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; they claimed "prevented planting" for 2012 acreage due to wet conditions.
- NAU denied the claims; the policy required arbitration for disputes and the parties proceeded to binding arbitration.
- Arbitrator issued an award on January 21, 2014, denying the Karos’ prevented‑planting claims.
- The Karos filed a state‑court “Petition for Judicial Review” seeking vacatur under 9 U.S.C. § 10 on May 15, 2014 (outside the FAA’s 3‑month notice window in § 12).
- The Holt County District Court vacated the arbitration award; NAU appealed. The Nebraska Supreme Court considered whether the FAA’s notice/time requirements are jurisdictional and whether the district court had authority to vacate.
Issues
| Issue | Plaintiff's Argument (Karos) | Defendant's Argument (NAU) | Held |
|---|---|---|---|
| Whether FAA governs dispute | FAA applies because policies are federally reinsured | Same | FAA governs arbitration (interstate commerce) |
| Whether § 12’s 3‑month notice is jurisdictional | § 12 is a statute of limitations/claim‑processing rule; untimeliness is waivable | § 12 is jurisdictional — timely notice is a statutory precondition | § 12’s notice/time requirement is jurisdictional |
| Effect of failing to serve notice within 3 months | Court could still hear vacatur under § 10; procedures in state court suffice | Failure to comply deprived court of power to review; vacatur procedure is mandatory | Karos’ untimely filing deprived district court of jurisdiction; vacatur was void |
| Consequence for appealability of district court order | Court should reach merits of vacatur and NAU’s other arguments | Void judgment confers no appellate jurisdiction; appeal must be dismissed | District court judgment vacated and appeal dismissed for lack of jurisdiction |
Key Cases Cited
- Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008) (describing FAA’s expedited judicial‑review scheme)
- Piccolo v. Dain, Kalman & Quail, Inc., 641 F.2d 598 (8th Cir. 1981) (timely service under § 12 is a precondition to judicial review)
- Bowles v. Russell, 551 U.S. 205 (2007) (statutory time limits for taking appeals are jurisdictional)
- John R. Sand & Gravel Co. v. United States, 552 U.S. 130 (2008) (distinguishing jurisdictional time bars from waivable limitations)
- Sebelius v. Auburn Regional Medical Center, 568 U.S. 145 (2013) (adopting the clear‑statement rule for labeling limits jurisdictional)
- Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193 (2000) (construing FAA provisions together for venue/jurisdictional purposes)
- Vaden v. Discover Bank, 556 U.S. 49 (2009) (FAA’s substantive rules apply in state and federal courts; FAA does not itself confer federal jurisdiction)