[00:00:01] Speaker 00:
Case number 24-5122, Virgin Islands Housing Finance Authority appellants versus Federal Emergency Management Agency.

[00:00:10] Speaker 00:
Mr. Bargava for the appellants, Ms.

[00:00:13] Speaker 00:
Smith for the appellant.

[00:00:16] Speaker 05:
Good morning.

[00:00:16] Speaker 05:
Good morning, your honors.

[00:00:18] Speaker 05:
May it please the court?

[00:00:19] Speaker 05:
My name is Michael Bargava, and I represent Appellant Virgin Islands Housing Finance Authority.

[00:00:25] Speaker 05:
This court should overturn the lower court's decision for two reasons.

[00:00:29] Speaker 05:
First, appellants should have been permitted to proceed under the Administrative Procedures Act with a challenge to a final agency action by the Civilian Board of Contract Appeals.

[00:00:39] Speaker 05:
The evidence shows that Congress didn't intend to displace broad APA review with a much more cramped review process under the Federal Arbitration Act.

[00:00:50] Speaker 05:
And second, even if the FAA applies, the statute of limitations was never triggered

[00:00:56] Speaker 05:
because the board's decision was void of an issue.

[00:00:59] Speaker 05:
Void decisions cannot trigger statutes of limitations.

[00:01:04] Speaker 05:
On the first point, the APA should clearly apply here.

[00:01:08] Speaker 05:
The board is a federal agency and its decisions constitute final agency action under subject to APA review.

[00:01:16] Speaker 05:
The APA is Congress's way of reining in improper agency action that's arbitrary and capricious, whether it exceeds the agency's powers.

[00:01:25] Speaker 02:
So in the realm, though, of arbitration, there seemed to be a default way of appealing arbitration awards.

[00:01:34] Speaker 02:
And it seems that Congress would be aware of that.

[00:01:38] Speaker 02:
And yet, they didn't say explicitly or otherwise that they contemplated anything different.

[00:01:45] Speaker 02:
It would undermine the efficiency and efficacy of arbitration if there were some other way to appeal an arbitration.

[00:01:53] Speaker 05:
Well, Your Honor, it may be the default way of appealing for private arbitrations.

[00:01:58] Speaker 05:
This is government action here.

[00:02:00] Speaker 05:
And so the question is whether the APA applies.

[00:02:04] Speaker 05:
Congress understood that in order to make the FAA apply, it had to specifically say that in the statute.

[00:02:10] Speaker 05:
And that's exactly what it did in the Contract Disputes Act.

[00:02:13] Speaker 05:
The board conducts arbitrations both under the Contract Disputes Act and under the Stafford Act.

[00:02:19] Speaker 05:
In the CDA, it said specifically that the FDA would apply for review.

[00:02:24] Speaker 05:
In the Stafford Act, which is what we're dealing with here, it shows not to do so.

[00:02:27] Speaker 02:
I understand that.

[00:02:28] Speaker 02:
It just seems to me that there's sort of an overarching purpose for arbitration, which is to do this efficiently and more quickly and in a more simple way.

[00:02:38] Speaker 02:
And to promote that, there are just very limited ways in which you can appeal an arbitration board generally.

[00:02:45] Speaker 02:
And even the APA itself says, like when we're talking about arbitration awards, we don't give them the full APA arbitrary and capricious review.

[00:02:54] Speaker 02:
So it just seems that it's an uphill climb for you to say that arbitration board should be reviewed using APA standards.

[00:03:06] Speaker 05:
Well, Your Honor, as you know, the standard here is congressional intent and whether Congress intended

[00:03:13] Speaker 05:
to apply APA review or intended to displace APA review with some other review procedure.

[00:03:20] Speaker 02:
There has to be- What's your strongest argument that that's what Congress intended here?

[00:03:23] Speaker 05:
Well, first of all, it didn't write it into the Stafford Act, which- It didn't write it one way or the other.

[00:03:29] Speaker 05:
Well, it chose to do so in other actions, including the CDA, but it chose not to do so for the Stafford Act.

