PUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT


FRIEDMAN’S, INCORPORATED;               
AMERICAN BANKERS INSURANCE
COMPANY OF FLORIDA; AMERICAN
BANKERS LIFE ASSURANCE
COMPANY OF FLORIDA,
               Plaintiffs-Appellants,           No. 01-1407

                 v.
JAMES DUNLAP,
                Defendant-Appellee.
                                        
            Appeal from the United States District Court
     for the Southern District of West Virginia, at Charleston.
             Charles H. Haden II, Chief District Judge.
                          (CA-00-533-2)

                      Argued: December 4, 2001

                        Decided: May 9, 2002

   Before NIEMEYER, MOTZ, and TRAXLER, Circuit Judges.



Affirmed by published opinion. Judge Traxler wrote the majority
opinion, in which Judge Motz joined. Judge Niemeyer wrote a dis-
senting opinion.


                            COUNSEL

ARGUED: Charles Leslie Woody, SPILMAN, THOMAS & BAT-
TLE, P.L.L.C., Charleston, West Virginia, for Appellants. John Wil-
2                        FRIEDMAN’S v. DUNLAP
liam Barrett, THE GRUBB LAW GROUP, Charleston, West
Virginia, for Appellee. ON BRIEF: Gregory R. Hanthorn, JONES,
DAY, REAVIS & POGUE, Atlanta, Georgia; Farrokh Jhabvala, JOR-
DEN BURT, L.L.P., Miami, Florida; P. Michael Pleska, BOWLES,
RICE, MCDAVID, GRAFF & LOVE, P.L.L.C., Charleston, West
Virginia, for Appellants. John W. Barrett, THE GRUBB LAW
GROUP, Charleston, West Virginia; Brian A. Glasser, BAILEY &
GLASSER, L.L.P., Charleston, West Virginia, for Appellee.



                              OPINION

TRAXLER, Circuit Judge:

   Appellants Friedman’s, Inc., American Bankers Insurance Com-
pany of Florida, and American Bankers Life Assurance Company of
Florida (collectively "Friedman’s") brought an action against Appel-
lee James Dunlap under the Federal Arbitration Act, see 9 U.S.C.A.
§§ 1 - 16 (West 1999), to compel arbitration of Dunlap’s state court
claims against Friedman’s. The district court concluded that it lacked
subject matter jurisdiction because the amount in controversy did not
satisfy the $75,000 threshold for federal diversity jurisdiction. See 28
U.S.C.A. § 1332(a) (West 1993 & Supp. 2001). We agree this action
should be dismissed on jurisdictional grounds, but on slightly differ-
ent reasoning.

                                   I.

   James Dunlap financed a ring for purchase in the amount of
$412.66 from Friedman’s, Inc., a jewelry company. Dunlap alleges
that as part of the transaction he was required to sign a retail install-
ment contract that included, without Dunlap’s knowledge, additional
charges for "credit life, credit disability and/or property insurance,"
J.A. 21, and that these insurance products were provided by American
Bankers Insurance Company of Florida (ABICF) and American
Bankers Life Assurance Company of Florida (ABLACF). He filed an
action in West Virginia state court against Friedman’s, four employ-
                          FRIEDMAN’S v. DUNLAP                          3
ees of Friedman’s, and these insurance companies, alleging various
claims under state law and seeking actual and punitive damages.1

  The retail installment contract contained an arbitration clause that
purported to eliminate punitive damages:

      14. ALTERNATIVE DISPUTE RESOLUTION: All dis-
      putes, controversies or claims of any kind or nature between
      Buyer and Seller, arising out of or in connection with the
      sale of goods financed or refinanced pursuant to the terms
      of this Agreement, . . . or with respect to negotiation of,
      inducement to enter into, construction of, performance of,
      enforcement of, or breach of, effort to collect the debt evi-
      denced by, the applicability of the arbitration clause in, or
      the validity of this Agreement . . . shall be resolved by arbi-
      tration in the state in which this Agreement is entered into
      . . . in accordance with the Commercial Arbitration Rules of
      the American Arbitration Association, and judgment upon
      the award rendered by the arbitrator may be entered in any
      court having jurisdiction thereof. . . . No arbitrator may
      make an award of punitive damages.

