Second Circuit Court Of Appeals Allows Federal Courts To 'Look Through' § 10 FAA Petition To Determine Federal Jurisdiction

The United States Court of Appeals for the Second Circuit has reversed its own precedent to allow federal courts examining petitions under § 10 of the FAA to "look through" the petition to examine if there is federal jurisdiction. In the case, which arose out of a dispute involving registered FINRA members and their former employees, the district court dismissed the case for want of jurisdiction, finding that it did not state a "substantial federal question on its face." On appeal, the petitioner argued that the Second Circuit's precedent in Greenberg v. Bear, Stearns & Co., 220 F.3d 22 (2d Cir. 2000), which led the district court to its determination, had been displaced by Vaden v. Discovery Bank, 556 U.S. 49 (2009). The Second Circuit panel held that Vaden "rendered Greenberg's result fundamentally inconsistent with the...