No Federal Power to Compel Arbitration of Ongoing State Probate Asset Proceedings: The Sixth Circuit’s “Look‑Through plus In‑Rem” Bar under FAA § 4

Introduction

In Amos C. Johnson, M.D., and Johnson Family Trust v. Rita Elizabeth Johnson, the U.S. Court of Appeals for the Sixth Circuit affirmed the dismissal of a federal action seeking to compel arbitration of state probate proceedings. The family dispute arose after the death of Marjorie Johnson, whose will contained a pour-over provision to the Johnson Family Trust. Her daughter, Rita Johnson, serving as personal representative, initiated probate proceedings in Wayne County, Michigan to determine whether certain assets belonged to the estate or to the Trust. The Trust instrument required disputes “related to” the Trust to be arbitrated.

When the state probate court declined to compel arbitration, the trustee and son, Dr. Amos C. Johnson, and the Trust filed in federal district court under § 4 of the Federal Arbitration Act (FAA), seeking an order compelling arbitration of the pending probate matters. The district court dismissed for lack of subject matter jurisdiction, and the Sixth Circuit affirmed.

The appeal presented interlocking questions of federal jurisdiction: (1) whether § 4 of the FAA supplies federal-question jurisdiction or allows “look-through” jurisdiction when the underlying dispute is a state probate asset proceeding; (2) whether diversity jurisdiction is defeated by the probate exception and the prior-exclusive-jurisdiction rule governing in rem proceedings; and (3) whether compelling arbitration would impermissibly interfere with a state probate court’s custody over estate property. The Sixth Circuit answered with a categorical “no” to federal jurisdiction in these circumstances and affirmed.

Summary of the Opinion

The Sixth Circuit held:

• FAA § 4 does not itself confer federal-question jurisdiction. Courts must “look through” the petition to the underlying dispute to determine whether an independent jurisdictional basis exists. Here, the underlying probate disputes arise under state law; therefore, no federal-question jurisdiction exists (Moses H. Cone; Vaden; Badgerow).
• Diversity jurisdiction likewise fails, because the state probate proceedings are in rem. Ordering arbitration would disturb or affect the possession of property in the custody of the state probate court, contravening the probate exception and the prior-exclusive-jurisdiction principle.
• Classifying the probate litigation as in rem was decisive. Upon the appointment of the personal representative, the estate assets are within the custody and control of the probate court as a matter of federal law (Yonley). An order compelling arbitration would wrest control of the res from the probate court by placing the assets at the disposal of the arbitral forum—an impermissible interference.
• Because the federal court would not have had subject matter jurisdiction over the underlying probate disputes, it lacked power under FAA § 4 to compel arbitration. Affirmed.

The panel did not resolve whether complete diversity was lacking under 28 U.S.C. § 1332(c)(2) (citizenship of the personal representative), nor did it opine whether the probate exception applies in federal-question cases, noting that courts may address jurisdictional defects in any order (Acheson Hotels).