[00:03:35] Speaker 05:
So that's one indication that there's not clear and convincing evidence.

[00:03:40] Speaker 05:
The second issue is that

[00:03:42] Speaker 05:
The review process is not at all similar between the APA and the FAA.

[00:03:49] Speaker 05:
This court, the Supreme Court, have always held that essentially you have to have a process that mimics the APA, have a de novo review process.

[00:04:00] Speaker 05:
The FAA doesn't come close to that.

[00:04:02] Speaker 05:
It has a very meager standard.

[00:04:04] Speaker 05:
It only allows courts to overturn decisions for fraud, misconduct, similar egregious behavior.

[00:04:11] Speaker 05:
It doesn't allow courts to look at the merits of any decision.

[00:04:15] Speaker 05:
And so there is essentially no review process for an arbitral award by the board here under the Stafford Act if we're saying that the FAA applies.

[00:04:26] Speaker 02:
What you're asking for, though, is vacating the award, which you can get under the FAA versus.

[00:04:32] Speaker 05:
Well, two points on that, Your Honor.

[00:04:34] Speaker 05:
First of all, the test is not what the individual plaintiff asks for.

[00:04:39] Speaker 05:
It's whether Congress intended to displace the APA for the FA.

[00:04:43] Speaker 02:
Well, under CRU, isn't it whether it's what you asked for, and then also is it adequate?

[00:04:48] Speaker 02:
Our CRU case seems to acknowledge both of those.

[00:04:52] Speaker 05:
It does seem to acknowledge both of those, Your Honor.

[00:04:54] Speaker 05:
But the standard that has been applied is whether there's congressional intent, whether there is clear and convincing evidence of legislative intent to displace the APA.

[00:05:06] Speaker 05:
And second on that point, Your Honor,

[00:05:08] Speaker 05:
is that the relief would be different under the FAA and the APA.

[00:05:14] Speaker 05:
Under the FAA, all that the court can do is displace a single arbitral award that applies just between the two parties here.

[00:05:22] Speaker 05:
Under the APA, it's required under section 706 of the APA to hold unlawful and set aside any agency action that's improper in whatever way.

[00:05:35] Speaker 05:
And so that is prospective relief as well.

[00:05:38] Speaker 05:
It's telling the board that it has to vacate the entire practice of issuing decisions in this kind of way in violation of its own rules.

[00:05:46] Speaker 05:
Yes, sir.

[00:05:47] Speaker 05:
Sorry to interrupt.

[00:05:47] Speaker 04:
In terms of precedent, have you found any case where a court has reviewed an arbitration award under the APA?

[00:05:57] Speaker 05:
I have not, Your Honor, but this is a unique

[00:06:00] Speaker 05:
This is a case of first impression.

[00:06:03] Speaker 05:
It was before this court, and in fact, in any court of appeal, they have not found this issue.

[00:06:10] Speaker 05:
Whether the FAA displaces the APA, I don't think any court has dealt with this issue.

[00:06:19] Speaker 02:
So how do you reconcile what you just argued with crew?

[00:06:25] Speaker 02:
Because in crew, there was an argument

[00:06:31] Speaker 02:
there was an inadequate remedy under the FOIA, because FOIA would not require, would not grant the relief of putting the documents on a public website.

[00:06:44] Speaker 02:
It would only grant the relief of giving the document to the plaintiff.

[00:06:48] Speaker 02:
And we still held that it was adequate, that FOIA was an adequate remedy.

[00:06:54] Speaker 05:
So in Crewe, Your Honor, the difference in terms of the relief was quite marginal.

[00:06:59] Speaker 05:
In terms of whether they had to produce the documents, as you said, to the to the individual plaintiff or publish it in the federal register court didn't hold that under the API that it could require the government to to.

[00:07:16] Speaker 05:
publish the OLC decisions in the Federal Register.

[00:07:19] Speaker 05:
But here, the difference between the FAA and the APA is quite stark in terms of the remedies available.

