Karo v. NAU Country Ins. Co.

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
10/20/2017 01:12 AM CDT
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Nebraska Supreme Court A dvance Sheets
297 Nebraska R eports
KARO v. NAU COUNTRY INS. CO.
Cite as 297 Neb. 798
M att K aro and Michael K aro,
appellees, v. NAU Country
Insurance Company, appellant.
___ N.W.2d ___
Filed September 22, 2017. No. S-16-810.
1. Judgments: Jurisdiction. A jurisdictional issue that does not involve a
factual dispute presents a question of law.
2. Arbitration and Award: Federal Acts: Contracts. If arbitration arises
from a contract involving interstate commerce, it is governed by the
Federal Arbitration Act.
3. Arbitration and Award: Federal Acts: Contracts: Insurance: Crops.
The arbitration of disputes arising under federally reinsured crop insur-
ance contracts plainly involves interstate commerce and, as such, is
governed exclusively by the Federal Arbitration Act.
4. Jurisdiction: Appeal and Error. Before reaching the legal issues
presented for review, it is the duty of an appellate court to determine
whether it has jurisdiction over the matter before it. This is so even
where neither party has raised the issue.
5. Federal Acts: Jurisdiction: Time. To determine whether a time limit
in a federal statute is a jurisdictional requirement, an appellate court
inquires whether Congress has “clearly stated” that the rule is jurisdic-
tional; absent such a clear statement, courts should treat the restriction
as nonjurisdictional in character.
6. Arbitration and Award: Federal Acts: Jurisdiction: Notice:
Limitations of Actions: Appeal and Error. The clear language of 9
U.S.C. § 9 (2012) indicates Congress intended the statutory time limits
on serving notice of an application for judicial review under the Federal
Arbitration Act to be jurisdictional.
7. Arbitration and Award: Federal Acts: Limitations of Actions:
Appeal and Error. Under the Federal Arbitration Act, once the arbi-
trator has heard a case and entered an award, Congress has placed
strict limitations on judicial review of the arbitration award by placing
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KARO v. NAU COUNTRY INS. CO.
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temporal limits on when a court is authorized to review an award and
by limiting the grounds upon which a court is authorized to vacate or
modify an award. In that regard, streamlined judicial review of an arbi-
trator’s award under the Federal Arbitration Act is similar to a restricted
appellate review.
8. Jurisdiction: Limitations of Actions: Appeal and Error. Statutory
time limits on appellate review are almost always considered jurisdic-
tional in nature, both historically and presently, and strict compliance
with such time limits is necessary.
9. Jurisdiction: Limitations of Actions: Dismissal and Nonsuit: Appeal
and Error. The statutory time limits on notices of appeal are more
than simple claim-processing rules, and when an appeal has not been
prosecuted in the manner directed, within the time limited by the acts of
Congress, it must be dismissed for want of jurisdiction.
10. Arbitration and Award: Federal Acts: Notice: Time: Appeal and
Error. Similar to a notice of appeal, the Federal Arbitration Act’s
requirement that those seeking expedited judicial review must serve
notice of their application in a certain manner and within a specified
timeframe is more than a simple claim-processing rule; it is the statutory
procedure that defines which forum has authority over the dispute and
delineates the classes of cases the court may review.
11. Arbitration and Award: Federal Acts: Jurisdiction: Motions to
Vacate: Notice: Time. The notice requirement under 9 U.S.C. § 12
(2012) is jurisdictional in nature, and a party’s failure to serve notice of
an application for judicial vacatur in the manner directed and within the
time limits required has jurisdictional consequences.
12. Judgments: Jurisdiction. When a court lacks jurisdiction and nonethe-
less enters an order, such order is void.
13. Judgments: Final Orders: Jurisdiction: Appeal and Error. A void
order is a nullity which cannot constitute a judgment or final order that
confers appellate jurisdiction on a court.
Appeal from the District Court for Holt County: M ark D.
Kozisek, Judge. Vacated and dismissed.
Thomas M. Locher and Amy Locher, of Locher, Pavelka,
Dostal, Braddy & Hammes, L.L.C., and Mitch D. Carthel, of
Mullin, Hoard & Brown, L.L.P., for appellant.
Sean A. Minahan, of Lamson, Dugan & Murray, L.L.P.,
for appellees.
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Nebraska Supreme Court A dvance Sheets
297 Nebraska R eports
KARO v. NAU COUNTRY INS. CO.
Cite as 297 Neb. 798
Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy,
K elch, and Funke, JJ.
Stacy, J.
This is an appeal from a judgment of the Holt County
District Court vacating an arbitration award under the Federal
Arbitration Act (FAA).1 Because we conclude the district court
lacked jurisdiction to vacate the arbitration award, we vacate
the district court’s judgment and dismiss the appeal.
I. FACTS
Matt Karo and Michael Karo farm together in Holt County,
Nebraska. They each obtained federally reinsured crop insur-
ance policies, serviced by NAU Country Insurance Company
(NAU), for the acres at issue in this dispute.
In 2012, the Karos submitted “prevented planting” claims
under their crop insurance policies, claiming they were unable
to plant corn on certain acres due to wet conditions. Federal
crop insurance policies are uniform, and the provisions of the
policies are codified at 7 C.F.R. § 457.8 (2017). “Prevented
planting” for the purpose of federal crop insurance is defined
as follows:
Failure to plant the insured crop by the final planting
date designated in the Special Provisions for the insured
crop in the county, or within any applicable late planting
period, due to an insured cause of loss that is general
to the surrounding area and that prevents other produc-
ers from planting acreage with similar characteristics.
