                           PUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT


DISCOVER BANK; DISCOVER FINANCIAL       
SERVICES, INCORPORATED,
                Plaintiffs-Appellees,
                 v.                              No. 04-1848

BETTY E. VADEN,
              Defendant-Appellant.
                                        
           Appeal from the United States District Court
            for the District of Maryland, at Baltimore.
              William D. Quarles, Jr., District Judge.
                      (CA-03-3224-1-WDQ)

                      Argued: December 1, 2004

                      Decided: January 24, 2005

 Before WILKINSON, TRAXLER, and DUNCAN, Circuit Judges.



Vacated and remanded by published opinion. Judge Wilkinson wrote
the opinion, in which Judge Traxler and Judge Duncan joined.


                             COUNSEL

ARGUED: John Andrew Mattingly, Jr., BALDWIN, BRISCOE &
MATTINGLY, CHTD., Lexington Park, Maryland, for Appellant.
Christopher Landau, KIRKLAND & ELLIS, L.L.P., Washington,
D.C., for Appellees. ON BRIEF: Joseph W. Hovermill, Matthew T.
Wagman, John C. Celeste, II, MILES & STOCKBRIDGE, P.C., Bal-
timore, Maryland; Alan S. Kaplinsky, Martin C. Bryce, Jr., BAL-
2                      DISCOVER BANK v. VADEN
LARD, SPAHR, ANDREWS & INGERSOLL, L.L.P., Philadelphia,
Pennsylvania, for Appellees.


                              OPINION

WILKINSON, Circuit Judge:

   Betty Vaden, a Discover card holder, was sued in state court by
Discover Financial Services, an affiliate of Discover Bank, for her
unpaid credit card balance. In response, she instituted several class
action counterclaims against Discover Financial Services based on
state law. Discover then filed suit in federal district court under § 4
of the Federal Arbitration Act, seeking to compel Ms. Vaden to sub-
mit her counterclaims to arbitration. The district court ordered arbitra-
tion.

   On appeal, this court was presented with a host of issues, including
the threshold question of whether the federal district court had subject
matter jurisdiction to hear the case. We remand most of these issues
for the district court to consider in the first instance. However, we do
hold that when a party comes to federal court seeking to compel arbi-
tration, the presence of a federal question in the underlying dispute is
sufficient to support subject matter jurisdiction. Whether such a ques-
tion exists here is a matter we reserve for the district court on remand.

                                   I.

   Discover Bank issued Betty Vaden a credit card in October 1990.
Discover Financial Services ("DFS") is the servicing affiliate of the
bank. On June 23, 2003, DFS sued Ms. Vaden in Maryland state court
for the nonpayment of over $10,000 in credit card bills. Ms. Vaden
responded by filing several class action counterclaims against DFS on
behalf of herself and other Maryland residents. All of these counter-
claims — most involving breach of contract allegations as to
increased interest rates and late fees — were based on Maryland law.
It is Discover’s position that these state law claims are completely
preempted by the Federal Deposit Insurance Act.
                      DISCOVER BANK v. VADEN                         3
   On November 12, 2003, Discover filed a petition in the United
States District Court for the District of Maryland seeking to compel
arbitration of Ms. Vaden’s counterclaims. According to Discover, Ms.
Vaden’s credit card agreement was amended in July 1999 to include
a provision requiring arbitration in the event of a dispute. Thus, Dis-
cover asked the federal court to compel arbitration, invoking § 4 of
the Federal Arbitration Act. 9 U.S.C. § 4 (2000).

   Whether or not a valid arbitration agreement exists between the
parties is a matter of some controversy. Ms. Vaden has never signed
such an agreement. However, Discover points to language in the orig-
inal credit agreement which specifies that it can be amended by writ-
ten notice and that "the use of your Account or the Card on or after
the effective date of the change means that you accept and agree to
the change." Discover claims it mailed Ms. Vaden a notice in July
1999 explaining that her credit card agreement was being amended to
include an arbitration provision. By continuing to use her card after
receiving this notice, Discover says Ms. Vaden consented to the new
terms of her agreement.