[00:07:27] Speaker 05:
There are preliminary injunctions here.

[00:07:29] Speaker 05:
There are various writs that are available under the APA.

[00:07:33] Speaker 02:
But you're not requesting any of that.

[00:07:34] Speaker 02:
And how would that be a remedy for an arbitration award?

[00:07:38] Speaker 05:
But again, the standard your honor is there has to be clear and convincing evidence of congressional intent to displace the API.

[00:07:46] Speaker 05:
And there's just no such evidence here, both because it didn't say so in the statute and because

[00:07:52] Speaker 05:
Both the scope of review in terms of the de novo review process that's available for APA is far greater than what's available under the FAA and in terms of the overall remedies that are available under the statutes are very different.

[00:08:08] Speaker 05:
I'd like to reserve the rest of my time if I may.

[00:08:11] Speaker 05:
Thank you.

[00:08:12] Speaker 05:
Thank you.

[00:08:26] Speaker 01:
May it please the court, Sarah Smith, on behalf of the government.

[00:08:30] Speaker 01:
In 2018, Congress amended the Stafford Act to give applicants seeking to challenge FEMA's funding determination two choices.

[00:08:39] Speaker 01:
After first appealing the decision to the FEMA regional administrator, the applicant could either pursue a second appeal within FEMA and, if unsuccessful, seek judicial review in a district court of FEMA's determination under the APA,

[00:08:52] Speaker 01:
or the applicant could submit the dispute to arbitration before the Civilian Board of Contract Appeals.

[00:08:57] Speaker 01:
Petitioner here chose to arbitrate and they did so with the understanding that the board's decision would be binding and like arbitration decisions generally subject to limited judicial review.

[00:09:08] Speaker 01:
In the Federal Arbitration Act, Congress provided a review procedure for parties seeking to challenge arbitration decisions.

[00:09:18] Speaker 01:
Nine USC 10 authorizes district courts to vacate arbitration decisions in certain circumstances, including in the circumstance that petitioner alleges here, which is that the arbitrator exceeded their powers.

[00:09:32] Speaker 01:
Because the FAA provides an adequate remedy, APA review is not appropriate here.

[00:09:40] Speaker 03:
Can you talk about this argument that

[00:09:45] Speaker 03:
The authority says FEMA cannot simply undo a statutory requirement under the APA by promulgating a regulation permitting review only under the FAA.

[00:09:55] Speaker 03:
So I understand that the act contemplates arbitration.

[00:09:59] Speaker 03:
But as I understand their argument, it's the regulation that says review will only be under the FAA.

[00:10:05] Speaker 03:
So their argument is a regulation can't be under the statute.

[00:10:09] Speaker 01:
So had Congress provided in the Stafford Act that review of these decisions was under the APA, then it is absolutely true that FEMA could not promulgate a regulation saying review is limited to the FAA.

[00:10:20] Speaker 01:
But here, Congress did not limit review in the Stafford Act under the APA.

[00:10:24] Speaker 01:
The FAA provides the general background principles of how courts review arbitration decisions.

[00:10:31] Speaker 01:
And under the APA, the question is just whether there is an adequate remedy in a court.

[00:10:36] Speaker 01:
As we've explained,

[00:10:37] Speaker 01:
The FAA provides that adequate remedy, provides vacancy of the decision, provides it on the exact grounds the petitioner is seeking here.

[00:10:42] Speaker 01:
The only problem for petitioners is that they didn't comply with FAA's notice requirement.

[00:10:47] Speaker 01:
That's why they need APA review, but that is not a grounds to get review under the APA.

[00:10:54] Speaker 03:
The Stafford Act is silent.

[00:10:56] Speaker 03:
That means the default rule kicks in and the default rule comes from

[00:11:00] Speaker 01:
It comes from the FAA, which is clear that Congress set out, here are the conditions under which a district court can vacate an arbitration decision.

[00:11:08] Speaker 01:
In the Hall Street Associates, the Supreme Court was clear that that list is exclusive.

