Farnsworth, III v. Towboat Nantucket Sound, Inc., 790 F.3d 90

Background

On July 28, 2012, Farnsworth's yacht ran aground; Towboat Nantucket Sound (TNS) rendered assistance and the parties signed a standard "no cure, no pay" salvage contract containing a broad binding arbitration clause.
Farnsworth later alleged he signed under duress (coercion by two TNS crew members at ~3:30 a.m.) and that towage, not salvage, was appropriate.
The parties submitted the dispute to a three‑member arbitration panel under the contract's arbitration clause; Farnsworth participated and asserted duress in his arbitration counterclaims.
While arbitration was pending, Farnsworth filed a federal suit seeking a preliminary injunction, a declaration that the contract was unenforceable for duress, and a ruling that the parties were not required to arbitrate; the district court denied the injunction and stayed the case pending arbitration.
The arbitration panel unanimously rejected Farnsworth's duress defense, awarded TNS $60,306.85, and dismissed Farnsworth's counterclaims. TNS moved in district court to confirm the award; Farnsworth then, for the first time in court papers, specifically challenged the validity of the arbitration clause itself.
The district court confirmed the award, holding Farnsworth had not timely and specifically challenged the arbitration clause in his complaint and that the arbitration clause was broad enough to encompass the dispute. The First Circuit affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Who decides duress to the contract containing an arbitration clause?	Farnsworth argued duress invalidated the arbitration clause and asked the court to decide that now.	TNS argued duress challenged the contract generally, so the arbitrators should decide under the severability doctrine.	Where the challenge is to the contract as a whole (not the arbitration clause specifically), arbitrators decide; court confirmed award.
Whether Farnsworth timely challenged the arbitration clause so the court must decide validity of arbitration clause	Farnsworth contended he refined his complaint later and raised the arbitration‑clause challenge in opposition to confirmation, which should permit judicial review.	TNS argued Farnsworth failed to specifically and timely challenge the arbitration clause in his complaint or before arbitration concluded.	Court held the specific challenge to the arbitration clause came too late; he should have raised it earlier (in the complaint or before arbitration).
Whether limited judicial review under FAA permits denying confirmation based on late‑raised non‑statutory grounds	Farnsworth urged court to consider late challenge despite FAA's limited review.	TNS relied on FAA's restrictive review framework (sections 9–11) requiring confirmation absent statutory grounds to vacate/modify.	Court ruled FAA's limited review applies; none of §10/§11 grounds existed, so award must be confirmed.
Whether participation in arbitration waived right to judicial adjudication of arbitrability	Farnsworth suggested participation did not foreclose court review if raised later.	TNS argued waiver may apply (though not pressed below).	Court did not decide waiver; reason for affirmance was failure to timely challenge; waiver was not reached.

Key Cases Cited

Rent‑A‑Center, W., Inc. v. Jackson, 561 U.S. 63 (2010) (party must specifically challenge arbitration agreement itself for court to decide).
Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) (arbitration clause severable; challenges to contract validity go to arbitrator unless directed at arbitration clause).
Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967) (established separability doctrine: general contract defenses go to arbitrator).
Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002) (arbitrability questions depend on whether parties agreed to have arbitrators decide).
Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008) (statutory grounds in §§10–11 are exclusive for vacatur/modification).
Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064 (2013) (judicial review of arbitration awards is narrowly cabined to preserve arbitration's speed and finality).
Dialysis Access Center, LLC v. RMS Lifeline, Inc., 638 F.3d 367 (1st Cir. 2011) (discussing allocation of threshold arbitrability questions under severability doctrine).