  Ms. Vaden argues, however, that this notice of amendment was
addressed only to Discover card members who held a Discover Plati-
num card. She claims — supported by evidence from Discover’s own
business records — that she was not a Discover Platinum card holder
until September 1999. Thus, she says, the amendment notice allegedly
sent in July did not apply to her.1

   In any event, on December 15, 2003, and on January 12, 2004, Ms.
Vaden filed a motion to dismiss and a motion for summary judgment
with the district court. She asked the court to dismiss Discover’s suit
compelling arbitration for two main reasons. First, Ms. Vaden
claimed that Discover Bank lacked standing to sue for arbitration
since the class action counterclaims were filed against Discover
Financial Services, and not Discover Bank. Second, Ms. Vaden
  1
   Discover counters this argument by explaining that Ms. Vaden’s
account was "automatically" upgraded to a Discover Platinum account in
June of 1999. Ms. Vaden contends, though, that she was not asked to
write her check to Discover Platinum until November of 1999.
4                      DISCOVER BANK v. VADEN
argued that she had never validly entered into an arbitration agree-
ment with Discover.

   On June 21, 2004, the district court rejected Ms. Vaden’s argu-
ments and granted Discover’s request to compel arbitration. It ordered
that Ms. Vaden’s counterclaims in state court be stayed pending the
outcome of the arbitration. With the exception of the standing issue,
the district court did not have the opportunity to address any of the
issues relating to its subject matter jurisdiction which are now before
this court on appeal.

                                   II.

   We must first address the question of whether the district court had
subject matter jurisdiction over the present case. Discover asserts that
its suit is properly in federal court by virtue of 28 U.S.C. § 1331
(2000) because it presents a federal question. Since neither party
pressed this issue in the court below, it is before us for the first time
on appeal.

   Discover invokes § 4 of the Federal Arbitration Act ("FAA") to
support its view that federal question jurisdiction exists. This part of
the FAA states that a petition to compel arbitration can be filed in
"any United States district court which, save for such agreement,
would have jurisdiction under Title 28, in a civil action or in admi-
ralty of the subject matter of a suit arising out of the controversy
between the parties. . . ." 9 U.S.C. § 4.

   No one contends that this statute in and of itself constitutes a fed-
eral question. Indeed, such an understanding is inconsistent with the
language of the statute and has been foreclosed by the Supreme Court.
Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1,
25, n.32 (1983). However, the courts of appeals are in disagreement
as to whether — in a suit to compel arbitration authorized by § 4 —
a district court has subject matter jurisdiction of a case when the
underlying dispute between the parties raises a federal question. Com-
pare Westmoreland Capital Corp. v. Findlay, 100 F.3d 263 (2d Cir.
1996) with Tamiami Partners, Ltd. v. Miccosukee Tribe, 177 F.3d
1212 (11th Cir. 1999).
                       DISCOVER BANK v. VADEN                          5
   There are two approaches to this issue, which respectively narrow
and broaden the instances in which a federal court can properly
assume jurisdiction of a suit under § 4 of the FAA. The narrower view
has come to be known as the Westmoreland doctrine. See Blue Cross
v. Anesthesia Care Assocs. Med. Group, 187 F.3d 1045, 1050, n.5
(9th Cir. 1999). This doctrine holds that for a district court to have
federal question jurisdiction over a suit compelling arbitration, the
federal question must be evident on the face of the arbitration petition
itself. Perhaps realizing that such a possibility is highly unlikely, the
Westmoreland line of cases concludes that federal question jurisdic-
tion will never form the basis for a court’s subject matter jurisdiction
to hear a § 4 petition. Westmoreland, 100 F.3d at 268. Under this
view, jurisdiction will lie only when "some other basis for federal
jurisdiction exists, such as diversity of citizenship or assertion of a
claim in admiralty," but will not lie simply because the underlying
controversy between the parties "raises a federal question." Id.