Failure to plant because of uninsured causes such as lack
of proper equipment or labor to plant the acreage, or use
of a particular production method, is not considered pre-
vented planting.2
The policies issued to the Karos also provided, “[I]f it is pos-
sible for you to plant on or prior to the final planting date
1
9 U.S.C. § 1 et seq. (2012).
2
7 C.F.R. § 457.8, ¶ 1.
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KARO v. NAU COUNTRY INS. CO.
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when other producers in the area are planting and you fail to
plant, no prevented planting payment will be made.”3
It is undisputed that in 2012, the Karos did not plant their
corn crop on the insured acres prior to the final planting
date. The Karos claimed continuous wet conditions prevented
them from doing so. The Karos did not attempt to plant corn
during the late planting period, but did plant soybeans on
some acres.
NAU denied the Karos’ prevented planting claims. It found
that excessive moisture was not general to the surrounding area
and did not prevent other producers from planting acres with
similar characteristics.
1. A rbitration
Pursuant to a mandatory arbitration clause in the crop insur-
ance policies,4 the parties submitted their disputes to binding
arbitration. After an evidentiary hearing, the arbitrator issued
a final arbitration award in favor of NAU, denying the Karos’
claims under the “prevented planting coverage” of the crop
insurance policies. The arbitration award denying coverage
was issued January 21, 2014.
In denying coverage, the arbitrator found “[t]he evidence
as presented, concerning the excessive moisture in the area in
early spring, did not prevent most other producers with acreage
with similar characteristics from planting their acres.”
2. The K aros Seek to Judicially
Vacate A rbitration Award
On May 15, 2014, the Karos filed what they termed a
“Petition for Judicial Review” in the Holt County District
Court seeking to vacate the arbitration award under § 10 of the
FAA.5 Section 10(a) provides:
3
Id., § 457.8, ¶ 17(d)(2).
4
See id., § 457.8, ¶ 20(a) (“[For Reinsured Policies]”).
5
See 9 U.S.C. § 10.
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KARO v. NAU COUNTRY INS. CO.
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In any of the following cases the United States court in
and for the district wherein the award was made may
make an order vacating the award upon the application of
any party to the arbitration—
(1) where the award was procured by corruption, fraud,
or undue means;
(2) where there was evident partiality or corruption in
the arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in
refusing to postpone the hearing, upon sufficient cause
shown, or in refusing to hear evidence pertinent and
material to the controversy; or of any other misbehav-
ior by which the rights of any party have been preju-
diced; or
(4) where the arbitrators exceeded their powers, or
so imperfectly executed them that a mutual, final, and
definite award upon the subject matter submitted was
not made.
The Karos relied on § 10(a)(4) to support their request to
vacate the award.
NAU filed a motion to dismiss pursuant to Neb. Ct. R. Pldg.
§ 6-1112(b)(6), alleging the Karos had failed to state a claim
upon which relief could be granted. The district court over-
ruled the motion and required NAU to file an answer. NAU’s
answer generally denied the Karos’ complaint for vacatur, and
it set forth several affirmative defenses, but NAU did not file
an application or motion to confirm the award.6
In March 2016, all parties moved for summary judgment.
After an evidentiary hearing, the court granted the Karos’ sum-
mary judgment motion and vacated the arbitration award under
§ 10(a)(4) of the FAA, finding that the arbitrator exceeded his
powers and manifestly disregarded the law.
NAU timely appealed from that judgment, and we granted
its petition to bypass the Nebraska Court of Appeals.
6
See 9 U.S.C. § 9.
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KARO v. NAU COUNTRY INS. CO.
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II. ASSIGNMENTS OF ERROR
NAU assigns, restated, that the district court erred in (1)
reviewing and vacating the arbitration award; (2) applying
the manifest disregard of the law doctrine; (3) ruling that the
arbitrator exceeded his powers or so imperfectly executed them
that a mutual, final, and definite award upon the subject mat-
ter submitted was not made; and (4) refusing to grant NAU’s
motion for summary judgment.
III. STANDARD OF REVIEW
[1] A jurisdictional issue that does not involve a factual dis-
pute presents a question of law.7
IV. ANALYSIS
1. FAA Governs This A ppeal
[2,3] As a threshold matter, we agree with the district court
and the parties that the issues presented in this appeal are
governed by the FAA. It is well-settled that “if arbitration
arises from a contract involving interstate commerce, it is gov-
erned by the FAA.”8 The arbitration of disputes arising under
federally reinsured crop insurance contracts plainly involves
interstate commerce and, as such, is governed exclusively by
the FAA.9
2. Judicial Vacatur Under FAA
[4] Before reaching the legal issues presented for review,
it is the duty of an appellate court to determine whether it
7
In re Interest of Luz P. et al., 295 Neb. 814, 891 N.W.2d 651 (2017).
8
Aramark Uniform & Career Apparel v. Hunan, Inc., 276 Neb. 700, 703,
757 N.W.2d 205, 209 (2008).
9
Kremer v. Rural Community Ins. Co., 280 Neb. 591, 788 N.W.2d 538
(2010); Svancara v. Rain and Hail, LLC, No. 8:09CV144, 2009 WL
2982906 (D. Neb. Sept. 11, 2009) (unpublished memorandum and order)
(citing Nobles v. Rural Community Ins. Services, 122 F. Supp. 2d 1290
(M.D. Ala. 2000)).
