By Leslie King O’Neal
Don’t Be Late
Being “too late” is a popular theme in rock music.[1] Being “too late” in filing a motion to vacate an arbitration award can mean a party loses its right to review an adverse award. This post discusses the deadline for filing motions to vacate and some obstacles to avoid.
A Series of Unfortunate Events
The case of Virgin Islands Housing and Finance Authority v. FEMA[2] provides many lessons about motions to vacate arbitration awards. This case involved VIHA’s attempt to recover approximately $77 million in costs from FEMA for restoring Virgin Island housing projects damaged by two hurricanes in 2017.
Civilian Board of Contract Appeals Arbitrates FEMA Claims
Under federal law applicants for FEMA assistance may request arbitration for disputes over $500,000.[3] The Civilian Board of Contract Appeals conducts the arbitration. Hearings are held before a three-judge panel of the CBCA.[4] Unfortunately for VIHA, in this case a series of unfortunate events occurred, resulting in an adverse award and no avenue for relief.
Arbitrator Incapacitated Before Award–Problems Begin
In the VIHA case, after the hearing ended and the record closed (but before the award), one of the judges became ill and was unable to participate in the deliberations. Unfortunately, he later passed away.[5] The remaining two judges issued an award on June 28, 2023, which denied VIHA’s claims.
VIHA’s Motion to Vacate–Problems Multiply
Losing an arbitrator was the first in a series of problems for VIHA. Disappointed with the arbitration award, VIHA filed a motion to vacate the award on July 28, 2023—one month after the award. However, it filed the motion with the Board, asserting the award was invalid because the full panel did not participate. On August 16, 2023, the Board denied the motion asserting it lacked authority to reconsider the decision.[6] Inexplicably, VIHA did not re-file its motion to vacate immediately. Rather, it waited over a month to do so. On September 26, 2023, VIHA filed a motion to vacate in the federal district court. It served the motion on FEMA by email on September 26, 2023, and by mail on September 29, 2023. However, the mail service was one day past the three-month deadline.[7]
A Double Whammy: Email Service Disallowed; Mail Service Too Late
The District Court rejected VIHA’s motion to vacate, finding its attempt to serve the motion on FEMA by email ineffective because FEMA did not consent in writing to email service as required by Rule 5(b)(2)(E), Fed. R. Civ. Proc.[7] FEMA’s consent to email service in arbitration did not apply to filings in federal court.[8]
Deadline Applies Even If Award Allegedly Invalid
VIHA admitted its mail service was a day late but asserted the deadline should not apply because the award was invalid. The trial court found this argument contradicted the FAA’s clear language, which does not distinguish between different kinds of arbitration awards, nor provide any exceptions to the strict deadline.[9] The District Court noted that VIHA’s argument “would nullify the limitations period for any petition to review an award where the arbitrators allegedly “exceeded their powers” such that no “final” award was made. The text of the statute does not support such a gaping exception.”
No Equitable Tolling of Deadline
The district court found equitable tolling did not apply to extend the deadline because VIHA’s own delay and confusion, rather than outside circumstances, caused the delay.[10] To merit equitable tolling, a litigant must show both “(1) that [it] has been pursuing [its] rights diligently, and (2) that some extraordinary circumstance stood in [its] way and prevented timely filing.”[11]
No APA Review Available
Further, VIHA could not seek review under the Administrative Procedures Act because the FAA provided an adequate remedy. Denying VIHA’s motion to vacate, the District Court quoted the old saying: “Men must turn square corners when they deal with the Government. If it attaches even purely formal conditions to its consent to be sued those conditions must be complied with.”
DC Circuit Affirms Denial of Motion to Vacate
On appeal the D.C. Circuit Court of Appeal affirmed the District Court’s order denying VIHFA’s motion to vacate the arbitration award. VIHA changed its arguments slightly on appeal. It abandoned the email service issue and focused on the alleged invalidity of the arbitration award, asserting the deadline did not apply because the award was void ab initio. However, the DC Circuit disagreed, holding the three-month deadline applied even to allegedly void awards. Further, the Court noted, “So far as we can tell, every court to confront this issue has reached the same conclusion. Many courts have held that the FAA’s notice deadline applies to motions arguing that the arbitrators lacked authority to issue the award or otherwise exceeded their powers. . . (citations omitted). No court, to our knowledge, has taken a different view on the exact question before us.”
