VADEN v. DISCOVER BANK et al.

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VADEN v. DISCOVER BANK et al.
certiorari to the united states court of appeals for
the fourth circuit
No. 07–773. Argued October 6, 2008—Decided March 9, 2009
Section 4 of the Federal Arbitration Act (FAA or Act), 9 U. S. C. § 4, au
thorizes a United States district court to entertain a petition to compel
arbitration if the court would have jurisdiction, “save for [the arbitra
tion] agreement,” over “a suit arising out of the controversy between
the parties.”
Discover Bank’s servicing affiliate filed a complaint in Maryland state
court to recover past-due charges from one of its credit cardholders,
petitioner Vaden. Discover’s pleading presented a claim arising solely
under state law. Vaden answered and counterclaimed, alleging that
Discover’s finance charges, interest, and late fees violated state law.
Invoking an arbitration clause in its cardholder agreement with Vaden,
Discover then filed a § 4 petition in Federal District Court to compel
arbitration of Vaden’s counterclaims. The District Court ordered
arbitration.
On Vaden’s initial appeal, the Fourth Circuit remanded the case for
the District Court to determine whether it had subject-matter jurisdic
tion over Discover’s § 4 petition pursuant to 28 U. S. C. § 1331, which
gives federal courts jurisdiction over cases “arising under” federal law.
The Fourth Circuit instructed the District Court to conduct this inquiry
by “looking through” the § 4 petition to the substantive controversy be
tween the parties. With Vaden conceding that her state-law counter
claims were completely preempted by § 27 of the Federal Deposit Insur
ance Act, the District Court expressly held that it had federal-question
jurisdiction and again ordered arbitration. The Fourth Circuit then af
firmed. The Court of Appeals recognized that, in Holmes Group, Inc.
v. Vornado Air Circulation Systems, Inc., 535 U. S. 826, this Court held
that federal-question jurisdiction depends on the contents of a well
pleaded complaint, and may not be predicated on counterclaims. It con
cluded, however, that the complete preemption doctrine is paramount
and thus overrides the well-pleaded complaint rule.
Held: A federal court may “look through” a § 4 petition to determine
whether it is predicated on a controversy that “arises under” federal
law; in keeping with the well-pleaded complaint rule as amplified in
Holmes Group, however, a federal court may not entertain a § 4 petition
based on the contents of a counterclaim when the whole controversy

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between the parties does not qualify for federal-court adjudication.
Pp. 58–72.
(a) Congress enacted the FAA “[t]o overcome judicial resistance to
arbitration,” Buckeye Check Cashing, Inc. v. Cardegna, 546 U. S. 440,
443, and to declare “ ‘a national policy favoring arbitration’ of claims that
parties contract to settle in that manner,” Preston v. Ferrer, 552 U. S.
346, 353. To that end, § 2 makes arbitration agreements in contracts
“involving commerce” “valid, irrevocable, and enforceable,” while § 4
provides for federal district court enforcement of those agreements.
The “body of federal substantive law” generated by elaboration of § 2 is
equally binding on state and federal courts. Southland Corp. v. Keat
ing, 465 U. S. 1, 12. However, the FAA “requir[es] [for access to a fed
eral forum] an independent jurisdictional basis” over the parties’ dis
pute. Hall Street Associates, L. L. C. v. Mattel, Inc., 552 U. S. 576, 582.
Under the well-pleaded complaint rule, a suit “arises under” federal law
for 28 U. S. C. § 1331 purposes “only when the plaintiff ’s statement of
his own cause of action shows that it is based upon [federal law].” Lou
isville & Nashville R. Co. v. Mottley, 211 U. S. 149, 152. Federal juris
diction cannot be predicated on an actual or anticipated defense, ibid.,
or rest upon an actual or anticipated counterclaim, Holmes Group, 535
U. S. 826. A complaint purporting to rest on state law can be recharac
terized as one “arising under” federal law if the law governing the com
plaint is exclusively federal, see Beneficial Nat. Bank v. Anderson, 539
U. S. 1, 8, but a state-law-based counterclaim, even if similarly suscepti
ble to recharacterization, remains nonremovable. Pp. 58–62.
(b) FAA § 4’s text drives the conclusion that a federal court should
determine its jurisdiction by “looking through” a § 4 petition to the par
ties’ underlying substantive controversy. The phrase “save for [the ar
bitration] agreement” indicates that the district court should assume
the absence of the agreement and determine whether it “would have
jurisdiction under title 28” over “the controversy between the parties,”
which is most straightforwardly read to mean the “underlying dispute”
between the parties. See Moses H. Cone Memorial Hospital v. Mer
cury Constr. Corp., 460 U. S. 1, 25, n. 32. Vaden’s argument that the
relevant “controversy” is simply and only the parties’ discrete dispute
over the arbitrability of their claims is difficult to square with § 4’s lan
guage. If courts are to determine whether they would have jurisdic
tion “save for [the arbitration] agreement,” how can a dispute over an
arbitration agreement’s existence or applicability be the controversy
that counts? The Court is unpersuaded that the “save for” clause
means only that the “antiquated and arcane” ouster notion no longer
holds sway. To the extent that the ancient “ouster” doctrine continued
to impede specific enforcement of arbitration agreements, FAA § 2, the

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Act’s “centerpiece provision, ” Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U. S. 614, 625, directly attended to the
problem by commanding that an arbitration agreement is enforceable
just as any other contract. Vaden’s approach also has curious practical
consequences. It would permit a federal court to entertain a § 4 peti
tion only when a federal-question suit is already before the court, when
the parties satisfy the requirements for diversity-of-citizenship jurisdic
tion, or when the dispute over arbitrability involves a maritime contract,
yet would not accommodate a § 4 petitioner who could file a federal
question suit in, or remove such a suit to, federal court, but has not done
so. In contrast, the “look through” approach permits a § 4 petitioner to
ask a federal court to compel arbitration without first taking the formal
step of initiating or removing a federal-question suit. Pp. 62–65.
(c) Having determined that a district court should look through a § 4
petition, this Court considers whether the court “would have [federal
question] jurisdiction” over “a suit arising out of the controversy” be
tween Discover and Vaden. Because § 4 does not enlarge federal-court
jurisdiction, a party seeking to compel arbitration may gain such a
court’s assistance only if, “save for” the agreement, the entire, actual
“controversy between the parties,” as they have framed it, could be
litigated in federal court. Here, the actual controversy is not amenable
to federal-court adjudication. The “controversy between the parties”
arose from Vaden’s “alleged debt,” a claim that plainly did not “arise
under” federal law; nor did it qualify under any other head of federal
court jurisdiction. The Fourth Circuit misapprehended Holmes Group
when it concluded that jurisdiction was proper because Vaden’s state
law counterclaims were completely preempted. Under the well
pleaded complaint rule, a completely preempted counterclaim remains a
counterclaim, and thus does not provide a key capable of opening
a federal court’s door. Vaden’s responsive counterclaims challenging
the legality of Discover’s charges are merely an aspect of the whole
controversy Discover and Vaden brought to state court. Whether one
might hypothesize a federal-question suit involving that subsidiary dis
agreement is beside the point. The relevant question is whether the
whole controversy is one over which the federal courts would have juris
diction. Section 4 does not give parties license to recharacterize an
existing controversy, or manufacture a new controversy, in order to ob
tain a federal court’s aid in compelling arbitration. It is hardly fortu
itous that the controversy in this case took the shape it did. Seeking
to collect a debt, Discover filed an entirely state-law-grounded complaint
in state court, and Vaden chose to file responsive counterclaims. Sec
tion 4 does not invite federal courts to dream up counterfactuals when
actual litigation has defined the parties’ controversy. Allowing parties

