Court Opinion

ID: 4912092
Source: CourtListenerOpinion
Date Created: 2021-09-17 21:00:49.608326+00
Date Added: 2024-06-11T08:13:37.563008
License: Public Domain

USCA11 Case: 20-12904   Date Filed: 09/17/2021    Page: 1 of 19

                                                                   [PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT
                      ________________________

                             No. 20-12904
                       ________________________

                   D.C. Docket No. 1:19-cv-00553-JB-M

ANN MCLAURIN,
LYNNE FITZGERALD,

                                                           Plaintiffs–Appellees,

                                  versus

THE TERMINIX INTERNATIONAL COMPANY, LP,
TERMINIX INTERNATIONAL, INC.,

                                                         Defendants–Appellants.

                       ________________________

                Appeal from the United States District Court
                   for the Southern District of Alabama
                       ________________________

                           (September 17, 2021)

Before JORDAN, BRASHER, and JULIE CARNES, Circuit Judges.

BRASHER, Circuit Judge:
         USCA11 Case: 20-12904         Date Filed: 09/17/2021   Page: 2 of 19

      This appeal raises a question of first impression about dueling motions to

confirm and vacate arbitration awards under the Federal Arbitration Act. An

arbitrator awarded money damages in favor of Ann McLaurin and Lynne Fitzgerald

and against the Terminix International Company LP and Terminix International, Inc.

After winning the arbitration, McLaurin and Fitzgerald quickly filed a motion to

confirm with the district court. The district court ordered Terminix to respond, but

Terminix opted to forego any substantive opposition to the motion. Instead, it

asserted what it believed was its procedural right to file a separate motion to vacate

any time within three months. At the end of the three-month period, Terminix filed

its motion to vacate. The district court granted the motion to confirm as substantively

unopposed and struck the motion to vacate as untimely.

      We affirm the district court’s order granting the motion to confirm. We also

conclude that the district court did not abuse its discretion when it struck Terminix’s

later-filed motion and thereby declined to rule on its merits. We recommend that,

when faced with a motion to confirm filed within three months of an arbitration

award, district courts enter a briefing schedule that sets simultaneous deadlines for

the losing party to file an opposition to the motion to confirm, if any, and to file a

motion to vacate, modify, or correct, if any. This practice will prevent similar

disputes from arising in the future.

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                                           I.

      Ann McLaurin and Lynne Fitzgerald, two retired educators in their seventies,

bought a house on Dauphin Island to spend their retirement birdwatching. The island

lies just off the coast of Alabama, a little over five miles south of Mobile and fifty-

five miles west of Pensacola, as the crow flies. Lying at the heart of many birds’

semi-annual migration routes, the island also happens to be the first land that many

migrating birds will see after a long flight across the Caribbean. These characteristics

make Dauphin Island a prime habitat for birds and the “birders” who observe them.

      Unfortunately for McLaurin and Fitzgerald, their dream house was eaten by

termites. Before McLaurin and Fitzgerald purchased the house, Terminix had

contracted with the previous owner to provide termite prevention services. Under

that contract, Terminix had agreed to inspect the property for termites or any

previous termite-related-damage. Terminix also had agreed to perform annual

inspections of the house and either to treat and repair any termite damage or to

replace the house if damaged beyond repair. This contract was assigned to McLaurin

and Fitzgerald when they purchased the house.

      Four years after McLaurin and Fitzgerald moved into the house, their third-

party pest control operator discovered live termites, mud tunnels, and significant

termite damage to their house. He contacted Terminix, and Terminix engaged in

various sub-standard repairs until it became apparent that the house would have to

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be torn down. McLaurin and Fitzgerald filed a complaint against Terminix. When

the case proceeded to arbitration, Terminix could not present any documentary

evidence that it had provided the initial inspection or any subsequent annual follow

up inspection. The arbitrator awarded McLaurin and Fitzgerald $2,767,900.00

against Terminix.

