In Johnson v. Johnson, No. 24-2058 (6th Cir. Oct. 24, 2025), the Sixth Circuit affirms dismissal of an action to compel arbitration under Section 4 of the Federal Arbitration Act, holding that – under the probate exception – the lower court lacked equitable jurisdiction to interfere with a state in rem proceeding.
The decedent “Mrs. Johnson’s daughter, [defendant] Rita E. Johnson, was appointed as the executrix of her mother’s estate by the probate court in Wayne County, Michigan. The daughter initiated two probate proceedings in that court to determine the ownership of some of her mother’s assets. The proceedings center on a pour-over provision in the decedent’s will and whether some of her assets belong to the Trust (and therefore pass outside of probate) or the estate (and therefore pass through probate).”
Citing an arbitration clause in the trust, Rita’s sibling Amos Johnson moved unsuccessfully in state court to compel arbitration. He then “filed this action in the Eastern District of Michigan, seeking to compel arbitration of the probate proceedings under § 4 of the Federal Arbitration Act (FAA), 9 U.S.C. § 4.”
The district court dismissed the action for lack of subject-matter jurisdiction, holding that “it lacked diversity jurisdiction because the proceedings in the state court were brought in rem, and the proceeding in federal court ‘would interfere with the state probate court’s custody over the disputed assets’ by ‘plac[ing] them at the disposal of the arbitral body charged with adjudicating the dispute.’”
The Sixth Circuit affirms dismissal for lack of subject-matter jurisdiction. Section 4 of the FAA does not provide federal-question jurisdiction by itself; a federal court must locate jurisdiction in the underlying dispute (a/k/a the “look-through” doctrine).
Because the case arose under state law, that left diversity jurisdiction (28 U.S.C. § 1332) as the only potential basis for jurisdiction here. The plaintiff plead that he (citizen of Michigan) and his sister (citizen of California) were diverse. (In a footnote, the panel questions this assumption: the sister, as executor, assumes the citizenship of the decedent under 28 U.S.C. § 1332(c)(2), and so is deemed a Michigan citizen. But it does not take the opportunity to decide the case on this patently simple ground, for some reason.)
Diversity jurisdiction founders here, the panel holds, because of the limits of federal equitable jurisdiction.
The Supreme Court has long held that the equity jurisdiction conferred by Congress on federal courts (by the original Judiciary Act) extends only to the limits of the English Court of Chancery in 1789. And, though it is disputed history, the Supreme Court has held that the English court lacked power over probate matters. This has come to be known as the “probate exception.”
Notwithstanding the probate exception, federal courts do have power to hear claims by creditors, legatees, heirs, and other claimants against a decedent’s estate, provided that it does not interfere with the state proceeding or assume control over the property in the state-court’s custody. The panel concludes here, though, that federal jurisdiction would indeed be interfering with property under the control of the Michigan state court.
“The state court probate proceedings are plainly in rem proceedings. The core of the probate case is whether certain pieces of real and personal property belong to Mrs. Johnson’s estate or whether they belong to the Trust. That is a dispute over the title to property—a classic in rem proceeding. By appointing Rita Johnson as the executrix of the estate, the state probate court took possession of the property as a matter of federal law . . . By wresting control of that property away from the probate court and giving it to an arbitral panel, the district court would have been interfering with the possession of property within the control of the state probate court. The district court therefore lacked subject matter jurisdiction.”
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