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to commandeer a federal court to slice off responsive pleadings for dis
crete arbitration while leaving the remainder of the parties’ controversy
pending in state court makes scant sense. Furthermore, the presence
of a threshold question whether a counterclaim alleged to be based on
state law is totally preempted by federal law may complicate the § 4
inquiry. Although FAA § 4 does not empower a federal court to order
arbitration here, Discover is not left without recourse. Because the
FAA obliges both state and federal courts to honor and enforce arbi
tration agreements, Discover may petition Maryland’s courts for ap
propriate aid in enforcing the arbitration clause of its contracts with
Maryland credit cardholders. Pp. 66–71.
489 F. 3d 594, reversed and remanded.
Ginsburg, J., delivered the opinion of the Court, in which Scalia, Ken
nedy, Souter, and Thomas, JJ., joined. Roberts, C. J., filed an opinion
concurring in part and dissenting in part, in which Stevens, Breyer,
and Alito, JJ., joined, post, p. 72.
Daniel R. Ortiz argued the cause for petitioner. With
him on the briefs were John A. Mattingly, Jr., and David
T. Goldberg.
Carter G. Phillips argued the cause for respondents.
With him on the brief were Paul J. Zidlicky, Alan S.
Kaplinsky, Joseph W. Hovermill, and Matthew T. Wagman.*
Justice Ginsburg delivered the opinion of the Court.
Section 4 of the Federal Arbitration Act, 9 U. S. C. § 4, au
thorizes a United States district court to entertain a petition
to compel arbitration if the court would have jurisdiction,
“save for [the arbitration] agreement,” over “a suit arising
out of the controversy between the parties.” We consider
in this opinion two questions concerning a district court’s
*Briefs of amici curiae urging affirmance were filed for the Chamber
of Commerce of the United States of America et al. by Evan M. Tager,
David M. Gossett, Robin S. Conrad, Amar D. Sarwal, and Michael F.
Altschul; for Cintas Corp. by Mark C. Dosker, Joseph A. Meckes, and
Pierre H. Bergeron; for the Financial Services Roundtable et al. by Beth
S. Brinkmann, L. Richard Fischer, and Seth M. Galanter; and for Law
Professors by Imre S. Szalai, pro se.

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subject-matter jurisdiction over a § 4 petition: Should a dis
trict court, if asked to compel arbitration pursuant to § 4,
“look through” the petition and grant the requested relief if
the court would have federal-question jurisdiction over the
underlying controversy? And if the answer to that question
is yes, may a district court exercise jurisdiction over a § 4
petition when the petitioner’s complaint rests on state law
but an actual or potential counterclaim rests on federal law?
The litigation giving rise to these questions began when
Discover Bank’s servicing affiliate filed a complaint in Mary
land state court. Presenting a claim arising solely under
state law, Discover sought to recover past-due charges from
one of its credit cardholders, Betty Vaden. Vaden answered
and counterclaimed, alleging that Discover’s finance charges,
interest, and late fees violated state law. Invoking an arbi
tration clause in its cardholder agreement with Vaden, Dis
cover then filed a § 4 petition in the United States District
Court for the District of Maryland to compel arbitration of
Vaden’s counterclaims. The District Court had subject
matter jurisdiction over its petition, Discover maintained,
because Vaden’s state-law counterclaims were completely
preempted by federal banking law. The District Court
agreed and ordered arbitration. Reasoning that a federal
court has jurisdiction over a § 4 petition if the parties’ under
lying dispute presents a federal question, the Fourth Circuit
eventually affirmed.
We agree with the Fourth Circuit in part. A federal court
may “look through” a § 4 petition and order arbitration if,
“save for [the arbitration] agreement,” the court would have
jurisdiction over “the [substantive] controversy between the
parties.” We hold, however, that the Court of Appeals mis
identified the dimensions of “the controversy between the
parties.” Focusing on only a slice of the parties’ entire con
troversy, the court seized on Vaden’s counterclaims, held
them completely preempted, and on that basis affirmed the
District Court’s order compelling arbitration. Lost from

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sight was the triggering plea—Discover’s claim for the
balance due on Vaden’s account. Given that entirely state
based plea and the established rule that federal-court juris
diction cannot be invoked on the basis of a defense or coun
terclaim, the whole “controversy between the parties” does
not qualify for federal-court adjudication. Accordingly, we
reverse the Court of Appeals’ judgment.
I
This case originated as a garden-variety, state-law-based
contract action: Discover sued its cardholder, Vaden, in a
Maryland state court to recover arrearages amounting to
$10,610.74, plus interest and counsel fees.1 Vaden’s answer
asserted usury as an affirmative defense. Vaden also filed
several counterclaims, styled as class actions. Like Dis
cover’s complaint, Vaden’s pleadings invoked only state law:
Vaden asserted that Discover’s demands for finance charges,
interest, and late fees violated Maryland’s credit laws. See
Md. Com. Law Code Ann. §§ 12–506, 12–506.2 (Lexis 2005).
Neither party invoked—by notice to the other or petition
to the state court—the clause in the credit card agreement
providing for arbitration of “any claim or dispute between
[Discover and Vaden],” App. 44 (capitalization and bold type
face omitted).2
Faced with Vaden’s counterclaims, Discover sought
federal-court aid. It petitioned the United States District
Court for the District of Maryland for an order, pursuant to
§ 4 of the Federal Arbitration Act (FAA or Act), 9 U. S. C. § 4,
1 Discover apparently had no access to a federal forum for its suit against
Vaden on the basis of diversity-of-citizenship jurisdiction. Under that
head of federal-court jurisdiction, the amount in controversy must “ex
cee[d] . . . $75,000.” 28 U. S. C. § 1332(a).
2 Vaden’s preference for court adjudication is unsurprising. The arbi
tration clause, framed by Discover, prohibited presentation of “any claims
as a representative or member of a class. ” App. 45 (capitalization
omitted).

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compelling arbitration of Vaden’s counterclaims.3 Although
those counterclaims were framed under state law, Discover
urged that they were governed entirely by federal law, spe
cifically, § 27(a) of the Federal Deposit Insurance Act (FDIA),
12 U. S. C. § 1831d(a). Section 27(a) prescribes the interest
rates state-chartered, federally insured banks like Discover
can charge, “notwithstanding any State constitution or stat
ute which is hereby preempted.” This provision, Discover
maintained, was completely preemptive, i. e., it superseded
otherwise applicable Maryland law, and placed Vaden’s coun
terclaims under the exclusive governance of the FDIA. On
that basis, Discover asserted, the District Court had author
ity to entertain the § 4 petition pursuant to 28 U. S. C. § 1331,
which gives federal courts jurisdiction over cases “arising
under” federal law.
The District Court granted Discover’s petition, ordered
arbitration, and stayed Vaden’s prosecution of her counter
claims in state court pending the outcome of arbitration.
App. to Pet. for Cert. 89a–90a. On Vaden’s initial appeal,
the Fourth Circuit inquired whether the District Court had
federal-question jurisdiction over Discover’s § 4 petition.
To make that determination, the Court of Appeals in
structed, the District Court should “look through” the § 4
petition to the substantive controversy between the parties.
396 F. 3d 366, 369, 373 (2005). The appellate court then re
manded the case for an express determination whether that
controversy presented “a properly invoked federal ques
tion.” Id., at 373.
3 Section 4 reads, in relevant part:
“A party aggrieved by the alleged failure, neglect, or refusal of another
to arbitrate under a written agreement for arbitration may petition any
United States district court which, save for such agreement, would have
jurisdiction under title 28, in a civil action or in admiralty of the subject
matter of a suit arising out of the controversy between the parties, for an
order directing that such arbitration proceed in the manner provided for
in such agreement.” 9 U. S. C. § 4.