[00:11:12] Speaker 01:
Parties can't even, by contract, agree to more expanded judicial review.

[00:11:16] Speaker 01:
So when Congress amended the Stafford Act to say, applicant, if you like, you can arbitrate, it did so.

[00:11:24] Speaker 01:
It put the petitioner on notice that that decision would be under the limited judicial review that's available under the FAA.

[00:11:32] Speaker 03:
I think this is a friendly question.

[00:11:33] Speaker 03:
But do you think the Contract Disputes Act reinforces that or applies its own default?

[00:11:40] Speaker 03:
I guess reinforces that default rule.

[00:11:43] Speaker 03:
It says, an award by an arbitrator under this chapter shall be reviewed pursuant to sections 9 to 13 of Title IX, which is

[00:11:53] Speaker 03:
the FAA, except a minute.

[00:11:56] Speaker 01:
Yeah, absolutely.

[00:11:57] Speaker 01:
So it made sense.

[00:11:58] Speaker 01:
In the Contract Disputes Act, Congress wanted to provide for an expanded review, not just the FAA, but they also wanted to provide this additional basis on which a court could vacate an award.

[00:12:09] Speaker 01:
So it makes sense that Congress included that review provision, because they were providing something more than the default.

[00:12:16] Speaker 03:
That's not what's doing.

[00:12:17] Speaker 03:
It's not doing any work in this case.

[00:12:19] Speaker 01:
No.

[00:12:21] Speaker 01:
They're just separate authorities.

[00:12:23] Speaker 01:
That's right.

[00:12:25] Speaker 01:
I'm happy to say a few things about petitioners' claim under the FAA.

[00:12:28] Speaker 01:
The district court correctly determined that review is not available under the FAA because petitioner failed to comply with the Act's notice requirement.

[00:12:37] Speaker 01:
On appeal, petitioner does not argue that they complied with that statutory requirement.

[00:12:41] Speaker 01:
Instead, they argue that the statute of limitations does not apply here.

[00:12:44] Speaker 01:
But that argument just confuses the grounds on which a decision could be set aside.

[00:12:48] Speaker 01:
with whether there's a decision at all.

[00:12:50] Speaker 01:
And here, there's clearly a decision.

[00:12:51] Speaker 01:
It's in effect until a court sets it aside.

[00:12:55] Speaker 02:
But if they're right, though, there wouldn't be a decision because it would be void ab initio.

[00:13:00] Speaker 02:
If they're correct that a decision made without a quorum is void ab initio, then the statute of limitations wouldn't kick in.

[00:13:11] Speaker 02:
And we do have precedent in Noel Canning that a decision made without an adequate

[00:13:18] Speaker 02:
would be void ab initio.

[00:13:19] Speaker 02:
That doesn't mean that it wasn't a quorum in this case, but I'm saying if they were correct that there was no quorum, then it would be void ab initio, right?

[00:13:28] Speaker 01:
So the problem with petitioners argument is that they're trying to argue that it is void and so therefore they do not have to comply with the statute of limitations at all.

[00:13:36] Speaker 01:
Practically there are huge problems with that.

[00:13:38] Speaker 01:
It would mean that a party could come in a decade later and say that this arbitration decision

[00:13:42] Speaker 01:
It should be set aside.

[00:13:44] Speaker 01:
And when we think about the virtues of arbitration and providing an efficient and final resolution, that's a very troubling result.

[00:13:50] Speaker 01:
But again, the key problem with their argument is that they're saying that this grounds for which a court could vacate means that there's no decision at all until a court says that there's something different between this particular type of grounds.

[00:14:05] Speaker 02:
which is that there's no quorum.

[00:14:07] Speaker 02:
So the tribunal had no authority to act at all.

[00:14:11] Speaker 02:
That's basically what they're saying.

[00:14:13] Speaker 02:
And that you could raise.

[00:14:14] Speaker 02:
It's kind of a jurisdictional argument, which you can raise at any time.

