Karo v. NAU Country Ins. Co.
297 Neb. 798
| Neb. | 2017Background
- Matt and Michael Karo held federally reinsured crop insurance policies serviced by NAU Country and filed prevented-planting claims for 2012 that NAU denied.
- The policy contained a mandatory arbitration clause; the parties arbitrated and an arbitrator denied the Karos’ claims by award dated January 21, 2014.
- The Karos filed a state-court “Petition for Judicial Review” to vacate the award under 9 U.S.C. § 10 on May 15, 2014 (served outside the FAA’s 3-month notice window in § 12).
- NAU moved to dismiss under state pleading rules; the district court denied that motion, later granted summary judgment to the Karos, and vacated the arbitration award under § 10(a)(4).
- NAU appealed; the Nebraska Supreme Court considered whether the district court had jurisdiction to vacate the award given the § 12 notice/time requirements.
Issues
| Issue | Plaintiff's Argument (Karos) | Defendant's Argument (NAU) | Held |
|---|---|---|---|
| Whether the FAA governs arbitration of federally reinsured crop insurance disputes | FAA applies but not determinative of timeliness issue | FAA governs and its procedures control judicial review | FAA governs (arbitration involves interstate commerce) |
| Whether §12’s 3‑month notice requirement is jurisdictional (nonwaivable) | The 3‑month rule is not jurisdictional and can be treated as a waived/forfeitable defense | The 3‑month rule is jurisdictional and deprives courts of power if not met | §12’s 3‑month notice requirement is jurisdictional |
| Legal effect of filing/serving vacatur application after the 3‑month period | Late filing should be treated as an affirmative/waived defense; court may still adjudicate | Late service forfeits right to judicial review under FAA; court lacks power | Untimely service deprived court of authority to review under the FAA |
| Validity of district court’s vacatur judgment and appellate jurisdiction | Judgment vacating award was valid; NAU may appeal | Judgment is void for lack of jurisdiction; no appealable judgment exists | District court’s vacatur judgment is void; appeal dismissed for lack of jurisdiction |
Key Cases Cited
- Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (discussing jurisdictional meaning and limits on labeling statutes jurisdictional)
- Bowles v. Russell, 551 U.S. 205 (statutory time limits for appeals are jurisdictional)
- John R. Sand & Gravel Co. v. United States, 552 U.S. 130 (time limits that are not jurisdictional must be clearly identified; otherwise treated as jurisdictional in some contexts)
- Sebelius v. Auburn Regional Medical Center, 568 U.S. 145 (articulates the clear-statement/bright-line rule for jurisdictional statutes)
- Vaden v. Discover Bank, 556 U.S. 49 (FAA creates federal substantive law but does not itself confer federal jurisdiction)
- Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193 (interpretive principle to read §§9–11 of the FAA together when construing procedures for judicial review of awards)
- Hall Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576 (describes FAA’s streamlined/expedited judicial-review scheme)