J.A. 67.

   Based on this arbitration clause, the defendants in the West Vir-
ginia state court action moved for the state court to order arbitration.
Dunlap contended that he never agreed to the arbitration provision in
the installment sales contract. The defendants urged the state court to
order arbitration based, at least in part, on the Federal Arbitration Act.

   While that motion and Dunlap’s underlying claims were pending
in state court, Friedman’s brought this action in district court to com-
pel arbitration of Dunlap’s claims pursuant to the Federal Arbitration
Act. See 9 U.S.C.A. §§ 1 - 16. Dunlap raised in federal court the same
defense to the arbitration clause that he raised in state court, and the
  1
   Dunlap brought the action in West Virginia state court as the named
plaintiff in a class action. Only Dunlap, however, is involved in this
appeal.
4                        FRIEDMAN’S v. DUNLAP
parties agree that the Federal Arbitration Act applies in both the state
and federal actions.

   Dunlap moved to dismiss Friedman’s federal action to compel arbi-
tration for lack of subject matter jurisdiction, arguing that the action
did not meet the amount in controversy requirement for federal juris-
diction based on diversity of citizenship. See 28 U.S.C.A. § 1332(a).2
The district court granted Dunlap’s motion and dismissed the action
to compel arbitration. Focusing on the bar to punitive damages con-
tained in the arbitration clause, the district court concluded that the
arbitrator would be limited to awarding an amount for actual damages
and statutory penalties. The district court found that "the possible
award that might reasonably result from arbitration, were the petition
granted, will not exceed eight thousand dollars ($8,000)." J.A. 127.
Thus, the district court held that Friedman’s, ABICF and ABLACF
"failed to bring forward competent proof to satisfy their burden that
the amount in controversy with regard to Dunlap’s claims, which
might reasonably be awarded in the arbitration that they seek, exceeds
[$75,000]." J.A. 127. Less than two weeks after the district court
entered its order of dismissal, the West Virginia state court granted
Friedman’s motion to compel arbitration. Friedman’s, ABICF and
ABLACF now appeal the district court’s dismissal of the action to
compel arbitration under the Federal Arbitration Act.

                                   II.

   The district court concluded that it lacked subject matter jurisdic-
tion because the amount in controversy failed to reach the $75,000
threshold to federal court. We also conclude that federal jurisdiction
is lacking, but we need not reach the amount in controversy issue in

    2
   Dunlap also urged the district court to abstain from exercising juris-
diction over the case, but the district court concluded that the question
of whether one of the abstention doctrines applied was moot since fed-
eral jurisdiction was lacking. Additionally, Dunlap argued that Fried-
man’s action should be dismissed because Friedman’s failed to join
necessary and indispensable parties to the litigation. The district court
did not address this issue either.
                         FRIEDMAN’S v. DUNLAP                            5
coming to this conclusion inasmuch as another jurisdictional defect
exists.3

   Despite getting in state court what it is now seeking in federal court
— an order that Dunlap’s underlying claims be submitted to arbitra-
tion — Friedman’s still insists that we can and should permit his fed-
eral lawsuit to continue. Indeed, Friedman’s argued to the state court
that it was required by the Federal Arbitration Act to enforce the arbi-
tration clause and order the parties to arbitration on Dunlap’s claims,
which is all that Friedman’s argues in federal court.4 Friedman’s
argues that the federal action should continue because Dunlap has
appealed the state court’s order to arbitrate to the West Virginia
Supreme Court of Appeals. In other words, Friedman’s is hedging its
bets: it wants a federal order compelling arbitration at the ready in
case the West Virginia Supreme Court of Appeals decides that Dun-
lap’s claims are not subject to arbitration and reverses the decision of
the lower state court.

