230 F.3d 920 (7th Cir. 2000)
Robert L. Caudle, Plaintiff-Appellant,v.American Arbitration Association, Defendant-Appellee.
No. 00-1423
In the  United States Court of Appeals  For the Seventh Circuit
Argued September 29, 2000Decided October 17, 2000

Appeal from the United States District Court  for the Southern District of Illinois.  No. 99-4108-JPG--J. Phil Gilbert, Judge.
Before Easterbrook, Ripple, and Evans, Circuit  Judges.
Easterbrook, Circuit Judge.


1
When Robert Caudle  became a distributor of Sears products in 1989 he  agreed to arbitrate (under the auspices of the  American Arbitration Association) any  disagreements arising out of that arrangement.  After Sears terminated the distributorship,  however, Caudle decided that he prefers  litigation to arbitration--indeed, that he  prefers lots of litigation.


2
Sears reorganized its distribution system in  1992, cutting out catalog centers that had been  operated by independent businesses, including  Caudle. Instead of initiating arbitration under  the contract, Caudle filed a suit seeking to  represent a class of all similar dealers. He  thought that by pursuing relief for a class he  could avoid arbitration, because the AAA does not  conduct class-wide arbitrations. But the state  courts held that Caudle's excuse for avoiding his  promise to arbitrate--a claim that Sears had made  oral promises in addition to the written  contract--was unavailing. Caudle v. Sears,  Roebuck & Co., 245 Ill. App. 3d 959, 614 N.E.2d  1312 (5th Dist. 1993). A procedural device  aggregating multiple persons' claims in  litigation does not entitle anyone to be in  litigation; a contract promising to arbitrate the  dispute removes the person from those eligible to  represent a class of litigants. Next in line was  a suit--also in state court, because both Caudle  and Sears are citizens of Illinois--seeking a  declaration that the arbitration clause in the  contract is unenforceable. Once again Caudle  lost. Caudle v. Sears, Roebuck & Co., 281 Ill.  App. 3d 1151, 701 N.E.2d 844 (5th Dist. 1996)  (unpublished order). After the Supreme Court  denied his petition for certiorari, 520 U.S. 1143  (1997), Caudle finally initiated arbitration--but  he did not pursue it. The AAA concluded that its  procedures call for disputes of this kind to be  heard by panels of three arbitrators, and it  directed both Caudle and Sears to prepay fees  $5,800 on top of the $3,400 assessed for a one-  arbitrator proceeding. Sears complied; Caudle did  not. He balked at paying more than $3,400; the  AAA responded by informing Caudle that, if he did  not pay in full, the proceedings would be closed.  Caudle did not pay, and after the deadline had  passed he filed this, his third lawsuit--and he  filed it in federal court against the AAA,  contending it broke a contract (one formed by  Caudle's tender of $3,400) requiring it to  provide arbitration services at a reasonable  price.


3
Relying on Hawkins v. National Association of  Securities Dealers Inc., 149 F.3d 330 (5th Cir.  1998); Olson v. National Association of  Securities Dealers, 85 F.3d 381 (8th Cir. 1996),  and many equivalent decisions from other courts,  the district judge held that arbitrators (and  sponsoring organizations such as the AAA) possess  immunity from suit. Just as a litigant files an  appeal, rather than suing the judge or the court  of which the judge is a member, if he does not  like decisions by the trial court (including  calculations of filing fees and costs), so a  party to arbitration should sue to enforce or set  aside the award, naming as the adverse litigants  the other parties to the original contract.  (Applications for mandamus, to which district  judges were nominal parties before the 1996  amendment to Fed. R. App. P. 21(a), are a form of  appellate proceeding within a suit involving the  real adversaries.) Like judges, arbitrators "have  no interest in the outcome of the dispute between  [the parties to the contract], and they should  not be compelled to become parties to that  dispute." Tamari v. Conrad, 552 F.2d 778, 781  (7th Cir. 1977). It is not clear whether this  principle is properly understood as an "immunity"  rather than a conclusion that arbitrators and  organizing bodies are not the real parties in  interest. See Fed. R. Civ. P. 17(a). Suppose  Caudle had paid the full $9,200 the AAA  specified, and the Association had pocketed the  money without arbitrating the dispute; it is  unlikely that the AAA could claim "immunity" in  response to a demand for a refund (or an order to  furnish the arbitration service for which it had  been paid). Caudle contends that his grievance--  that he paid $3,400 yet has not received an  arbitration--is like this hypothetical and thus  outside the scope of arbitral immunity. We need  not decide whether that is so, because there is  a more fundamental question, one the district  judge did not mention: What is this case doing in  federal court?