      Two days after winning the arbitration award, McLaurin and Fitzgerald filed

a complaint in district court to confirm the award and enter final judgment. Two

weeks later, Terminix filed an answer, which said nothing of substance. Instead, the

answer said that Terminix intended to file a motion to vacate the award “on or before

November 14, 2019.” Several days later, McLaurin and Fitzgerald filed a motion to

confirm the arbitration award and enter final judgment. The district court then

ordered that “[a]ny opposition to the Motion shall be filed no later than September

25, 2019, and any reply to an opposition shall be filed no later than October 2, 2019.”

      On September 25, 2019, Terminix filed a four-page brief that said McLaurin

and Fitzgerald’s motion to confirm was “premature” and “procedurally improper”

because it was filed within three months of the arbitration award. Terminix did not

identify any substantive reason for the district court not to confirm the arbitration

award. McLaurin and Fitzgerald replied that their motion was timely and asked the

court to expeditiously confirm the award because “Plaintiff Fitzgerald is 75 years

old and without a place to live . . . except for her travel camper.” Terminix waited

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until November 12, 2019, to file a motion to vacate the award, which identified

substantive reasons for undoing the award.

      The district court confirmed the arbitration award against Terminix and struck

Terminix’s motion to vacate as untimely. Terminix timely appealed the district

court’s order. McLaurin and Fitzgerald filed a motion for sanctions against Terminix

for taking a frivolous appeal.

                                          II.

      When reviewing an appeal from an order confirming an arbitration award, we

review the district court’s legal conclusions de novo and its factual findings for clear

error. Gianelli Money Purchase Plan & Tr. v. ADM Inv. Servs., Inc., 146 F.3d 1309,

1311 (11th Cir. 1998). Courts have broad authority to control their dockets, and

decisions related to timing issues are reviewable only for abuse of discretion. See

J.D. Pharm. Distribs., Inc. v. Save-on Drugs & Cosms. Corp., 893 F.2d 1201, 1209

(11th Cir. 1990). We also review a district court’s interpretation of its own orders

for an abuse of discretion. In re Managed Care, 756 F.3d 1222, 1234 (11th Cir.

2014). And we review a district court’s “decision to hold litigants to the clear terms

of its scheduling orders” for abuse of discretion. Josendis v. Wall to Wall Residence

Repairs, Inc., 662 F.3d 1292, 1307 (11th Cir. 2011).

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                                         III.

      Before addressing the parties’ arguments, we need to discuss the mechanics

and characteristics of motions to confirm and motions to vacate, modify, or correct

under the Federal Arbitration Act. See 9 U.S.C. § 9, 10, 11. These motions all replace

what would otherwise be a separate breach of contract action to enforce or dispute

an arbitration award, but they serve different purposes, request different relief, and

are governed by different provisions of the FAA. See Hall St. Assocs., L.L.C. v.

Mattel, Inc., 552 U.S. 576, 582 (2008); compare id. § 16(D) (allowing appeals from

orders confirming or denying confirmation of an award) with id. § 16(E) (allowing

appeals from orders modifying, correcting, or vacating an award). As for a motion

to confirm, the arbitration’s winner “seeks confirmation by a court generally because

he fears the losing party will not abide by the award;” when he is “[a]rmed with a

court order[,] the winning party has a variety of remedies available to enforce the

judgment.” Florasynth, Inc. v. Pickholz, 750 F.2d 171, 176 (2d Cir. 1984). On the

other hand, the arbitration’s loser (or winner) may file a motion to vacate, modify,

or correct because he wants to re-arbitrate before a different arbitrator, to reduce or

increase the amount of the award, or to fix an evident mistake in the award. 9 U.S.C.

§ 10(b); id. § 11(a)–(c).

      Because the FAA reflects a national policy in favor of arbitration agreements,

there is a “presumption under the FAA that arbitration awards will be confirmed[.]”