   That is not something we can do under the Rooker-Feldman doc-
trine. Although the Rooker-Feldman doctrine was not discussed by
the parties, it too is a jurisdictional doctrine that may be raised by the
court sua sponte, see Jordahl v. Democratic Party of Va., 

, 197 n.5 (4th Cir. 1997), and may be considered for the first time
on appeal, see Plyler v. Moore, 

, 731 n.6 (4th Cir. 1997).
Because the Rooker-Feldman doctrine is jurisdictional, we are
obliged to address it before proceeding further in our analysis. See
Stanton v. District of Columbia Court of Appeals, 

, 75
(D.C. 1997) ("Because it is jurisdictional, we first consider the
  3
     We agree with our colleague that there was diversity and that the
amount in controversy requirement was met. Even if this is so, however,
federal courts have no authority to entertain this action, as we explain
herein.
   4
     Our understanding of what theories the parties argued in state court
is drawn from the parties’ representations to the panel at oral argument.
Both sides, however, agreed that the effect of the Federal Arbitration Act
was argued in state court. Indeed, both Friedman’s and Dunlap told us
that West Virginia had no arbitration act of its own. Given that there is
no dispute on this critical issue, we see nothing in this regard to clarify
via a remand.
6                        FRIEDMAN’S v. DUNLAP
Rooker-Feldman doctrine . . . ." (emphasis added)); Neal v. Wilson,

, 356 (8th Cir. 1997) (explaining that "to the extent that
any portion of [the] complaint survived the jurisdictional bar of the
Rooker-Feldman doctrine, the district court correctly ruled that Youn-
ger abstention was warranted").

   The Rooker-Feldman doctrine5 generally prohibits lower federal
courts from reviewing state court decisions; "rather, jurisdiction to
review such decisions lies exclusively with superior state courts and,
ultimately, the United States Supreme Court." 

.
Under the Rooker-Feldman doctrine, lower federal courts may not
consider either "issues actually presented to and decided by a state
court" or "constitutional claims that are inextricably intertwined with
questions ruled upon by a state court." 

marks
omitted). Federal courts are divested of jurisdiction "where entertain-
ing the federal claim should be the equivalent of an appellate review
of the state court order." 

(alterations and
internal quotation marks omitted). Rooker-Feldman applies when the
federal action "essentially amounts to nothing more than an attempt
to seek review of [the state court’s] decision by a lower federal court."

. Thus, "when a party sues in federal district
court to readjudicate the same issues decided in the state court pro-
ceedings, that action is in essence an attempt to obtain direct review
of the state court decision . . . in contravention of Rooker-Feldman."
Brown & 

. The label attached to the federal
court action will rarely, if ever, be important, since a party that is
seeking in federal court to readjudicate an issue decided in state court
is unlikely to say so.

    The Rooker-Feldman doctrine is premised largely upon 28
U.S.C.A. § 1257(a), which "[t]he Rooker-Feldman doctrine interprets
. . . as ordinarily barring direct review in the lower federal courts of
a decision reached by the highest state court." ASARCO, Inc. v. Kad-
ish, 

, 622 (1989) (emphasis added). However, we view
the doctrine to also preclude review of adjudications by lower state
courts as well. See 

("[T]he Rooker-Feldman
    5
   The Rooker-Feldman doctrine was distilled from the Supreme Court’s
decisions in District of Columbia Court of Appeals v. Feldman, 

(1983), and Rooker v. Fidelity Trust Co., 

(1923).
                         FRIEDMAN’S v. DUNLAP                           7
doctrine precludes not only review of adjudications of the state’s
highest court, but also the decisions of its lower courts."). Thus, the
fact that the decision of a state court is winding its way through the
state appellate system does not subject it to federal review in the
meantime. See 

("The Rooker-Feldman doctrine is in no way
dependent upon the temporal procedural posture of the state court
judgment . . . .").

   From these general principles, it follows that Friedman’s is essen-
tially asking the federal courts to sit in review of a West Virginia state
court that has already ruled on the arbitrability of Friedman’s claims.
In Brown & Root, Inc. v. Breckenridge, 

(4th Cir. 2000),
a West Virginia state court determined that claims brought against
Brown & Root by two employees under the West Virginia Human
Rights Act were not subject to arbitration, and the West Virginia
Supreme Court of Appeals affirmed the denial of Brown & Root’s
motion to compel arbitration. We concluded that Brown & Root’s
subsequent action in federal court under the Federal Arbitration Act
was impermissible under the Rooker-Feldman doctrine because
Brown & Root’s "complaint [sought] precisely the same relief denied
by the state trial court." 