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On remand, Vaden “concede[d] that the FDIA completely
preempts any state claims against a federally insured bank.”
409 F. Supp. 2d 632, 636 (Md. 2006). Accepting this conces
sion, the District Court expressly held that it had federal
question jurisdiction over Discover’s § 4 petition and again
ordered arbitration. Id., at 634–636, 639. In this second
round, the Fourth Circuit affirmed, dividing 2 to 1. 489
F. 3d 594 (2007).
Recognizing that “a party may not create jurisdiction by
concession,” id., at 604, n. 10, the Fourth Circuit majority
conducted its own analysis of FDIA § 27(a), ultimately con
cluding that the provision completely preempted state law
and therefore governed Vaden’s counterclaims.4 This
Court’s decision in Holmes Group, Inc. v. Vornado Air Cir
culation Systems, Inc., 535 U. S. 826 (2002), the majority rec
ognized, held that federal-question jurisdiction depends on
the contents of a well-pleaded complaint, and may not be
predicated on counterclaims. 489 F. 3d, at 600, n. 4. Never
theless, the majority concluded, the complete preemption
doctrine is paramount, “overrid[ing] such fundamental cor
nerstones of federal subject-matter jurisdiction as the well
pleaded complaint rule.” Ibid. (quoting 14B C. Wright,
A. Miller, & E. Cooper, Federal Practice and Procedure
§ 3722.1, p. 511 (3d ed. 1998) (hereinafter Wright & Miller)).5
The dissenting judge considered Holmes Group disposi
tive. As § 27(a) of the FDIA formed no part of Discover’s
complaint, but came into the case only as a result of Vaden’s
4 Our disposition of this case makes it unnecessary to take up the ques
tion of § 27(a)’s preemptive force generally or in the particular context of
Discover’s finance charges. We therefore express no opinion on those is
sues. Cf. Beneficial Nat. Bank v. Anderson, 539 U. S. 1, 9–10 (2003)
(holding that the National Bank Act, 12 U. S. C. §§ 85, 86, completely pre
empts state-law usury claims against national banks).
5 But see 489 F. 3d 594, 612 (CA4 2007) (dissenting opinion) (observing
that the passage from Wright & Miller referenced by the majority “makes
clear that the doctrine of complete preemption is exclusively focused on
claims in a plaintiff ’s complaint”).

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responsive pleadings, the dissent reasoned, “[t]here was no
‘properly invoked federal question’ in the underlying state
case.” 489 F. 3d, at 610.
We granted certiorari, 552 U. S. 1256 (2008), in view of the
conflict among lower federal courts on whether district
courts, petitioned to order arbitration pursuant to § 4 of
the FAA, may “look through” the petition and examine the
parties’ underlying dispute to determine whether federal
question jurisdiction exists over the § 4 petition. Compare
Wisconsin v. Ho-Chunk Nation, 463 F. 3d 655, 659 (CA7
2006) (in determining jurisdiction over a § 4 petition, the
court may not “look through” the petition and focus on the
underlying dispute); Smith Barney, Inc. v. Sarver, 108 F. 3d
92, 94 (CA6 1997) (same); Westmoreland Capital Corp. v.
Findlay, 100 F. 3d 263, 267–269 (CA2 1996) (same); and
Prudential-Bache Securities, Inc. v. Fitch, 966 F. 2d 981,
986–989 (CA5 1992) (same), with Community State Bank v.
Strong, 485 F. 3d 597, 605–606 (court may “look through” the
petition and train on the underlying dispute), vacated, reh’g
en banc granted, 508 F. 3d 576 (CA11 2007); 6 and 396 F. 3d,
at 369–370 (case below) (same).
As this case shows, if the underlying dispute is the proper
focus of a § 4 petition, a further question may arise. The
dispute brought to state court by Discover concerned Va
den’s failure to pay over $10,000 in past-due credit card
charges. In support of that complaint, Discover invoked no
federal law. When Vaden answered and counterclaimed,
however, Discover asserted that federal law, specifically
§ 27(a) of the FDIA, displaced the state laws on which Vaden
relied. What counts as the underlying dispute in a case so
postured? May Discover invoke § 4, not on the basis of its
6 In Community State Bank v. Strong, 485 F. 3d 597, 605–606 (CA11
2007), the Court of Appeals approved the “look through” approach as ad
vanced in Circuit precedent. But Judge Marcus, who authored the court’s
unanimous opinion, wrote a special concurrence, noting that, were he writ
ing on a clean slate, he would reject the “look through” approach.

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own complaint, which had no federal element, but on the
basis of counterclaims asserted by Vaden? To answer
these questions, we first review relevant provisions of the
FAA, 9 U. S. C. § 1 et seq., and controlling tenets of federal
jurisdiction.
II
In 1925, Congress enacted the FAA “[t]o overcome judicial
resistance to arbitration,” Buckeye Check Cashing, Inc. v.
Cardegna, 546 U. S. 440, 443 (2006), and to declare “ ‘a na
tional policy favoring arbitration’ of claims that parties con
tract to settle in that manner,” Preston v. Ferrer, 552 U. S.
346, 353 (2008) (quoting Southland Corp. v. Keating, 465 U. S.
1, 10 (1984)). To that end, § 2 provides that arbitration
agreements in contracts “involving commerce” are “valid, ir
revocable, and enforceable.” 9 U. S. C. § 2.7 Section 4—the
section at issue here—provides for United States district
court enforcement of arbitration agreements. Petitions to
compel arbitration, § 4 states, may be brought before “any
United States district court which, save for such agreement,
would have jurisdiction under title 28 . . . of the subject mat
ter of a suit arising out of the controversy between the par
ties.” See supra, at 55, n. 3.8
7 Section 2 reads, in full:
“A written provision in any maritime transaction or a contract evidenc
ing a transaction involving commerce to settle by arbitration a contro
versy thereafter arising out of such contract or transaction, or the refusal
to perform the whole or any part thereof, or an agreement in writing to
submit to arbitration an existing controversy arising out of such a con
tract, transaction, or refusal, shall be valid, irrevocable, and enforceable,
save upon such grounds as exist at law or in equity for the revocation of
any contract.” 9 U. S. C. § 2.
8 A companion provision, § 3, provides for stays of litigation pending ar
bitration. It reads:
“If any suit or proceeding be brought in any of the courts of the United
States upon any issue referable to arbitration under an agreement in writ
ing for such arbitration, the court in which such suit is pending, upon being
satisfied that the issue involved in such suit or proceeding is referable to
arbitration under such an agreement, shall on application of one of the

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Opinion of the Court
The “body of federal substantive law” generated by elabo
ration of FAA § 2 is equally binding on state and federal
courts. Southland, 465 U. S., at 12 (quoting Moses H. Cone
Memorial Hospital v. Mercury Constr. Corp., 460 U. S. 1, 25,
n. 32 (1983)); accord Allied-Bruce Terminix Cos. v. Dobson,
513 U. S. 265, 271–272 (1995). “As for jurisdiction over con
troversies touching arbitration,” however, the Act is “some
thing of an anomaly” in the realm of federal legislation: It
“bestow[s] no federal jurisdiction but rather requir[es] [for
access to a federal forum] an independent jurisdictional
basis” over the parties’ dispute. Hall Street Associates,
L. L. C. v. Mattel, Inc., 552 U. S. 576, 581–582 (2008) (quoting
Moses H. Cone, 460 U. S., at 25, n. 32).9 Given the substan
tive supremacy of the FAA, but the Act’s nonjurisdictional
cast, state courts have a prominent role to play as enforcers
of agreements to arbitrate. See Southland, 465 U. S., at 15;
Moses H. Cone, 460 U. S., at 25, and n. 32.
The independent jurisdictional basis Discover relies upon
in this case is 28 U. S. C. § 1331, which vests in federal dis
parties stay the trial of the action until such arbitration has been had in
accordance with the terms of the agreement, providing the applicant
for the stay is not in default in proceeding with such arbitration.” 9
U. S. C. § 3.
9 Chapter 2 of the FAA, not implicated here, does expressly grant fed
eral courts jurisdiction to hear actions seeking to enforce an agreement
or award falling under the Convention on the Recognition and Enforce
ment of Foreign Arbitral Awards. See 9 U. S. C. § 203 (“An action or pro
ceeding falling under the Convention shall be deemed to arise under the
laws and treaties of the United States. The district courts of the United
States . . . shall have original jurisdiction over such an action or proceed
ing . . . .”). FAA § 205 goes further and overrides the well-pleaded com
plaint rule pro tanto. 9 U. S. C. § 205 (“The procedure for removal of
causes otherwise provided by law shall apply, except that the ground for
removal provided in this section need not appear on the face of the com
plaint but may be shown in the petition for removal.”). As Vaden points
out, these sections demonstrate that “when Congress wants to expand
[federal-court] jurisdiction, it knows how to do so clearly and unequivo
cally.” Brief for Petitioner 38.