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Frazier v. CitiFinancial Corp., LLC, 604 F.3d 1313, 1321 (11th Cir. 2010). To that

end, the FAA provides only limited grounds for undoing or modifying an arbitration

award, such as fraud, corruption, or an evident miscalculation. 9 U.S.C. §§ 10

(vacatur), 11 (modification or correction). But it allows a party to file a motion to

confirm an arbitration award for any reason, which “the court must grant . . . unless

the award is vacated, modified, or corrected[.]” Id. § 9; see also Hall St. Assocs.,

L.L.C. v. Mattel, Inc., 552 U.S. 576, 587 (2008) (“There is nothing malleable about

‘must grant,’ which unequivocally tells courts to grant confirmation in all cases,

except when one of the ‘prescribed’ exceptions applies.”). Moreover, the deadline

to file a motion to challenge an arbitration award is only three months, but the FAA

gives the parties up to a year to file a motion to confirm. Compare 9 U.S.C. § 12

with id. § 9. The upshot is that if three months elapse without the losing party having

filed a motion to vacate, modify, or change the award, then the losing party will be

unable to defend against a later-filed motion for confirmation on any grounds set out

in Section 10 or Section 11. Cullen v. Paine, Webber, Jackson & Curtis, Inc., 863 F.

2d 851, 854 (11th Cir. 1989) (“[T]he failure of a party to move to vacate an arbitral

award within the three-month limitations period prescribed by section 12 of the

[FAA] bars him from raising the alleged invalidity of the award as a defense in

opposition to a motion brought under section 9 of the [FAA] to confirm the award.”).

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         Sometimes, as in this case, a successful party files a motion to confirm an

arbitration award before the losing party’s three-month limitations period has run.

Within the three-month limitations period, the FAA allows the losing party to oppose

the motion to confirm based on the moving party’s failure to comply with the statute

or the reasons specified in the statute for vacating, modifying, or correcting the

award. See Frazier, 604 F.3d at 1324 (defenses to a motion to confirm are limited to

those grounds in Section 10 and 11 of the statute); Booth v. Hume Publ’g, Inc., 902

F.2d 925, 929 n.4, 932 (11th Cir. 1990) (same). The losing party can also take up to

three months from the arbitration award to file a separate motion to vacate, modify,

or correct the award. And, if the losing party files a timely motion, it may ask the

court to stay the proceedings to confirm the award until the court rules on the

separate motion to vacate, modify, or correct. 9 U.S.C. § 12 (contemplating such a

stay).

         When a motion to confirm is filed before the time to challenge an arbitration

award has lapsed, we believe that the best practice is for a district court to issue an

order that sets simultaneous deadlines for a losing party to file an opposition to the

motion to confirm, if any, and to file a separate motion to vacate, modify, or correct,

if any. Individual circumstances may justify a different approach in certain cases.

But a district court that follows this best practice will be on sound legal footing and

ensure that all issues are fully and fairly litigated.

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                                          IV.

      Now, we turn to the facts of this appeal. When McLaurin and Fitzgerald filed

a motion to confirm, the district court did not set simultaneous deadlines for

Terminix to file a brief in opposition to confirmation and a motion to vacate the

award. Instead, the district court ordered that “any opposition to the [motion to

confirm] shall be filed no later than September 25, 2019” and did not expressly set

a separate deadline for a motion to vacate, modify, or correct. For its part, Terminix’s

response was baffling. Rather than make substantive objections to the motion to

confirm, seek an extension to oppose it, or ask the district court to wait to rule on it,

Terminix filed a four-page brief, arguing only that the motion to confirm was filed

too soon. Terminix waited to raise its substantive arguments until it filed a motion

to vacate a month-and-a-half after the district court’s deadline to oppose

confirmation. In response, the district court rejected Terminix’s procedural

argument, granted the motion to confirm as substantively unopposed, and struck

Terminix’s motion to vacate as untimely.

      Terminix makes two arguments on appeal. First, it argues that a court cannot

confirm an arbitration award without giving the losing party three months to file its

motion to vacate, modify, or correct. Second, it argues that, even if the district court

correctly rejected its procedural argument, the district court should have considered

and ruled on the merits of its separate motion to vacate. Like the district court, we

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conclude that Terminix’s first argument is incompatible with the plain text of the

statute. As for the second argument, we cannot say the district court abused its

discretion in declining to rule on the merits of Terminix’s later-filed motion to

vacate.

                                        A.

      We conclude that the district court did not err in granting the motion to

confirm. When Terminix filed its four-page opposition brief to the motion to

confirm, it made only one argument against confirmation—that the motion was

procedurally improper because three months had not elapsed, making confirmation

premature. That argument fails for several reasons.