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has jurisdiction over the matter before it.10 This is so even
where, as here, neither party has raised the issue.11 The thresh-
old issue we must address is whether the Karos satisfied
the statutory preconditions to seeking judicial vacatur under
the FAA.
“Congress enacted the FAA to replace judicial indisposi-
tion to arbitration with a ‘national policy favoring [it] and
plac[ing] arbitration agreements on equal footing with all
other contracts.’”12 The FAA includes mechanisms for enforc-
ing arbitration awards in state and federal courts that have
jurisdiction,13 including provisions for obtaining judicial con-
firmation of the award,14 and separate provisions for judicial
vacatur15 or modification16 of an award. The U.S. Supreme
Court has described these provisions as providing “expedited
judicial review”17 of arbitration awards, and it has observed
that “[a]n application for any of these orders will get stream-
lined treatment as a motion, obviating the separate contract
action that would usually be necessary to enforce or tinker with
an arbitral award in court.”18
We observe that in the present case, the district court
and the parties appear to have treated the Karos’ request for
10
Cl. Ch. v. First Nat. Bank of Omaha, 296 Neb. 632, 895 N.W.2d 284
(2017).
11
Schlake v. Schlake, 294 Neb. 755, 885 N.W.2d 15 (2016).
12
Hall Street Associates, L. L. C. v. Mattel, Inc., 552 U.S. 576, 581, 128 S.
Ct. 1396, 170 L. Ed. 2d 254 (2008).
13
Hall Street Associates, L. L. C., supra note 12.
14
9 U.S.C. § 9.
15
Id., § 10.
16
Id., § 11
17
Hall Street Associates, L. L. C., supra note 12, 552 U.S. at 592.
18
Id., 552 U.S. at 582. See, also, 9 U.S.C. § 6 (“[a]ny application to the
court [under the FAA] shall be made and heard in the manner provided
by law for the making and hearing of motions, except as otherwise herein
expressly provided”).
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KARO v. NAU COUNTRY INS. CO.
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judicial vacatur not as a motion, but, rather, as an ordinary
civil complaint, governed by the Nebraska Court Rules of
Pleading in Civil Cases and amenable to motions for summary
judgment under Neb. Rev. Stat. § 25-1330 et seq. (Reissue
2016). While the procedure used here runs contrary to that
mandated by the FAA and threatens to develop expedited
judicial vacatur into full scale litigation with evidentiary hear-
ings and dispositive motions,19 no one assigns this as error,
and in any event, the procedure followed does not drive our
disposition of this case. Instead, our disposition focuses on
the statutory 3-month notice requirement for seeking judicial
vacatur under the FAA20 and whether that requirement is juris-
dictional in nature.
Section 12 of the FAA governs motions to vacate and
modify awards under §§ 10 and 11 of the FAA.21 Section 12
provides, in relevant part:
Notice of a motion to vacate, modify, or correct an
award must be served upon the adverse party or his
attorney within three months after the award is filed or
delivered. If the adverse party is a resident of the district
within which the award was made, such service shall be
made upon the adverse party or his attorney as prescribed
by law for service of notice of motion in an action in
the same court. If the adverse party shall be a nonresi-
dent then the notice of the application shall be served
by the marshal of any district within which the adverse
party may be found in like manner as other process of
the court.
19
See O.R. Securities v. Professional Planning Assoc., 857 F.2d 742 (11th
Cir. 1988) (under FAA and Federal Rules of Civil Procedure, proper way
to request judicial vacatur is filing motion in district court rather than
complaint; one defending award should not have burden of dismissing
complaint).
20
9 U.S.C. § 12.
21
See id., §§ 10 through 12.
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KARO v. NAU COUNTRY INS. CO.
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Use of the terms “must” and “shall” in 9 U.S.C. § 12 of
the FAA leaves little room to argue that the requirements
of serving notice are permissive rather than mandatory. And
we understand the 3-month notice requirement to implicitly
require filing the application within the same timeframe.
Here, the record shows the arbitration award was issued
January 21, 2014. It was received January 23, but the Karos
did not move to vacate the award until May 15, when they
filed the application in the district court and provided NAU
notice of the same via U.S. mail. Because the Karos’ motion
to vacate was filed and served outside the 3-month period
mandated by § 12, we must determine the legal effect, if
any, of the Karos’ delay. The U.S. Supreme Court has not
addressed this question, but the Eighth Circuit Court of
Appeals has.
In Piccolo v. Dain, Kalman & Quail, Inc.,22 the Eighth
Circuit determined that serving notice within the 3-month
timeframe under § 12 is a statutory precondition to judicial
review of an arbitration award. In that case, pro se par-
ties to an arbitration award governed by the FAA sought to
vacate the award more than 3 months after it was issued.
The federal district court dismissed the matter, finding that
the parties’ failure to serve notice within 3 months of the
arbitration award deprived the court of power to review
the award under the FAA. The Eighth Circuit Court of
Appeals agreed, reasoning that “[a] party to an arbitration
award who fails to comply with the statutory precondi-
tion of timely service of notice [under § 12 of the FAA]
forfeits the right to judicial review of the award [under
§ 10 of the FAA].”23 The court went on to conclude that a
party’s “failure to serve [a motion] to vacate within three
months of the award deprived [the district court] of power
22
Piccolo v. Dain, Kalman & Quail, Inc., 641 F.2d 598 (8th Cir. 1981).