Analysis

Precedents Cited and How They Shaped the Decision

• Moses H. Cone Memorial Hospital v. Mercury Construction (1983): Confirmed that the FAA does not create federal-question jurisdiction by itself; a petition under the Act must rest on an independent jurisdictional foundation.
• Vaden v. Discover Bank (2009): Adopted the “look-through” approach for FAA § 4 petitions—courts assess jurisdiction by looking through the petition to the underlying substantive controversy.
• Badgerow v. Walters (2022): Reaffirmed that the look-through approach applies to § 4 (not universally across the FAA), and underscored the separate, jurisdictional nature of the inquiry.
• Markham v. Allen (1946) and Marshall v. Marshall (2006): Described and confined the probate exception—federal courts may not probate or annul a will, administer an estate, or dispose of property in the custody of a state probate court; however, they may adjudicate in personam claims that do not disturb the res.
• Payne v. Hook (1868) and Grupo Mexicano de Desarrollo v. Alliance Bond Fund (1999): Emphasized that federal equity jurisdiction tracks the powers of the English High Court of Chancery at the Founding; that court lacked probate jurisdiction.
• Trump v. CASA, Inc. (2025): Restated that federal equitable authority is cabined to traditional equitable powers; a doctrinal anchor used here to explain why federal courts cannot extend equitable jurisdiction to probate matters beyond historical bounds.
• Wisecarver v. Moore (6th Cir. 2007); Chevalier v. Estate of Barnhart (6th Cir. 2015); Cartwright v. Garner (6th Cir. 2014): Sixth Circuit framework for the probate exception: first classify the suit as in personam or in rem; only if in rem or quasi in rem do courts ask whether federal action would disturb property in state custody.
• Jones v. Brennan (7th Cir. 2006) and Struck v. Cook County Public Guardian (7th Cir. 2007): Articulated the policy concern against a federal court “elbowing” into ongoing control over a res in another court’s hands.
• Yonley v. Lavender (1874): When an executor or administrator is appointed, the decedent’s property comes under the custody of the probate court—key to the in rem classification and custody analysis.
• Allied-Bruce Terminix v. Dobson (1995) and Prima Paint v. Flood & Conklin (1967): Confirmed that the FAA rests on Congress’s Commerce Clause powers—relevant to dispel the contention that the Act’s broad substantive scope supplies subject-matter jurisdiction.
• Acheson Hotels v. Laufer (2023): Courts may address jurisdictional issues in any order—a procedural note used to sidestep unresolved issues once one dispositive jurisdictional defect was found.

Legal Reasoning

The court’s reasoning proceeds in two tracks: the “look-through” requirement under the FAA, and the limits imposed by the probate exception and prior-exclusive-jurisdiction principles.

• FAA § 4’s jurisdictional gateway:
  • FAA § 4 authorizes a petition to compel arbitration only in a federal court that, “save for” the arbitration agreement, would have jurisdiction over the “suit arising out of the controversy.”
  • Applying Vaden’s look-through approach, the court examines the underlying dispute pending in state court. Here, that is a probate proceeding to determine title to assets between the estate and the Trust—quintessentially a state-law matter. No federal question exists. FAA § 4 therefore cannot be invoked to manufacture federal-question jurisdiction.
• Diversity jurisdiction constrained by the probate exception and in rem custody:
  • Even assuming diversity, the Sixth Circuit applies its two-step probate-exception test. Step one: classify the posture. The state probate proceedings are in rem because they concern title to property and bind all claimants as against the world.
  • Step two: would a federal order disturb property in state custody? Yes. Once Rita Johnson was appointed personal representative, the probate court’s custody attached to estate assets (Yonley). A federal order compelling arbitration would remove control from that court and place the res “at the disposal of” arbitrators. That interference is precisely what the probate exception and the prior-exclusive-jurisdiction doctrine forbid.
• Equity-jurisdiction boundary:
  • Reinforcing the analysis, the opinion locates these limits in the historical scope of federal equity, which mirrors the English Chancery’s lack of probate jurisdiction. Federal courts cannot enlarge equitable powers to reach the administration of estates or possession of estate property.

The court further notes but does not decide an independent barrier: the possibility that complete diversity is lacking because § 1332(c)(2) deems the personal representative a citizen of the decedent’s state (Michigan), the same as the plaintiffs for jurisdictional purposes. Because subject-matter jurisdiction fails on the in rem/probate-exception ground, the panel declines to reach that alternative defect.

Impact

This decision establishes a clear and practical rule in the Sixth Circuit: a federal court cannot use FAA § 4 to compel arbitration of an ongoing state probate asset-determination proceeding when doing so would interfere with the state court’s in rem custody of estate property. Practitioners should expect several ripple effects:

