New Hampshire’s three-year statute of limitations for filing lawsuits, RSA 508:4, states “Except as otherwise provided by law, all personal actions, except actions for slander or libel, may be brought only within 3 years of the act or omission complained of . . .” The phrase “personal actions” is not defined in the statute. Does it encompass arbitration proceedings?
Neither the Federal Arbitration Act, 9 U.S.C. § 1 et seq., nor New Hampshire’s state arbitration act, RSA 542, mentions the statute of limitations. The New Hampshire Supreme Court implicitly assumed applicability of the statute of limitations to arbitration proceedings in Metropolitan Property and Liability Insurance Co. v. Walker, 136 N.H. 594 (1993), but in that case “the defendant’s August 2, 1989 request for arbitration was commenced well within the three-year statute of limitations,” id. at 598, so there was no occasion for the Court to decide whether an arbitration not commenced within three years would be barred by RSA 508:4.
Because arbitrations are not court proceedings, statutes of limitations that apply to an “action,” “civil action,” “suit” or “action at law” have been held by a number of courts not to apply to arbitration proceedings. Typical is Gannett Fleming, Inc. v. Corman Construction, Inc., 243 Md. App. 376, 397, 220 A.3d 411, 424 (2019) (holding that the term “action” means “the steps by which a party seeks to enforce any right in a court”). Similar conclusions have been reached by courts in Connecticut, R.A. Civitello Co., v. New Haven, 6 Conn.App. 212, 226, 504 A.2d 542 (1986); Maine, Lewiston Firefighters Ass’n v. City of Lewiston, 354 A.2d 154, 167 (Me. 1976); Massachusetts, Carpenter v. Pomerantz, 36 Mass. App. Ct. 627, 631, 634 N.E.2d 587, 590 (1994); Minnesota, Vaubel Farms, Inc. v. Shelby Farmers Mutual, 679 N.W.2d 407, 412 (Minn. App. 2004); North Carolina, Cameron v. Griffith, 91 N.C. App. 164, 165, 370 S.E.2d 704 (1988); Ohio, NCR Corp. v. CBS Liquor Control, Inc., 874 F. Supp. 168, 172 (S.D. Ohio 1993), aff’d 43 F.3d 1076 (6th Cir. 1995); and Vermont, Clayton v. Unsworth, 188 Vt. 432, 8 A.3d 1066, 1073 (2010). It is easy to see how the same reasoning might govern interpretation of the phrase “personal action” in our own statute of limitations.
Some courts leave it to the arbitrator to decide the applicability of the statute. See Merchants Mutual Ins. Co. v. American Arbitration Ass’n, 433 Pa. 250, 252, 248 A.2d 842 (1969) (“the issue of the applicability of the statute of limitations comes within the arbitrator’s purview”). New Hampshire courts may well take this approach. Given the deferential standard of review for arbitral awards under New Hampshire’s arbitration act (see Blog #20), and without a definitive case on point from our Supreme Court, whatever the arbitrator decides here will likely be rubber-stamped by any New Hampshire court asked to confirm or vacate the decision. Deference to an arbitrator’s decision is even greater under the Federal Arbitration Act, with some federal courts requiring the challenger to demonstrate “manifest disregard” of the law by the arbitrator – an insurmountable hurdle if the law is unsettled. See Trustees of Lawrence Academy v. Merrill Lynch Pierce Fenner & Smith, Inc., 821 F.Supp. 59, 63 (D.N.H. 1993) (holding that arbitrators’ refusal to apply the statute of limitations was not “manifest disregard” of the law).
Of course, the parties’ contracts can explicitly make statutes of limitations applicable to their arbitrations. Section 15.4.1.1 of the AIA A201 General Conditions (2017), for example, provides that a demand for arbitration shall not be made “after the date when the institution of legal or equitable proceedings based on the Claim would be barred by the applicable statute of limitations.” Similarly, section 12.5.1.1 of ConsensusDocs 200 provides: “Neither Party may commence arbitration if the claim or cause of action would be barred by the applicable statute of limitations had the claim or cause of action been filed in a state or federal court.”
