# In the Matter of METROPOLITAN ST. LOUIS SEWER DISTRICT

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URL: https://www.frixlaw.com/law-library/documents/agency%3Acbca%3A2127914f31d926e9

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

September 24, 2020

CBCA 6821-FEMA

In the Matter of METROPOLITAN ST. LOUIS SEWER DISTRICT

Debbie S. Champion and Victor H. Essen, II, of Rynearson, Suess, Schnurbusch &
Champion, L.L.C., St. Louis, MO, counsel for Applicant.
Nathan S. Weinert, State Emergency Management Agency, Missouri Department of
Public Safety, Jefferson City, MO, counsel for Grantee.
Charles Schexnaildre and Frank Bruscato, Office of Chief Counsel, Federal
Emergency Management Agency, Department of Homeland Security, St. Louis, MO, counsel
for Federal Emergency Management Agency.
Before the Arbitration Panel consisting of Board Judges SHERIDAN, SULLIVAN, and
LESTER.
The Board is faced with an unusual situation in this arbitration matter. When the
applicant, Metropolitan St. Louis Sewer District (MSD), filed its request for arbitration in
this arbitration matter on May 21, 2020, it informed the Board that it was seeking
reimbursement of $597,839.71 in emergency overtime costs that it had incurred allegedly as
a result of a Presidentially-declared disaster, a request that the Federal Emergency
Management Agency (FEMA) had denied. Pursuant to a statutory amendment enacted
October 5, 2018, section 423 of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (Stafford Act), 42 U.S.C. § 5189a(d) (2018), authorizes the Board to arbitrate
disputes between applicants and FEMA regarding eligibility for public assistance for
disasters that occurred after January 1, 2016, but only if the amount in dispute for a project
in a non-rural area exceeds $500,000. In anticipation of the arbitration hearing, MSD has

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told us that it is now only seeking $333,986.51, an amount that falls below the threshold for
arbitration eligibility. This reduction did not result from any partial settlement with or other
action by FEMA that affected or narrowed the dispute between the parties, but, as MSD
explains it, was a voluntary strategic decision.
FEMA has asked us to dismiss this arbitration because the amount in dispute falls
below the statutory eligibility threshold. For the reasons set forth below, we grant FEMA’s
motion.
Background
Pursuant to section 403 of the Stafford Act, 42 U.S.C. § 5170b, FEMA reimburses
states and local governments, among others, a percentage of the cost of emergency
work—including debris removal and overtime for permanent government employees
“conducting emergency protective measures”—incurred in responding to a declared major
disaster. If FEMA denies all or part of a request for public assistance under this provision,
an applicant may file a first appeal of that denial. 44 CFR 206.206 (2019). If the applicant
does not receive complete relief in the first appeal decision, it may file a second-level appeal
within sixty days after receiving the first-level appeal decision. Id. 206.206(c)(1).
As an alternative to a second-level appeal, certain applicants may pursue arbitration
with the Board. An applicant seeking costs for a disaster project (other than in a rural area)
for a disaster that occurred after January 1, 2016, that wishes to pursue “a dispute of more
than $500,000” may, either after receiving a first appeal decision or after having received no
first appeal decision after a period of 180 days, may submit a request for arbitration to the
Board:
Notwithstanding this section, an applicant for assistance under this subchapter
may request arbitration to dispute the eligibility for assistance or repayment of
assistance provided for a dispute of more than $500,000 for any disaster that
occurred after January 1, 2016. Such arbitration shall be conducted by the
Civilian Board of Contract Appeals and the decision of such Board shall be
binding.
42 U.S.C. § 5189a(d)(1).
In this case, MSD requested that FEMA reimburse $843,776.25 in costs that MSD
claimed it had incurred because of severe flooding from heavy rainfall between December
23, 2015, and January 9, 2016, flooding that resulted in a Presidential declaration of a major
disaster. Through project worksheet 593 (PW 593), FEMA granted more than $200,000 of