      To start, the FAA does not impose an automatic three-month stay on

confirmation. Instead, the statute explicitly authorizes a party to file a motion to

confirm at any time during the year immediately following an arbitration award. This

timeline does not change based on whether a losing party intends to challenge an

award by filing its own motion. Section 12 grants a court the discretion to stay

litigation on a motion for confirmation when it is considering a motion to vacate or

modify the award. The statute provides that “any judge who might make an order to

stay the proceedings in an action brought in the same court may make an order, to

be served with the notice of motion [to vacate or modify], staying the proceedings

of the adverse party to enforce the award.” 9 U.S.C. § 12. Because the FAA expressly

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provides for this discretionary stay, it makes no sense to conclude that the FAA also

imposes a mandatory stay. See United States v. Hurtado, 779 F.2d 1467, 1475 (11th

Cir. 1985) (“[W]e may not import into the statute a provision Congress elected not

to include.”); A. Scalia & B. Garner, READING LAW: THE INTERPRETATION OF LEGAL

TEXTS 107 (2012) (discussing the negative implication canon). So, the motion to

confirm was timely and procedurally proper even though it was filed within three

months of the arbitration award.

      Terminix contends that, even if litigation may proceed on a motion to confirm

within the first three months after an arbitration, an award cannot be confirmed if the

court has notice that the losing party intends to file a motion to vacate, modify, or

correct the award. Again, we disagree. The FAA provides that a motion to confirm

“must” be granted “unless the award is vacated, modified, or corrected as prescribed

in sections 10 and 11 of this title.” 9 U.S.C. § 9. For this reason, “a court’s

confirmation of an arbitration award is usually routine or summary.” Riccard v.

Prudential Ins. Co., 307 F.3d 1277, 1288 (11th Cir. 2002). Of course, a court cannot

grant a motion to confirm without giving the opposing party an opportunity to

respond or ruling on a timely opposition to the motion. But the FAA does not, as

Terminix contends, condition confirmation on the absence of an expected motion to

vacate.

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      We find support for this conclusion in the only circuit precedent to have

expressly addressed a comparable argument: The Hartbridge., 57 F.2d 672 (2d Cir.

1932). There, the prevailing party in an arbitration proceeding filed a motion in

federal district court to confirm the award within a month of its issuance. In

opposition, the losing party argued that the district court lacked jurisdiction to

entertain the motion because its three months to file a motion to vacate had not

expired. See id. at 672-73. After the district court confirmed the award, the Second

Circuit rejected the losing party’s argument that the district court lacked jurisdiction.

It explained that the prevailing party’s motion to confirm “was not premature”

because there is nothing in the text of the FAA to suggest that a prevailing party has

to “refrain during [the three-month vacatur] period from exercising the privilege

conferred by [§] 9 to move ‘at any time’ within [a] year [to confirm].” Id. at 673.

Instead, the Second Circuit explained that the party opposing confirmation of an

arbitration award may “object upon any ground which constitutes a sufficient cause

under the [FAA] to vacate, modify, or correct, although no such formal motion has

been made.” Id.

      We agree with the Second Circuit’s reasoning. Nothing in the statute prevents

a party from moving for confirmation of an award within three months of that award

or mandates that a district court wait to rule on such a motion because another party

may file a motion to vacate. And, as we have already explained, a party may raise

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the grounds under Section 10 and Section 11 as defenses to a motion to confirm an

arbitration award so long as those defenses are timely under the statute and any

scheduling order. See Frazier, 604 F.3d at 1324; Cullen, 863 F. 2d at 854; Booth,

902 F.2d at 929.

       In short, nothing in the FAA required McLaurin and Fitzgerald to wait to file

their motion to confirm until after Terminix filed its motion to vacate, modify, or

correct. The district court correctly rejected Terminix’s procedural argument and

granted the motion to confirm.

                                         B.

      We also conclude that, after deciding to grant the earlier-filed motion to

confirm, the district court did not abuse its discretion in declining to rule on the

merits of Terminix’s later-filed motion to vacate. This is so for two reasons.