23
Id. at 600. See 9 U.S.C. §§ 10 and 12.
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to review the award.”24 Other courts have reached similar
conclusions.25
Although the Eighth Circuit in Piccolo did not expressly
hold the 3-month notice requirement under § 12 jurisdictional,
it implied as much by holding that a court’s “power to review
the award” is present only when the statutory preconditions
of § 12 have been met.26 “Jurisdiction” is a term that “refers
to a court’s adjudicatory authority,”27 and the U.S. Supreme
Court has observed that “jurisdictional statutes ‘speak to the
power of the court rather than to the rights or obligations of
the parties.’”28
The Eighth Circuit’s opinion in Piccolo has been cited
with approval by one panel of the 10th Circuit Court of
Appeals,29 but another panel of the same circuit has con-
cluded that the notice requirement in § 12 is more “in
the nature of a statute of limitations, which is subject to
waiver.”30 Other courts have relied upon the 3-month notice
requirement under § 12 to preclude judicial consideration
of untimely vacatur requests without expressly addressing
whether the r­equirement is jurisdictional in nature.31 And
24
Piccolo, supra note 22, 641 F.2d at 600.
25
See, Pfannenstiel v. Merrill Lynch, Pierce, 477 F.3d 1155 (10th Cir. 2007);
Franco v. Prudential Bache Securities, Inc., 719 F. Supp. 63 (D. Puerto
Rico 1989).
26
Piccolo, supra note 22, 641 F.2d at 600.
27
Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 160, 130 S. Ct. 1237, 176
L. Ed. 2d 18 (2010).
28
Landgraf v. USI Film Products, 511 U.S. 244, 274, 114 S. Ct. 1483, 128
L. Ed. 2d 229 (1994).
29
See Pfannenstiel, supra note 25.
30
See Foster v. Turley, 808 F.2d 38, 41 (10th Cir. 1986). See 9 U.S.C. § 12.
31
See, e.g., Lafarge Conseils et Etudes, S.A. v. Kaiser Cement, 791 F.2d
1334 (9th Cir. 1986); White v. Mayflower Transit, LLC, 481 F. Supp. 2d
1101 (C.D. Cal. 2007); M.J. Woods, Inc. v. Conopco, Inc., 271 F. Supp. 2d
576 (S.D.N.Y. 2003); Federated Rural Elec. Ins. Ex. v. Nationwide Mut.,
134 F. Supp. 2d 923 (S.D. Ohio 2001).
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while some courts have indirectly approached the juris-
dictional question by considering whether the time limit
in § 12 is subject to equitable tolling, those courts have
reached inconsistent conclusions despite applying similar
legal principles.32
The present case requires us to squarely address this unset-
tled question of federal law and decide whether the 3-month
time limit in § 12 is a jurisdictional requirement. If it is, the
Karos’ delay in filing their application and serving notice
deprived the district court of jurisdiction to vacate the award.
If, however, the time limit is more in the nature of an affirma-
tive defense, then NAU waived it by failing to raise it in the
district court.33
Before undertaking this jurisdictional analysis, we pause
to clarify that the question before us has little to do with the
unrelated, but equally unsettled, question of when a federal
court has subject matter jurisdiction under the FAA.34 We
are aware of the U.S. Supreme Court’s decision in Vaden
v. Discover Bank35 and its holding that federal courts may
hear claims under the FAA only when there is an inde-
pendent basis for federal jurisdiction. In Vaden, the Court
32
Compare, e.g., Move, Inc. v. Citigroup Global Markets, Inc., 840 F.3d
1152 (9th Cir. 2016) (3-month time limit under FAA is subject to equitable
tolling), and Chilcott Entertainment v. John G. Kinnard, 10 P.3d 723
(Colo. App. 2000) (3-month notice requirement under § 12 of FAA is not
subject to equitable tolling).
33
See John R. Sand & Gravel Co. v. United States, 552 U.S. 130, 128
S. Ct. 750, 169 L. Ed. 2d 591 (2008) (unless statutory time limitation
is jurisdictional, law typically treats statute of limitations defense as
affirmative defense that must be raised or is waived). Cf. State v. Crawford,
291 Neb. 362, 865 N.W.2d 360 (2015).
34
See, e.g., Kristen M. Blankley, A Uniform Theory of Federal Court
Jurisdiction Under the Federal Arbitration Act, 23 Geo. Mason L. Rev.
525 (2016).
35
Vaden v. Discover Bank, 556 U.S. 49, 129 S. Ct. 1262, 173 L. Ed. 2d 206
(2009).
