20-2500-cv Milberg, LLP v. Drawrah Limited, HWB et al.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 9th day of February, two thousand twenty-one. PRESENT: JOHN M. WALKER, JR., REENA RAGGI, WILLIAM J. NARDINI, Circuit Judges. _____________________________________ MILBERG, LLP, Petitioner-Appellant, v. 20-2500-cv DRAWRAH LIMITED, HWB ALEXANDRIA STRATEGIES PORTFOLIO, HWB DACHFONDS-VENIVIDIVICI, HWB GOLD & SILBER PLUS, HWB PORTFOLIO PLUS, HWB RENTEN PORTFOLIO PLUS, HWB VICTORIA STRATEGIES PORTFOLIO, KLAUS BOHRER, NW GLOBAL STRATEGY, UTE KANTNER, U.V.A. VADUZ, VICTORIA STRATEGIES PORTFOLIO LTD. Respondents-Appellees. _____________________________________

FOR PETITIONER-APPELLANT: JAY S. AUSLANDER (Scott Watnik, on the brief), Wilk Auslander LLP, New York, NY

FOR RESPONDENTS-APPELLEES: WILLIAM F. DAHILL, Dunnington Bartholow & Miller LLP, New York, NY

1 Appeal from a judgment of the United States District Court for the Southern District of New York (Torres, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.

Petitioner-Appellant Milberg, LLP, appeals from the judgment of the district court,

entered on July 8, 2020, dismissing its petition to vacate an arbitration award rendered in favor of

Respondents-Appellees. The district court dismissed the petition for lack of subject matter

jurisdiction, on the theory that Milberg had failed to adequately plead diversity of the parties, and

for failure to serve notice of its petition within the three-month deadline established by the

Federal Arbitration Act,

. Milberg appeals, challenging both holdings. We assume

the reader’s familiarity with the record.

I. Subject Matter Jurisdiction

Milberg initially filed its petition to vacate the arbitration award on May 6, 2019, alleging

(among other things) that the district court had subject matter jurisdiction based on diversity of

citizenship among the parties under

. The district court twice noted deficiencies

in Milberg’s allegations of its partners’ citizenship, and twice ordered Milberg to amend its

petition. The court ultimately dismissed the petition, reasoning that (1) the amended diversity

allegations remained ambiguous and (2) the supporting declaration did not indicate that it was

based on the declarant’s personal knowledge. See Milberg LLP v. HWB Alexandra Strategies

Portfolio, No. 19-CV-4058,

, at *3 (S.D.N.Y. July 8, 2020).

Although the question is close, we conclude that Milberg adequately pled diversity. The

district court’s contrary conclusion was understandable, given the inadequacy of the first two

petitions and the inartful drafting of the third. But “tak[ing] all facts alleged in the complaint as

true and draw[ing] all reasonable inferences in favor of plaintiff,” Sweet v. Sheahan,

,

2 83 (2d Cir. 2000), we conclude that Milberg plausibly alleged that it had two partners at the time

the action was commenced, that both were then citizens of the United States, and, therefore, that

complete diversity existed between Milberg and the respondents, all of whom were citizens of

Germany, Liechtenstein, or Luxembourg. See Universal Licensing Corp. v. Paola del Lungo

S.p.A.,

(2d Cir. 2002) (“diversity must exist at the time the action is

commenced”). The declaration of a longtime Milberg attorney (who was part of firm

management for many years), when read in the light most favorable to plaintiff, can be

understood to state personal knowledge of the relevant facts and, thus, should not have been

struck. See Fed. R. Civ. P. 56(c)(4); Fed. R. Evid. 602. We therefore hold that Milberg carried its

burden of establishing subject matter jurisdiction. See Herrick Co., Inc. v. SCS Commc’ns, Inc.,

, 322–23 (2d Cir. 2001).

II. Timeliness Under the Federal Arbitration Act

Nevertheless, we hold that Milberg failed to comply with the timing provisions of the

Federal Arbitration Act (the “FAA”). Section 12 of the FAA states that “[n]otice of a motion to

vacate, modify, or correct an award must be served upon the adverse party or his attorney within

three months after the award is filed or delivered.”

. In holding that this deadline

applies to a motion to vacate even if interposed as a defense against a motion to confirm an

arbitral award, this Court has stated that “there is no common law exception to the three month

limitations period.” Florasynth, Inc. v. Pickholz,

(2d Cir. 1984).

Milberg does not contend that it met the three-month deadline. It effected service under

the Hague Convention months after the FAA’s three-month mark passed. Rather, Milberg asserts

that it should be deemed to have complied with that deadline, invoking concepts of fairness and

equity which Milberg argues apply to service under the FAA when foreign respondents must be

3 served, and citing In re Arbitration Between InterCarbon Bermuda, Ltd. and Caltex Trading and

Transport Corp.,

(S.D.N.Y 1993). We need not reach the question of whether there

are any exceptions to the rule of strict compliance with the FAA’s three-month deadline because

the facts advanced by Milberg would not support even the equitable exception that it

hypothesizes. Milberg did not even notify opposing counsel of its petition to vacate the arbitral

award until § 12’s three-month window closed, and only after opposing counsel stated it was not

authorized to accept service did Milberg set the wheels in motion for service overseas. Such

circumstances do not demonstrate diligence within the FAA’s three-month service period

warranting a possible equitable extension. We therefore uphold the district court’s dismissal of

Milberg’s petition as untimely.

* * *

Accordingly, we AFFIRM the judgment of the district court.

FOR THE COURT:

Catherine O’Hagan Wolfe, Clerk

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