      First, we cannot say the district court abused its discretion in interpreting and

applying its scheduling order. The district court directed Terminix to file “any

opposition” to confirming the award by late September, and, later, said that it had

intended “any opposition” to mean any ground for opposing the award, even a

substantive ground that could otherwise be raised in a motion for vacatur.

Specifically, the district court held that its order “imposing a deadline to file any

objections” to the motion required Terminix “to articulate grounds for vacatur prior

to the expiration of the three-month period provided in [Section] 12 for filing a

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‘notice of a motion to vacate.’” When construing a court order, the goal is to

determine the intent of the issuing court. Accordingly, when an issuing judge

interprets alleged ambiguities in his or her own order, we accord substantial

deference to that interpretation. See In re Blackwood Assocs., L.P., 153 F.3d 61, 66

(2d Cir. 1998) (explaining that such deference is premised on “the truism that the

draftsman of a document is uniquely situated to understand the intended meaning of

that document”).

      Terminix argues that the district court’s order cannot bear the district court’s

interpretation, but we disagree. We have explained that “‘any’ means all.” Merritt v.

Dillard Paper Co., 120 F.3d 1181, 1186 (11th Cir. 1997). And there is no dispute

that Terminix could have asserted in its opposition brief the same Section 10 and

Section 11 grounds that it later identified in its motion to vacate. See Frazier, 604

F.3d at 1324. Moreover, at the time of the district court’s scheduling order, Terminix

had already responded to the request for confirmation with a cursory “Notice of

Intention to File Motion to Vacate” that did not identify any grounds for denying the

motion to confirm. At the very least, the district court’s scheduling order clearly set

a deadline for Terminix to identify and explain its grounds for opposing

confirmation, whether in a filing styled as a brief or as a motion.

      Terminix also argues that a court cannot, as a matter of law, shorten the three-

month period for an arbitration loser to give “[n]otice of a motion to vacate, modify,

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or correct an award.” 9 U.S.C. § 12. We agree that a court cannot unliterally extend

the statutory deadline to serve a motion to vacate an arbitration award under 9 U.S.C.

§ 12. 4B Wright & Miller, FEDERAL PRACTICE          AND   PROCEDURE § 1165 (4th ed.

2021); Argentine Republic v. Nat’l Grid PLC, 637 F.3d 365, 368–69 (D.C. Cir.

2011). But it does not follow that a court cannot shorten this statutory deadline in a

routine scheduling order. The statutory deadline for giving notice of a motion to

vacate sets an outer bound; it does not impose a three-month delay for the benefit of

an arbitration’s loser. Moreover, courts routinely set scheduling deadlines for parties

to raise claims or defenses that are shorter than the applicable statute of limitations.

See Chrysler Int’l Corp. v. Chemaly, 280 F.3d 1358, 1360 (11th Cir. 2002) (noting

that district courts have “discretion and authority to ensure that their cases move to

a reasonably timely and orderly conclusion”). Accordingly, it seems clear to us that,

if a district court already has jurisdiction over an arbitration dispute before a motion

to vacate is filed, it may set a reasonable schedule for a party to file such a motion.

      In any event, Terminix could have, and should have, identified all its reasons

for opposing confirmation by the district court’s deadline. Although the district court

did not expressly shorten Terminix’s time for serving notice of a motion to vacate,

it set a late September deadline for Terminix to identify grounds for denying the

motion to confirm. Because Terminix did not make any Section 10 or Section 11

arguments by the deadline, the district court reasoned that Terminix had waived

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those arguments and concluded that Terminix could not revive its waived arguments

in a later-filed motion. Cf. Hamilton v. Southland Christian Sch., Inc., 680 F.3d

1316, 1319 (11th Cir. 2012) (“failure to make arguments and cite authorities in

support of an issue waives it”). Under these unique circumstances, we cannot say

the district court abused its discretion in striking Terminix’s motion as inconsistent

with its scheduling order.