4
As Caudle sees matters, the federal-question  jurisdiction, 28 U.S.C. sec.1331, applies because  he wants to compel the AAA to arbitrate his  dispute under 9 U.S.C. sec.4. But sec.4 is  neither a grant of jurisdiction nor the source of  an independent claim arising under federal law.  "Section 4 provides for an order compelling  arbitration only when the federal district court  would have jurisdiction over a suit on the  underlying dispute; hence, there must be  diversity of citizenship or some other  independent basis for federal jurisdiction".  Moses H. Cone Memorial Hospital v. Mercury  Construction Corp., 460 U.S. 1, 25 n.32 (1983);  see also, e.g., We Care Hair Development, Inc. v.  Engen, 180 F.3d 838, 841 (7th Cir. 1999). If  Caudle's dispute is with the AAA, as he insists,  rather than Sears, then the parties are of  diverse citizenship (the AAA is a nonprofit  corporation with both its headquarters and its  place of incorporation in New York; see CCC  Information Services Inc. v. American Salvage  Pool Association, No. 99-3393 (7th Cir. Sept. 22,  2000)). But the amount in controversy between  Caudle and the AAA is well short of $75,000. If  Caudle ponied up the $5,800, or the AAA changed  its mind about the appropriate number of  arbitrators and settled for the $3,400 Caudle has  paid, then his dispute with the AAA would be at  an end. The maximum judgment in this suit cannot  exceed an order to arbitrate without insisting on  the remaining $5,800, and this order would not be  worth more than $5,800 from either side's  perspective. Cf. In re Brand Name Prescription  Drugs Antitrust Litigation, 123 F.3d 599, 610  (7th Cir. 1997); McCarty v. Amoco Pipeline Co.,  595 F.2d 389 (7th Cir. 1979).


5
To see this, suppose Michael Jordan left his  Ferrari in a garage, which would not return the  car until he paid $10 for two hours' parking.  Could Jordan get review in federal court of his  contention that $10 is an "unreasonably high fee"  for such a short stay by alleging that the value  of the detained car exceeds $75,000? Surely not;  the real controversy concerns the difference (if  any) between $10 and the proper fee for two  hours' parking. By paying $10 Jordan could have  his car immediately while continuing his quest  for a refund. Caudle likewise could pay,  arbitrate, and demand some of the money back  later (and if, as Caudle insists, he cannot cover  the expense up front, he could borrow it from his  lawyer, as is customary in contingent-fee  litigation). In many commercial disputes damages  are set by the price of cover: if the seller  fails to deliver a shipment of steel for which  the contract price is $1 million, the damages are  limited to the difference between $1 million and  the price (say, $1,050,000) at which the buyer  could have obtained the product from another  seller. The amount in controversy in such a case  is $50,000, not $1 million. See Gardynski-  Leschuck v. Ford Motor Co., 142 F.3d 955 (7th  Cir. 1998). Similarly, the amount in controversy  here is $5,800, not the amount Sears may owe  Caudle (if Caudle ultimately prevails).


6
What Caudle wants to do is combine the stakes  of his dispute with Sears (which exceed $75,000)  with the citizenship of the AAA in order to come  within 28 U.S.C. sec.1332. That won't work,  however; the stakes must be the amount in dispute  between the litigants. Many a suit entails a  claim that arbitration is too expensive or  otherwise inappropriate, and that a clause  requiring arbitration therefore should not be  enforced. Then the main issue would be the  location of the dispute resolution (court versus  arbitrator), the stakes would be those of the  underlying dispute, see Doctor's Associates, Inc.  v. Hamilton, 150 F.3d 157, 160-61 (2d Cir. 1998),  and the litigants would be the parties to the  contract calling for arbitration. It is easy to  see, however, why Caudle has not pursued that  kind of claim: he already litigated it against  Sears in state court, and he lost. Sears could  use principles of preclusion to block any further  effort to get out of the promise to arbitrate.  That is why Caudle sued the AAA instead. But to  do this he must leave behind his dispute with  Sears and focus on his dispute with the AAA,  which concerns the fee it seeks to collect. This  $6,000 dispute cannot be resolved under the  diversity jurisdiction.


7
The judgment of the district court is vacated,  and the case is remanded with instructions to  dismiss for want of jurisdiction.

