BOLSTERING THE FOUNDATION OF FUNDAMENTAL FAIRNESS: THE NINTH CIRCUIT DECLARES EQUITABLE TOLLING NOW APPLIES TO THE FEDERAL ARBITRATION ACT

Authors

Matthew E. Selmasska, Penn State LawFollow

First Paragraph

In Move, Inc. v. Citigroup Global Markets, Inc. the Ninth Circuit Court of Appeals held that the doctrine of equitable tolling applies to the Federal Arbitration Act, (“FAA”). The Court further held that Move, Inc. (“Move”) did not receive a fundamentally fair arbitration hearing because a non-attorney who falsified his credentials chaired the arbitration panel. The court reasoned that none of the textual factors set out by the Supreme Court in Holland v. Florida, 560 U.S. 631 (2010), which are used to determine whether the doctrine of equitable tolling does not apply to a statute, weighed against applying equitable tolling to the FAA. The court also stated that the structure of the FAA is compatible with equitable tolling, and that equitable tolling would not undermine the FAA’s basic purpose. Furthermore, the court held that by falsifying his credentials and lying to the Financial Industry Regulatory Authority (“FINRA”), the very presence of the chairman of the three-member arbitration panel denied Move a fundamentally fair hearing. As such, the court declared that Move was entitled to vacatur of the arbitration award under § 10(a)(3) of the FAA. This decision is significant because the Ninth Circuit is only the second federal circuit to answer this question in the affirmative. Additionally, because multiple federal circuits have avoided answering this question, this decision could represent a bold shift in momentum favoring equitable tolling with respect to the FAA. While the decision potentially broadens the scope of Section 12 of the FAA and its three-month challenge requirement, the decision nevertheless bolsters the foundation of fundamental fairness upon which the U.S. law of arbitration rests.

Recommended Citation

Matthew E. Selmasska, BOLSTERING THE FOUNDATION OF FUNDAMENTAL FAIRNESS: THE NINTH CIRCUIT DECLARES EQUITABLE TOLLING NOW APPLIES TO THE FEDERAL ARBITRATION ACT, 9 Arb. L. Rev. 291 (2017).