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explained that the “‘body of federal substantive law’” gen-
erated by the FAA is “equally binding on state and federal
courts”36 but:
“As for jurisdiction over controversies touching arbitra-
tion,” however, the [FAA] is “something of an anomaly”
in the realm of federal legislation: It “bestow[s] no fed-
eral jurisdiction but rather requir[es] [for access to a
federal forum] an independent jurisdictional basis” over
the parties’ dispute. . . . Given the substantive supremacy
of the FAA, but the [FAA’s] nonjurisdictional cast, state
courts have a prominent role to play as enforcers of
agreements to arbitrate.37
The Karos filed their application for judicial vacatur in
state court rather than federal court, so we are not concerned
here with questions of federal court jurisdiction. Rather, the
threshold question presented is whether the 3-month time limit
under § 12 of the FAA is jurisdictional in nature, such that
it cannot be waived and courts must consider the issue sua
sponte even when the parties do not raise it.38
(a) Framework Under Federal Law
for Determining When Statutory
Time Limits Are Jurisdictional
Because the question presented requires this court to inter-
pret federal law, we look to federal court decisions for guid-
ance. The U.S. Supreme Court has, in recent years, endeavored
to “‘bring some discipline’” to its “use of the term ‘jurisdic-
tional’” due to what it described as its “‘less than meticulous’
use of the term in the past.”39 Generally speaking, it has done
so by attempting to distinguish between those statutory time
36
Id., 556 U.S. at 59.
37
Id.
38
See, John R. Sand & Gravel Co., supra note 33; 9 U.S.C. § 12.
39
Gonzalez v. Thaler, 565 U.S. 134, 141, 132 S. Ct. 641, 181 L. Ed. 2d 619
(2012).
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limits which are merely “‘claim-processing rules’” and those
which affect a court’s “‘adjudicatory authority’” and thus
are jurisdictional.40
Over the past decade or so, the Court has granted certiorari
in several cases to determine whether statutory time limitations
were jurisdictional and, in most of those cases, concluded they
were not.41 The Supreme Court has observed that “[m]ost stat-
utes of limitations seek primarily to protect defendants against
stale or unduly delayed claims” and for that reason, “the law
typically treats a limitations defense as an affirmative defense
that the defendant must raise at the pleadings stage and that
is subject to rules of forfeiture and waiver.”42 The Court has
described these ordinary statutory filing deadlines as “‘quint-
essential claim processing rules’” which “‘seek to promote
the orderly process of litigation,’ but do not deprive a court
of authority to hear a case.”43 Alternatively, when statutory
time limitations “seek not so much to protect a defendant’s
case-specific interest in timeliness as to achieve a broader
40
Id.
41
Compare, e.g., U.S. v. Kwai Fun Wong, ___ U.S. ___, 135 S. Ct. 1625,
191 L. Ed. 2d 533 (2015) (statutory requirement that suit under Federal
Tort Claims Act be filed within 6 months after claim denied by federal
agency is not jurisdictional); Sebelius v. Auburn Regional Medical
Center, 568 U.S. 145, 133 S. Ct. 817, 184 L. Ed. 2d 627 (2013) (180-day
filing deadline for filing appeals to Medicare’s Provider Reimbursement
Review Board is not jurisdictional); and Henderson v. Shinseki, 562 U.S.
428, 131 S. Ct. 1197, 179 L. Ed. 2d 159 (2011) (120-day deadline for
filing notice of appeal seeking de novo review before Board of Veterans’
Appeals is not jurisdictional), with John R. Sand & Gravel Co., supra
note 33 (6-year statutory limitation on filing claims before U.S. Court
of Federal Claims is jurisdictional and cannot be waived); Bowles
v. Russell, 551 U.S. 205, 127 S. Ct. 2360, 168 L. Ed. 2d 96 (2007)
(statutory time limits for taking appeal in civil case are mandatory and
jurisdictional).
42
John R. Sand & Gravel Co., supra note 33, 552 U.S. at 133.
43
Kwai Fun Wong, supra note 41, 135 S. Ct. at 1632 (quoting Henderson,
supra note 41).
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system-related goal,” they more often are considered jurisdic-
tional in nature.44
The Court has “urged that a rule should not be referred to
as jurisdictional unless it governs a court’s adjudicatory capac-
ity, that is, its subject-matter or personal jurisdiction.”45 But
the Court has also recognized that even where a statutory time
limitation appears to be a claim-processing rule, it may nev-
ertheless be jurisdictional because “Congress is free to attach
the conditions that go with the jurisdictional label to a rule
that we would prefer to call a claim-processing rule.”46 The
Court has acknowledged that “[w]hile perhaps clear in theory,
the distinction between jurisdictional conditions and claim-
processing rules can be confusing in practice.”47
[5] To make it easier for courts applying federal law to
determine whether statutory time limits are jurisdictional, the
U.S. Supreme Court has recently adopted what it refers to
alternatively as the “clear statement rule”48 or the “‘bright
line’” rule.49 In Sebelius v. Auburn Regional Medical Center,50
the Court explained the rule as follows:
To ward off profligate use of the term “jurisdiction,”
we have adopted a “readily administrable bright line”
for determining when to classify a statutory limitation
as jurisdictional. . . . We inquire whether Congress
has “clearly state[d]” that the rule is jurisdictional;
absent such a clear statement, we have cautioned,
“courts should treat the restriction as nonjurisdictional
44
John R. Sand & Gravel Co., supra note 33, 552 U.S. at 133.
45
Henderson, supra note 41, 562 U.S. at 435.
46
Id.
47
Reed Elsevier, Inc., supra note 27, 559 U.S. at 161.
48
Kwai Fun Wong, supra note 41, 135 S. Ct. at 1632. See, also, Gonzalez,
supra note 39.
49
Sebelius, supra note 41, 568 U.S. at 153.
50
Sebelius, supra note 41.
