In Hermes of Paris, Inc. v. Swain, No. 16‐3182‐cv (August 14, 2017), the Second Circuit held that in determining diversity jurisdiction for a petition to compel arbitration under Section 4 of the FAA, a court can look only at the citizenship of the parties to the petition to compel and any parties who must be joined as indispensable parties under Fed. R. Civ. P. 19. The court ruled that it would be improper to "look through" the petition to see if any other persons might be affected by the arbitration (and who would not be considered indispensable parties). The court stated that it was bound by its decision in Doctor's Associates, Inc. v. Distajo, 66 F. 3d 438 (2d Cir. 1995), which directly held that diversity jurisdiction is determined by looking at the parties to the petition plus any indispensable parties.
The Second Circuit said that the Supreme Court's ruling in Vaden v. Discover Bank, 556 U.S. 49 (2009), did not alter the binding effect of Distajo, because Vaden employed a "look-through" approach to determine if there was federal question jurisdiction, and not diversity jurisdiction. In footnote 6, the Second Circuit pointed out that diversity jurisdiction existed in Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983), where the parties to the petition were completely diverse but the parties to the underlying dispute were not (although the Second Circuit added that the Supreme Court did not expressly address subject matter jurisdiction in that case).