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MSD’s request, but denied $597,839.71 in claimed emergency overtime costs as unsupported
by documentation tying that overtime work to the disaster. MSD filed a first appeal of that
denial on November 8, 2019, and, while providing additional documentation in support of
that appeal, acknowledged that it would have been administratively impossible for MSD to
track particular overtime work to specific tasks on particular work orders. On March 26,
2020, FEMA issued its first appeal decision denying any further recovery based on what it
stated was a continued lack of adequate documentation.
Rather than filing a second-level appeal, MSD submitted an arbitration request to the
Board on May 21, 2020, challenging FEMA’s first appeal denial of the $597,839.71 in
claimed overtime costs. In its response to MSD’s arbitration request, FEMA indicated that
“there [may] be potentially eligible work buried within MSD’s claim,” but that, because the
disorganization of MSD’s documentation made it impossible to tie overtime costs to disaster
work, FEMA could provide only what it had originally granted prior to the first appeal. In
reply, MSD indicated that it was, and had been, “willing to help FEMA understand the
documents presented.”
After the Board scheduled a two-day hearing for the week of July 27, 2020, FEMA,
without opposition from MSD, requested a stay to allow FEMA to work to assist MSD in
presenting necessary documentary evidence in a manner that would allow FEMA to find
additional eligibility and potentially eliminate or reduce the need for an arbitration hearing.
Although we denied FEMA’s stay request, the Board agreed to reschedule the hearing for
the week of September 21, 2020, and directed the parties to meet by teleconference or video
conference to attempt to come to agreement on claimed costs, where they could, so that the
costs that would have to be addressed at a hearing were those that were truly in dispute. In
its scheduling order dated July 14, 2020, the Board also directed each party, no later than
September 11, 2020, to submit “a brief explaining the issues or amounts that remain in
dispute” after the parties’ discussions, along with, among other things, “written direct
testimony of any witnesses, with citations to the evidence in the record by exhibit number”
and “any additional documents or other evidence that the panel should consider.”
The time that the Board provided the parties was of little benefit, as FEMA notified
the Board on September 11, 2020, that, based upon its review of additional information that
MSD provided, it was able to find approximately $6500 in additional entitlement, an amount
to which MSD did not agree. Nevertheless, in the arbitration brief that MSD submitted later
that same day, MSD significantly reduced the $597,839.71 amount that it had previously said
was in dispute, telling the Board in its brief that, “[b]ased on the evidence, here, before the
[Board], it is evident that MSD is entitled to $333,986.51 due in connection with the
overtime work incurred due to the rain and flooding events at issue, and that FEMA
erroneously disallowed those claims.” Applicant’s Brief at 1; see id. at 3 (“MSD’s total

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claim for emergency overtime is $333,986.51.”); id. at 19 (“These four examples clearly
demonstrate that the MSD Master Exhibit accounts for MSD’s claim under PW 593 of
$333,986.51.”); id. at 20 (“[T]he Board should award MSD the $333,986.51 sought in this
matter under PW 593.”). Accompanying the arbitration brief was the written testimony of
MSD’s Finance Director, who testified that “MSD claims on this appeal $333,986.51 for
overtime incurred to respond to the major disaster at issue under PW 593.” Written
Testimony of Marion Gee (Sept. 11, 2020) ¶ 77. Nowhere in MSD’s arbitration brief or in
the written testimony that MSD presented did MSD acknowledge or even mention that MSD
had reduced the amount being sought by more than $250,000, nor did MSD or its Finance
Director explain why MSD had reduced the claimed amount.
In addition to the pleadings that FEMA submitted on September 11, 2020, in
conformance with the Board’s scheduling order, FEMA filed a motion to dismiss this
arbitration, arguing that, because MSD had voluntarily reduced its claim to a figure below
the $500,000 dispute threshold for arbitration eligibility involving a non-rural area, the Board
lacked authority to arbitrate the dispute under 42 U.S.C. § 5189a(d). Confused by MSD’s
failure to mention in its brief that it was reducing its claim amount, we asked MSD in
response to FEMA’s motion to explain the reasons for the quantum reduction, including
whether it resulted from a settlement with FEMA of a portion of its claim or for other reasons
caused by FEMA.
MSD notified us in its September 17, 2020, response to that order that, as part of its
attempts to convince FEMA to pay its claim, MSD had voluntarily decided to make “a
reduced demand,” although MSD then stated that its counsel “directly communicated with
counsel for FEMA . . . to inform FEMA’s counsel that the full amount of the claim for the
disallowed $597,839.71 remained at issue.” Applicant’s Response (Sept. 17, 2020) at 3. The
$333,986.51 in costs upon which MSD is now focused are those that MSD claims can be tied
to actual work orders in the record, but MSD asserts that “[t]he full $597,839.71,” which
includes costs that are not tied to work orders, is “still recoverable.” Id. The non-work order
costs “can easily be proven to be recoverable,” says MSD, “through testimony at the
arbitration hearing in this matter rather than work orders.” Id. at 4. Yet, because “such proof
would require a great deal of extra time and additional witnesses at the arbitration [beyond
the two witnesses that MSD told the Board it would present] to testify about the actual work
they performed,” MSD tells us, “MSD has strategically chosen to focus on obtaining a
recovery of the work that is more directly linked to work orders for ease of proceeding in this
matter” and that MSD’s “evidence will focus on that work, which amounts to $333,986.51
in overtime expense.” Id.