   By contrast, the broader view permits a federal court to examine
the underlying dispute between the parties to determine if a federal
question is present. On this understanding, a district court is permitted
to "look through" the arbitration request to assess whether the overall
controversy between the parties is grounded in federal law. Tamiami
Partners, 177 F.3d at 1223, n.11.

   After examining the text of § 4 and the relevant precedent, we are
persuaded by the broader view outlined above. We thus hold that a
federal court possesses subject matter jurisdiction over a case when
the controversy underlying the arbitration agreement presents a fed-
eral question.

                                   A.

   It is fundamental that "[w]hen interpreting statutes we start with the
plain language." U.S. Dep’t of Labor v. North Carolina Growers
Ass’n, 377 F.3d 345, 350 (4th Cir. 2004). In fact, "where the statute’s
language is plain, the sole function of the courts is to enforce it
according to its terms." U.S. ex rel. Wilson v. Graham County Soil &
Water Conservation Dist., 367 F.3d 245, 247 (4th Cir. 2004)(internal
quotation omitted).
6                         DISCOVER BANK v. VADEN
    Section 4 of the FAA states:

        A party aggrieved by the alleged failure, neglect, or refusal
        of another to arbitrate under a written agreement for arbitra-
        tion may petition any United States district court which,
        save for such agreement, would have jurisdiction under Title
        28, in a civil action or in admiralty of the subject matter of
        a suit arising out of the controversy between the parties
        ...

9 U.S.C. § 4. We are convinced that this language directs courts to
look through the arbitration agreement so to assess questions of sub-
ject matter jurisdiction. There are three specific components of the
text which lead us to this conclusion.

   First, there is the phrase "save for such agreement" in the text of
§ 4. It is a classic canon of statutory construction that courts must
"give effect to every provision and word in a statute and avoid any
interpretation that may render statutory terms meaningless or super-
fluous." United States v. Ryan-Webster, 353 F.3d 353, 366 (4th Cir.
2003)(internal quotation omitted). When interpreting these words, we
must give them their "common and ordinary meaning." Mapoy v.
Carroll, 185 F.3d 224, 229 (4th Cir. 1999).

   The common understanding of the phrase "save for" means "but
for" or "notwithstanding." Used in this context, "save for such agree-
ment" must mean that the district court would have jurisdiction of the
case even if the agreement had never existed. We thus read this
phrase as an instruction to set aside the arbitration agreement and then
consider the grounds for federal jurisdiction independently. Indeed,
we can think of no other reason why Congress would have chosen to
include the "save for" language.2
    2
   We are unpersuaded by the argument adopted by some courts that the
"save for" language was included by Congress for the purpose of
responding to an "antiquated and arcane principal of the common law"
where a claim for specific performance of an arbitration agreement
would oust the court of jurisdiction. Drexel Burnham Lambert, Inc v.
Valenzuela Bock, 696 F. Supp. 957, 961-62 (S.D.N.Y. 1988).
                       DISCOVER BANK v. VADEN                           7
   Second, we find significant the decision of Congress to reference
"Title 28" generally in the text of § 4. The statute reads that a party
can petition a district court which "save for such agreement, would
have jurisdiction under Title 28 . . ." 9 U.S.C. § 4. Congress could
have decided to parse Title 28 into its component parts. It could, for
instance, have specifically referred to either § 1332 (diversity) or
§ 1331 (federal question jurisdiction). There are indeed examples in
the United States Code where Congress has been so specific. See, e.g.,
42 U.S.C. § 9613(h) (2000); 22 U.S.C. § 6082(c)(1) (2000). But Con-
gress chose not to do so in the FAA. And "where Congress knows
how to say something but chooses not to, its silence is controlling."
In re Griffith, 206 F.3d 1389, 1394 (11th Cir. 2000)(internal quotation
omitted).

   This general reference to "Title 28" means a party may petition a
district court to compel arbitration if the district court would have
subject matter jurisdiction of the underlying suit by virtue of any pro-
vision in Title 28. Siphoning off federal question jurisdiction from
Title 28 would rewrite the statute.

