Nuvasive, Inc. v. Absolute Medical, LLC

USCA11 Case: 22-10214 Document: 43-1 Date Filed: 06/21/2023 Page: 1 of 36

[PUBLISH]

In the

United States Court of Appeals

For the Eleventh Circuit

____________________

No. 22-10214

____________________

NUVASIVE, INC.,

Plaintiff-Counter Defendant-Appellee,

versus

ABSOLUTE MEDICAL, LLC,

GREG SOUFLERIS,

DAVE HAWLEY,

ABSOLUTE MEDICAL SYSTEMS, LLC,

RYAN MILLER,

Defendants-Appellants,

____________________

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2 Opinion of the Court 22-10214

Appeal from the United States District Court

for the Middle District of Florida

D.C. Docket No. 6:17-cv-02206-CEM-GJK

____________________

Before WILSON and JILL PRYOR, Circuit Judges, and RUIZ,*

District Judge.

JILL PRYOR, Circuit Judge:

NuVasive, Inc. manufactures medical products and equip-

ment to treat spinal disease. In central Florida, NuVasive sold its

products through an exclusive distribution agreement with Abso-

lute Medical, LLC, a company owned by Greg Soufleris. Under the

agreement, Absolute Medical employed independent-contractor

sales representatives who marketed and sold NuVasive’s products

to doctors and medical practices in the region. Long before the end

of the agreement’s term, Soufleris informed NuVasive that he was

dissolving Absolute Medical and ending its business relationship

with NuVasive. He started a new company, Absolute Medical Sys-

tems, LLC (“AMS”), which began selling products for one of NuVa-

sive’s competitors.

NuVasive sued Absolute Medical, Soufleris, AMS, and two

of Absolute Medical’s sales representatives who began working for

AMS, Dave Hawley and Ryan Miller, for breaching the exclusive

* Honorable Rodolfo A. Ruiz II, United States District Judge for the Southern

District of Florida, sitting by designation.

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22-10214 Opinion of the Court 3

distribution agreement and the included noncompetition agree-

ments. After two years of litigation, the district court enforced a

dispute resolution clause in the agreement, ordering NuVasive and

Absolute Medical to arbitrate NuVasive’s breach-of-contract claim

seeking money damages. The district court stayed most of the

other claims during the arbitration. The arbitration panel’s final

award found Absolute Medical liable for breaching the agreement

but denied NuVasive’s claims for lost profits damages.

Following arbitration, the litigation resumed to resolve

NuVasive’s remaining claims.1 In discovery, Absolute Medical pro-

duced text messages that Soufleris had sent to Hawley while Haw-

ley testified before the arbitration panel. The text messages con-

cerned the subject matter of Hawley’s testimony, and his testi-

mony on cross-examination appeared to be consistent with an-

swers suggested in Soufleris’s contemporaneous texts. Based on

this new information, NuVasive moved the district court to vacate

the arbitration panel’s award under 9 U.S.C. § 10(a)(1) on the

ground that the award had been procured by fraud. Absolute Med-

ical objected that NuVasive filed the motion to vacate after the

1 While the arbitration was pending, NuVasive moved for summary judgment

on its breach-of-contract claim against Absolute Medical that sought injunc-

tive relief (Count I), the breach-of-contract claim against AMS (Count III), and

the breach-of-contract claim against Hawley and Miller (Count IV). Hawley,

Miller, and AMS moved for summary judgment on the breach-of-contract

claim against Hawley and Miller and the conversion claim against Hawley and

AMS (Count V).

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4 Opinion of the Court 22-10214

statutory three-month deadline, but the district court tolled the

deadline and ultimately vacated the arbitration panel’s award.

Absolute Medical, Soufleris, AMS, and the sales representa-

tives now appeal the district court’s order granting NuVasive’s mo-

tion to vacate the arbitration panel’s final award. After careful re-

view, and with the benefit of oral argument, we affirm.

I. BACKGROUND

A. NuVasive and Absolute Medical’s Business Relation-

ship

NuVasive is a medical device manufacturer that designs, de-

velops, and markets products for the surgical treatment of spinal

disorders. Absolute Medical, owned by Soufleris, employed inde-

pendent contractors to act as sales representatives to market and

sell NuVasive’s products to hospitals and doctors.

Around 2005, Absolute Medical began working with NuVa-

sive to market and sell NuVasive’s products in central Florida. By

2013, NuVasive and Absolute Medical had entered into an exclu-

sive distribution arrangement in which Absolute Medical and its

sales representatives would be the sole marketers, distributors, and

sellers of NuVasive’s products in a defined territory in Florida that

included specific counties as well as certain hospitals in other coun-

ties.

This appeal concerns the contract NuVasive and Absolute

Medical inked in 2017, when they agreed to extend their exclusive

distribution relationship “after many months of negotiation[].”

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Doc. 1 at 4. 2 This contract, entitled “Exclusive Sales Representative

Agreement” (the “Agreement”), had a term of five years beginning

on January 1, 2017. Like the earlier agreement, it appointed Abso-

lute Medical and its sales representatives as the exclusive sellers of

NuVasive’s products in the defined territory. In section 5.09(c) of

the Agreement, Absolute Medical promised that during the Agree-

ment’s five-year term and for one year afterward, Absolute Medi-

cal’s sales representatives would not “represent, promote, sell, so-

licit, or otherwise commercialize . . . any products or services that

[we]re, in NuVasive’s reasonable judgment, competitive with any

of NuVasive’s products or services.” Doc. 260-3 at 137. Absolute

Medical further agreed that, during the same period, its sales rep-

resentatives would not “solicit, encourage, or induce, or cause to

be solicited, encouraged or induced” any current, former, or pro-

spective NuVasive customers “to terminate or adversely modify

any business relationship with NuVasive.” Id. In exchange, NuVa-

sive agreed to provide Absolute Medical’s sales representatives

with “extraordinary, specialized, comprehensive, and industry-

leading training” on NuVasive’s products, which would give the

sales representatives “a deep understanding of NuVasive’s prod-

ucts, methodology, trade secrets, and other valuable confidential

or proprietary information.” Doc. 188 ¶ 30.

To effect section 5.09(c)’s non-competition and non-solicita-

tion provisions, section 5.09(e) of the Agreement required Absolute

2 “Doc.” refers to the docket entries in No. 6:17-cv-02206 (M.D. Fla.).