“Void” Arbitration Award Not Like a “Void” Judgment
The DC Circuit also rejected VIHA’s attempt to claim that a “void” arbitration award, like a “void” judgment, may be challenged at any time. The Court noted that, “. . .[T]he notion that a void arbitration award cannot trigger a procedural deadline was not a well-settled common-law principle in 1925, when the FAA became law.” [12] (emphasis in original). Finding no pre-1925 cases (or post-1925 cases) supporting this principle, the DC Circuit rejected VIHA’s claim it could move to vacate an arbitration award under the FAA at any time, simply by challenging the arbitrator’s authority to make it.
Takeaways
- Don’t be late! Courts strictly enforce the three-month deadline to file and serve motions to vacate arbitration awards. Counsel should make every effort to file and serve such motions well within this window. If extraordinary circumstances prevent timely filing, they should be well-documented.
- Get Consent! Note that Rule 5(b)(2)(E), Fed. R. Civ. Proc. requires a party to give written consent to email service. Consent cannot be implied by conduct. A party’s consent to using email service in arbitration may not carry over to federal court.
- More is More! As the District Court in the VIHFA case noted, “in the case of legal uncertainty, it is wise to adopt a belt-and-suspenders approach.” When in doubt, use more than one approach to ensure timely service.
[1] E.g. It’s Too Late (Carole King); Too Late for Love (Def Leppard); Too Late (Journey); Little Too Late (Pat Benatar); It’s Too Late to Turn Back Now (The Cornelius Bros. & Sister Rose); Too Late for Goodbyes (Julian Lennon)
[2](Case No. 24-5122, D. C. Cir. August 15, 2025) https://law.justia.com/cases/federal/appellate-courts/cadc/24-5122/24-5122-2025-08-15.html
[3] 42 U.S.C. §5189a(d); applicants in rural areas may arbitrate claims over $100,000.
[4] Under the Stafford Act, cost eligibility disputes between FEMA and grantees are subject to arbitration by the Civilian Board of Contract Appeals. 42 U.S.C. § 5189a(d)(1); 48 C.F.R. § 6106.603. The Board conducts arbitration proceedings under the Rules of Procedure for Arbitration of Public Assistance Eligibility or Repayment, codified at 48 C.F.R. Part 6106. The full panel must issue any decision. §§ 6106.606, 6106.613.
[5] The applicable arbitration rules did not address replacing an arbitrator. Neither the appellate court nor the district court decision indicate that the parties requested appointment of a new arbitrator or a new panel under FAA §5. A future post will discuss what happens when an arbitrator resigns or is incapacitated before a final award is issued.
[6] §6106.613 “The decision of the panel is the final administrative action on the arbitrated dispute and is judicially reviewable only to the limited extent provided by 9 U.S.C.§10.”
[7] 9 U.S.C.§ 12 https://www.law.cornell.edu/uscode/text/9/12
[8] https://www.federalrulesofcivilprocedure.org/frcp/title-ii/rule-5-serving-and-filing-pleadings-and-other-papers/. Courts strictly construe this requirement. “The consent must be express, and cannot be implied from conduct.” Ortiz-Moss v. N.Y.C. Dep’t of Transp., 623 F. Supp. 2d 404, 407 (S.D.N.Y. 2008) (citing Advisory Committee Notes to Fed. R. Civ. P. 5, 2001 Amendments). Also, FEMA refused VIHA’s electronic service.
[9] In Dalla-Longa v. Magnetar Capital, LLC, 33 F.4th 693, 696 (2d Cir. 2022) the Second Circuit rejected the argument that an “agreement to accept papers by email in the arbitration proceedings extends to service of motion papers in the district court to vacate the arbitration award.”
[10] See 9 U.S.C. §12.
[11] [T]he Court will not credit VIHFA’s claims that “confusion” and “ambiguity” led it astray when poor judgment and a lack of resourcefulness prevented it from taking the correct path
[12] Citing Holland v. Florida, 560 U.S. 631, 649 (2010). There is a circuit split on whether courts can equitably toll 9 U.S.C. § 12’s statutory deadline. The 11th Circuit has allowed equitable tolling of the three-month deadline where there was evidence of fraud. See post: https://theconstructionadrtoolbox.com/2024/10/texting-witness-during-testimony-at-arbitration-hearing-may-be-grounds-to-vacate-arbitration-award