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in character.” . . . This is not to say that Congress must
incant magic words in order to speak clearly. We con-
sider “context, including this Court’s interpretations of
similar provisions in many years past,” as probative of
whether Congress intended a particular provision to rank
as jurisdictional.51
With these principles in mind, we review the statutory
language of the FAA for any clear indication that Congress
intended the statutory time limits on serving notice of an appli-
cation for expedited judicial review to be jurisdictional.
(b) Congress Intended Notice Requirements
Under §§ 9 and 12 to Be Jurisdictional
As noted, the FAA authorizes parties to an arbitration to
apply for expedited judicial review of arbitration awards seek-
ing either to confirm the award,52 vacate the award,53 or modify
the award.54 The notice requirements for judicial confirmation
are set out in § 9 of the FAA and the notice requirements for
judicial vacatur and modification are set out in § 12.55 Under
both §§ 9 and 12, it is mandatory that notice of any applica-
tion be served on the adverse party, and the manner in which
notice must be served is the same. Only the time period for
serving the required notice is different—those applying for
judicial confirmation may do so anytime within 1 year after
the award,56 and those applying for judicial vacatur or modi-
fication must do so within 3 months after the award is filed
or delivered.57
51
Id., 568 U.S. at 153-54 (citations omitted).
52
9 U.S.C. § 9.
53
Id., § 10.
54
Id., § 11.
55
Id., §§ 9 and 12.
56
Id., § 9.
57
Id., § 12.
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Section 9, which is titled “Award of arbitrators; confirma-
tion; jurisdiction; procedure,” provides in pertinent part:
[A]ny time within one year after the award is made any
party to the arbitration may apply to the court . . . for
an order confirming the award, and thereupon the court
must grant such an order unless the award is vacated,
modified, or corrected as prescribed in sections 10 and
11 of this title. . . . Notice of the application shall be
served upon the adverse party, and thereupon the court
shall have jurisdiction of such party as though he had
appeared generally in the proceeding. If the adverse
party is a resident of the district in which the award
was made, such service shall be made upon the adverse
party or his attorney as prescribed by law for service of
notice of motion in an action in the same court. If the
adverse party shall be a nonresident, then the notice of
the application shall be served by the marshal of any dis-
trict within which the adverse party may be found in like
manner as other proc­ess of the court.58
Section 9 provides that an application for judicial confir-
mation “may” be filed anytime within 1 year after an award
appears, and this language has caused federal courts to split
over whether the 1-year time period is mandatory or permis-
sive.59 But here, we are not concerned with interpreting the
requirements for timely filing applications to confirm awards.
Rather, we look to the language of § 9 for instruction, if
any, on whether Congress considered the notice requirements
attend­ant to the streamlined process for judicial review to be
mandatory and jurisdictional in nature.
58
Id., § 9 (emphasis supplied).
59
See Teresa L. Elliott, Conflicting Interpretations of the One-Year
Requirement on Motions to Confirm Arbitration Awards, 38 Creighton L.
Rev. 661 (2005) (analyzing split in federal courts over whether 9 U.S.C.
§ 9 allows parties to seek judicial confirmation of award more than 1 year
after award is entered).
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Section 9 requires that notice of any application for judicial
confirmation “shall be served upon the adverse party” and
“shall be made” in the manner provided, and it then expressly
provides that “thereupon,” after service of such notice, “the
court shall have jurisdiction” over the adverse parties to the
arbitration. This is a clear indication that Congress intended
the statutory requirements for serving notice of an applica-
tion for expedited judicial review under the FAA to be juris-
dictional in nature. And while it is tempting to think about
the FAA’s notice requirements using traditional notions of
personal jurisdiction, we are not persuaded that the general
jurisprudence governing obtaining and waiving personal juris-
diction in federal court actions has any proper application to
the sort of streamlined judicial review Congress authorized
under the FAA.
Both the title and the statutory language of § 9 indicate that
Congress intended compliance with the notice requirement to
carry jurisdictional consequence. This makes practical sense,
because expedited judicial review under the FAA gets “stream-
lined treatment as a motion”60 and thus is not subject to the
formal process or time restrictions on serving complaints. The
FAA’s requirement of serving notice of an application on the
adverse party is the only procedure governing movement of
the case from the arbitral forum to the judicial forum.
[6] We conclude, based on the clear statutory language of
§ 9, that the notice requirements governing judicial review
under the FAA are intended to “govern[] a court’s adjudica-
tory capacity”61 and properly are termed jurisdictional. We next
consider whether the same can be said for the 3-month time
limit under § 12.
60
See Hall Street Associates, L. L. C., supra note 12, 552 U.S. at 582. See,
also, 9 U.S.C. § 6 (“[a]ny application to the court [under the FAA] shall be
made and heard in the manner provided by law for the making and hearing
of motions, except as otherwise herein expressly provided”).
61
Henderson, supra note 41, 562 U.S. at 435.
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Under § 12, Congress used mandatory language to set out
both the notice requirements and the timeframe for serving
such notice. That section requires that notice of an applica-
tion seeking judicial vacatur “must be served upon the adverse
party or his attorney within three months after the award is
filed or delivered.” Although Congress did not, in § 12, repeat
the phrase from § 9 that “thereupon the court shall have juris-
diction” when addressing notice under § 12, we conclude it is
appropriate to analyze §§ 9 and 12 together when considering
the effect of the jurisdictional language.