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Medical to cause each of its “Representative Affiliate[s]”—in Abso-

lute Medical’s case, its sales representatives—to sign compliance

agreements. The compliance agreements incorporated section

5.09(c) of the Agreement. To comply with section 5.09(e), Absolute

Medical agreed to have its sales representatives, including Hawley

and Miller, sign compliance agreements.

Less than one year into the Agreement’s five-year term, Sou-

fleris informed NuVasive by email of his “resignation” from the

Agreement because “[his] time [had] come to move on.” Doc. 188-

4. Just three days later, Soufleris formed AMS. After a week, the

Absolute Medical sales representatives who sold NuVasive prod-

ucts resigned. According to NuVasive, the sales representatives

then began working for AMS soliciting business from, and perform-

ing services for, the same customers they serviced for NuVasive,

but on behalf of a different manufacturer, Alphatec, which pro-

duced competing products. NuVasive believed that with this con-

duct, Absolute Medical was violating the Agreement by not enforc-

ing the compliance agreements that it was supposed to have had

the representatives sign, and that the sales representatives were vi-

olating the compliance agreements by working for Alphatec

through AMS.

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B. NuVasive’s Lawsuit

NuVasive filed a federal lawsuit against Absolute Medical,

Soufleris, Hawley, Miller, and AMS. 3 NuVasive’s complaint al-

leged nine counts against the various defendants: (I) breach of con-

tract against Absolute Medical seeking injunctive relief; (II) breach

of contract against Absolute Medical seeking damages through an

arbitration proceeding; (III) breach of contract for injunctive relief

and damages against AMS; (IV) breach of contract for injunctive

relief and damages against Hawley and Miller; (V) conversion

against Hawley and AMS for sharing a NuVasive product with

competitor Alphatec; (VI) breach of fiduciary duty of loyalty

against Soufleris under Florida’s Limited Liability Company Act;

(VII) piercing the corporate veil to hold Soufleris liable for actions

of Absolute Medical and AMS; (VIII) violation of the Florida De-

ceptive and Unfair Trade Practices Act against all defendants; and

(IX) tortious interference with contract against Soufleris for inter-

ference with NuVasive’s relationship with surgeon customers.

The operative complaint alleged the following. Absolute

Medical’s sales representatives—including Hawley and Miller—

were “soliciting business from, and performing services for, the

same customers they solicited business and performed services on

NuVasive’s behalf.” Doc. 188 ¶ 54. “The only difference” was that

they had started “sell[ing] products marketed by Alphatec on behalf

3 The initial complaint named as defendants Absolute Medical, Soufleris, and

Hawley. The first amended complaint added as defendants AMS and Miller.

NuVasive’s second amended complaint is the operative pleading.

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of AMS.” Id. Less than a week after AMS was formed, Soufleris and

Miller dined with one of Absolute Medical’s surgeon customers

who had previously purchased NuVasive products and asked the

surgeon to try Alphatec’s products. During the same month, Haw-

ley sent a message to Alphatec “regarding custom instruments

needed by a surgeon” to whom he had previously sold NuVasive

products. Id. ¶ 6. The email provided precise descriptions of the in-

struments. Hawley also promised to send samples of the custom

instruments NuVasive had made for the surgeon so that Alphatec

could create similar ones. NuVasive later discovered, in a Florida

hospital, custom instruments NuVasive had made for the surgeon,

which were sterilized and prepared for a surgery involving non-

NuVasive products, without NuVasive’s knowledge. Soufleris,

Hawley, and Miller continued to use the same telephone numbers

and work email addresses that they had used while working with

Absolute Medical to sell NuVasive products—even though they

purported to work for AMS, a different company.

C. Litigation Stayed for Arbitration of NuVasive’s

Breach-of-Contract Damages Claim Against Abso-

lute Medical

NuVasive’s breach-of-contract claim seeking damages

against Absolute Medical (Count II) alleged that Absolute Medical

breached the Agreement by attempting to terminate the agree-

ment, failing to enforce its sales representatives’ compliance agree-

ments, falsely representing that its sales representatives had not ex-

ecuted compliance agreements, soliciting business for Alphatec,

and converting NuVasive’s business into business for Alphatec.

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NuVasive alleged that Absolute Medical’s breaches caused it “sig-

nificant damages.” Id. ¶ 79.

NuVasive moved to compel arbitration of the claim in

Count II under the Agreement’s binding arbitration clause. The dis-

trict court granted the motion to compel arbitration of Count II

and ordered that litigation on most of the remaining claims be

stayed pending the arbitration. 4

NuVasive moved for summary judgment in the arbitration

proceeding. The arbitration panel concluded that Absolute Medical

breached multiple sections of the Agreement by failing to have its

sales representatives sign the required compliance agreements, fail-

ing to inform NuVasive that Alphatec was pursuing sales in the re-

gion, and failing to perform its marketing and sales obligations. The

panel declined to grant summary judgment, however, because

“NuVasive [was] still required to establish causation and damages

in order to prevail” on the claim. Doc. 283-1 at 6.

NuVasive and Absolute Medical arbitrated the causation and

damages elements of the claim before the panel via videoconfer-

ence in December 2020. On March 4, 2021, the arbitration panel

entered a Final Award denying NuVasive’s breach of contract claim

because NuVasive had failed to prove loss causation connecting

Absolute Medical’s conduct with NuVasive’s claimed lost-profit

damages. The panel’s conclusion was based in part on its finding

4 The stayed claims included Count III’s claim for monetary damages, Count

VI, VII, VIII, and IX.

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that NuVasive’s causation evidence did not adequately account for

several surgeon customers’ “variety of personal circumstances”

that led them to switch from NuVasive’s products to products sold

by other vendors, including Alphatec. Doc. 283-2 at 11. Therefore,

NuVasive’s lost-profits damages model failed to capture accurately

how the breaches affected its profits. The panel found that some of

the surgeon customers—who had no contractual obligation to use

any particular vendor—had used Alphatec products prior to Abso-

lute Medical’s breach of the Agreement; other surgeons continued

to use NuVasive products after the breach; and still other surgeons

said they stopped using NuVasive products due to a “variety of fac-

tors,” id. at 10, including a transition to robotic surgery in one in-

stance, and personal skepticism about NuVasive’s business deci-

sions, such as its removal of its Chief Executive Officer.

