Connecticut Supreme Court Finds State Law Statutory Limitation Period to Vacate Arbitration Award Confers Jurisdiction on State Courts and Not Preempted by FAA

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Plaintiff A Better Way Wholesale Autos Inc. filed an application in Connecticut state court seeking to vacate an arbitration award issued in favor of the defendants, James Saint Paul and Julie J. Saint Paul. The defendants filed motions to confirm the award and for attorneys’ fees, and to dismiss the plaintiff’s application. The defendants argued that the application was untimely under Connecticut Statutes section 52-420 (b) and that the trial court therefore lacked subject matter jurisdiction. The trial court order granting the defendant’s motions and dismissing the plaintiff’s application was affirmed on appeal. The Supreme Court of Connecticut framed the issues as: (1) whether Connecticut’s 30-day statutory limitation for seeking to vacate an arbitration award is “jurisdictional” in that it implicates the subject matter jurisdiction of state courts; and (2) whether the Connecticut statute is preempted by the FAA, which has a three-month limitation period for seeking to vacate.

With regard to the jurisdictional issue, the plaintiff claimed that section 52-420 (b) did not confer jurisdiction because the arbitration clause between the parties explicitly provided that any arbitration “shall be governed by the [FAA] … and not by any state law concerning arbitration.” But the Supreme Court agreed with the courts below that parties cannot privately agree to have the FAA’s three-month limitation period apply to a vacatur action filed in Connecticut state court, so as to override the limitation period in section 52-420 (b). The Supreme Court also found it is “hornbook law” that parties cannot confer subject matter jurisdiction on a court by consent or agreement. The Supreme Court was similarly unpersuaded by the plaintiff’s preemption argument, finding the time limitation in section 52-420 (b) does not impede the federal policy of enforcing arbitration agreements.

A Better Way Wholesale Autos, Inc. v. Saint Paul, No. SC 20386 (Conn. Apr. 15, 2021).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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