Without some such contract language, parties are at risk that their arbitration might never be time-barred. How scary would that be?
Neither the Federal Arbitration Act, 9 U.S.C. § 1 et seq., nor New Hampshire’s state arbitration act, RSA 542, mentions the statute of limitations. The New Hampshire Supreme Court implicitly assumed applicability of the statute of limitations to arbitration proceedings in Metropolitan Property and Liability Insurance Co. v. Walker, 136 N.H. 594 (1993), but in that case “the defendant’s August 2, 1989 request for arbitration was commenced well within the three-year statute of limitations,” id. at 598, so there was no occasion for the Court to decide whether an arbitration not commenced within three years would be barred by RSA 508:4.
Because arbitrations are not court proceedings, statutes of limitations that apply to an “action,” “civil action,” “suit” or “action at law” have been held by a number of courts not to apply to arbitration proceedings. Typical is Gannett Fleming, Inc. v. Corman Construction, Inc., 243 Md. App. 376, 397, 220 A.3d 411, 424 (2019) (holding that the term “action” means “the steps by which a party seeks to enforce any right in a court”). Similar conclusions have been reached by courts in Connecticut, R.A. Civitello Co., v. New Haven, 6 Conn.App. 212, 226, 504 A.2d 542 (1986); Maine, Lewiston Firefighters Ass’n v. City of Lewiston, 354 A.2d 154, 167 (Me. 1976); Massachusetts, Carpenter v. Pomerantz, 36 Mass. App. Ct. 627, 631, 634 N.E.2d 587, 590 (1994); Minnesota, Vaubel Farms, Inc. v. Shelby Farmers Mutual, 679 N.W.2d 407, 412 (Minn. App. 2004); North Carolina, Cameron v. Griffith, 91 N.C. App. 164, 165, 370 S.E.2d 704 (1988); Ohio, NCR Corp. v. CBS Liquor Control, Inc., 874 F. Supp. 168, 172 (S.D. Ohio 1993), aff’d 43 F.3d 1076 (6th Cir. 1995); and Vermont, Clayton v. Unsworth, 188 Vt. 432, 8 A.3d 1066, 1073 (2010). It is easy to see how the same reasoning might govern interpretation of the phrase “personal action” in our own statute of limitations.
Some courts leave it to the arbitrator to decide the applicability of the statute. See Merchants Mutual Ins. Co. v. American Arbitration Ass’n, 433 Pa. 250, 252, 248 A.2d 842 (1969) (“the issue of the applicability of the statute of limitations comes within the arbitrator’s purview”). New Hampshire courts may well take this approach. Given the deferential standard of review for arbitral awards under New Hampshire’s arbitration act (see Blog #20), and without a definitive case on point from our Supreme Court, whatever the arbitrator decides here will likely be rubber-stamped by any New Hampshire court asked to confirm or vacate the decision. Deference to an arbitrator’s decision is even greater under the Federal Arbitration Act, with some federal courts requiring the challenger to demonstrate “manifest disregard” of the law by the arbitrator – an insurmountable hurdle if the law is unsettled. See Trustees of Lawrence Academy v. Merrill Lynch Pierce Fenner & Smith, Inc., 821 F.Supp. 59, 63 (D.N.H. 1993) (holding that arbitrators’ refusal to apply the statute of limitations was not “manifest disregard” of the law).
Of course, the parties’ contracts can explicitly make statutes of limitations applicable to their arbitrations. Section 15.4.1.1 of the AIA A201 General Conditions (2017), for example, provides that a demand for arbitration shall not be made “after the date when the institution of legal or equitable proceedings based on the Claim would be barred by the applicable statute of limitations.” Similarly, section 12.5.1.1 of ConsensusDocs 200 provides: “Neither Party may commence arbitration if the claim or cause of action would be barred by the applicable statute of limitations had the claim or cause of action been filed in a state or federal court.”
Without some such contract language, parties are at risk that their arbitration might never be time-barred. How scary would that be?
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