The Nebraska Supreme Court recently had the unenviable task of determining whether the three month time period that the FAA provides for vacating an arbitration award is a statute of limitation (subject to tolling) or is jurisdictional.  In Karo v. Nau Country Ins. Co., 2017 WL 4185426 (Neb. Sept. 22, 2017), it found that the time periods for both confirming and vacating awards are jurisdictional.

The consequence for the parties in Karo was significant.  The party who lost in arbitration waited four months to bring their petition to vacate the award.  Nevertheless, the district court vacated the award, finding the arbitrator had exceeded his powers and manifestly disregarded the law.  On appeal, however, the state’s high court took up the issue of jurisdiction.  After analyzing the statutory language, it held that “Congress intended that a party’s failure to serve notice of the application…within mandatory time limits would have jurisdictional consequences.”  Therefore, the high court found the district court’s order was void.  [How does that square with the Ninth Circuit finding the three-month period was equitably tolled for five years in this case??!]

In other arbitration news

  • The Supreme Court of Alabama agrees that just because a defendant wins a motion to compel arbitration, it does not obligate that defendant to then initiate the arbitration.  Nation v. Lydmar Revocable Trust, 2017 WL 4215891 (Ala. Sept. 22, 2017).
  • Seeing that the Senate could not be counted on to block the rule, the Chamber of Commerce and a coalition of bankers started a lawsuit challenging the CFPB’s arbitration rule.  (Absent a court injunction or Senate action, that rule takes effect in just over a month.)’
  • SCOTUS heard argument today on the big showdown over whether employees can be forced to waive their rights to class actions.  Coverage by SCOTUSblog here.