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60 VADEN v. DISCOVER BANK
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trict courts jurisdiction over “all civil actions arising under
the Constitution, laws, or treaties of the United States.”
Under the longstanding well-pleaded complaint rule, how
ever, a suit “arises under” federal law “only when the plain
tiff ’s statement of his own cause of action shows that it is
based upon [federal law].” Louisville & Nashville R. Co. v.
Mottley, 211 U. S. 149, 152 (1908). Federal jurisdiction can
not be predicated on an actual or anticipated defense: “It is
not enough that the plaintiff alleges some anticipated defense
to his cause of action and asserts that the defense is invali
dated by some provision of [federal law].” Ibid.
Nor can federal jurisdiction rest upon an actual or antici
pated counterclaim. We so ruled, emphatically, in Holmes
Group, 535 U. S. 826. Without dissent, the Court held in
Holmes Group that a federal counterclaim, even when com
pulsory, does not establish “arising under” jurisdiction.10
Adhering assiduously to the well-pleaded complaint rule, the
Court observed, inter alia, that it would undermine the clar
ity and simplicity of that rule if federal courts were obliged
to consider the contents not only of the complaint but also of
10 Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc., 535
U. S. 826 (2002), involved 28 U. S. C. § 1295(a)(1), which vests in the Federal
Circuit exclusive jurisdiction over “an appeal from a final decision of a
district court . . . if the jurisdiction of that court was based, in whole or in
part, on [28 U. S. C. §] 1338.” Section 1338(a), in turn, confers on district
courts “[exclusive] original jurisdiction of any civil action arising under
any Act of Congress relating to patents.” The plaintiff ’s complaint in
Holmes Group presented a federal claim, but not one relating to patents;
the defendant counterclaimed for patent infringement. The Court ruled
that the case did not “aris[e] under” the patent laws by virtue of the patent
counterclaim, and therefore held that the Federal Circuit lacked appellate
jurisdiction under § 1295(a)(1). See 535 U. S., at 830–832.
In reaching its decision in Holmes Group, the Court first attributed to
the words “arising under” in § 1338(a) the same meaning those words have
in § 1331. See id., at 829–830. It then reasoned that a counterclaim as
serted in a responsive pleading cannot provide the basis for “arising
under” jurisdiction consistently with the well-pleaded complaint rule.
See id., at 830–832.

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responsive pleadings in determining whether a case “arises
under” federal law. Id., at 832. See also id., at 830 (“[T]he
well-pleaded complaint rule, properly understood, [does not]
allo[w] a counterclaim to serve as the basis for a district
court’s ‘arising under’ jurisdiction.”); Franchise Tax Bd. of
Cal. v. Construction Laborers Vacation Trust for Southern
Cal., 463 U. S. 1, 10, n. 9 (1983) (“The well-pleaded complaint
rule applies to the original jurisdiction of the district courts
as well as to their removal jurisdiction.”).11
A complaint purporting to rest on state law, we have rec
ognized, can be recharacterized as one “arising under” fed
eral law if the law governing the complaint is exclusively
federal. See Beneficial Nat. Bank v. Anderson, 539 U. S. 1,
8 (2003). Under this so-called “complete-preemption doc
trine,” a plaintiff ’s “state cause of action [may be recast] as
a federal claim for relief, making [its] removal [by the de
fendant] proper on the basis of federal question jurisdiction.”
14B Wright & Miller § 3722.1, p. 511.12 A state-law-based
counterclaim, however, even if similarly susceptible to re
11 The Court noted in Franchise Tax Bd. of Cal. v. Construction Labor
ers Vacation Trust for Southern Cal., 463 U. S. 1, 10–11, n. 9 (1983), and
in Holmes Group, 535 U. S., at 831, that commentators have repeatedly
suggested Judicial Code revisions under which responsive pleadings that
may be dispositive would count in determining whether a case “arises
under” federal law. See American Law Institute, Study of the Division of
Jurisdiction Between State and Federal Courts § 1312, pp. 188–194 (1969)
(discussed in 14B C. Wright, A. Miller, & E. Cooper, Federal Practice and
Procedure § 3722, pp. 505–507 (3d ed. 1998) (hereinafter Wright & Miller));
cf. Wechsler, Federal Jurisdiction and the Revision of the Judicial Code,
13 Law & Contemp. Prob. 216, 233–234 (1948). Congress, however, has
not responded to these suggestions.
12 Recharacterization of an asserted state-law claim as in fact a claim
arising exclusively under federal law, and therefore removable on the de
fendant’s petition, of course does not mean that the claim cannot remain
in state court. There is nothing inappropriate or exceptional, Discover
acknowledges, about a state court’s entertaining, and applying federal
law to, completely preempted claims or counterclaims. See Tr. of Oral
Arg. 35.

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62 VADEN v. DISCOVER BANK
Opinion of the Court
characterization, would remain nonremovable. Under our
precedent construing § 1331, as just explained, counter
claims, even if they rely exclusively on federal substantive
law, do not qualify a case for federal-court cognizance.
III
Attending to the language of the FAA and the above
described jurisdictional tenets, we approve the “ look
through” approach to this extent: A federal court may “look
through” a § 4 petition to determine whether it is predicated
on an action that “arises under” federal law; in keeping with
the well-pleaded complaint rule as amplified in Holmes
Group, however, a federal court may not entertain a § 4 peti
tion based on the contents, actual or hypothetical, of a
counterclaim.
A
The text of § 4 drives our conclusion that a federal court
should determine its jurisdiction by “looking through” a § 4
petition to the parties’ underlying substantive controversy.
We reiterate § 4’s relevant instruction: When one party seeks
arbitration pursuant to a written agreement and the other
resists, the proponent of arbitration may petition for an
order compelling arbitration in
“any United States district court which, save for [the
arbitration] agreement, would have jurisdiction under
title 28, in a civil action or in admiralty of the subject
matter of a suit arising out of the controversy between
the parties.” 9 U. S. C. § 4.
The phrase “save for [the arbitration] agreement” indicates
that the district court should assume the absence of the arbi
tration agreement and determine whether it “would have ju
risdiction under title 28” without it. See 396 F. 3d, at 369,
372 (case below). Jurisdiction over what? The text of § 4
refers us to “the controversy between the parties.” That
phrase, the Fourth Circuit said, and we agree, is most

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straightforwardly read to mean the “substantive conflict be
tween the parties.” Id., at 370. See also Moses H. Cone,
460 U. S., at 25, n. 32 (noting in dicta that, to entertain a
§ 4 petition, a federal court must have jurisdiction over the
“underlying dispute”).13
The majority of Courts of Appeals to address the question,
we acknowledge, have rejected the “look through” approach
entirely, as Vaden asks us to do here. See supra, at 57.
The relevant “controversy between the parties,” Vaden in
sists, is simply and only the parties’ discrete dispute over the
arbitrability of their claims. She relies, quite reasonably, on
the fact that a § 4 petition to compel arbitration seeks no
adjudication on the merits of the underlying controversy.
Indeed, its very purpose is to have an arbitrator, rather than
a court, resolve the merits. A § 4 petition, Vaden observes,
is essentially a plea for specific performance of an agreement
to arbitrate, and it thus presents principally contractual
questions: Did the parties validly agree to arbitrate? What
issues does their agreement encompass? Has one party dis
honored the agreement?
Vaden’s argument, though reasonable, is difficult to square
with the statutory language. Section 4 directs courts to de
termine whether they would have jurisdiction “save for [the
arbitration] agreement.” How, then, can a dispute over the
existence or applicability of an arbitration agreement be the
controversy that counts?
13 The parties’ underlying dispute may or may not be the subject of
pending litigation. This explains § 4’s use of the conditional “would” and
the indefinite “a suit.” A party often files a § 4 petition to compel arbitra
tion precisely because it does not want to bring suit and litigate in court.
Sometimes, however, a § 4 petition is filed after litigation has commenced.
The party seeking to compel arbitration in such cases is typically the de
fendant, who claims to be aggrieved by the plaintiff ’s attempt to litigate
rather than arbitrate. This case involves the relatively unusual situation
in which the party that initiated litigation of the underlying dispute is also
the party seeking to compel arbitration.

