Arbitration award is 'delivered' when mailed, rules 7th Circuit.

• Author: Ziemer, David

Byline: David Ziemer

A Nov. 2 opinion by the Seventh Circuit clarifies a number of issues related to the three-month statute of limitations for moving to vacate an arbitration award.

The key holdings are:

The statute of limitations begins to run on the date the award is mailed; andThe statute of limitations is not tolled until the defendant is served with a copy of the motion to vacate.In discussions incidental to the main holdings, the court also cautioned that a motion to vacate an arbitration award should not be labeled a complaint, and a motion to enforce the award should not be labeled a motion to dismiss a complaint.

The decision also contains dicta regarding whether an arbitration award may be delivered to a party via e-mail.

Background

In the case, A.T. Kearney, Inc. hired David M. Webster as general counsel in 1994. The following year, Electronic Data Systems Corp. (EDS) acquired A.T. Kearney.

After working for the new entity for a number of years, Webster lost his job when A.T. Kearney's legal department was eliminated. He brought claims against EDS for age discrimination and breach of his 1995 employment agreement.

The agreement contained a mandatory arbitration provision, and an arbitration hearing was held.

The arbitrator issued the award on Jan. 4, 2006. The same day, the award was placed in the mail and also distributed to both parties' counsel via e-mail.

Webster's attorney, Norman Lerum, first opened the e-mail on Jan. 5, and the post office delivered the mail on Jan. 9.

On April 3, Lerum moved to vacate the award in federal court in Illinois, but EDS was not served with the motion until April 5.

Court Finds Action Untimely

EDS moved to dismiss the action as untimely, and the district court granted the motion.

Webster appealed, but the court of appeals affirmed in a decision by Judge Ilana Diamond Rovner.

The court began by chastising counsel for improperly classifying their motions. Counsel for Webster had labeled the motion to vacate the award a complaint, and EDS labeled its motion to enforce a motion to dismiss the complaint.

However, actions to challenge arbitration awards proceed outside the rules of civil procedure, unless the Federal Arbitration Act (FAA) is silent, and there is no complaint under the FAA.

Turning to the merits, the court concluded that the motion to vacate the arbitration award was untimely.

The court first concluded that the relevant date for calculating whether service on the defendants was...