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Discussion

Under 42 U.S.C. § 5189a(d) (section 5189a(d)), a matter involving a project in a nonrural area is eligible for arbitration before the Board only if the applicant is raising “a dispute
of more than $500,000.” A “dispute” requires “a conflict or controversy,” and an “arbitrable
dispute” is “[a] dispute that can properly be resolved by arbitration.” Black’s Law Dictionary
572 (10th ed. 2014).
When it filed its request for arbitration, MSD told us that it was disputing the entire
$597,839.71 that FEMA had denied in PW 593, an amount in dispute that satisfies the
eligibility threshold of section 5189a(d). Generally, “[t]he rule governing dismissal for want
of jurisdiction,” at least “in cases brought in the federal court[,] is that, unless the law gives
a different rule, the sum claimed by the plaintiff controls if the claim is apparently made in
good faith.” St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288 (1938).
That is, “[t]he test to determine amount in controversy is not the sum ultimately found to be
due, but the sum demanded in good faith.” Gibson v. Jeffers, 478 F.2d 216, 220 (10th Cir.
1973). “On its face, the phrase ‘good faith’ would seem to imply that the relevant
consideration is the [applicant’s] state of mind and that, therefore, it is a subjective test.”
Jaconski v. Avisun Corp., 359 F.2d 931, 934 (3rd Cir. 1966). Ultimately, though, “the
plaintiff’s actual mental state can never be satisfactorily measured without recourse to
objective facts.” Id. Thus, the basic test for determining “good faith” is that “[i]t must
appear to a legal certainty that the claim is really for less than the jurisdictional amount to
justify dismissal.’” St. Paul Mercury Indemnity, 303 U.S. at 289.
FEMA has not suggested that, when MSD submitted its request for arbitration, it did
not in good faith dispute FEMA’s denial of $597,839.71 in overtime reimbursements and
intend to pursue recovery of that amount, suggesting that this arbitration, with an asserted
amount in dispute that exceeds the $500,000 eligibility threshold, is properly before us.
Nevertheless, MSD has now decided, with some caveats that we will address below, that it
is now only going to attempt to prove a recovery entitlement of $333,986.51 and that we
should award it that amount. Although jurisdiction, or eligibility to pursue a matter in a
chosen forum, normally depends “on the facts as they exist when the complaint is filed,”
Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 830 (1989), the Supreme Court in
Rockwell International Corp. v. United States, 549 U.S. 457 (2007), held that “[t]he state of
things and the originally alleged state of things are not synonymous.” Id. at 473. “[W]hen
a plaintiff files a complaint in federal court and then voluntarily amends the complaint, courts
look to the amended complaint to determine jurisdiction.” Id. at 473-74. “[T]he withdrawal
of those allegations” that originally provided the basis for a court’s jurisdiction will defeat
that jurisdiction “unless they are replaced by others that establish jurisdiction.” Id. at 473.