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64 VADEN v. DISCOVER BANK
Opinion of the Court
The “save for” clause, courts espousing the view embraced
by Vaden respond, means only that the “antiquated and ar
cane” ouster notion no longer holds sway. Drexel Burnham
Lambert, Inc. v. Valenzuela Bock, 696 F. Supp. 957, 961
(SDNY 1988). Adherents to this “ouster” explanation of
§ 4’s language recall that courts traditionally viewed arbitra
tion clauses as unworthy attempts to “oust” them of juris
diction; accordingly, to guard against encroachment on their
domain, they refused to order specific enforcement of
agreements to arbitrate. See H. R. Rep. No. 96, 68th Cong.,
1st Sess., 1–2 (1924) (discussed in Dean Witter Reynolds Inc.
v. Byrd, 470 U. S. 213, 219–220, and n. 6 (1985)). The “save
for” clause, as comprehended by proponents of the “ouster”
explanation, was designed to ensure that courts would no
longer consider themselves ousted of jurisdiction and would
therefore specifically enforce arbitration agreements. See,
e. g., Westmoreland, 100 F. 3d, at 267–268, and n. 6 (adopting
the “ouster” interpretation advanced in Drexel Burnham
Lambert, 696 F. Supp., at 961–963); Strong, 485 F. 3d, at 631
(Marcus, J., specially concurring) (reading § 4’s “save for”
clause “as instructing the court to ‘set aside’ not the arbitra
tion agreement . . . , but merely the previous judicial hostility
to arbitration agreements”).
We are not persuaded that the “ouster” explanation of § 4’s
“save for” clause carries the day. To the extent that the
ancient “ouster” doctrine continued to impede specific en
forcement of arbitration agreements, § 2 of the FAA, the
Act’s “centerpiece provision,” Mitsubishi Motors Corp. v.
Soler Chrysler-Plymouth, Inc., 473 U. S. 614, 625 (1985), di
rectly attended to the problem. Covered agreements to ar
bitrate, § 2 declares, are “valid, irrevocable, and enforceable,
save upon such grounds as exist at law or in equity for the
revocation of any contract.” Having commanded that an ar
bitration agreement is enforceable just as any other contract,
Congress had no cause to repeat the point. See 1 I. Mac-
Neil, R. Speidel, & T. Stipanowich, Federal Arbitration Law

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§ 9.2.3.3, p. 9:18 (1995) (hereinafter MacNeil) (“Th[e] effort to
connect the ‘save for’ language to the ancient problem of
‘ouster of jurisdiction’ is imaginative, but utterly unfounded
and historically inaccurate.” (footnote omitted)).14
In addition to its textual implausibility, the approach
Vaden advocates has curious practical consequences. It
would permit a federal court to entertain a § 4 petition only
when a federal-question suit is already before the court,
when the parties satisfy the requirements for diversity-of
citizenship jurisdiction, or when the dispute over arbitrabil
ity involves a maritime contract. See, e. g., Westmoreland,
100 F. 3d, at 268–269; 1 MacNeil § 9.2.3.1, pp. 9:12–9:13 (when
a federal-question suit has been filed in or removed to federal
court, the court “may order arbitration under FAA § 4”).15
Vaden’s approach would not accommodate a § 4 petitioner
who could file a federal-question suit in (or remove such a
suit to) federal court, but who has not done so. In contrast,
when the parties’ underlying dispute arises under federal
law, the “look through” approach permits a § 4 petitioner to
ask a federal court to compel arbitration without first taking
the formal step of initiating or removing a federal-question
suit—that is, without seeking federal adjudication of the
very questions it wants to arbitrate rather than litigate.
See id., § 9.2.3.3, p. 9:21 (explaining that the approach Vaden
advocates “creates a totally artificial distinction” based on
whether a dispute is subject to pending federal litigation).
14 Because “the ouster problem was just as great under state law as it
was under federal,” the absence of “save for” language in contemporane
ous state arbitration acts bolsters our conclusion that § 4 was not devised
to dislodge the common-law ouster doctrine. 1 I. MacNeil, R. Speidel, &
T. Stipanowich, Federal Arbitration Law § 9.2.3.3, p. 9:18 (1995). See also
396 F. 3d 366, 369–370, n. 2 (CA4 2005) (case below).
15 Specific jurisdiction-granting provisions may also authorize a federal
court to entertain a petition to compel arbitration. See, e. g., 9 U. S. C.
§§ 203, 205 (providing for federal-court jurisdiction over arbitration agree
ments covered by the Convention on the Recognition and Enforcement of
Foreign Arbitral Awards).

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66 VADEN v. DISCOVER BANK
Opinion of the Court
B
Having determined that a district court should “look
through” a § 4 petition, we now consider whether the court
“would have [federal-question] jurisdiction” over “a suit aris
ing out of the controversy” between Discover and Vaden. 9
U. S. C. § 4. As explained above, § 4 of the FAA does not
enlarge federal-court jurisdiction; rather, it confines federal
courts to the jurisdiction they would have “save for [the arbi
tration] agreement.” See supra, at 59. Mindful of that
limitation, we read § 4 to convey that a party seeking to com
pel arbitration may gain a federal court’s assistance only if,
“save for” the agreement, the entire, actual “controversy be
tween the parties,” as they have framed it, could be litigated
in federal court. We conclude that the parties’ actual con
troversy, here precipitated by Discover’s state-court suit for
the balance due on Vaden’s account, is not amenable to
federal-court adjudication. Consequently, the § 4 petition
Discover filed in the United States District Court for the
District of Maryland must be dismissed.
As the Fourth Circuit initially stated, the “controversy be
tween the parties” arose from the “alleged debt” Vaden owed
to Discover. 396 F. 3d, at 370. Discover’s complaint in
Maryland state court plainly did not “arise under” federal
law, nor did it qualify under any other head of federal-court
jurisdiction. See supra, at 54, and n. 1.
In holding that Discover properly invoked federal-court
jurisdiction, the Fourth Circuit looked beyond Discover’s
complaint and homed in on Vaden’s state-law-based defense
and counterclaims. Those responsive pleadings, Discover
alleged, and the Fourth Circuit determined, were completely
preempted by the FDIA. See supra, at 54–55. The Fourth
Circuit, however, misapprehended our decision in Holmes
Group. Under the well-pleaded complaint rule, a com
pletely preempted counterclaim remains a counterclaim and
thus does not provide a key capable of opening a federal
court’s door. See supra, at 59–62. See also Taylor v. An

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67 Cite as: 556 U. S. 49 (2009)
Opinion of the Court
derson, 234 U. S. 74, 75–76 (1914) (“[W]hether a case is one
arising under [federal law] . . . must be determined from
what necessarily appears in the plaintiff ’s statement of his
own claim . . . , unaided by anything alleged in anticipation
o[r] avoidance of defenses which it is thought the defendant
may interpose.”).
Neither Discover nor The Chief Justice, concurring in
part and dissenting in part (hereinafter dissent), defends the
Fourth Circuit’s reasoning. Instead, the dissent insists that
a federal court “would have” jurisdiction over “the contro
versy Discover seeks to arbitrate”—namely, “whether ‘Dis
cover Bank charged illegal finance charges, interest and late
fees.’ ” Post, at 72 (quoting App. 30). The dissent hypothe
sizes two federal suits that might arise from this purported
controversy: “an action by Vaden asserting that the charges
violate the FDIA, or one by Discover seeking a declaratory
judgment that they do not.” Post, at 73.
There is a fundamental flaw in the dissent’s analysis: In
lieu of focusing on the whole controversy as framed by the
parties, the dissent hypothesizes discrete controversies of its
own design. As the parties’ state-court filings reflect, the
originating controversy here concerns Vaden’s alleged debt
to Discover. Vaden’s responsive counterclaims challenging
the legality of Discover’s charges are a discrete aspect of the
whole controversy Discover and Vaden brought to state
court. Whether one might imagine a federal-question suit
involving the parties’ disagreement over Discover’s charges
is beside the point. The relevant question is whether the
whole controversy between the parties—not just a piece bro
ken off from that controversy—is one over which the federal
courts would have jurisdiction.
The dissent would have us treat a § 4 petitioner’s state
ment of the issues to be arbitrated as the relevant contro
versy even when that statement does not convey the full
flavor of the parties’ entire dispute. Artful dodges by a § 4
petitioner should not divert us from recognizing the actual