We are mindful that the U.S. Supreme Court has counseled
against restrictively “parsing the language” when comparing
similar provisions of the sections governing judicial review
under the FAA.62 In Cortez Byrd Chips, Inc. v. Bill Harbert
Constr. Co.,63 the Court considered whether differences in the
permissiveness of the venue language used in § 9 (judicial
confirmation) could be reconciled with the more mandatory
venue language used in §§ 10 and 11 (judicial vacatur and
modification). There, a unanimous Court held that the lan-
guage of §§ 10 and 11 should be read to “supplement, but . . .
not supplant” the permissive language of § 9, reasoning that
these sections “are best analyzed together, owing to their con-
temporaneous enactment and the similarity of their pertinent
language.”64 The Court noted some of the practical problems
that would result from construing the venue requirements
differently for judicial confirmation and vacatur, and it ulti-
mately concluded that permissive venue was more consistent
with the FAA’s “‘statutory policy of rapid and unobstructed
enforcement of arbitration agreements.’”65 We assume the
same interpretive reasoning applies here.
62
Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193, 198,
120 S. Ct. 1331, 146 L. Ed. 2d 171 (2000).
63
Cortez Byrd Chips, Inc., supra note 62.
64
Id., 529 U.S. at 198.
65
Id., 529 U.S. at 201.
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Although different timeframes apply for serving notice
under §§ 9 and 12, there is no difference in the mandatory
proc­ess by which the adverse party must be served with notice
of the application, and no difference in the practical pur-
pose for requiring such notice. It would make little sense for
Congress to give clear jurisdictional weight to serving notice
in one context but not the other, and we see nothing in the
language or purpose of the FAA that would compel the conclu-
sion that Congress intended the statutory notice requirements
for expedited judicial review to be jurisdictional when a party
seeks judicial confirmation, but not when a party seeks judi-
cial vacatur or modification. Even though § 9 governs judicial
confirmation, it expressly references vacating, modifying, or
correcting awards “as prescribed in sections 10 and 11 of
this title”66 before stating the jurisdictional impact of serving
notice of applications for judicial review. Due to the similarity
of the mandatory notice procedures, we analyze §§ 9 and 12
together, and we conclude that whether an arbitrating party is
applying for judicial review to confirm an award under § 9 or
to vacate or modify an award under §§ 10 and 11, Congress
intended that a party’s failure to serve notice of the applica-
tion in the manner directed, and within mandatory time limits,
would have jurisdictional consequences.
(c) Context and Purpose of § 12
Indicate It Is Jurisdictional
Our conclusion that Congress intended the 3-month time
limit under § 12 to be jurisdictional is supported by more
than just the presence of clear jurisdictional language in
§ 9. The U.S. Supreme Court has directed that in addition
to considering whether Congress used language clearly stat-
ing that a time limitation is jurisdictional, courts should
consider “‘context, including this Court’s interpretations of
similar provisions in many years past,’” as probative of
66
9 U.S.C. § 9.
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whether Congress intended a particular provision to rank as
jurisdictional.67
In discussing the purpose of the time limit in § 12, the
Second Circuit Court of Appeals reasoned:
The role of arbitration as a mechanism for speedy dispute
resolution disfavors delayed challenges to the validity
of an award. . . . Thus, when a party to an arbitration
believes that he has been prejudiced in the proceedings
by behavior that the [FAA] condemns he must bring a
motion to vacate within the allotted time. When the three
month limitations period has run without vacation of
the arbitration award, the successful party has a right to
assume the award is valid and untainted, and to obtain its
confirmation in a summary proceeding.68
Under the FAA, state and federal courts have only an ancil-
lary role in the arbitration process. The U.S. Supreme Court
has described judicial review under §§ 9 through 11 of the
FAA as
substantiating a national policy favoring arbitration with
just the limited [judicial] review needed to maintain arbi-
tration’s essential virtue of resolving disputes straight-
away. Any other reading opens the door to the full-bore
legal and evidentiary appeals that can “rende[r] informal
arbitration merely a prelude to a more cumbersome and
time-consuming judicial review process” . . . .69
[7] Under the FAA, once the arbitrator has heard a case and
entered an award, Congress has placed strict limitations on
judicial review of the arbitration award by placing temporal
limits on when a court is authorized to review an award70 and
67
Sebelius, supra note 41, 568 U.S. at 153-54.
68
Florasynth, Inc. v. Pickholz, 750 F.2d 171, 177 (2d Cir. 1984) (citation
omitted).
69
See Hall Street Associates, L. L. C., supra note 12, 552 U.S. at 588.
70
See, e.g., 9 U.S.C. §§ 9 and 12.
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by limiting the grounds upon which a court is authorized to
vacate or modify such an award.71 In that regard, the stream-
lined judicial review of an arbitrator’s award is similar to
restricted appellate review, and we conclude it is appropriate to
view the timely notice requirements governing judicial review
in that context as well.
Before addressing the law which has developed around the
jurisdictional nature of notices of appeal, we pause to acknowl-
edge that the streamlined motion process which Congress
adopted for expedited judicial review of arbitration awards is
procedurally unique and resists easy application of the settled
jurisprudence that federal courts apply in both actions and
appeals. Traditional concepts of subject matter jurisdiction,
personal jurisdiction, and appellate jurisdiction are strained by
the FAA’s streamlined procedure for judicial review of arbitra-
tions. But until the U.S. Supreme Court weighs in on this issue,
we find it necessary to draw from the settled jurisprudence
governing those traditional concepts in order to resolve the
jurisdictional questions which are not answered in the sparse
provisions of the FAA.