D. NuVasive’s Motion to Vacate the Final Award

After the arbitration panel issued the Final Award, NuVasive

and the defendants returned to district court to prepare the previ-

ously stayed claims for trial. The district court permitted a brief pe-

riod of limited discovery on the remaining claims. During the dis-

covery period, NuVasive served the defendants with requests for

production of documents. Dissatisfied with the defendants’ re-

sponses, NuVasive filed a motion to compel better responses. The

district court granted the motion in part, ordering Soufleris and

AMS to produce most of the documents NuVasive had requested,

no later than August 26, 2021. Instead of producing the documents,

the defendants moved for reconsideration of the order. The district

court denied reconsideration.

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Soufleris and AMS did not produce the documents until No-

vember 4, well after the court’s August deadline had passed. Six

days after the production, Absolute Medical and AMS moved to

confirm the Final Award. In the motion to confirm the arbitration

award, they informed the district court that they “expect[ed]”

NuVasive to “argue for the first time that there was some level of

misconduct during the underlying arbitration that did not come to

the attention of the arbitration panel, and that this alleged miscon-

duct provides a basis for challenging the Final Award.” Doc. 333 at

7. Anticipating NuVasive’s arguments, they told the district court

that “it seem[ed] clear that what NuVasive intend[ed] [wa]s an at-

tack upon the validity of the Final Award notwithstanding NuVa-

sive’s conscious decision not to timely register an objection to con-

firmation of the award.” Id. They argued that the court should re-

ject NuVasive’s attempt to pursue vacatur because it was too late.

On November 15, as predicted, NuVasive moved for leave to file a

motion to vacate the Final Award based on the defendants’ miscon-

duct reflected in text messages the defendants had just produced.

On November 17, the district court granted leave to file the mo-

tion.

In its motion to vacate the Final Award, filed on November

22, NuVasive argued that Absolute Medical “procured” the Final

Award through “corruption, fraud or undue means,” and thus the

award should be vacated under § 10 of the Federal Arbitration Act

(“FAA”). 9 U.S.C. § 10(a)(1). Recognizing that the FAA requires any

party seeking to vacate an arbitration award under § 10 to file its

motion within three months of the panel’s award, see 9 U.S.C. § 12,

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NuVasive’s motion requested that the district court grant relief in

two respects.

First, NuVasive asked the district court to equitably toll the

three-month statutory filing deadline and consider its otherwise

overdue motion. It argued that, even though this Court had not

previously applied equitable tolling to the FAA, the district court

should conclude that it was available and apply it in its case because

of Soufleris’s and AMS’s misconduct.

Second, the motion argued that the Final Award should be

vacated. NuVasive alleged that Soufleris had instructed sales repre-

sentative Hawley “on how to answer questions NuVasive asked

Hawley during the Arbitration as Hawley testified” remotely via

videoconference. Doc. 353 at 2. NuVasive argued that it “did not

know—and had no way of knowing—of Defendant’s malfeasance

in the Arbitration” until Soufleris and AMS provided the text mes-

sage thread in their November production. Id. NuVasive explained

that Soufleris was physically present in his counsel’s Atlanta, Geor-

gia office, at least for his own testimony by videoconference, on

December 16, 2020. Hawley was physically present in Orlando,

Florida when he testified later the same day. As a party to the arbi-

tration proceeding, Soufleris was permitted to observe Hawley’s

video testimony, which he did from his counsel’s office. But Sou-

fleris was not merely observing the testimony, according to NuVa-

sive. NuVasive maintained that by comparing the time stamps on

the text messages the defendants produced in discovery with Haw-

ley’s arbitration testimony, it could demonstrate that Soufleris was

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instructing Hawley in real-time on how to answer the questions

posed to him by NuVasive’s counsel. Hawley’s testimony demon-

strated “that he followed Soufleris’ directions on how to answer

these questions.” Id. at 10. As an example, NuVasive’s counsel

questioned Hawley about compliance agreements he was required

to sign pursuant to NuVasive’s and Absolute Medical’s 2017 Agree-

ment and the companies’ prior exclusive distribution agreements.

NuVasive pointed out that Hawley answered “yes” when asked if

“[he] signed numerous noncompetes with Absolute Medical.” Id.

at 5–6. After Hawley received a text message from Soufleris saying,

“it was your corporate entity,” id. at 5, he changed his testimony to

say that he had signed the compliance agreements on behalf of his

corporate entity, which was not a defendant in the lawsuit. Id. at

5–6. 5 NuVasive offered numerous other examples.

The defendants opposed the motion. They argued that

NuVasive’s motion to vacate the Final Award—filed on Novem-

ber 22—should be denied because it was filed more than three

months after the Final Award was issued, outside of the time al-

lowed by the FAA. See 9 U.S.C. § 12. Further, they asserted that

5 Soufleris’s text message stating “[i]t was your corporate entity” was sent at

6:24 p.m. Doc. 353 at 5. At 6:25 p.m., Hawley testified that he signed the com-

pliance agreements not individually but on behalf of his company:

Q: In fact, you signed numerous noncompetes with Absolute

Medical, correct?

A: Over the years, yes.

Q: Now, I want to go back - -

A: On behalf of Hawley Med.

Id. at 5–6.

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equitable tolling was not available in the FAA context, so NuVasive

could not seek leave to file its motion after the statutory deadline.

In the defendants’ view, although equitable tolling of a statute of

limitations may sometimes be available, to apply it in this case

would have contravened this Court’s “strict” adherence to the

FAA’s provisions. Doc. 360 at 4. And with respect to NuVasive’s

allegations of misconduct, the defendants provided a declaration

from Hawley in which he attested that he “was not aware that Mr.

Soufleris was texting [him] during the course of [his] testimony and

did not review or utilize the text messages from Mr. Soufleris prior

to answering questions during the Arbitration.” Doc. 360-3 at 4. It

is undisputed that neither Soufleris nor Hawley disclosed—at any

time—that Soufleris sent Hawley text messages at the time of his

arbitration testimony.