[00:14:17] Speaker 02:
There's no statute of limitations problem with that.

[00:14:20] Speaker 01:
Well, so again, but if we think about comparing this to, say, a party who loses in district court and wants to challenge the district court's order because it didn't have jurisdiction, we wouldn't say that there wasn't an order there.

[00:14:34] Speaker 01:
and a party seeking to challenge the district court's order would still have to comply with the Notice of Appeal deadline.

[00:14:39] Speaker 02:
No, of course.

[00:14:39] Speaker 02:
I'm saying, I think, my question is, is there a specific type of claim, such as the one that's being made here?

[00:14:47] Speaker 02:
There are claims in which an order is void ab initio.

[00:14:50] Speaker 02:
And if an order is void ab initio, you would agree that the statute of limitations doesn't kick in.

[00:14:55] Speaker 01:
No.

[00:14:55] Speaker 01:
Because, OK, so under, as the district.

[00:14:57] Speaker 01:
Ever?

[00:14:58] Speaker 01:
Ever?

[00:14:58] Speaker 02:
A void ab initio order, so that there's no order, the statute of limitations still applies?

[00:15:03] Speaker 01:
In this context?

[00:15:05] Speaker 02:
I'm just asking you generally.

[00:15:07] Speaker 01:
That might be in a different case.

[00:15:09] Speaker 01:
I'm not sure, but here.

[00:15:11] Speaker 02:
All I'm saying is their premise is this order is void ab initio.

[00:15:16] Speaker 02:
And I'm asking you, if an order is void ab initio, the statute of limitations does not apply, correct?

[00:15:28] Speaker 01:
So here,

[00:15:30] Speaker 01:
The FAA clearly, Congress envisioned that a party might want to bring the sort of argument that an award was invalid.

[00:15:38] Speaker 01:
That's a possible basis.

[00:15:39] Speaker 02:
I'm saying, aside from award being invalid, I'm saying a particular type of invalid award, which is not a... After it has been... If it's an award that's void ab initio, the tribunal had no authority to issue the order at all.

[00:15:54] Speaker 02:
There is no statute of limitations issue in that context, correct?

[00:15:57] Speaker 01:
But I think the court has to declare that it's void ab initio.

[00:16:00] Speaker 01:
The party just cannot declare it void ab initio.

[00:16:03] Speaker 02:
Which is why I think we have to look at the merits of their argument to determine whether the statute of limitations even applies.

[00:16:10] Speaker 02:
Because the argument is, and it could be incorrect, is that the order is void ab initio.

[00:16:16] Speaker 02:
And if that's the case, we have to determine if there's an order or not before we determine whether the statute of limitations applies, correct?

[00:16:23] Speaker 01:
I'm happy to talk about the merits if Your Honor's interested in them.

[00:16:27] Speaker 00:
But is that analytically correct?

[00:16:31] Speaker 01:
I don't, again, I don't think so here because the FAA clearly provides that the notice requirement, the three month notice requirement applies to petitions filed seeking vacancy under 10A4, which is, as petitioner argued here, that the arbitrator acted without authority.

[00:16:50] Speaker 01:
So the statute provides that you still have to comply with the notice requirement, even when your argument is that there was no valid decision rendered.

[00:17:00] Speaker 02:
So I'm not sure how they can get around that.

[00:17:02] Speaker 02:
This type of argument is just like any other invalid award argument.

[00:17:06] Speaker 01:
Yes, yes.

[00:17:08] Speaker 01:
And the other problem with their argument is that if they're not pursuing under, if they're not arguing for vacant or under 10A4, then I'm not sure under what grounds they think a court could vacate the award because

[00:17:18] Speaker 01:
As I said earlier, the Supreme Court has made clear that the list, the basis procedure.

[00:17:22] Speaker 02:
But they say void ab initio, vacated void ab initio.

[00:17:26] Speaker 02:
The tribunal had no authority to issue.

[00:17:28] Speaker 01:
That again, it just gets them under 10A4.