   The third section of the statutory text we find significant is the
phrase "controversy between the parties." Section 4 specifies that one
can seek to compel arbitration in a district court when that court
would have jurisdiction "under Title 28, in a civil action or in admi-
ralty of the subject matter of a suit arising out of the controversy
between the parties . . . ." 9 U.S.C. § 4. Those urging adoption of the
Westmoreland doctrine would interpret the phrase "controversy
between the parties" to encompass only the discrete dispute about
whether there is a valid arbitration agreement. We think the more nat-

  As the authors of a respected federal arbitration treatise explain, this
theory is historically inaccurate. See 1 MacNeil, Speidel & Stipanowich,
Federal Arbitration Law § 9.2.3 (1995). For, the "save for" language is
found only in the FAA, not in any of the state arbitration reform acts
upon which the FAA was based. Those states suffered from the same
common law ouster problem. Had the "save for" language been meant to
solve the ouster problem, "similar language would have been found in
the 1920 New York Act, the 1923 New Jersey Act, and the old UAA, all
drafted by the same reformers who drafted the FAA." Id. at 9:18.
8                      DISCOVER BANK v. VADEN
ural reading of the phrase is as a reference to the overall substantive
conflict between the parties.

   Litigants do not come to court solely to resolve the collateral issue
of whether or not they have an agreement to arbitrate. Instead, parties
incurring the expense and burdens of litigation are motivated to
resolve their real-life conflicts and move on. In this case, for example,
the question of the arbitration agreement’s existence only arose
because one party thought it was owed $10,000. That alleged debt is
the source of the "controversy between the parties." The "controversy
between the parties," as that term is used in 9 U.S.C. § 4, is the under-
lying one, and it is that controversy that must arise under federal law.

   This common understanding of the word "controversy" must gov-
ern our interpretation unless Congress chooses to narrow the term.
The text of § 4 requires us to consider jurisdiction as it arises out of
the whole controversy between the parties. This necessarily entails
looking beyond the arbitration petition alone.

                                   B.

  Two further aspects of the Westmoreland doctrine reinforce our
conclusion that it is not consistent with the statute.

                                   1.

   The courts which have adopted the Westmoreland doctrine were
moved by an understandable allegiance to the well-pleaded complaint
rule. See, e.g., Westmoreland, 100 F.3d at 268-69; Prudential-Bache
Secs., Inc. v. Fitch, 966 F.2d 981, 988 (5th Cir. 1992). These cases
rightly point out that, "[t]he usual rules for determining federal ques-
tion jurisdiction provide that a complaint will not avail a basis of
jurisdiction in so far as it goes beyond a statement of the plaintiff’s
cause of action and anticipates or replies to a probable defense."
Prudential-Bache, 966 F.2d at 988, citing Gully v. First Nat’l Bank,
299 U.S. 109, 113 (1936).

   According to these courts, a federal question will never properly
arise under a § 4 arbitration petition because such a petition never
                       DISCOVER BANK v. VADEN                         9
invokes a federal question on its face. Thus, they reason, if the FAA
"is construed to provide for a federal forum whenever the underlying
dispute involves a federal question, it must be seen as overturning the
well-established rule that § 1331 federal question jurisdiction must be
determined based on the face of a well-pleaded complaint."
Valenzuela Bock, 696 F. Supp. at 963. This result, they conclude, is
unacceptable because "[t]here is no indication that Congress in enact-
ing the FAA . . . intended to change the rules for determining federal
jurisdiction over a complaint." Prudential-Bache, 966 F.2d at 988.
See also Westmoreland, 100 F.3d at 269.

   We respect this argument, but we do not find it persuasive. For it
is not true that a fair reading of § 4 "changes the rules" of the well-
pleaded complaint doctrine. Indeed, the rules of the well-pleaded
complaint doctrine, while strict, are not as rigid as the Westmoreland
court suggests.

