Strike While the Arbitration Award Is Hot: Three-Month Window to File Motion to Vacate Does Not Prevent Earlier Confirmation

The Federal Arbitration Act provides for motions to confirm (9 U.S.C. § 9) or to vacate or modify (9 U.S.C. §§ 10, 11) an arbitration award, but the motions are not all subject to the same deadline. A motion to confirm may be filed within a year after the award is made, whereas the window for filing a motion to vacate or modify is only three months. (Compare id. § 9, with § 12.) But what happens when a motion to confirm is filed early, before the three months to file a motion to vacate has run? The Eleventh Circuit confronted that question, as a matter of first impression, in McLaurin v. Terminix International Co., 13 F.4th 1232 (11th Cir. 2021).

The underlying dispute in McLaurin arose from a termite infestation in a house on Dauphin Island, Alabama. Two retirees bought the house, assuming from the sellers a Terminix contract providing for annual inspections for termite damage. After the sale closed, they discovered that termites had already destroyed the structure. The homeowners sued Terminix, the case proceeded to arbitration, and the arbitrator awarded the homeowners more than $2.7 million.

Two days after the arbitration award issued, the homeowners filed a complaint in district court to confirm the award. Terminix answered, raising no substantive defenses to confirmation of the award but indicating that it intended to file a motion to vacate the award. Days later, the claimants filed a motion to confirm the award. The district court ordered that any opposition be filed no later than September 25, 2019.

On September 25, 2019—still within the three-month window—Terminix filed a short response to the motion to confirm, including no substantive defenses but arguing that the motion to confirm was “premature” and “procedurally improper.” Later, at the end of the three-month period, Terminix filed a motion to vacate, setting forth its substantive arguments for the first time. The district court granted the motion to confirm and struck the motion to vacate as untimely. Terminix appealed.

The Eleventh Circuit, in an opinion written by Judge Brasher, affirmed. The court began with some advice to district courts: “When a motion to confirm is filed before the time to challenge an arbitration award has lapsed, we believe that the best practice is for a district court to issue an order that sets simultaneous deadlines for a losing party to file an opposition to the motion to confirm, if any, and to file a separate motion to vacate, modify, or correct, if any.” In the case before it, however, that had not occurred. Terminix offered two arguments in support of its claim that the district court should not have granted the motion to confirm.

First, Terminix argued that a district court cannot confirm an arbitration award before the three-month period for filing a motion to vacate or modify has lapsed. The court rejected the argument, noting that “the FAA does not impose an automatic three-month stay on confirmation,” and joining the Second Circuit in holding that “[n]othing in the statute prevents a party from moving for confirmation of an award within three months of that award or mandates that a district court wait to rule on such a motion because another party may file a motion to vacate.”

Terminix’s second argument was that the district court erred when it declined to consider the merits of Terminix’s motion to vacate. The court rejected that argument, too, viewing the district court’s order setting a deadline for “any opposition” to the motion to confirm the award as a permissible shortening of a deadline by scheduling order: “it seems clear to us that, if a district court already has jurisdiction over an arbitration dispute before a motion to vacate is filed, it may set a reasonable schedule for a party to file such a motion.” The court found no abuse of discretion by the district court, and added that Terminix’s motion was in any event moot after it failed to oppose the motion to confirm and did not even ask the district court to delay ruling on the motion to confirm, or for more time to respond.

Posted by Valerie Sanders.

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