The district court granted NuVasive’s motion to vacate the

Final Award. The court first considered whether NuVasive’s mo-

tion was timely. It rejected the defendants’ argument that equitable

tolling is not available under FAA. While the district court ob-

served that this Court had not yet addressed whether the FAA’s

time limitations may be equitably tolled, it adopted the Ninth Cir-

cuit’s reasoning in Move, Inc. v. Citigroup Global Markets, 840 F.3d

1152 (9th Cir. 2016), and held that equitable tolling could be avail-

able when the circumstances warranted such an “extraordinary

remedy.” Doc. 371 at 10 (quoting Brown v. Barrow, 512 F.3d 1304,

1307 (11th Cir. 2008)). The district court then concluded that equi-

table tolling was appropriate in this case because NuVasive demon-

strated that the defendants’ conduct amounted to extraordinary

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22-10214 Opinion of the Court 15

circumstances. Further, NuVasive “was diligently pursuing its

rights at every step following issuance of the Final Award” because

the text messages showing misconduct were not shared before the

November 4 production, and as soon as it learned about them, it

quickly took appropriate action. Doc. 371 at 12–13. Thus, the dis-

trict court concluded that the application of equitable tolling was

appropriate, and NuVasive’s motion to vacate was timely because

of that tolling.

Having concluded that the motion to vacate was timely, the

district court considered the motion’s merits. The district court re-

lied on our three-part test to determine whether an arbitration

award should be vacated due to fraud, articulated in Bonar v. Dean

Witter Reynolds, 835 F.2d 1378 (11th Cir. 1988). The test requires

that (1) “the movant must establish the fraud by clear and convinc-

ing evidence,” (2) “the fraud must not have been discoverable upon

the exercise of due diligence prior to or during the arbitration,” and

(3) “the person seeking to vacate the award must demonstrate that

the fraud materially related to an issue in the arbitration.” Id. at

1383.

The district court set out a detailed chronology comparing

Soufleris’s text messages to Hawley with Hawley’s arbitration tes-

timony. It granted the motion, concluding that the Final Award

must be vacated. The district court reasoned that “all of Hawley’s

testimony directly align[ed] in time and subject-matter with the

messages being sent by Soufleris, and Hawley’s testimony [was] al-

ways consistent with Soufleris’ messages.” Doc. 371 at 15. Based on

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16 Opinion of the Court 22-10214

the chronology, the district court concluded that NuVasive had sat-

isfied the three-part test by demonstrating the defendants’ fraud,

showing that it could not have discovered the fraud before or dur-

ing the November 4 production, and that Hawley’s coached testi-

mony was material to an issue before the arbitration panel. The

district court’s order also denied the defendants’ request to remand

the case to the arbitration panel for rehearing or a determination

of how Hawley’s messages affected the Final Award.

The defendants timely appealed the district court’s order

granting NuVasive’s motion to vacate the Final Award.

II. STANDARD OF REVIEW

“[T]he question of whether equitable tolling applies is a legal

one subject to de novo review.” Booth v. Carnival Corp., 522 F.3d

1148, 1149 (11th Cir. 2008) (internal quotation marks omitted).

“[T]he application of that law to the particular facts is reviewed for

abuse of discretion.” Bhd. of Locomotive Eng’rs & Trainmen Gen.

Comm. of Adjustment CSX Transp. N. Lines v. CSX Transp., Inc.,

522 F.3d 1190, 1194 (11th Cir. 2008). “There is an abuse of discre-

tion when a district judge bases his or her decision on factual find-

ings that are clearly erroneous.” Id.

“[O]rders vacating arbitration awards, like orders confirm-

ing them, are to be reviewed for clear error with respect to factual

findings and de novo with respect to the district court’s legal conclu-

sions.” Gianelli Money Purchase Plan & Tr. v. ADM Inv’r. Servs., Inc.,

146 F.3d 1309, 1311 (11th Cir. 1998).

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III. DISCUSSION

There are four issues on appeal. The first two concern the

district court’s application of equitable tolling to NuVasive’s mo-

tion to vacate the Final Award. The latter two address the district

court’s decision to vacate the award.

First, the defendants argue that the district court erred when

it concluded that the three-month deadline for seeking vacatur of

the arbitration award may be equitably tolled. Second, they argue

that even if the FAA’s three-month deadline for moving to vacate

an award may be equitably tolled in appropriate circumstances, the

district court abused its discretion by tolling the deadline and find-

ing NuVasive’s motion timely in this case.

Third, the defendants maintain that the district court erred

by granting the motion to vacate the arbitration award. Fourth,

they argue that the district court abused its discretion when, after

vacating the Final Award, the court denied their request to remand

the case back to the arbitration panel. Below we address each issue

in turn.

A. The District Court Did Not Err by Equitably Tolling

the Three-Month Filing Deadline and Considering

NuVasive’s Motion as Timely.

The defendants first contend that, as a threshold matter, the

district court committed legal error by ruling that the three-month

window established by § 12 of the FAA for filing a motion to vacate

is subject to equitable tolling. Noting that this Court has not previ-

ously held that the FAA’s statutory time periods can be equitably

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18 Opinion of the Court 22-10214

tolled, they argue that § 12 does not permit equitable tolling be-

cause the three-month window is not a statute of limitations but

rather a “jurisdictional precondition to judicial review of [the] arbi-

tration award.” Appellants’ Br. at 10.

i. A District Court May Equitably Toll the Three-

Month Deadline in § 12 of the FAA.

The FAA authorizes a district court, “upon the application

of any party to the arbitration,” to vacate an arbitration award un-

der a limited set of circumstances, including “where the award was

procured by corruption, fraud, or undue means.” 9 U.S.C. § 10(a).

Section 12 requires that “[n]otice of a motion to vacate, modify, or

correct an award must be served upon the adverse party or his at-

torney within three months after the award is filed or delivered.”

9 U.S.C. § 12. Whether a district court may equitably toll § 12’s

three-month window is a question of first impression in this Cir-

cuit. 6

6The closest we have come to answering the question was in Cullen v. Paine,

Webber, Jackson & Curtis, Inc., 863 F.2d 851 (11th Cir. 1989). In that case, we

affirmed the district court’s denial of a motion to vacate an arbitration award,

holding that the appellant’s failure to move to vacate the award within three

months of its issuance “bar[red] him from raising the alleged invalidity of the

award.” Id. at 854. But we did not reach the appellant’s tolling argument—that

the district court nonetheless should have considered his motion because of a

“due-diligence” exception to § 12. Id. at 853. We did not decide whether such

an exception existed because the appellant failed to demonstrate, as a factual

matter, that he was prevented from filing a timely motion such that equitable

tolling would have been appropriate. Id. at 854.