   Under the Declaratory Judgment Act, for example, a party which
traditionally would be a defendant can bring a preemptive suit in fed-
eral court, thus accelerating the claim against it. This creates a wrin-
kle in the traditional well-pleaded complaint rule. A would-be
plaintiff — who might well have a federal cause of action — is trans-
formed into a declaratory-judgment defendant, incapable of invoking
a federal question on the face of a well-pleaded complaint. See gener-
ally 10B Charles Alan Wright, et al., Federal Practice and Procedure
§ 2767 (3d ed. 1998).

   The Supreme Court has resolved this by simply directing federal
courts to hypothesize what a well-pleaded complaint in a traditional
case would look like. "Skelly Oil has come to stand for the proposition
that if, but for the availability of the declaratory judgment procedure,
the federal claim would arise only as a defense to a state created
action, jurisdiction is lacking." Franchise Tax Bd. v. Constr. Laborers
Vacation Trust, 463 U.S. 1, 16 (1983)(internal quotation omitted).
Alternatively, "[f]ederal courts have regularly taken original jurisdic-
tion over declaratory judgment suits in which, if the declaratory judg-
ment defendant brought a coercive action to enforce its rights, that
suit would necessarily present a federal question." Id. at 19. Just as
the real controversy for purposes of Skelly Oil and Franchise Tax
Board was the prospect of a federal question suit which prompted the
10                     DISCOVER BANK v. VADEN
declaratory judgment action, so the real controversy in cases like the
present one is whether a federal action prompted the motion to com-
pel arbitration.

   None of this, of course, expands federal question jurisdiction.
Often, as in Franchise Tax Board, the conclusion reached will be that
no properly invoked federal question exists in the underlying contro-
versy. But this is not the inevitable conclusion; if it were, the entire
reasoning process would be an exercise in futility and a waste of time.
The same is true of the instructions in § 4 of the FAA. As explained
above, the text of the FAA quite explicitly directs the federal courts
to put aside the arbitration agreement, and determine if the court
"would have jurisdiction under Title 28" without it. 9 U.S.C. § 4. By
looking to the dispute underlying an arbitration petition — as the text
of § 4 requires us to do — we are not "changing the rules" of federal
question jurisdiction. We are just applying the rules in the context of
the FAA’s procedural posture, just as the Supreme Court did with the
Declaratory Judgment Act in Franchise Tax Board.

                                   2.

   There is a second aspect of the Westmoreland doctrine that con-
cerns us. Were we to follow that line of cases, we would greatly
restrict the ability of federal courts to hear cases under § 4 of the
FAA. Indeed, the Westmoreland court admits that its view forecloses
the possibility that federal question jurisdiction could ever form the
basis for subject matter jurisdiction of a § 4 petition. Westmoreland,
100 F.3d at 268. This means that, for all practical purposes, a federal
court could never hear a suit to compel arbitration unless the parties
happen to be diverse. Id. ("A petition under FAA § 4 to compel or
stay arbitration must be brought in state court unless some other basis
for federal jurisdiction exists, such as diversity of citizenship or a
claim in admiralty.").

   We find this consequence of the Westmoreland doctrine inconsis-
tent with the "congressional declaration of a liberal federal policy
favoring arbitration agreements." Moses Cone, 460 U.S. at 24. As we
have explained, "[t]he Federal Arbitration Act embodies a federal pol-
icy favoring arbitration. Thus, ‘as a matter of federal law, any doubts
concerning the scope of arbitrable issues should be resolved in favor
                       DISCOVER BANK v. VADEN                         11
of arbitration.’" Drews Distrib., Inc. v. Silicon Gaming, Inc., 245 F.3d
347, 350 (4th Cir. 2001) (quoting Moses Cone, 460 U.S. at 24-25).
See also Whiteside v. Teltech Corp., 940 F.2d 99, 101 (4th Cir. 1991).

