State Court Disregards State Law Authorizing Award of Attorneys’ Fees in Arbitration Dispute Governed by FAA

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The Nevada Supreme Court affirmed the denial of attorneys’ fees pursuant to section 38.243, N.R.S. and in association with the confirmation of an arbitration award. The Nevada statute provides “on application of a prevailing party to a contested judicial proceeding under [Nevada laws seeking confirmation, vacatur, or modification of an arbitration award], the court may add reasonable attorney’s fees and other reasonable expenses of litigation incurred.”

The Nevada Supreme Court first affirmed the lower court’s confirmation of the arbitration award, finding that the arbitrator had not exceeded its authority in rendering the award. The court then recognized that a court may not award attorneys’ fees “absent authority under a statute, rule, or contract.” Despite Nevada law authorizing such an award, the Nevada Supreme Court noted that the parties both agreed that the FAA governed judicial review of this particular arbitration award, and because neither the FAA nor the arbitration agreement itself authorized an award of post-arbitration attorneys’ fees or costs, the lower state court was correct in denying fees, contrary Nevada law notwithstanding.

In re Petition of CLA Properties LLC, No. 80427 (Nev. Mar. 17, 2022).

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