• Arbitration clauses in trust instruments:
  • They remain enforceable in principle, but enforcement must occur, in the first instance, in state court when the dispute is already lodged in a probate proceeding concerning title to estate assets.
  • Attempts to pivot to federal court under FAA § 4 will fail where the underlying matter is in rem and within a probate court’s control.
• Forum strategy in trust-and-estate disputes:
  • If a dispute is in personam (for example, a beneficiary’s damages action against a trustee for breach of fiduciary duty) and complete diversity exists, federal jurisdiction may still be available. But where the dispute is about who owns the assets (estate versus trust) within a pending probate administration, federal courts are off limits.
  • Counsel seeking to compel arbitration should proceed in state probate court and rely on the FAA’s substantive policy favoring arbitration there, rather than in federal court.
• Removal and anti-suit measures:
  • Removal to federal court of probate asset proceedings remains unavailable under the probate exception and in rem custody principles.
  • Requests for federal anti-suit injunctions or orders compelling arbitration that would divest a probate court of control over estate assets are jurisdictionally barred.
• Timing considerations:
  • Once a personal representative is appointed, probate-court custody attaches to estate assets. Any federal action that would disturb possession is presumptively barred. If parties wish to arbitrate ownership questions, the petition must be addressed to the state court with custody over the res.
• Unresolved questions:
  • The panel expressly avoided deciding whether the probate exception applies in federal-question cases. In a future case presenting a bona fide federal question, the interaction between Article III jurisdiction and the probate exception may resurface.

Complex Concepts Simplified

• FAA § 4 “look-through” jurisdiction:
  • Filing a petition to compel arbitration in federal court does not automatically create federal jurisdiction. The court asks: If we pretend there were no arbitration clause, would we still have jurisdiction over the actual dispute? If the answer is no, the petition must be dismissed.
• Federal-question versus diversity jurisdiction:
  • Federal-question jurisdiction exists if the underlying dispute arises under federal law. Diversity jurisdiction requires complete diversity of citizenship and a sufficient amount in controversy, but it can be limited by special doctrines like the probate exception.
• Probate exception:
  • A longstanding judicial doctrine that keeps federal courts out of core probate functions: probating or annulling a will, administering the estate, or taking control of property that a state probate court is already managing.
• In personam vs. in rem:
  • In personam suits seek to impose personal liability or obligations on a person. In rem suits are about the status or ownership of property itself, binding against the world. Probate asset disputes about who owns particular property are typically in rem.
• Prior-exclusive-jurisdiction rule:
  • When one court takes control (custody) over specific property, that court has exclusive authority to decide disputes about that property. Another court cannot issue orders that interfere with the first court’s control.
• Pour-over will:
  • A will that transfers (pours over) some or all of the decedent’s property into a trust upon death. Disputes often arise over whether particular assets poured into the trust or remained in the probate estate.
• Citizenship of estates for diversity (28 U.S.C. § 1332(c)(2)):
  • For purposes of diversity jurisdiction, the legal representative of an estate is deemed to be a citizen of the same state as the decedent. This can defeat complete diversity when other parties share that citizenship.

Strategic Takeaways and Practice Pointers

• If the state probate court has already taken custody of estate assets (e.g., by appointing a personal representative), do not expect a federal court to compel arbitration under FAA § 4 if the arbitration would decide title to those assets.
• Enforce trust arbitration clauses in state probate court. State courts are fully competent to apply the FAA’s substantive law favoring arbitration.
• When drafting trust instruments with arbitration clauses, consider mechanisms to channel disputes before estate administration begins, or to clarify that only in personam disputes (e.g., surcharge, damages, accounting) will be arbitrated, recognizing that asset-title determinations during probate may remain in court.
• If seeking a federal forum, frame claims as in personam where appropriate and ensure the relief sought does not disturb property in probate-court custody.
• Do not conflate the FAA’s broad substantive reach under the Commerce Clause with federal subject-matter jurisdiction. The Act supplies rules and remedies; it does not open federal courthouse doors on its own.

Conclusion

The Sixth Circuit’s opinion erects a bright-line jurisdictional barrier for FAA § 4 petitions aimed at ongoing state probate asset proceedings. By insisting on the FAA’s look-through requirement and by rigorously applying the probate exception and prior-exclusive-jurisdiction principles, the court confirms that federal courts cannot compel arbitration when doing so would divest a state probate court of control over estate property. The decision harmonizes the FAA with historic limits on federal equity rooted in English chancery practice, clarifies the in rem character of probate asset disputes, and channels arbitration enforcement efforts in this context to state courts. For trust-and-estate practitioners and litigators, the message is clear: if the controversy is about who owns property already under a probate court’s control, keep the battle—and any bid to arbitrate—in the probate tribunal.