dissenting.
In American Guaranty Co. v. Caldwell, 72 F.2d 209 (9th Cir.1934), we held that it is the “amount in controversy which determines jurisdiction, not the amount of the award.” Id. at 211. The majority today holds directly to the contrary. See Maj. op. at 1194. The opinion recognizes what American Guaranty said, but dismisses it on the ground that “it is unlikely that we meant to hold that jurisdiction turns on the amount in controversy rather than the amount of the award given the posture in which the issue arose and the context in which the remark was made. Certainly jurisdiction did not turn on any such distinction in that case.” Id. at 1192. With all due respect to my colleagues, they are mistaken. American Guaranty says very clearly that it is “the amount in controversy which determines jurisdiction.” 72 F.2d at 211 (emphasis added). The statement is phrased as a rule of law, not idle chatter; if this is not a holding, I’m not sure what is.
What we can say about American Guaranty is that the court there also had an alternative ground for decision, based on the fact that the district court had retained jurisdiction over the case when it sent the parties to arbitration. Id. at 211-12. We could just as easily characterize that passage in American Guaranty as a meaningless distraction added for local color after the court had determined there was jurisdiction based on the amount in controversy, but that would be equally wrong. Quite clearly, the American Guaranty opinion had alternative rulings: It held there was jurisdiction in the district court because the amount in controversy was satisfied and because the court had retained jurisdiction when the parties were engaged in arbitration. The following excerpt from the case bears this out:
In addition to the record showing this original award of $32,500, it further discloses that evidence had been offered showing appellee had suffered damages in excess of $100,000.... It is the amount in controversy which determines jurisdiction, not the amount of the award.
The District Court first acquired jurisdiction in this matter when the controversy as to the original award of $32,500 was transferred by appellant’s application from the state court to the federal court. This application of appel-lee to set aside the award giving him nothing was made in the same court, filed in the same action, involving the same controversy between the same parties in which the District Court had originally acquired jurisdiction upon the application of appellant, and which was still *1197pending. The contention that the District Court was without jurisdiction to set aside the award is without merit.
Id. (citation omitted).
We have no basis for choosing either of these grounds as the holding and dismissing the other as dicta. On the contrary, “where a decision rests on two or more grounds, none can be relegated to the category of obiter dictum.” Woods v. Interstate Realty Co., 337 U.S. 535, 537, 69 S.Ct. 1235, 93 L.Ed. 1524 (1949). Even those who take a narrow view of what constitutes binding precedent recognize as much. See United States v. Johnson, 256 F.3d 895, 920 n. 5 (9th Cir.2001) (en banc) (Tashima, J., concurring) (“Of course, [alternative holdings and dicta] are not the same.”). As an alternative holding, our statement that “[i]t is the amount in controversy which determines jurisdiction, not the amount of the award,” American Guaranty, 72 F.2d at 211, is binding on us. If my colleagues don’t like that rule, they must make a sua sponte en banc call.
The majority seems to be swayed by the fact that “two circuits have since taken a contrary view,” but they are mistaken. In Ford v. Hamilton Investments, Inc., 29 F.3d 255 (6th Cir.1994), the Sixth Circuit held that the district court lacked jurisdiction over a claim to vacate an arbitration award that fell below the jurisdictional minimum. Id. at 260. But, because of the posture of the case, the amount in controversy just happened to equal the amount of the arbitration award. The party who sought arbitration in Ford was satisfied with the award of $30,524.16, while the party against whom the award was entered was trying to vacate it. Thus, regardless of the ultimate outcome of the proceedings, no more than about $30,000 would actually change hands, which was less than the $50,000 jurisdictional amount in controversy. In Luong’s case, however, the amount in dispute between the parties is more than $178,000 — the amount to which Luong claims to be entitled. If Luong persuades the district court to vacate the arbitration award, Luong will continue to press his claim for an award in that amount.
My colleagues seem to believe that the Eleventh Circuit rejected American Guaranty in Baltin v. Alaron Trading Corp., 128 F.3d 1466 (11th Cir.1997), but they totally misread the case. Baltin was a petition to set aside an arbitration award in the amount of $36,284.69, brought by the party against whom the award was entered. The Eleventh Circuit said: “The maximum remedy sought by the Baltins was the vacatur of the arbitration award of $36,284.69. Diversity jurisdiction did not exist because it was a ‘legal certainty’ that the amount in controversy was less than $50,000, the amount required for federal diversity jurisdiction at the time the Bal-tins filed suit.” Id. at 1472 (footnotes omitted). In a footnote, the court explained that “[t]he Baltins [against whom the arbitration award was entered] did not request an award modification that would provide the Baltins with money. Instead, the Baltins sought merely to reduce or eliminate the arbitration award against them.” Id. at 1472 n. 16. Clearly the Eleventh Circuit looked to the actual amount in dispute between the parties, not merely to the arbitrator’s award, else what would have been the point of footnote sixteen? Baltin thus adopted the American Guaranty rule. By abandoning American Guaranty, the majority is creating a split with the Eleventh Circuit.
Moreover, the rule my colleagues adopt makes no sense, as it causes the amount in controversy to turn on the arbitrator’s possibly erroneous ruling, rather than the actual amount in dispute between the parties. The absurdity of the rule can be demonstrated by considering the following *1198example: X claims Y owes him $100,000 in a contract dispute. The case is ordered to arbitration, and the arbitrator comes up with an award of $80,000. X claims he was entitled to more and petitions to have the award vacated. Under the majority’s approach, the district court would have jurisdiction. But if the arbitrator happens to award only $30,000 — or nothing at all— because of the same claimed legal error, the district court would lack jurisdiction. There is no principled distinction between the two cases; if the petitioner prevails in either case, the award will be vacated and petitioner will be back in arbitration seeking his full $100,000. I can see no logic at all in letting the very award that is the fruit of the claimed error govern the amount in controversy.
“ ‘[W]here a panel confronts an issue germane to the eventual resolution of the case, and resolves it after reasoned consideration in a published opinion, that ruling becomes the law of the circuit, regardless of whether doing so is necessary in some strict logical sense.’ ” Miranda B. v. Kitzhaber, 328 F.3d 1181, 1186 (9th Cir.2003) (per curiam) (quoting Johnson, 256 F.3d at 914). American Guaranty confronts the jurisdictional issue and resolves it in terms clearly applicable to our case. It doesn’t matter whether that ruling was necessary; it suffices that it was a ruling. The Eleventh Circuit has followed the same path in Baltin. With one stroke, the majority creates both an intra- and inter-circuit conflict. This is too big a leap for me. I dissent.