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68 VADEN v. DISCOVER BANK
Opinion of the Court
dimensions of that controversy. The text of § 4 instructs
federal courts to determine whether they would have juris
diction over “a suit arising out of the controversy between
the parties”; it does not give § 4 petitioners license to re
characterize an existing controversy, or manufacture a new
controversy, in an effort to obtain a federal court’s aid in
compelling arbitration.16
Viewed contextually and straightforwardly, it is hardly
“fortuit[ous]” that the controversy in this case took the shape
it did. Cf. post, at 73. Seeking to collect a debt, Discover
filed an entirely state-law-grounded complaint in state court,
and Vaden chose to file responsive counterclaims. Perhaps
events could have unfolded differently, but § 4 does not invite
federal courts to dream up counterfactuals when actual liti
gation has defined the parties’ controversy.17
16 Noting that the FAA sometimes uses “controversy” to refer to the
dispute to be arbitrated, the dissent insists that it must have the same
meaning in § 4. Cf. post, at 73. But § 4 does not ask a district court to
determine whether it would have jurisdiction over “the controversy the
§ 4 petitioner seeks to arbitrate”; it asks whether the court would have
jurisdiction over “the controversy between the parties.” Here, the issue
Discover seeks to arbitrate is undeniably only a fraction of the controversy
between the parties. We decline to rewrite the statute to ignore this
reality.
Moreover, our reading of § 4 fully accords with the statute’s subjunctive
construction (“would have jurisdiction”) and its reference to “a suit.”
Cf. post, at 75–76. Section 4, we recognize, enables a party to seek an
order compelling arbitration even when the parties’ controversy is not the
subject of pending litigation. See supra, at 63, n. 13, 66. Whether or not
the controversy between the parties is embodied in an existing suit, the
relevant question remains the same: Would a federal court have jurisdic
tion over an action arising out of that full-bodied controversy?
17 Our approach, the dissent asserts, would produce “inconsistent re
sults” based “upon the happenstance of how state-court litigation has un
folded.” Post, at 76. Of course, a party’s ability to gain adjudication of
a federal question in federal court often depends on how that question
happens to have been presented, and the dissent’s argument is little more
than a veiled criticism of Holmes Group and the well-pleaded complaint
rule. When a litigant files a state-law claim in state court, and her oppo

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As the dissent would have it, parties could commandeer
a federal court to slice off responsive pleadings for arbi
tration while leaving the remainder of the parties’ contro
versy pending in state court. That seems a bizarre way to
proceed. In this case, Vaden’s counterclaims would be sent
to arbitration while the complaint to which they are ad
dressed—Discover’s state-law-grounded debt-collection ac
tion—would remain pending in a Maryland court. When the
controversy between the parties is not one over which a fed
eral court would have jurisdiction, it makes scant sense to
allow one of the parties to enlist a federal court to disturb
the state-court proceedings by carving out issues for sepa
rate resolution.18
Furthermore, the presence of a threshold question
whether a counterclaim alleged to be based on state law is
totally preempted by federal law may complicate the dis
sent’s § 4 inquiry. This case is illustrative. The dissent re
lates that Vaden eventually conceded that FDIA § 27(a), not
nent parries with a federal counterclaim, the action is not removable to
federal court, even though it would have been removable had the order of
filings been reversed. See Holmes Group, 535 U. S., at 831–832.
True, the outcome in this case may well have been different had Vaden
initiated an FDIA claim about the legality of Discover’s charges. Because
that controversy likely would have been amenable to adjudication in a
federal forum, Discover could have asked a federal court to send the par
ties to arbitration. But that is not what occurred here. Vaden did not
invoke the FDIA. Indeed, she framed her counterclaims under state law
and clearly preferred the Maryland forum. The dissent’s hypothesizing
about the case that might have been brought does not provide a basis for
federal-court jurisdiction.
18 The dissent observes, post, at 75, that our rule might enable a party
to request a federal court’s aid in compelling arbitration of a state-law
counterclaim that might otherwise be adjudicated in state court. But if
a federal court would have jurisdiction over the parties’ whole contro
versy, we see nothing anomalous about the court’s ordering arbitration of
a state-law claim constituting part of that controversy. Federal courts
routinely exercise supplemental jurisdiction over state-law claims. See
28 U. S. C. § 1367.

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70 VADEN v. DISCOVER BANK
Opinion of the Court
Maryland law, governs the charges and fees Discover may
impose. Post, at 72. But because the issue is jurisdictional,
Vaden’s concession is not determinative. See supra, at 56,
and n. 4. The dissent simply glides by the preemption issue,
devoting no attention to it, although this Court has not yet
resolved the matter.
In sum, § 4 of the FAA instructs district courts asked to
compel arbitration to inquire whether the court would have
jurisdiction, “save for [the arbitration] agreement,” over
“a suit arising out of the controversy between the parties.”
We read that prescription in light of the well-pleaded com
plaint rule and the corollary rule that federal jurisdiction
cannot be invoked on the basis of a defense or counterclaim.
Parties may not circumvent those rules by asking a federal
court to order arbitration of the portion of a controversy that
implicates federal law when the court would not have
federal-question jurisdiction over the controversy as a whole.
It does not suffice to show that a federal question lurks some
where inside the parties’ controversy, or that a defense or
counterclaim would arise under federal law. Because the
controversy between Discover and Vaden, properly per
ceived, is not one qualifying for federal-court adjudication,
§ 4 of the FAA does not empower a federal court to order
arbitration of that controversy, in whole or in part.19
19 This Court’s declaratory judgment jurisprudence in no way undercuts
our analysis. Cf. post, at 73, 77–78. Discover, the dissent implies, could
have brought suit in federal court seeking a declaration that its charges
conform to federal law. Again, the dissent’s position rests on its miscon
ception of “the controversy between the parties.” Like § 4 itself, the De
claratory Judgment Act does not enlarge the jurisdiction of the federal
courts; it is “procedural only.” Aetna Life Ins. Co. v. Haworth, 300 U. S.
227, 240 (1937). Thus, even in a declaratory judgment action, a federal
court could not entertain Discover’s state-law debt-collection claim.
Cf. 10B Wright & Miller § 2758, pp. 519–521 (“The Declaratory Judgment
Act was not intended to enable a party to obtain a change of tribunal from
a state to federal court, and it is not the function of the federal declaratory

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Discover, we note, is not left without recourse. Under the
FAA, state courts as well as federal courts are obliged to
honor and enforce agreements to arbitrate. Southland, 465
U. S., at 12; Moses H. Cone, 460 U. S., at 25, 26, n. 34. See
also supra, at 59. Discover may therefore petition a Mary
land court for aid in enforcing the arbitration clause of its
contracts with Maryland cardholders.
True, Maryland’s high court has held that §§ 3 and 4 of the
FAA prescribe federal-court procedures and, therefore, do
not bind the state courts.20 But Discover scarcely lacks an
available state remedy. Section 2 of the FAA, which does
bind the state courts, renders agreements to arbitrate “valid,
irrevocable, and enforceable.” This provision “carries with
it duties [to credit and enforce arbitration agreements] indis
tinguishable from those imposed on federal courts by FAA
§§ 3 and 4.” 1 MacNeil § 10.8.1, p. 10:77. Notably, Mary
land, like many other States, provides a statutory remedy
nearly identical to § 4. See Md. Cts. & Jud. Proc. Code Ann.
§ 3–207 (Lexis 2006) (“If a party to an arbitration agreement
. . . refuses to arbitrate, the other party may file a petition
with a court to order arbitration. . . . If the court determines
that the agreement exists, it shall order arbitration. Other
wise it shall deny the petition.”). See also Walther v. Sover
eign Bank, 386 Md. 412, 424, 872 A. 2d 735, 742 (2005) (“The
Maryland Arbitration Act has been called the ‘State ana
logue . . . to the Federal Arbitration Act.’ The same policy
favoring enforcement of arbitration agreements is present in
both our own and the federal acts.” (some internal quota
tion marks and citation omitted)). Even before it filed its
debt-recovery action in a Maryland state court, Discover
action merely to anticipate a defense that otherwise could be presented in
a state action.” (footnote omitted)).
20 This Court has not decided whether §§ 3 and 4 apply to proceedings
in state courts, see Volt Information Sciences, Inc. v. Board of Trustees
of Leland Stanford Junior Univ., 489 U. S. 468, 477, n. 6 (1989), and we
do not do so here.