      Second, even were we to adopt Terminix’s position on the district court’s

scheduling order, we would conclude that Terminix’s later-filed motion was moot

in light of Terminix’s failure to oppose the motion to confirm. Again, we find the

Second Circuit’s reasoning in The Hartbridge to be persuasive. As explained above,

the FAA does not impose an automatic stay on confirmation until the losing party’s

motion to vacate, modify, or correct has been filed. Instead, the FAA “sets an outside

limit within which a notice to vacate must be served; it does not say that such a

motion may be made at any time within the three months even though the award has

gone into judgment.” The Hartbridge, 57 F.2d at 673. It follows, then, that a losing

party who wants to preserve its right to litigate a later-filed motion to vacate, modify,

or correct must, at the very least, oppose the winning party’s earlier-filed motion to

confirm by a district court’s deadline. As a practical matter, a “motion to confirm

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puts the other party to his objections” because he cannot litigate a later-filed motion

to vacate if the earlier-filed motion to confirm succeeds. Id.

      Here, as we have explained, Terminix did not oppose the motion to confirm

with a substantive argument. We have held that a party can raise Section 10 and

Section 11 grounds as defenses to a motion to confirm. See Frazier, 604 F.3d at

1324. But neither Terminix’s answer nor its opposition brief identified any of those

defenses, even in a cursory manner. In The Hartbridge, the arbitration’s loser asked

for more time to oppose the motion to confirm because certain documents had been

lost. See 57 F.2d. at 673-74. But, here, Terminix never asked the district court to

delay ruling on the motion to confirm or for more time to respond. Accordingly,

because the motion to confirm was effectively unopposed, that motion was due to

be granted, and Terminix’s own later-filed motion was moot. See 9 U.S.C. § 9. For

this additional reason, under these unique circumstances, we cannot say the district

court abused its discretion in declining to rule on the merits of Terminix’s later-filed

motion to vacate.

      Finally, Terminix argues that its later-filed motion necessarily preserved its

arguments under our unpublished, nonprecedential opinion in Careminders Home

Care, Inc. v. Kianka, 666 F. App’x 832 (11th Cir. 2016). But we disagree. In

Careminders, we reasoned that a district court did not abuse its discretion by refusing

to rule on “broad allegations” of FAA grounds for vacatur that an arbitration loser

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asserted in its “answer” to a motion to confirm. Id. at 833. We explained that the

arbitration’s loser—despite promising to file a separate, timely motion to vacate—

had never expanded on its allegations in a separate motion or otherwise briefed the

issue of vacatur. Here, of course, the question is not whether Terminix would have

preserved its arguments by cursorily asserting them in a timely brief in opposition

to the motion to confirm. Instead, the question is whether an arbitration’s loser has

the right to decline to identify any Section 10 or Section 11 reason to deny a motion

to confirm by a deadline set by a district court and then, after that deadline, raise

those grounds for the first time in a motion to vacate. Careminders has no bearing

on that question, which we answer in the negative.

                                          V.

      Again, we encourage district courts faced with motions to confirm to set

simultaneous deadlines for the arbitration’s losing party to file an opposition to the

motion to confirm, if any, and to file a separate motion to vacate, modify, or correct,

if any. Nonetheless, a district court is the master of its own docket, and the parties

ignore its orders at their peril. Here, the district court was within its discretion in

granting McLaurin and Fitzgerald’s substantively unopposed motion to confirm

without addressing Terminix’s later-filed motion to vacate. Accordingly, we affirm

the district court’s judgment.

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      But we deny McLaurin and Fitzgerald’s motion for sanctions. An award of

damages and costs under Federal Rule of Appellate Procedure 38 is appropriate

when an appellant raises “clearly frivolous claims in the face of established law and

clear facts.” Parker v. Am. Traffic Sols., Inc., 835 F.3d 1363, 1371 (11th Cir. 2016).

“[A] claim is clearly frivolous if it is utterly devoid of merit.” Id. (internal quotation

marks omitted). Although we ultimately do not agree with Terminix’s reading of the

FAA, we cannot say that its appeal is “utterly devoid of merit.” Both sides advanced

plausible arguments on this issue of first impression. And appeals about issues of

first impression are unlikely to be frivolous. See Albra v. Advan, Inc., 490 F.3d 826,

835 (11th Cir. 2007) (denying motion for Rule 38 sanctions because “resolution of

the appeal required us to decide two issues of first impression”).

      The district court’s judgment is AFFIRMED, and the motion for sanctions is

DENIED.

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