
“false prescriptions, ” which led to
“medication errors” and “endager[ed]
patients.” [Id. ¶ 18]. According to Ms.
Payne, the Metrics system was a “cost-cutting
measure” that Defendants designed to place
“unobtainable goals” on its older pharmacists so
they could terminate and replace them with recent
pharmacy-school graduates “willing to work for less
money.” [Id. ¶¶ 12, 14, 16].
Payne alleges that, several years later, she notified her
superiors of “illegal practices, ” “public
policy violations, ” and “inappropriate
behavior” occurring in the pharmacy. [Id.
¶¶ 20, 25]. She claims that Defendants began
treating her “harshly in retaliation” and
ultimately “constructively” discharged her.
[Id. ¶¶ 25, 27]. She maintains that
Defendants also terminated several other “higher
paid” and “experience[d]” pharmacists
“within a short period of time.” [Id.
¶ 25]. As a result, she brings this action,
pleading claims for wrongful discharge in violation of public
policy. [Id. ¶¶ 28-37]. In response,
Defendants move the Court-under the Federal Arbitration Act
(“FAA”), 9 U.S.C. §§ 3-4-to compel
arbitration of her claims, citing their Arbitration of
Workplace Legal Disputes Policy [doc. 14-1]. [Defs.' Br.,
doc. 14, at 12].
The Federal Arbitration Act
states that an arbitration provision in “a contract
evidencing a transaction involving commerce” is
“valid, irrevocable, and enforceable” except on
“such grounds as exist at law or in equity for the
revocation of any contract.” 9 U.S.C. § 2. Under
the FAA, parties may initiate suit “in any of the
courts of the United States upon any issue referable to
arbitration under an agreement in writing for such
arbitration.” Id. § 3. In simple terms,
the FAA permits courts to compel parties to resolve their
legal dispute in an arbitral tribunal, rather than in the
judiciary, when they have agreed to a valid, written
arbitration provision. Burden v. Check into Cash of Ky.,
LLC, 267 F.3d 483, 487 (6th Cir. 2001).
importantly, neither the FAA's provisions nor a motion to
compel arbitration under the FAA confers subject matter
jurisdiction on federal courts, which “are courts of
limited jurisdiction, ” possessing “only that
power authorized by Constitution and statute.”
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
375, 377 (1994) (citations omitted).
The [FAA] is something of an anomaly in the field of
federal-court jurisdiction. It creates a body of federal
substantive law establishing and regulating the duty to honor
an agreement to arbitrate, yet it does not create any
independent federal-question jurisdiction under 28 U.S.C.
§ 1331 . . . or otherwise.
H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 25 n.32 (1983) (citing 28 U.S.C.
§ 1331). The federal courts must therefore have an
independent jurisdictional basis to address a motion to
compel arbitration under the FAA. In other words, they must
have jurisdiction over the underlying lawsuit-the “suit
arising out of the controversy between the parties.” 9
U.S.C. § 4; see Moses H. Cone, 460 U.S. at 25
n.32 (stating that the FAA permits federal courts to hear
motions under the FAA “only when [they] would have
jurisdiction over a suit on the underlying dispute” and
“hence, there must be diversity of citizenship or some
other independent basis for federal jurisdiction”
Court, as is true in all cases that come before it, must
insist on allegations that establish a basis for subject
matter jurisdiction in this case. See Vaughn v. Holiday
Inn Cleveland Coliseum, 56 F. App'x 249,
250 (6th Cir. 2003) (“A plaintiff in federal court has
the burden of pleading sufficient facts to support the
existence of the court's jurisdiction.” (citation
omitted)); Boone v. Comcast/Verizon, No.
3:10-CV-144, 2011 WL 1258050, at *3 (E.D. Tenn. Mar. 31,
2011). (“In the absence of proper allegations
establishing [federal jurisdiction], the court must presume
that subject matter jurisdiction does not
exist.”); May v. Wal-Mart Stores, Inc., 751
F.Supp.2d 946, 950 (E.D. Ky. 2010) (“Just as a criminal
defendant is presumed innocent until the government proves
him guilty, a case is presumed to fall outside a federal
court's jurisdiction until a litigant proves
Federal Question Jurisdiction
Payne pleads that the Court's basis for subject matter
jurisdiction over this case is federal question jurisdiction
under 28 U.S.C. § 1331. [Am. Compl. ¶ 1]. Section
1331 provides that “district courts shall have original
jurisdiction of all civil actions arising under the
Constitution, laws, or treaties of the United States.”
In determining whether “arising under”
jurisdiction exists under this statute, federal courts adhere
to the venerable well-pleaded complaint rule. Louisville
& Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152
(1908). This rule, in broad strokes, means that
“federal jurisdiction exists only when a federal
question is presented on the face of the plaintiff's
properly pleaded complaint.” Caterpillar Inc. v.
Williams, 482 U.S. 386, 392 (1987) (citation omitted). A
plaintiff satisfies the rule only when the complaint
establishes that (1) “federal law creates the cause of
action” or that (2) “the plaintiff's right to
relief necessarily depends on resolution of a substantial
question of federal law.” Franchise Tax Bd. v.
Constr. Laborers Vacation Tr. for S. Cal., 463 U.S. 1,
this language is somewhat wooly, and the application of the
rule is hardly an exact science. See Grable & Sons
Metal Prods., Inc. v. Darue Eng'g & Mfg., 545
U.S. 308, 317 (2005) (“[We have] disclaimed the
adoption of any bright-line rule . . . in exploring the outer
reaches of § 1331[.]” (internal quotation mark and
quotation omitted)); Long v. Bando Mfg. of Am.,
Inc., 201 F.3d 754, 759 (6th Cir. 2000) (“The
exact contours of the federal courts' jurisdiction under
28 U.S.C. § 1331 are somewhat imprecise.”);
Willy v. Coastal Corp., 855 F.2d 1160, 1165 (5th
Cir. 1988) (“Defining when a claim arises under federal
law has drawn much attention but no simple solutions.”
(citations omitted)). The rule's application presents
particularly difficult challenges when a plaintiff embeds
state-law claims with federal matters or when a plaintiff
raises alternate theories of recovery under state law and