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72 VADEN v. DISCOVER BANK
Opinion of Roberts, C. J.
could have sought from that court an order compelling arbi
tration of any agreement-related dispute between itself and
cardholder Vaden. At no time was federal-court interven
tion needed to place the controversy between the parties be
fore an arbitrator.
* * *
For the reasons stated, the District Court lacked jurisdic
tion to entertain Discover’s § 4 petition to compel arbitration.
The judgment of the Court of Appeals affirming the District
Court’s order is therefore reversed, and the case is remanded
for further proceedings consistent with this opinion.
It is so ordered.
Chief Justice Roberts, with whom Justice Stevens,
Justice Breyer, and Justice Alito join, concurring in
part and dissenting in part.
I agree with the Court that a federal court asked to compel
arbitration pursuant to § 4 of the Federal Arbitration Act
should “look through” the dispute over arbitrability in deter
mining whether it has jurisdiction to grant the requested
relief. But look through to what? The statute provides a
clear and sensible answer: The court may consider the § 4
petition if the court “would have” jurisdiction over “the sub
ject matter of a suit arising out of the controversy between
the parties.” 9 U. S. C. § 4.
The § 4 petition in this case explains that the controversy
Discover seeks to arbitrate is whether “Discover Bank
charged illegal finance charges, interest and late fees.”
App. 30. Discover contends in its petition that the resolu
tion of this dispute is controlled by federal law—specifically
§ 27(a) of the Federal Deposit Insurance Act (FDIA), 12
U. S. C. § 1831d(a) (setting forth the interest rates a state
chartered, federally insured bank may charge “notwith
standing any State constitution or statute which is hereby
preempted”). Vaden agrees that the legality of Discover’s

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charges and fees is governed by the FDIA.* A federal
court therefore “would have jurisdiction . . . of the subject
matter of a suit arising out of the controversy” Discover
seeks to arbitrate. That suit could be an action by Vaden
asserting that the charges violate the FDIA, or one by Dis
cover seeking a declaratory judgment that they do not.
The majority is diverted off this straightforward path by
the fortuity that a complaint happens to have been filed in
this case. Instead of looking to the controversy the § 4 peti
tioner seeks to arbitrate, the majority focuses on the contro
versy underlying that complaint, and asks whether “the
whole controversy,” as reflected in “the parties’ state-court
filings,” arises under federal law. Ante, at 67 (emphasis
added). Because that litigation was commenced as a state
law debt-collection claim, the majority concludes there is no
§ 4 jurisdiction.
This approach is contrary to the language of § 4, and
sharply restricts the ability of federal courts to enforce
agreements to arbitrate. The “controversy” to which § 4 re
fers is the dispute alleged to be subject to arbitration. The
§ 4 petitioner must set forth the nature of that dispute—the
one he seeks to arbitrate—in the § 4 petition seeking an
order to compel arbitration. Section 4 requires that the
petitioner be “aggrieved” by the other party’s “failure, ne
glect, or refusal . . . to arbitrate under a written agreement
for arbitration”; that language guides the district court to
the specific controversy the other party is unwilling to
arbitrate.
That is clear from the FAA’s repeated and consistent use
of the term “controversy” to mean the specific dispute as
*Vaden has conceded that the FDIA completely pre-empts her state-law
counterclaims. See 489 F. 3d 594, 604, n. 10 (CA4 2007). What is signifi
cant about that concession is not Vaden’s agreement on the jurisdictional
question of complete pre-emption (which we need not and do not address),
cf. ante, at 69–70, but rather her agreement that federal law—the FDIA—
governs her allegation that Discover’s charges and fees are illegal.

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74 VADEN v. DISCOVER BANK
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serted to be subject to arbitration, not to some broader, “full
flavor[ed]” or “full-bodied” notion of the disagreement be
tween the parties. Ante, at 67, 68, n. 16. In § 2, for ex
ample, the “controversy” is the one “to [be] settle[d] by arbi
tration” and the one “to [be] submit[ted] to arbitration.” 9
U. S. C. § 2. In § 10(a)(3), it is a ground for vacating an ar
bitration award that the arbitrator refused to hear evidence
“pertinent and material to the controversy”—obviously the
“controversy” subject to arbitration, or the arbitrator’s re
fusal to consider the evidence would hardly be objectionable.
In § 11(c), an award may be modified if “imperfect in matter
of form not affecting the merits of the controversy”—again,
necessarily the controversy submitted to arbitration, and
therefore the subject of the award.
There is no reason to suppose “controversy” meant the
controversy subject to arbitration everywhere else in the
FAA, but something quite different in § 4. The issue is
whether there is jurisdiction to compel arbitration to resolve
a controversy; why would the pertinent controversy for
assessing jurisdiction be anything other than the same one
asserted to be subject to arbitration?
The majority looks instead to the controversy the state
court litigation seeks to resolve. This produces the odd re
sult of defining “controversy” more broadly than the § 4 peti
tion itself. Discover’s petition does not seek to arbitrate its
state-law debt-collection claims, but rather Vaden’s allega
tion that the fees Discover has been charging her (and other
members of her proposed class) violate the FDIA. See App.
30. The majority does not appear to question that there
would be federal jurisdiction over a suit arising out of the
subject matter of that dispute. The majority finds no juris
diction here, however, because “a federal court could not en
tertain Discover’s state-law debt-collection claim.” Ante, at
70, n. 19. There is no jurisdiction to compel arbitration of
a plainly federal controversy—the FDIA dispute—because
there is no jurisdiction to compel arbitration of the debt

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collection dispute. But why Discover should have to demon
strate federal jurisdiction over a state-court claim it does not
seek to arbitrate is a mystery. Cf. Moses H. Cone Memorial
Hospital v. Mercury Constr. Corp., 460 U. S. 1, 19–21 (1983)
(affirming federal-court jurisdiction over a § 4 petition seek
ing to arbitrate only one of two disputes pending in state
court litigation); Dean Witter Reynolds Inc. v. Byrd, 470
U. S. 213, 218–221 (1985) (when litigation involves multiple
claims, only some of which are covered by an arbitration
agreement, district court must compel arbitration of the cov
ered claims if so requested).
The majority’s approach will allow federal jurisdiction to
compel arbitration of entirely state-law claims. Under that
approach the “controversy” is not the one the § 4 petitioner
seeks to arbitrate, but a broader one encompassing the
“whole controversy” between the parties. Ante, at 67. If
that broader dispute involves both federal and state-law
claims, and the “originating” dispute is federal, ibid., a party
could seek arbitration of just the state-law claims. The
“controversy” under the majority’s view would qualify as
federal, giving rise to § 4 jurisdiction to compel arbitration
of a purely state-law claim.
Take this case as an example. If Vaden had filed her
FDIA claim first, and Discover had responded with a state
law debt-collection counterclaim, that suit is one that “could
be litigated in federal court.” Ante, at 66. As a result, the
majority’s approach would seem to permit Vaden to file a § 4
petition to compel arbitration of the entirely state-law-based
debt-collection dispute, because that dispute would be part
and parcel of the “full flavor[ed],” “originating” FDIA con
troversy. Ante, at 67. Defining the controversy as the dis
pute the § 4 petitioner seeks to arbitrate eliminates this
problem by ensuring that the actual dispute subject to arbi
tration is federal.
The majority’s conclusion that this controversy “is not one
qualifying for federal-court adjudication,” ante, at 70, stems