[8] Unlike statutes of limitation that govern filing actions in
the trial courts, statutory time limits on appellate review are
almost always considered jurisdictional in nature, both his-
torically and presently, and strict compliance with such time
limits is necessary.72 The U.S. Supreme Court recognized as
much in Bowles v. Russell.73
71
See, id., §§ 10 and 11; Hall Street Associates, L. L. C., supra note 12.
72
See, generally, 4 C.J.S. Appeal and Error § 361 (2007). See, also,
Henderson, supra note 41, 562 U.S. at 438 (“time for taking an appeal
from a district court to a court of appeals in a civil case has long
been understood to be jurisdictional”); Fitzgerald v. Fitzgerald, 286 Neb.
96, 835 N.W.2d 44 (2013) (appellate courts do not generally acquire
jurisdiction of appeal unless notice of appeal is filed and docket fee is paid
within 30 days of final order).
73
Bowles, supra note 41.
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[9] In Bowles, the Court considered whether the statutory
time limit for filing a notice of appeal in a habeas action was
jurisdictional. The district court had denied habeas relief and
then gave the petitioner additional time in which to file his
notice of appeal. According to federal statute, a notice of
appeal must be filed within 30 days of entry of judgment,74
and district courts have limited authority to grant motions to
reopen the time to file an appeal for a period of 14 days.75 The
district court purported to reopen the filing period for more
than 14 days. Because of this, the Court of Appeals found the
notice of appeal was untimely filed and concluded it lacked
jurisdiction over the appeal. The Supreme Court granted cer-
tiorari, and affirmed. The Court acknowledged that several of
its recent opinions had undertaken to clarify the distinction
between jurisdictional rules and claims-processing rules, but
pointed out that “none of them calls into question our long-
standing treatment of statutory time limits for taking an appeal
as jurisdictional.”76 The Court went on to explain:
Because Congress specifically limited the amount of time
by which district courts can extend the notice-of-appeal
period in §2107(c), that limitation is more than a simple
“claim-processing rule.” As we have long held, when an
“appeal has not been prosecuted in the manner directed,
within the time limited by the acts of Congress, it must
be dismissed for want of jurisdiction.”77
Like the time-sensitive notice-of-appeal requirements con-
sidered jurisdictional in Bowles, the notice requirements that
govern judicial review under the FAA are “more than a simple
‘claim-processing rule.’”78 Like notices of appeal, the notice
74
See 28 U.S.C. § 2107(a) (2012).
75
See id., § 2107(c).
76
Bowles, supra note 41, 551 U.S. at 210.
77
Id., 551 U.S. at 213.
78
Id.
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requirements for judicial review under the FAA play a critical
role in the orderly movement of the case between forums in a
multiforum system.
[10] The concept of jurisdiction—in its most essential form—
has been described as “erect[ing] both the fences that separate
forums and the gates that cases may pass through.”79 The FAA’s
requirement that one seeking judicial vacatur must serve notice
of the application in a certain manner and within a specified
timeframe, like the notice of appeal considered jurisdictional in
Bowles, is the statutory procedure that defines which forum has
authority over the dispute. Because it “‘delineat[es] the classes
of cases’” the court may review, it is properly considered juris-
dictional.80 Indeed, if the notice requirements under § 12 are
not considered jurisdictional in nature, then we see nothing else
in the FAA which purports to govern the movement of a case
from the arbitral forum into the judicial forum for purposes of
judicial vacatur or modification under §§ 10 and 11.
(d) 3-Month Notice Requirement
Is Jurisdictional
[11] For all these reasons, we conclude that the 3-month
notice requirement of § 12 is jurisdictional in nature and that
the Karos’ failure to comply with the requirement deprived
the district court of authority under the FAA to vacate the
arbitration award under § 10. While expedited judicial review
under § 10(a) of the FAA may not be the only way to bring an
arbitration award before the courts,81 it was the only ground
relied upon by the Karos in seeking vacatur, and we express no
opinion about other possible avenues for judicial enforcement
of this award.
79
Scott Dodson, Jurisdiction and Its Effects, 105 Geo. L.J. 619, 634 (2017).
80
Reed Elsevier, Inc., supra note 27, 559 U.S. at 160.
81
See Hall Street Associates, L. L. C., supra note 12, 552 U.S. at 590 (noting
§§ 10 and 11 of FAA are “not the only way into court for parties wanting
review of arbitration awards”).
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[12,13] When a court lacks jurisdiction and nonetheless
enters an order, such order is void.82 “‘[A] void order is a nul-
lity which cannot constitute a judgment or final order that con-
fers appellate jurisdiction on [a] court.’”83 Because the district
court lacked jurisdiction to enter a judgment vacating the arbi-
tration award under the FAA, its judgment is void and NAU’s
appeal from such judgment cannot confer appellate jurisdiction
upon this court. Accordingly, we do not reach the other juris-
dictional and legal issues briefed by the parties.
V. CONCLUSION
For the foregoing reasons, we vacate the district court’s
judgment and dismiss this appeal for lack of jurisdiction.
Vacated and dismissed.
82
Anderson v. Finkle, 296 Neb. 797, 896 N.W.2d 606 (2017).
83
Id. at 802-03, 896 N.W.2d at 611.