We rejected Brown & Root’s argu-
ment that Rooker-Feldman did not apply because the state court order
"was based solely on [an] interpretation of West Virginia state law,"

marks omitted), and because the state court’s
order did not mention the Federal Arbitration Act, see 

In
fact, the Federal Arbitration Act had been argued during the state pro-
ceedings, and we concluded that Rooker-Feldman requires only "a
reasonable opportunity to raise [an] Federal Arbitration Act claim in
state court." 

   In this case, Friedman’s federal action seeks precisely the same
relief that it sought — and received — in its motion to compel arbitra-
tion in the state court. As previously noted, Friedman’s relied on the
Federal Arbitration Act, at least to some extent, in its successful argu-
ment in state court. Basically, Friedman’s is asking the federal courts
to decide precisely the same issue already decided by a West Virginia
state court.

   Moreover, Friedman’s has not identified any relief that an arbitra-
tion order from federal district court would afford him that the state
8                        FRIEDMAN’S v. DUNLAP
court’s arbitration order does not. Indeed, there is no effective relief
available in federal court that Friedman’s has not already received in
state court. The Constitution limits the jurisdiction of federal courts
to actual "Cases" or "Controversies." See U.S. Const., art. III, § 2,
cl.1. "To qualify as a case fit for federal-court adjudication, an actual
controversy must be extant at all stages of review, not merely at the
time the complaint is filed." Arizonans for Official English v. Arizona,

, 67 (1997) (internal quotation marks omitted). The parties
did not raise the issue of mootness, but the question of whether we
are presented with a live case or controversy is a question we may
raise sua sponte "since mootness goes to the heart of the Article III
jurisdiction of the courts." Suarez Corp. Indus. v. McGraw, 

, 228 (4th Cir. 1997). "When circumstances change from the time
the suit is filed to the time of appeal, so that the appellate court can
no longer serve the intended harm-preventing function or has no
effective relief to offer, the controversy is no longer live and must be
dismissed as moot." County Motors v. General Motors Corp., 

, 43 (1st Cir. 2002) (internal quotation marks omitted). Gener-
ally speaking, one such circumstance mooting a claim arises when the
claimant receives the relief he or she sought to obtain through the
claim. See Broughton v. North Carolina, 

, 149 (4th Cir.
1983) (per curiam). Thus, when a state court orders the same relief
sought by the plaintiff in a parallel federal action, there is no longer
a live controversy and the parallel federal claim is moot. See Simpson
v. Camper, 

, 1031 (8th Cir. 1992) (case was moot
where state court granted "precisely the same relief" that was
requested in federal action); New York v. Seneci, 

, 1017
(2d Cir. 1987) (claim dismissed where separate state court action pro-
vided all relief requested in federal action).

   In sum, this action does not belong in federal court. Regardless of
what occurs in the West Virginia Supreme Court of Appeals, the fed-
eral courts lack jurisdiction, on the basis of Rooker-Feldman, moot-
ness or both. Accordingly, we affirm the district court’s dismissal for
lack of jurisdiction.

                                                            AFFIRMED

NIEMEYER, Circuit Judge, dissenting:

  On James Dunlap’s motion to dismiss this action for lack of subject
matter jurisdiction under 28 U.S.C. § 1332 (conferring diversity juris-
                         FRIEDMAN’S v. DUNLAP                            9
diction), the district court found and concluded that "it lack[ed] sub-
ject matter jurisdiction because the amount in controversy regarding
Dunlap’s individual claim has not been shown to exceed the jurisdic-
tional threshold [of $75,000]." Accordingly, it dismissed the com-
plaint and closed the file. Although Dunlap suggested alternatively
that the district court should abstain under the doctrine of Colorado
River Water Conservation District v. United States, 

(1976), the district court never reached that issue because of its ruling
on the jurisdictional issue.