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In the absence of clear authority from this Court, the district

court adopted the reasoning of the Ninth Circuit’s decision in Move,

Inc. In Move, Inc., the Ninth Circuit held that “the FAA is subject to

the established doctrine of equitable tolling.” Id. at 1158. The court

relied on the Supreme Court’s opinion in Holland v. Florida,

560 U.S. 631 (2010), which “instructed lower courts to consider sev-

eral textual factors to determine whether Congress intended for

tolling not to apply to a given statute.” Move, Inc., 840 F.3d at 1157.

The Holland factors include whether the statute at issue:

(1) set forth its time limitations in unusually emphatic

form; (2) used highly detailed and technical language

that, linguistically speaking, cannot easily be read as

containing implicit exceptions; (3) reiterated its limi-

tations several times in several different ways; (4) re-

lated to an underlying subject matter . . . with respect

to which the practical consequences of permitting

tolling would have been substantial; and (5) would, if

tolled, require tolling, not only procedural limita-

tions, but also substantive limitations on the amount

of recovery—a kind of tolling for which [the Court]

found no direct precedent.

Holland, 560 U.S. at 646–47 (alterations adopted) (internal quota-

tion marks omitted).

In Move, Inc., the Ninth Circuit focused on the first three Hol-

land factors. In applying these factors, the court addressed § 12’s

text and structure. It concluded that “the text of the statute does

not preclude equitable tolling,” reasoning that the FAA’s instruc-

tion that notice of a motion to vacate “must be served” “is neither

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20 Opinion of the Court 22-10214

‘unusually generous’ nor ‘unusually emphatic’” and that “the

FAA’s limitations period is neither detailed nor technical and is not

reiterated elsewhere in the statute.” 840 F.3d at 1157.

The court next examined the argument that the FAA cannot

accommodate equitable tolling of § 12’s deadline for motions to va-

cate. Id. The argument went that because § 9 allows one year for a

party to seek confirmation of an arbitration award, equitably toll-

ing the deadline for a motion to vacate the same award could mean

that district courts might be forced to consider motions to vacate

filed after the court had already confirmed the award. The Ninth

Circuit concluded that “the FAA’s structure is not incompatible

with equitable tolling,” because a party seeking vacatur beyond the

three-month deadline “would still need to meet the heavy burden

of establishing its entitlement to equitable tolling for a court to va-

cate an award.” Id. Given the heavy burden, the court observed, “it

would only be the rare case in which the three-month dead-

line . . . would not apply.” Id.

Finally, the Ninth Circuit concluded that “[w]hile the FAA

reflects the national policy favoring arbitration with just the limited

review necessary to maintain finality in arbitral proceed-

ings . . . . § 10’s limited grounds for review were still designed to

preserve due process.” Id. at 1157–58 (internal quotation marks

omitted). “[B]alancing the needs for both finality and due process,

the arbitral process will not be disrupted if parties are permitted to

satisfy the high bar of equitable tolling in limited circumstances.”

Id. at 1158.

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22-10214 Opinion of the Court 21

The defendants here make many of the same arguments that

the Ninth Circuit rejected in Move, Inc. 7 We find the Ninth Circuit’s

reasoning thorough and persuasive. We therefore agree with our

sister circuit that the availability of equitable tolling does not con-

travene the FAA’s text, structure, or purpose.

Besides the arguments the Ninth Circuit rejected in Move,

Inc., the defendants maintain that the three-month window in § 12

is a “jurisdictional precondition to judicial review of [the] arbitra-

tion award” and not merely a statute of limitations eligible for toll-

ing if a party can demonstrate it is appropriate. We disagree.

Recently, in Boechler, P.C. v. Comm’r of Internal Revenue,

142 S. Ct. 1493 (2022), the Supreme Court offered relevant guid-

ance about how to determine whether a statute’s deadlines are ju-

risdictional, such that a court or agency would be precluded from

reviewing late filings. In Boechler, the Internal Revenue Service

(“IRS”) levied upon a law firm’s property to collect a debt for un-

paid tax liabilities. After losing its challenge to the seizure in a

7 One such argument is that if tolling were permitted, the FAA’s one-year

timeline to seek confirmation of an arbitration award would conflict with its

three-month timeline to seek vacatur of the same award. See Appellants’ Br. at

7–10. We note that under our precedent the purported conflict could exist

even in the absence of tolling because a party seeking to confirm an arbitration

award may seek confirmation as soon as the award is rendered. It need not

wait until the time for filing a motion to vacate has expired. See McLaurin v.

Terminix Int’l Co., LP, 13 F.4th 1232, 1240–41 (11th Cir. 2021) (“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.”).

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22 Opinion of the Court 22-10214

“collection due process” hearing before the IRS’s office of appeals,

the law firm had 30 days to petition for review of the result. Id. at

1496–97. When it filed the petition one day late, the Tax Court dis-

missed the appeal for lack of jurisdiction, and the Eighth Circuit

affirmed. Id. at 1497.

The statutory provision in question says that a person seek-

ing review of a negative result in a collection due process hearing

“may, within 30 days of a determination under this section, petition

the Tax Court for review of such determination (and the Tax Court

shall have jurisdiction with respect to such matter).” 26 U.S.C.

§ 6330(d)(1). In the Supreme Court, the IRS Commissioner argued

that the 30-day period for a taxpayer to file her petition for review

is a jurisdictional requirement and therefore cannot be equitably

tolled. Boechler, 142 S. Ct. at 1496. The Commissioner based this ar-

gument on the provision’s parenthetical language.

The Supreme Court first observed that the distinction be-

tween procedural and jurisdictional requirements “matters” be-

cause the consequences can be severe. Id. at 1497. Whereas the for-

mer “promote the orderly progress of litigation but do not bear on

a court’s power,” the latter “mark the bounds of a court’s adjudica-

tory authority” and “cannot be waived, or forfeited, must be raised

by courts sua sponte, and . . . do not allow for equitable exceptions.”

Id. (internal quotation marks omitted).