[00:17:30] Speaker 01:
And then they need to comply with the notice requirement.

[00:17:33] Speaker 04:
I understand.

[00:17:34] Speaker 04:
Isn't part of your argument also that there are all kinds of arguments under 10A4 that sound like they would render an award void?

[00:17:43] Speaker 04:
So one of the most common 10A4 grounds

[00:17:48] Speaker 04:
that I'm aware of is we never agreed to have the arbitrator decide this issue.

[00:17:53] Speaker 04:
And so it's void.

[00:17:54] Speaker 01:
Absolutely.

[00:17:55] Speaker 04:
That's just another way of saying they exceeded their powers.

[00:17:57] Speaker 04:
It's a run of the mill challenge under the FAA.

[00:18:00] Speaker 04:
Yes.

[00:18:01] Speaker 04:
The courts always apply the three month time on it too, right?

[00:18:04] Speaker 04:
Absolutely.

[00:18:07] Speaker 01:
If there are no further questions, we ask the court to affirm the district court's judgment.

[00:18:13] Speaker 03:
Thank you.

[00:18:23] Speaker 05:
So just a couple quick points.

[00:18:25] Speaker 05:
The government is arguing that the FAA should be the default here.

[00:18:30] Speaker 05:
But that's, again, not the standard.

[00:18:32] Speaker 05:
The APA is the default.

[00:18:34] Speaker 05:
And the Supreme Court and this court have said over and over again that the APA applies unless Congress specifically intends to displace it.

[00:18:43] Speaker 05:
Again, there's no such evidence here.

[00:18:45] Speaker 05:
On the void ab initio issue, the government's

[00:18:50] Speaker 05:
argument is contrary to the Supreme Court's holdings, this Court's holdings, every Court of Appeals that has looked at this issue is that if a decision is... Do any of those decisions you're talking about involve an arbitration award?

[00:19:06] Speaker 05:
No, they don't specifically.

[00:19:07] Speaker 04:
So there's many, many cases that address this argument.

[00:19:12] Speaker 04:
The government didn't cite them in their brief, but arguments that an arbitration award is void or issued without jurisdiction are still subject to the three-month time limit.

[00:19:21] Speaker 04:
And I don't think there's a contrary case out.

[00:19:24] Speaker 04:
And the reason for that is that the whole point of arbitration is to settle disputes quickly.

[00:19:28] Speaker 04:
So much like all the reasons the FAA applies here, the concern is that you could sit on an argument.

[00:19:35] Speaker 04:
This case doesn't involve that.

[00:19:37] Speaker 04:
You miss the time by a day.

[00:19:38] Speaker 04:
But we don't want to have people able to bring up an argument at any time.

[00:19:49] Speaker 04:
So you would be opening a pretty big hole in this three-month time limit, wouldn't you?

[00:19:54] Speaker 05:
No, Your Honor, as I understand those decisions that you're referring to, the decisions are not declared void of an issue.

[00:20:01] Speaker 05:
This is exactly like the Supreme Court's decision in New Process Steel, this court's decision in Noel Canning, where there was a lack of quorum for the decision makers here.

[00:20:13] Speaker 05:
And so in those cases, the decision is void ab initio.

[00:20:17] Speaker 05:
And so there is no statute of limitations.

[00:20:20] Speaker 04:
Do you think that when an arbitrator issues a decision on a subject the parties didn't agree to arbitrate, wouldn't that make it void ab initio also?

[00:20:28] Speaker 04:
They had no contractual authority to issue the award.

[00:20:32] Speaker 05:
I don't think those decisions are not declared void ab initio, as I understand it.

[00:20:40] Speaker 05:
It's declared under the FAA not to be within the scope of what the parties agreed to.

[00:20:49] Speaker 05:
But it is, again, under these decisions, if it's void ab initio, which it is if there's a lack of quorum in this specific case, then there is no statute of limitations.

[00:21:02] Speaker 05:
Thank you, Your Honors.

[00:21:04] Speaker 05:
Thank you.