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from its mistaken focus on the existing litigation. Rather
than ask whether a court “would have” jurisdiction over the
“subject matter” of “a” suit arising out of the “controversy,”
the majority asks only whether the court does have jurisdic
tion over the subject matter of a particular complaint. But
§ 4 does not speak of actual jurisdiction over pending suits;
it speaks subjunctively of prospective jurisdiction over “the
subject matter of a suit arising out of the controversy be
tween the parties.” 9 U. S. C. § 4. The fact that Vaden has
chosen to package the FDIA controversy in counterclaims in
pending state-court litigation in no way means that a district
court “would [not] have” jurisdiction over the “subject mat
ter” of “a suit” arising out of the FDIA controversy. A big
part of arbitration is avoiding the procedural niceties of for
mal litigation; it would be odd to have the authority of a
court to compel arbitration hinge on just such niceties in a
pending case.
By focusing on the sequence in which state-court litigation
has unfolded, the majority crafts a rule that produces incon
sistent results. Because Discover’s debt-collection claim
was filed before Vaden’s counterclaims, the majority treats
the debt-collection dispute as the “originating controversy.”
Ante, at 67. But nothing would have prevented the same
disagreements between the parties from producing a differ
ent sequence of events. Vaden could have filed a complaint
raising her FDIA claims before Discover sought to collect on
any amounts Vaden owes. Because the “originating contro
versy” in that complaint would be whether Discover has
charged fees illegal under federal law, in that situation Dis
cover presumably could bring a § 4 petition to compel arbi
tration of the FDIA dispute. The majority’s rule thus
makes § 4 jurisdiction over the same controversy entirely de
pendent upon the happenstance of how state-court litigation
has unfolded. Nothing in § 4 suggests such a result.
The majority glosses over another problem inherent in its
approach: In many if not most cases under § 4, no complaint

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will have been filed. See Hartford Financial Systems, Inc.
v. Florida Software Servs., Inc., 712 F. 2d 724, 728 (CA1
1983) (Breyer, J.) (“Normally, [§ 4] motions are brought in
independent proceedings”). What to “look through” to
then? The majority instructs courts to look to the “full
bodied controversy.” Ante, at 68, n. 16. But as this case
illustrates, that would lead to a different result had the
state-court complaint not been filed. Discover does not seek
to arbitrate whether an outstanding debt exists; indeed, Dis
cover’s § 4 petition does not even allege any dispute on that
point. See App. 28–41. A district court would therefore
not understand the § 4 “controversy” to include the debt
collection claim in the absence of the state-court suit.
Under the majority’s rule, the FDIA dispute would be
treated as a “controversy” qualifying under § 4 before the
state suit and counterclaims had been filed, but not after.
The far more concrete and administrable approach would
be to apply the same rule in all instances: Look to the contro
versy the § 4 petitioner seeks to arbitrate—as set forth in
the § 4 petition—and assess whether a federal court would
have jurisdiction over the subject matter of a suit arising
out of that controversy. The controversy the moving party
seeks to arbitrate and the other party will not would be
the same controversy used to assess jurisdiction to compel
arbitration.
The majority objects that this would allow a court to
“hypothesiz[e] discrete controversies of its own design,”
ante, at 67, in an apparent effort to find federal jurisdiction
where there is none. Not so. A district court entertaining
a § 4 petition is required to determine what “a suit” arising
out of the allegedly arbitrable controversy would look like.
There is no helping that, given the statute’s subjunctive lan
guage. But that does not mean the inquiry is the free-form
one the majority posits.
To the contrary, a district court must look to the speci
fic controversy—the concrete dispute that one party has

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“fail[ed], neglect[ed], or refus[ed]” to arbitrate—and deter
mine whether that controversy would give rise to a suit
under federal law. District courts do that sort of thing
often enough; the exercise is closely analogous to the juris
dictional analysis in a typical declaratory judgment action.
See Franchise Tax Bd. of Cal. v. Construction Laborers
Vacation Trust for Southern Cal., 463 U. S. 1, 19 (1983) ( ju
risdiction over a declaratory judgment action exists when,
“if the declaratory judgment defendant brought a coer
cive action to enforce its rights, that suit would necessarily
present a federal question” (emphasis added)). Looking to
the specific controversy outlined in Discover’s § 4 petition
(whether its fees violate the FDIA), it hardly requires
“dream[ing]” to conceive of a lawsuit in which Vaden would
claim the FDIA has been violated and Discover would claim
it has not. Ante, at 68.
Nor would respondents’ approach allow a § 4 petitioner to
simply “recharacterize” or “manufacture” a controversy to
create federal jurisdiction. Ibid. All of the established
rules of federal jurisdiction are fully applicable in scrutiniz
ing whether a federal court would have jurisdiction over a
suit arising out of the parties’ underlying controversy.
For example, a federal question must be presented by the
specific controversy the § 4 petitioner seeks to arbitrate, not
by some hypothetical federal issue “lurking in the back
ground.” Gully v. First Nat. Bank in Meridian, 299 U. S.
109, 117 (1936). A district court could not compel arbitra
tion of a state-law dispute by pointing to a potential federal
defense that the § 4 petitioner is not seeking to arbitrate,
because the “claim itself must present a federal question” to
arise under federal law. Skelly Oil Co. v. Phillips Petro
leum Co., 339 U. S. 667, 672 (1950). Nor could a district
court compel arbitration of a dispute that, though not federal
in character, could lead to the filing of a federal counterclaim,
for “a counterclaim . . . cannot serve as the basis for [federal]
jurisdiction” of the state-law dispute itself. Holmes Group,

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Inc. v. Vornado Air Circulation Systems, Inc., 535 U. S. 826,
831 (2002).
Accordingly, petitioners may no more smuggle state-law
claims into federal court through § 4 than they can through
declaratory judgment actions, or any other federal cause of
action. To the extent § 4 brings some issues into federal
court in a particular case that may not be brought in through
other procedural mechanisms, it does so by “enlarg[ing] the
range of remedies available in the federal courts[,] . . . not
extend[ing] their jurisdiction.” Skelly Oil, supra, at 671.
That is why the majority’s recital of the basic rules of
federal-court jurisdiction in Part II of its opinion is beside
the point: No one disputes what those rules are, and no one
disputes that they must be followed under § 4 in deciding
whether a federal court “would have jurisdiction . . . of the
subject matter of a suit arising out of the controversy be
tween the parties.” The issue is instead what suit should
be scrutinized for compliance with those rules. In defining
“controversy” by reference to existing litigation, the major
ity artificially limits the reach of § 4 to the particular suit
filed. The correct approach is to accord § 4 the scope man
dated by its language and look to “a suit,” arising out of the
“subject matter” of the “controversy” the § 4 petitioner seeks
to arbitrate, and determine whether a federal court would
have jurisdiction over such a suit.
The majority concludes by noting that state courts are
obliged to honor and enforce agreements to arbitrate. Ante,
at 71. The question here, however, is one of remedy. It is
a common feature of our federal system that States often
provide remedies similar to those under federal law for the
same wrongs. We do not, however, narrowly construe the
federal remedies—say, federal antitrust or civil rights reme
dies—because state law provides remedies in those areas as
well. Cf. Monroe v. Pape, 365 U. S. 167, 183 (1961) (“It is
no answer that the State has a law which if enforced would
give relief ”).

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80 VADEN v. DISCOVER BANK
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* * *
Discover and Vaden have agreed to arbitrate any dispute
arising out of Vaden’s account with Discover. Vaden’s alle
gations against Discover have given rise to such a dispute.
Discover seeks to arbitrate that controversy, but Vaden re
fuses to do so. Resolution of the controversy is governed
by federal law, specifically the FDIA. There is no dispute
about that. In the absence of the arbitration agreement, a
federal court “would have jurisdiction . . . of the subject mat
ter of a suit arising out of the controversy between the par
ties,” 9 U. S. C. § 4, whether the suit were brought by Vaden
or Discover. The District Court therefore may exercise
jurisdiction over this petition under § 4 of the Federal Arbi
tration Act.