Dalla-Longa v. Magnetar Capital LLC

Background

Damian Dalla-Longa filed a petition seeking to vacate an arbitration award issued in a dispute about the termination of his employment. The arbitration took place with the American Arbitration Association. The parties received the award on September 9, 2019; it unanimously denied and dismissed all of Dalla-Longa’s claims with prejudice. Dalla-Longa filed the petition on December 9, 2019. At 9:06 p.m. that day, his counsel emailed a copy of the petition to counsel who had represented Magnetar Capital LLC in the underlying arbitration.

Magnetar moved to dismiss the petition, arguing that Dalla-Longa had not provided proper and timely notice as required by Section 12 of the Federal Arbitration Act. The court noted that Section 12 requires notice of a motion to vacate an arbitration award to be served within three months after the award is delivered. Because the respondent was a resident of the district where the award was made, service had to follow the law governing service of a motion in that court. Federal Rule of Civil Procedure 5 provides that electronic service requires the recipient’s written consent.

Court’s Analysis

The court held that Dalla-Longa’s email did not constitute proper service because Magnetar had not consented in writing to service by email. The court also concluded that consent could not be implied from the parties’ email communications during the arbitration. The American Arbitration Association rule cited by Dalla-Longa concerned papers and notices for initiating or continuing an arbitration, or court actions connected to those matters; it did not govern service of a petition to vacate an award.

The court distinguished a Second Circuit decision concerning service of a motion to compel arbitration. That decision involved a different type of motion and did not change the rule that service of a petition to vacate an award is governed by Section 12 of the Federal Arbitration Act and Rule 5. The court also stated that the lawyer who received the email was counsel in the underlying arbitration but was not reasonably known at that time to be Magnetar’s counsel for the petition, and an attorney not authorized to accept service for a client cannot effectively receive service.

The court rejected Dalla-Longa’s argument that New York law allowed service by email. Rule 4, which governs service of a summons, did not apply because Section 12 referred to the rule governing service of a notice of motion, Rule 5. The court also rejected the request to excuse the service error on fairness or good-faith grounds, explaining that the three-month period has no statutory or common-law exception in these circumstances. Finally, the court ruled that New York’s six-month saving provision did not apply because the petition had been dismissed for failure to timely serve it.

Disposition

The court granted Magnetar’s motion to dismiss the petition to vacate the arbitration award. The order did not add a prejudice designation to that dismissal. The Clerk of Court was directed to close the motion at Docket Number 41 and close the case.