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Although arbitrations under section 5189a(d) do not require a “complaint” in exactly
the same format as Federal courts require, the applicant’s request for arbitration essentially
serves the same purpose as a complaint, identifying for the Board and for FEMA the scope
and amount of the applicant’s dispute with FEMA’s initial decision. To the extent that,
during the arbitration, an applicant voluntarily amended its dispute to an amount below the
section 5189a(d) threshold, it could, depending upon the reasons for the reduction, be found
to be retroactive to the original arbitration request submission and affect the dispute’s
eligibility for arbitration. See, e.g., Pintando v. Miami-Dade Housing Agency, 501 F.3d
1241, 1242-43 (11th Cir. 2007) (looking to plaintiff’s amended complaint, which superceded
the original, to determine whether district court had subject-matter jurisdiction); Boelens v.
Redman Homes, Inc., 759 F.2d 504, 506-08 (5th Cir. 1985) (“[T]he plaintiff must be held to
the jurisdictional consequences of a voluntary abandonment of claims that would otherwise
provide federal jurisdiction.”). The Rockwell International doctrine has been applied to
make reductions in the amount in controversy that a plaintiff is claiming retroactive to the
original complaint filing date. See Professional Service Industries, Inc. v. Dynamic
Development Co., No. 14-CV-06363, 2018 WL 3389705, at *2 (N.D. Ill. July 12, 2018)
(“When [plaintiff] filed its second amended complaint, alleging a new, and lower, amount
of damages, that figure became the relevant benchmark for assessment of the Court’s
jurisdiction under the diversity statute.”).
What does it mean, then, if an applicant submits a request for arbitration that properly
asserts a dispute in excess of the $500,000 threshold for arbitration eligibility, but then later
reduces the disputed amount below that threshold? In attempting to identify a standard
against which to evaluate when a reduction in the amount in dispute might affect eligibility
under section 5189a(d), we look to court decisions considering plaintiffs who, after filing a
lawsuit in Federal court on diversity jurisdiction grounds, reduce a claim that originally
exceeded the $75,000 amount in controversy requirement for diversity jurisdiction to a figure
below the necessary amount in controversy. The factors that the United States Court of
Appeals for the Sixth Circuit applied in analyzing such a situation in Jones v. Knox
Exploration Corp., 2 F.3d 181 (6th Cir. 1993), seem directly applicable here. The court in
Knox recognized that a subsequent event that occurs after a complaint is filed (such as a court
decision granting a partial motion to dismiss for failure to state a claim or a settlement
between the parties of part of their dispute), will not, if the subsequent event reduces the
amount in controversy below the jurisdictional dollar threshold, eliminate the jurisdiction that
was established when the case was filed, but that “subsequent revelations” that cause a
plaintiff voluntarily, on its own accord and without such a “subsequent event,” to reduce its
claim might:
These cases illustrate the rule that if a good-faith claim of sufficient amount
is made in the complaint, subsequent events that reduce the amount below the

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statutory requirement do not require dismissal. A distinction must be made,
however, between subsequent events that change the amount in controversy
and subsequent revelations that, in fact, the required amount was or was not
in controversy at the commencement of the action.
Id. at 182-83 (emphasis added). In Knox, the court recognized that “the jurisdictional defect
[at issue there] was not disclosed by an amended complaint, by application of a legal defense
following discovery, or by evidence adduced at a trial. Rather, the plaintiffs revealed in their
brief filed in this court that ‘the amount in controversy is actually less than [the required
statutory threshold].’” Id. at 183. In that circumstance, “[s]ince no subsequent event occurred
to reduce the amount in controversy, this can only mean that the plaintiffs’ claims never
satisfied the jurisdictional requirement.” Id.; see State Farm Mutual Automobile Insurance
Co. v. Powell, 87 F.3d 93, 97 (3d Cir. 1996) (directing district court to dismiss appeal where
plaintiff, during litigation, discovered that it had to reduce its requested judgment to an
amount below the jurisdictional threshold); Professional Service Industries, 2018 WL
3389705, at *5 (dismissing lawsuit after plaintiff reduced claim below jurisdictional
threshold); Ham v. TJX Cos., No. 17-CV-01463, 2018 WL 1143156, at *2-*3 (D.D.C. Mar.
2, 2018) (same); Walker v. Conquest Energy, Inc., No. 06-CV-872, 2008 WL 4569875, at
*2 (D. Utah Oct. 10, 2008) (same).
Further, in evaluating whether a reduction in the claimed amount in controversy
affects jurisdiction, courts look at the extent to which the reduction is an attempt at
gamesmanship by one of the parties. Often, a plaintiff who files a lawsuit in state court with
an amount in controversy above the diversity jurisdiction threshold will, after the defendant
has the case removed to Federal court, voluntarily reduce the amount being claimed and then,
asserting that the amount in controversy required for diversity jurisdiction no longer exists,
seek to have the case returned to state court. The Supreme Court has recognized that a
plaintiff, when filing a complaint in state court, can voluntarily place a limit upon the dollar
amount that it is seeking to avoid the possibility of removal to federal court. See St. Paul
Mercury, 303 U.S. at 294. Once a state court action is properly removed to federal court,
however, it is typically too late for a plaintiff then to defeat removal jurisdiction by reducing
the amount of its claim, given the gamesmanship that would result if such after-the-fact
jurisdictional changes were left to “the plaintiff’s caprice.” Id. That is consistent with the
fact that courts, whether addressing post-removal dollar claim reductions or initial
overstatements of amounts in controversy, often look to whether the plaintiff, when bringing
its action, was acting in good faith in identifying an amount in controversy that exceeded the
statutory threshold. See, e.g., Coventry Sewage Associates v. Dworkin Realty Co., 71 F.3d 1,
6 (1st Cir. 1995); Watson v. Blankinship, 20 F.3d 383, 387-388 (10th Cir. 1994).