   The only issue raised on appeal is whether the jurisdictional
amount required by 28 U.S.C. § 1332 has been satisfied under the
principles of St. Paul Mercury Indemnity Company v. Red Cab Com-
pany, 

, 288-89 (1938) ("[T]he sum claimed by the plain-
tiff controls [for satisfying the jurisdictional amount] if the claim is
apparently made in good faith. It must appear to a legal certainty that
the claim is really for less than the jurisdictional amount to justify dis-
missal" (footnotes omitted)). Without addressing the only issue
presented to us, stating that "we need not reach the amount in contro-
versy issue," the majority raises and decides the application of the
Rooker-Feldman doctrine, based on the decisions in D.C. Court of
Appeals v. Feldman, 

(1983), and Rooker v. Fidelity
Trust Co., 

(1923).

   Because I believe that the district court had subject matter jurisdic-
tion under 28 U.S.C. § 1332, I would reverse and remand to permit
the district court to decide, in the first instance, any other issues that
the parties may raise, such as whether, under Colorado River, the dis-
trict court should abstain. This is particularly prudent in this case
because of the lack of record evidence about the status of state court
proceedings and doubt about the applicability of the Rooker-Feldman
doctrine.

   Friedman’s, Inc. and the insurance companies commenced this
action under § 4 of the Federal Arbitration Act, 9 U.S.C. § 4, to com-
pel arbitration of Dunlap’s claims. This action is essentially a parallel
"backup" suit to the state action where arbitration has already been
compelled. Jurisdiction of this action is not conferred by the Federal
Arbitration Act itself. Rather, the Act focuses the jurisdictional
inquiry on whether the district court would have had jurisdiction if no
10                       FRIEDMAN’S v. DUNLAP
arbitration clause had been applicable. The first sentence of § 4 spe-
cifically so provides:

     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 mat-
     ter of a suit arising out of the controversy between the par-
     ties, for an order directing that such arbitration proceed in
     the manner provided for in such agreement.

9 U.S.C. § 4 (emphasis added). Thus, rather than focusing attention
on the scope and nature of the arbitration commanded by agreement,
§ 4 directs that jurisdiction be determined by the nature and scope of
the controversy underlying the arbitration agreement. While an arbi-
tration agreement may limit the scope of the arbitration by limiting
the amount of any award to an amount that is less than the jurisdic-
tional amount, it is the nature and scope of the controversy underlying
the arbitration, not the potential arbitration award, that is considered
for determining jurisdictional amount. See Doctor’s Assocs., Inc. v.
Hamilton, 

, 160-61 (2d Cir. 1998). The facts in Hamilton
are remarkably similar to those before us, and I see no reason to reach
a contrary result. The plaintiff in Hamilton alleged that a franchise
agreement had been entered into pursuant to fraud, demanding $1
million from the franchisor, a sum well in excess of the $75,000 juris-
dictional minimum. The franchise agreement, however, had an arbi-
tration clause limiting damages in arbitration to $50,000. In
concluding that the underlying controversy, not the scope of the
agreed-to arbitration, determined the jurisdictional amount, the Sec-
ond Circuit instructed that district courts must "look through" the
arbitration award to the underlying cause of action to determine
whether the amount in controversy exceeds $75,000. 

   In the case before us, the controversy centered around (1) Dunlap’s
purchase of a ring from Friedman’s, Inc., (2) the financing of the pur-
chase, and (3) the inclusion of credit life and property insurance.
Alleging that the purchase of insurance was concealed from him,
Dunlap asserted a host of statutory violations, claiming penalties and
other damages, including punitive damages. While the strict, contrac-
                         FRIEDMAN’S v. DUNLAP                         11
tual amounts involved were less than $75,000, Dunlap’s request for
punitive damages led to his claim for over $1 million.

   There is no evidence in the record that Dunlap’s claim in the under-
lying controversy was not made in good faith, and there is no sugges-
tion by either the parties or the district court that it was "a legal
certainty that [Dunlap’s] claim [was] really for less than the jurisdic-
tional amount." St. Paul 

. Indeed, unless
Friedman’s, Inc. and the insurance companies are successful in com-
pelling arbitration, there would be no legal limitation on the amount
of Dunlap’s claim. Rather than focusing on the underlying contro-
versy, however, the district court focused on what could have been
recovered from the arbitration, noting that the arbitration did not pro-
vide for punitive damages. Accordingly, the district court erroneously
dismissed this case for lack of subject matter jurisdiction, overlooking
the express command of 9 U.S.C. § 4 that jurisdiction be determined
from the underlying controversy "save for such [arbitration] agree-
ment."

