Reed Smith Client Alerts

On June 21, 2023, the U.S. Court of Appeals for the Eleventh Circuit issued a unanimous opinion in Nuvasive, Inc. v. Absolute Med., LLC, No. 22-10214, 2023 U.S. App. LEXIS 15607, at *1 (11th Cir. June 23, 2023), holding that the Federal Arbitration Act’s three-month statute of limitations to vacate an arbitral award is not a jurisdictional precondition and may be equitably tolled.

Authors: Ed Mullins Zachary Kosnitzky

Specifically, the Eleventh Circuit affirmed the district court’s ruling to vacate the panel’s decision denying lost profit damages for plaintiff NuVasive. After years of litigation, the court compelled arbitration pursuant to the parties’ agreement to resolve the primary liability issue in the greater lawsuit. After the panel issued the award in March, the court allowed limited discovery to resolve some of the remaining claims. Approximately eight months later, defendant Absolute Medical produced text messages showing that its principal owner, Greg Soufleris, had coached a witness who was testifying before the arbitration panel. The district court vacated the judgment even though NuVasive had filed its motion to vacate after the Federal Arbitration Act’s (FAA’s) statutory three-month deadline.

The underlying arbitration involved a dispute between NuVasive, a medical device manufacturer, and Absolute Medical, a sales company that employed independent-contractor sales representatives to sell NuVasive products. Prior to the termination of their exclusive distribution agreement, Soufleris dissolved the company and formed Absolute Medical Systems, LLC. Absolute Medical Systems in turn employed Dave Hawley and Ryan Miller, who shortly began selling products for one of NuVasive’s competitors.