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We, of course, are not bound by the decisions of the various federal courts, many of
which seem not to be completely consistent with one another on this issue, and those
decisions do not address the specific language of section 5189a(d). Nevertheless, we believe
that the court’s rationale in Knox Exploration provides a useful tool for us in analyzing
whether a dispute between an applicant and FEMA is eligible for arbitration after the
applicant reduces the amount of money in dispute. Unlike the situation in federal district
courts, there is no discovery period in section 5189a(d) arbitration matters that would allow
FEMA to investigate the “good faith” of the applicant in originally identifying the amount
that it intends to dispute in the arbitration, making application of a “good faith” standard that
some courts advocate difficult in practice here. See Knierim v. Siemens Corp., No. 06-4935,
2008 WL 906244, at *11-*12 (D.N.J. Mar. 31, 2008) (permitting discovery on jurisdictional
facts). Further, section 5189a(d) arbitrations are supposed to move quickly, with a hearing
on the merits within sixty days after the initial conference, and typically be fully resolved
within just a few months. 48 CFR 6104.607, .611. Given the speed with which an
arbitration is supposed to progress, an applicant should be well aware, when it files its
request for arbitration, of what it believes is properly in dispute and what it is going to
challenge. The rule from the Rockwell International line of cases that retroactively applies
amendments to the complaint back to the timing of the original filing seems to fit well here,
given that there simply is not time in the arbitration process for the applicant to make the type
of significant change in position that MSD has made here. We hold in the unique
circumstances here that MSD’s completely voluntary reduction in the amount that it is
disputing, made within weeks of submitting its arbitration request, ties back to the date upon
which it submitted, and substitutes for, its original request for arbitration. Because that
reduced amount is below the section 5189a(d) threshold, and because the reduction was not
based upon any kind of partial settlement or other action that resolved portions of the parties’
dispute, this matter is ineligible for arbitration.
MSD argues that we should interpret the amount in controversy requirement based
upon the amount at issue in the project worksheet applicable to this matter, as we have in
arbitrations relating to the Hurricanes Katrina and Rita disasters that we consider pursuant
to authority granted by the American Recovery and Reinvestment Act of 2009 (ARRA), Pub.
L. 111-5, 123 Stat. 115, 164 (Feb. 17, 2009). Section 601 of the ARRA granted arbitration
authority “regarding the award or denial of disputed public assistance applications for
covered hurricane damage under section 403, 406, or 407 of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C. §§ 5170b, 5172, or 5173) for a project the
total amount of which is more than $500,000.” (Emphasis added). MSD asserts that the
Board has recognized that “the amount at issue [in an arbitration authorized by the ARRA]
is determined by the amount of money obligated under the PW at issue” and that, because
PW 593 involves a total project cost of $843,776.25 ( of which $597,839.71 was disallowed),
arbitration eligibility is automatically established. Applicant’s Response (Sept. 17, 2020)

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at 5. In support, MSD cites to this Board’s decision in Forrest County Board of Supervisors,
CBCA 1772-FEMA, 10-1 BCA ¶ 34,453, in which the Board held that, even though the
amount of public assistance sought in arbitration was just over $200,000, the project costs
shown on FEMA’s PW were over $500,000. In that instance, the Board found arbitration
eligibility because the project cost shown on the PW exceeded the $500,000 threshold.
Section 5189a(d), which is the basis of our authority to arbitrate requests associated
with the dispute at issue here, is written very differently than the ARRA. It does not provide
eligibility based upon the project amount, but, instead, on the amount of denied funding that
the applicant is disputing. Granted, the PW will likely set the outside maximum of what the
Board, through arbitration, can provide the applicant through arbitration, given the
parameters of the pre-arbitration process in which the applicant and FEMA must engage to
narrow disputes before coming to the Board. Nevertheless, unless the applicant is coming
to the Board to dispute more than $500,000 in denied funds, section 5189a(d) does not permit
the applicant to arbitrate here. Here, subject to the caveats that MSD has raised and that we
will address below, the only “dispute” that MSD is asking the Board to resolve is its
entitlement to $333,986.51, a figure below the required dispute threshold. It is no longer
seeking any dollar recovery from the Board above that amount, meaning that, as far as the
Board’s proceeding is concerned, the only “dispute” that will be resolved by arbitration—that
is, the only “conflict or controversy” that is before the Board to decide, see Black’s Law
Dictionary 572 (10th ed. 2014)—is one that falls below the dollar threshold for arbitration
eligibility. Applying MSD’s argument, if FEMA in a PW declined to fund more than
$500,000 in claimed costs, but the applicant, upon review, ultimately only disagreed with and
wanted to challenge $50 of the disallowance, the applicant could properly file a request for
arbitration with the Board limited to that $50 dispute. That is clearly not what 42 U.S.C.
§ 5189a(d) envisions. The Forrest County decision interpreting a very different arbitration
threshold not only does not apply to this arbitration, but indicates that Congress, by adopting
a different standard under 42 U.S.C. § 5189a(d) than the ARRA, intentionally changed the
focus of the arbitration threshold from the amount in the PW to the amount actually in
dispute.
MSD also argues that it should not be penalized, through dismissal of this arbitration,
for engaging in good faith settlement negotiations with FEMA. Certainly, it would not create
a barrier to arbitration eligibility for an applicant seeking more than $500,000 in arbitration
to try to resolve its dispute with FEMA by making or considering a settlement offer below
that dollar amount. In fact, settlement negotiations that would resolve the parties’ dispute
are actively encouraged. Nevertheless, taking a position in settlement negotiations that might
resolve some or all of the parties’ dispute is very different from affirmatively reducing the
amount that is being claimed in the arbitration itself. That reduction is not something that
is necessary as part of a settlement negotiation. In modifying the amount of money in dispute