The Court rejected the Commissioner’s interpretation. It

declared that “a procedural requirement” is “jurisdictional only if

Congress clearly states that it is.” Id. (internal quotation marks

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22-10214 Opinion of the Court 23

omitted). Although “Congress need not incant magic words, . . .

the traditional tools of statutory construction must plainly show

that Congress imbued a procedural bar with jurisdictional conse-

quences.” Id. (internal quotation marks omitted).

The Court addressed the Commissioner’s argument based

on the parenthetical language that “the Tax Court shall have juris-

diction with respect to such matter.” 26 U.S.C. § 6330(d)(1). It rea-

soned that the Commissioner’s view was plausible—the parenthe-

tical could be read to condition the Tax Court’s jurisdiction on a

timely filing. But, the Court reasoned, “the text does not clearly

mandate the jurisdictional reading,” and “[w]here multiple plausi-

ble interpretations exist—only one of which is jurisdictional—it is

difficult to make the case that the jurisdictional reading is clear.”

Boechler, 142 S. Ct. at 1498. It explained that nothing else in the text

or structure of the provision or the statute, read as a whole, com-

pelled a jurisdictional interpretation. Id. at 1498–99. Relying on its

textual analysis, the Court held that the 30-day time limit was an

“ordinary, non-jurisdictional deadline subject to equitable tolling.”

Id. at 1501.

Unlike the filing deadline in Boechler, the three-month limi-

tation in § 12 makes no reference to jurisdiction. It merely instructs

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.” 9 U.S.C. § 12. Thus,

the argument that the time limit in § 12 is jurisdictional is even

weaker than the argument the Court rejected in Boechler. The

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24 Opinion of the Court 22-10214

language “must be served” does not communicate the sort of “ju-

risdictional clarity” that Boechler requires. Boechler, 142 S. Ct. at

1498. We reject the defendants’ argument.

We hold that the three-month window in § 12 may be equi-

tably tolled in the appropriate circumstances. To be clear, we hold

only that equitable tolling is available in the FAA context. Litigants

still must demonstrate that their cases present circumstances war-

ranting this extraordinary remedy. Below we consider whether

NuVasive has presented such circumstances.

ii. The District Court Did Not Err by Equitably

Tolling § 12’s Statutory Deadline and Consid-

ering NuVasive’s Motion to Vacate the Final

Award.

The defendants next argue that even if equitable tolling is

available in the FAA context, the district court erred in concluding

the three-month filing deadline should be tolled in this case. They

contend that Soufleris’s conduct did not qualify as extraordinary

circumstances and that NuVasive was insufficiently diligent in pur-

suing its rights to warrant tolling of the deadline for filing its mo-

tion to vacate the arbitration award.

“Equitable tolling is an extraordinary remedy which is typi-

cally applied sparingly.” Brown, 512 F.3d at 1307 (internal quotation

marks omitted). It is “appropriate when a movant untimely files

because of extraordinary circumstances that are both beyond his con-

trol and unavoidable even with diligence.” Arce v. Garcia, 434 F.3d

1254, 1260 (11th Cir. 2006) (internal quotation marks omitted). In

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22-10214 Opinion of the Court 25

this context, due diligence is “reasonable diligence.” Holland,

560 U.S. at 653 (internal quotation marks omitted).

The district court concluded that NuVasive satisfied both

the “extraordinary circumstances” and “diligence” prongs of the

equitable-tolling test. Doc. 371 at 13. It found that Soufleris’s mes-

sages to Hawley during Hawley’s arbitration testimony, along with

the defendants’ efforts to conceal the messages by defying discov-

ery requests and orders, presented extraordinary circumstances.

We address each prong of the analysis.

First, extraordinary circumstances. As we described above,

the evidence NuVasive presented to support its motion revealed

shocking conduct by Soufleris and Hawley at the arbitration pro-

ceeding. Before Hawley began his arbitration testimony, he took

an oath affirming that there was no one in the room with him and

no one communicating with him. Although the former was true,

the latter was not. While Hawley testified, he received text mes-

sages from Soufleris concerning the content of Hawley’s testi-

mony. When this conduct was discovered, Hawley submitted a

declaration denying that he had read the messages while testifying.

But by comparing Soufleris’s messages and their timing with Haw-

ley’s testimony, NuVasive showed, and the district court found,

that Hawley’s testimony was consistent with Soufleris’s contempo-

raneous text messages. In at least one instance, Hawley revised his

answers to comport with Soufleris’s suggestions. Further, having

observed the defendants’ conduct in discovery, the district court

found that it was “clear that Defendants were intentionally

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26 Opinion of the Court 22-10214

attempting to run out the clock on Plaintiff’s time to file a motion

to vacate by failing to produce the documents that could show mis-

conduct during the arbitration.” Doc. 371 at 13. We cannot say that

these factual findings are clearly erroneous. And we agree with the

district court that the conduct and the cover-up together constitute

the sort of “extraordinary circumstances” contemplated by the doc-

trine of equitable tolling. Id. The district court did not err in con-

cluding NuVasive satisfied this prong.

Turning to the due diligence prong, the district court found

that NuVasive could not have known about the text messages be-

tween Soufleris and Hawley until after the defendants produced

the documents NuVasive requested. Once the text messages were

produced, the court found, based on the “sequence of events,” that

NuVasive acted diligently by requesting permission from the court

to file a motion to vacate the Final Award mere days later. Id. at 12.

The record provides ample support for the district court’s findings

that NuVasive acted quickly once it learned about the text mes-

sages. We thus agree with the district court’s conclusion that

“Plaintiff was diligently pursuing its rights.” Id.

On appeal, the defendants contend that “a diligent lawyer

for NuVasive would certainly have looked for [fraud] during the

available 90-day window . . . [;] for example, [the lawyer] would

have immediately pursued discovery concerning the arbitration

panel, the witnesses, their text messages and the whole record—

looking for any proof of misconduct not detected in the arbitration

proceeding itself.” Appellants’ Br. at 18. This argument—which

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22-10214 Opinion of the Court 27

attempts to blame NuVasive for failing to investigate fraud when

there was no reason to suspect fraud—hardly warrants comment.