   Not only has the majority failed to address subject matter jurisdic-
tion — a necessary, first requirement, see Steel Co. v. Citizens for
Better Government, 

, 94 (1998) ("On every writ of error
or appeal, the first and fundamental question is that of jurisdiction,
first, of this court, and then of the court from which the record comes"
(quoting Ex Parte McCardle, 

, 514 (1869))) — it has also
introduced an issue not decided below and not briefed by the parties
on appeal, a particularly risky proposition when it is doubtful that the
Rooker-Feldman doctrine even applies in this case. First, Dunlap,
who would be the party to assert the doctrine, won dismissal of his
case on subject-matter jurisdictional grounds. He, therefore, would
not be asserting what the majority has asserted for him. Moreover, he
could not be seeking to apply the Rooker-Feldman doctrine because
it was the plaintiffs (Friedman’s, Inc. and the insurance companies)
who filed this action as a parallel backup to the state court’s decision,
not Dunlap. This action cannot fit the premise that it was commenced
to review a state court judgment.

   Second, we have no record of the status of state court proceedings
or the arbitration ordered in those proceedings.
12                       FRIEDMAN’S v. DUNLAP
   Finally, because the Rooker-Feldman doctrine addresses the route
to be taken for appeals of state court judgments, denying any route
that takes appeals to lower federal courts, the doctrine addresses, with
rare exception, efforts to review final state judgments. See 

(articulating the principle: "a United States District
Court has no authority to review final judgments of a state court in
judicial proceedings. Review of such judgments may be had only in
this Court" (emphasis added)). This action does not seek to review
any state judgment; it seeks to obtain in federal court the same relief
already obtained in state court. The fundamental purpose of the
Rooker-Feldman doctrine — to prohibit appeals to federal court to
review a state court judgment — cannot be fulfilled in an action, not
seeking to review a state court judgment, but to reinforce it with a
parallel federal judgment.

   Recognizing the circumstances that undermine application of the
Rooker-Feldman doctrine — i.e., the plaintiff does not seek to review
a state court judgment but rather to seek the same relief — the major-
ity moves for cover, without explanation, to the doctrine of mootness.
The majority opinion makes the transition as follows:

     Friedman’s federal action seeks precisely the same relief
     that it sought — and received — in its motion to compel
     arbitration in the state court.

                                  ***

     Friedman’s has not identified any relief that an arbitration
     order from federal district court would afford him that the
     state court’s arbitration order does not. Indeed, there is no
     effective relief available in federal court that Friedman’s has
     not already received in state court.

The majority then concludes that this case is moot.

   But the majority’s application of the doctrine of mootness is even
more profoundly flawed than its application of the Rooker-Feldman
doctrine. Mootness can apply only "when the issues presented are no
longer ‘live’ or the parties lack a legally cognizable interest in the out-
                        FRIEDMAN’S v. DUNLAP                       13
come." Powell v. McCormack, 

, 496 (1969). The issue
of whether the parties are required to arbitrate in this case is still
"live" because the issue is still pending before the West Virginia
Supreme Court of Appeals. Moreover, neither party has raised moot-
ness as a defense and the record does not contain any evidence that
supports mootness. As such, I respectfully submit that we cannot rely
on that doctrine to dismiss the appeal.

  But even if the West Virginia Supreme Court were to affirm the
order to arbitrate this case, then the appropriate principle to apply
would be either res judicata or full faith and credit, as provided for
under 28 U.S.C. § 1738. As the record is now constituted, however,
we can only conclude that a live controversy continues to exist
between the parties.

   Thus, the majority’s inappropriate application of two distinct doc-
trines does not somehow eliminate the deficiency in applying either
doctrine. Neither the Rooker-Feldman doctrine nor the doctrine of
mootness applies in this case, and there is no precedent to support
application of either to the circumstances of this case.

   Judicial restraint and wisdom urge that we address the issue raised
on appeal and remand this case to the district court to consider and
decide any other matter that the parties may raise. Any other course
unnecessarily threatens our judicial system’s concept of dual sover-
eignty.

   Because I would reverse the district court’s judgment on jurisdic-
tional grounds and remand, I respectfully dissent.