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and telling the Board that it was limiting its request to $333,986.51, MSD voluntarily
restricted the dispute to a dollar amount less than $500,000 and eliminated this matter’s
eligibility for arbitration under 42 U.S.C. § 5189a(d).
In addition, MSD asserts that “[t]he full $597,839.71 [is] still recoverable” because,
if it chose to do so, MSD could present testimony that would allow for recovery of that
amount. Applicant’s Response (Sept. 17, 2020) at 3. Yet, MSD has already taken positions
that preclude it from presenting such testimony. Under the Board’s July 14, 2020, scheduling
order, MSD had to present the written testimony of its witnesses, detailing what each witness
was going to say, no later than September 11, 2020. MSD complied with that order, and the
testimony that it presented not only does not include anything about costs in excess of
$333,986.51, it expressly disavows that MSD is seeking anything more than that amount.
Although MSD asserts that we could choose to award $597,839.71 even though it is not
presenting testimony to support it, the only supporting evidence in the record to which MSD
has pointed is Exhibit CC/CCC, which contains a series of timesheets showing that
employees incurred time working, but does not indicate what any of them were working on
or whether any of it involved disaster-related matters that required payment of more than
their regular salary. We could not base an excess costs award on that evidence, even if the
applicant was relying upon it.1 More importantly, the disputed amount in controversy is
typically “measured by the object of the litigation” and, more specifically, the monetary
benefit that would obtain from success in the litigation. Olden v. LaFarge Corp., 203 F.R.D.
254, 260 (E.D. Mich. 2001). MSD is presenting no evidence that could support any dollar
recovery beyond $333,986.51. The price reduction that MSD has “strategically chosen” to
make in the arbitration, Applicant’s Response (Sept. 17, 2020) at 4, and its decision to
present no evidence in support of any greater award eliminates any dispute about a monetary
award above $333,986.51.

1

Citing to Peterson v. Travelers Indemnity Co., 867 F.3d 992 (8th Cir. 2017), MSD
asks us to apply a “legal impossibility” standard to dismissal, such that we should find the
eligibility threshold satisfied unless “legal impossibility of recovery [is] so certain as virtually
to negative the plaintiff’s good faith in asserting the claim.” Id. at 995 (quoting Schubert v.
Auto Owners Insurance Co., 649 F.3d 817, 822 (8th Cir. 2011)). Applying that standard,
though, MSD’s voluntary decision to reduce its claim amount within weeks after submitting
its request for arbitration and providing no evidence upon which a higher award could be
based make it a legal impossibility for MSD to obtain a greater recovery than the
$333,986.51 that it is now seeking.

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Decision

For the foregoing reasons, we dismiss this arbitration because the amount in dispute
does not meet the eligibility threshold in section 5189a(d).

Patricia J. Sheridan
PATRICIA J. SHERIDAN
Board Judge

Marian E. Sullivan
MARIAN E. SULLIVAN
Board Judge

Harold D. Lester, Jr.
HAROLD D. LESTER, JR.
Board Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Acbca%3A2127914f31d926e9. Public record. Not legal advice.