The district court found that any purported delay or lack of dili-

gence by NuVasive was due entirely to defendants’ misconduct

and that the defendants “actively subvert[ed] discovery requests

and a Court Order by failing to timely produce the requested com-

munications.” Doc. 371 at 12. Had the defendants timely per-

formed their discovery obligations, the production that included

the Soufleris-Hawley text messages would have been in NuVa-

sive’s counsel’s hands more than four months earlier. 8 Once NuVa-

sive learned of the text messages, it promptly moved for leave to

file a motion to vacate within a few days. And after the district

court granted leave, NuVasive filed its motion to vacate less than a

week later.

Nor are we persuaded by the defendants’ argument that

their delayed responses were irrelevant to the diligence inquiry.

They say that, even if they had produced the documents by the

ordered date, NuVasive’s motion to vacate still would have been

too late because the “responses were not due until twenty-three

8 The original deadline for producing documents was June 30, 2021. When the

defendants’ document production was lacking, NuVasive sought the district

court’s assistance by filing a motion to compel, and the district court ordered

that Soufleris and AMS produce the documents. The district court’s deadline

for production was August 26, 2021, but Soufleris and AMS did not produce

the documents until November 4, in violation of the order compelling pro-

duction.

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28 Opinion of the Court 22-10214

days after the 90-day period expired on June 2, 2021.” 9 Appellants’

Br. at 18. But, again, in the absence of any indication that fraud or

misconduct had occurred, it would not have been reasonable to

expect NuVasive to try to discover any. On this record, it is auda-

cious indeed for the defendants to suggest that had NuVasive

sought “evidence of fraud in the arbitration,” id., they would

simply have offered it up. In any event, the district court properly

tolled the filing deadline on the motion to vacate, so the defend-

ants’ argument fails.

Based on our review of the record, the district court’s find-

ings of fact were not clearly erroneous, and they supported the dis-

trict court’s conclusion that NuVasive satisfied both prongs of the

equitable tolling analysis. The defendants’ conduct presented ex-

traordinary circumstances, and NuVasive was diligent once it

learned that there was reason to pursue vacatur. The district court

did not err in concluding that the deadline to move for vacatur

9 Although it is ultimately immaterial, we note that the defendants erred in

calculating when the statutory deadline expired because they counted 90 days,

rather than three months, as the statute says. See 9 U.S.C. § 12. The arbitration

panel issued the Final Award on March 4, 2021. Three months from that date

expired on June 4, not June 2 as the defendants say.

We acknowledge that even had the defendants complied with the June

30 deadline, any motion to vacate based on produced documents would have

been filed outside of the three-month window. But that fact is irrelevant to the

question whether NuVasive was diligent for equitable tolling purposes. NuVa-

sive acted diligently as soon as it became aware there was a reason to contest

the Final Award.

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22-10214 Opinion of the Court 29

should be equitably tolled such that NuVasive’s motion was

timely.

B. The District Court Did Not Err by Vacating the Final

Award

The defendants urge that even if the district court did not

err in tolling the three-month window and thus was permitted to

consider NuVasive’s motion to vacate the Final Award under 9

U.S.C. § 10(a), the court abused its discretion by granting the mo-

tion and vacating the award. They argue that the district court

erred in determining that NuVasive proved fraud by clear and con-

vincing evidence and that the fraud was not materially related to

an issue in the arbitration.

A district court “may,” in its discretion, vacate an arbitration

award “upon the application of any party to the arbitration” if “the

award was procured by corruption, fraud, or undue means.”

9 U.S.C. § 10(a)(1). This Court uses “a three part test to determine

whether an arbitration award should be vacated for fraud.” Bonar,

835 F.2d at 1383. First, the moving party “must establish the fraud

by clear and convincing evidence”; second, “the fraud must not

have been discoverable upon the exercise of due diligence prior to

or during the arbitration”; and third, “the person seeking to vacate

the award must demonstrate that the fraud materially related to an

issue in the arbitration.” Id. 10

10 In their briefing, the defendants conflate the distinct issues of whether the

district court erred by applying equitable tolling and by vacating the Final

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30 Opinion of the Court 22-10214

In its order granting the motion to vacate the Final Award,

the district court concluded that all three prongs were satisfied. To

support its conclusion on the first prong, that NuVasive established

fraud by clear and convincing evidence, the district court pointed

to its timeline comparing Soufleris’s messages to Hawley during

Hawley’s arbitration testimony with Hawley’s contemporaneous

testimony. Based on its side-by-side comparison of the text mes-

sages and Hawley’s contemporaneous testimony, the district court

found that “three specific instances during Hawley’s testimony that

establishe[d] by clear and convincing evidence that his testimony

was indeed being guided by Soufleris’s messages.” Doc. 371 at 15.

In each instance, Hawley appeared to change his answer after Sou-

fleris directed him to not implicate Absolute Medical. These in-

stances included testimony about: whether Hawley had signed

compliance agreements that the Agreement required, whether

Hawley’s compliance agreements had been sent to or withheld

from NuVasive, and whether Hawley had provided a NuVasive de-

vice to Alphatec. Based on these factual findings, the district court

concluded that “the complete alignment of all of Hawley’s testi-

mony with Soufleris’s messages” compelled the conclusion that

NuVasive “establishe[d] by clear and convincing evidence that

Hawley was reading Soufleris’s messages in real-time while

Award. As a result, the defendants do not directly contest the district court’s

findings on the second prong of the vacatur-for-fraud test. Instead, their brief

discusses diligence only in the context of equitable tolling. See Appellants’ Br.

at 18. For clarity, we discuss these issues separately.

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22-10214 Opinion of the Court 31

Hawley was testifying and conforming his testimony to Soufleris’s

messages.” Doc. 371 at 17.

The defendants respond with Hawley’s declaration, filed af-

ter the text messages came to light, that he did not see the text mes-

sages during his testimony. But the district court was free to disbe-

lieve Hawley’s declaration in the face of contrary evidence that he

conformed his answers to Soufleris’s instructions in the messages

in real-time. The defendants have pointed us to nothing in the rec-

ord showing that the district court’s factual findings on the first

prong were clearly erroneous. The district court did not err by de-

termining that NuVasive established the defendants’ fraud by clear

and convincing evidence.