   Were we to follow Westmoreland and eliminate the ability of a fed-
eral court to hear a § 4 petition in which federal question jurisdiction
exists over the actual dispute, we would be mangling the congressio-
nal intent behind the FAA that "plac[es] arbitration agreements upon
the same footing as other contracts." Gilmer v. Interstate/Johnson
Lane Corp., 500 U.S. 20, 24 (1991). Of course state courts are capa-
ble of applying federal law, including a petition to compel arbitration
under the FAA. But the disfavor to arbitration lies in limiting § 1331
in these cases to such an extent that the real controversy between the
parties cannot reach federal court even when the plaintiff’s complaint
emphatically presents a federal question.

   To be clear, we do not imply that arbitration agreements should
receive preferential treatment. No doors to federal court are open to
those claims that are closed to others. We agree that in passing the
FAA Congress did not intend to create federal jurisdiction, see Moses
Cone, 460 U.S. at 25, n.32, but we are likewise persuaded that Con-
gress did not mean to unduly restrict federal jurisdiction either. We
thus decline to eliminate § 1331 as a possible basis for federal juris-
diction over a petition to compel arbitration under § 4 of the FAA.

                                   C.

   In addition to the statutory text, our own precedent requires us to
reject the Westmoreland doctrine.

    In Gibraltar, Inc. v. Otoki Group, Inc., this court faced a trademark
ownership dispute. 104 F.3d 616 (4th Cir. 1997). Gibraltar filed suit
in federal court, under § 4 of the FAA, asking that Otoki be com-
pelled to arbitrate. Id. at 619. We agreed with the district court that
it lacked subject matter jurisdiction since no properly invoked federal
question existed. Id. Gibraltar had not alleged a violation of the Lan-
ham Act, and we refused to hold that a federal question existed
merely because the subject of the contract dispute was a federally-
created property interest. Id. Significantly, however, we reached this
12                      DISCOVER BANK v. VADEN
conclusion only after examining the underlying controversy between
the parties. Id. at 619.

   Adhering to the Westmoreland doctrine would mean stopping the
Gibraltar analysis after a realization that the parties were neither
diverse nor making a claim in admiralty. This we cannot do. Gibral-
tar indicates, therefore, that we assume the plain text of § 4 requires
us to ask whether any basis for subject matter jurisdiction would exist
for the case in the absence of the arbitration agreement.

                                   III.
   A federal court may therefore hear a § 4 petition to compel arbitra-
tion if, but for the arbitration agreement, subject matter jurisdiction
over the case would otherwise exist by virtue of a properly invoked
federal question in the underlying dispute. The question remains,
however, whether such a federal question exists in this case. We
reserve the resolution of that question for the district court.
   We recognize that challenges to a federal court’s subject matter
jurisdiction can be brought at any stage in litigation. Am. Canoe Ass’n
v. Murphy Farms, Inc., 326 F.3d 505, 515 (4th Cir. 2003). However,
this case presents several legally complex and partially fact-bound
inquiries which must be answered prior to resolving the subject matter
jurisdiction question.3 We therefore think it prudent to remand
these issues to the lower court, so that it can decide them in the first

  3
    Several such inquiries suggest themselves. First, in order to decide if
a federal question exists, the court must decide whether Ms. Vaden’s
state law counterclaims are completely preempted by the Federal Deposit
Insurance Act. See 12 U.S.C. § 1831d(a) (2000). This decision may be
affected by the court’s determination as to whether Discover Bank — as
opposed to merely Discover Financial Services — is a party of interest
in the state law suit.
   Second, if the court finds that a federal question has not been properly
stated, it will need to consider the pending motion to amend and, if grant-
ing it, ascertain whether the parties are diverse and whether the other
requirements of § 1332 are properly met.
                       DISCOVER BANK v. VADEN                          13
         4
instance.
                                         VACATED AND REMANDED
  4
    In the event the lower court concludes it does have subject matter
jurisdiction over this case, it should reexamine whether there was a ques-
tion of material fact about the existence of an arbitration agreement
between these particular parties. Specifically, the district court should
consider whether Discover’s own financial records — viewed in the light
most favorable to Vaden — could successfully rebut the presumption
that she was subject to the amended agreement during the relevant time
period.