On the second prong, the district court concluded that

NuVasive “could not have discovered prior to arbitration that Sou-

fleris was planning to improperly direct Hawley’s testimony” and

that “it also could not have discovered the fraud while it was ongo-

ing because Hawley’s testimony was occurring via video feed.” Id.

at 18. As the district court observed, the arbitration was conducted

from remote locations over videoconference—Hawley, Soufleris,

and NuVasive’s counsel were all in different states while Hawley

testified. The defendants do not explain how NuVasive could have

discovered the coaching remotely. 11 They point to the facts that

11 And given that, before testifying, Hawley took an oath affirming that there

was no one in the room with him and no one was communicating with him,

it was reasonable for NuVasive to believe, in reliance on this oath, that no one

was coaching him.

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32 Opinion of the Court 22-10214

“Hawley was visible to all viewers as he testified via his laptop com-

puter” and “[t]here is no suggestion in the record that anyone, in-

cluding the three arbitrators and [NuVasive’s] team of attorneys,

noticed any suspected coaching behaviors.” Appellants’ Br. at 21.

But that is precisely the point: there was no noticeable behavior. It

was only once the text messages were produced that they could be

compared to Hawley’s testimony. The district court’s factual find-

ings as to the second Bonar prong were not clearly erroneous.

Finally, the district court determined that NuVasive’s mo-

tion satisfied the third Bonar prong because Soufleris’s messages

and Hawley’s arbitration testimony were materially related to an

issue in the arbitration. The district court determined that Haw-

ley’s testimony “related directly” to issues that the court had or-

dered the parties to resolve through arbitration, including

(1) whether the sales representatives working for Absolute Medical

had executed the compliance agreements required by the Agree-

ment; (2) whether the defendants violated the compliance agree-

ments; and (3) whether Absolute Medical took any action to en-

force the compliance agreements. Doc. 371 at 19. As a factual mat-

ter, the district court did not err: Soufleris’s text messages instruct-

ing Hawley on how to answer the questions addressed each of

these areas.

The defendants do not dispute this fact. Instead, they argue

that the fraud Soufleris and Hawley perpetrated was not material

because the arbitration panel’s decision not to award lost profits

damages in the Final Award was based on a failure of proof as to

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22-10214 Opinion of the Court 33

loss causation and the amount of damages, not the subject matter

of Hawley’s testimony. Therefore, they say, even if the text mes-

sages influenced Hawley’s testimony, the testimony had no impact

on the arbitration panel’s decision.

Our precedent dooms this argument. In Bonar we said that

the materiality element “does not require the movant to establish

that the result of the proceedings would have been different had

the fraud not occurred.” 835 F.2d at 1383. Thus, NuVasive need not

prove that it would have succeeded in proving causation and dam-

ages absent the unlawful coaching, nor was it required to prove

that the subject matter on which Hawley was coached concerned

causation and damages specifically. Rather, the test is whether the

fraud was “materially related to an issue in the arbitration.” Id. We

reject the defendants’ attempt to define “issue in the arbitration”

more narrowly than our precedent allows. To permit a party who

committed fraud to render its fraud immaterial in this way would

undermine the purpose of vacatur for fraud under § 10(a)(1).

The issues the district court identified as impacted by Haw-

ley’s corrupted testimony all were “issue[s] in the arbitration.” In-

deed, whether the defendants breached the Agreement as it per-

tained to the compliance agreements was the primary liability issue

in the arbitration. The district court correctly concluded that the

fraud was materially related to that issue. Thus, the district court

did not err in vacating the Final Award under § 10(a).

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34 Opinion of the Court 22-10214

C. The District Court Did Not Abuse its Discretion by

Declining to Direct a Rehearing by the Arbitration

Panel

The final issue the defendants raise on appeal is whether, af-

ter vacating the Final Award, the district court abused its discretion

by failing to direct a rehearing by the arbitration panel, either to

determine whether any fraud took place or for a rehearing of the

arbitrated claims. The defendants argue that the district court’s de-

cision not to send the arbitrated claim back to the arbitration panel

was improperly based on a desire to punish them. They further ar-

gue that the district court should not have considered prejudice to

NuVasive in deciding whether to send the claim back because

NuVasive voluntarily entered into the dispute resolution agree-

ment. Therefore, they say, it could not claim prejudice from being

forced to arbitrate. NuVasive responds that this issue was not

properly noticed on appeal and that, even if it was, the district court

did not abuse its discretion.

The FAA provides that “[i]f an award is vacated . . . the court

may, in its discretion, direct a rehearing by the arbitrators.” 9 U.S.C.

§ 10(b) (emphasis added). We agree with the district court that the

FAA granted it “complete discretion about how to proceed” with

the case after the Final Award was vacated. Doc. 371 at 20. Tell-

ingly, the defendants cite no authority to the contrary.12 And the

12 The defendants rely on Bonar in arguing that remand is the normal course

following the vacatur of an arbitration award. In Bonar, the fraud at issue in-

volved a retained expert witness who lied about his education credentials, not

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22-10214 Opinion of the Court 35

district court did not abuse the discretion the FAA afforded it. The

court carefully considered how to proceed upon vacating the arbi-

tration award, taking into account the facts leading to the vacatur;

the defendants’ past misconduct throughout the litigation, includ-

ing intentional destruction of “vast amounts of evidence,” Doc. 371

at 21, by defendants and their counsel which led to spoliation sanc-

tions; and finally, the unlikelihood that a remand to the arbitration

panel could cure the harm from the defendants’ misconduct. We

also reject the defendants’ prejudice argument; we are uncon-

vinced that NuVasive’s voluntary participation in the Agreement’s

dispute resolution clause required the district court to compel re-

arbitration. NuVasive’s objection was not to arbitration generally,

but to re-arbitration after the defendant’s brazen, serious miscon-

duct. We therefore cannot say that the court abused its discretion

when it decided to retain control over the entire case after vacating

the Final Award.13

two of the parties themselves. See 835 F.2d at 1383–84 (reversing an arbitration

panel’s award of punitive damages and remanding to a new arbitration panel

following the discovery of a retained expert witness’s false testimony). What

is more, Bonar did not hold that a district court must remand to an arbitration

panel following vacatur.

13 Because we conclude that the district court did not abuse its discretion, we

need not address NuVasive’s argument that the defendants failed to raise this

issue properly on appeal.

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36 Opinion of the Court 22-10214

IV. CONCLUSION

For the reasons discussed above, we affirm the district

court’s order.

AFFIRMED.