Fair disposition of a dispute often requires studying key documents to understand the facts and circumstances of the dispute. In litigation, you can use the rules to subpoena documents from non-parties before the trial, although the procedure can be somewhat complicated when the non-party is in a different jurisdiction. Then, you may have to get a different court involved to enforce the subpoena.
In arbitration, it is straightforward to obtain documents from the opposing party. They have agreed to arbitrate and so are subject to arbitration rules. Those rules typically allow the arbitrator to require that key documents be provided before the hearing. E.g., AAA Commercial Rule 22.
But getting documents from non-parties in arbitration is trickier. And the courts don’t agree whether you can get them at all before the hearing. And yet, with some planning and knowledge, you should be able to get the information you need.
The Ninth Circuit Says No to Prehearing Documents Subpoenas
Late last year, the Ninth Circuit joined the courts that have said arbitrators have no power to subpoena documents from non-parties before the hearing. In Vividus, LLC v. HMX Services, LLC, No. 16-16187 (9th Cir. 2017), the appellant secured a subpoena from an arbitrator requiring a non-party to provide certain documents during discovery. When the non-party didn’t respond, the appellant went to the trial court to enforce the subpoena under Section 7 of the Federal Arbitration Act, 9 U.S.C. §7. That is the section the gives arbitrators subpoena powers and provides for enforcement of such subpoenas in federal district courts. The district court refused to enforce the subpoena, finding that Section 7 only gives an arbitrator power to subpoena testimony and documents from a non-party during a hearing, but not before.
The Ninth Circuit had not before addressed the question. Siding with the Second, Third and Fourth Circuits, it found that the plain language of Section 7 gives arbitrators only the power to compel an appearance before them at a hearing and bring documents.
The Court did note that the Eighth Circuit took a different approach. The Eight Circuit found that, implicit in the power Section 7 gives to arbitrators, is the power to order production of relevant documents for review before the hearing. See In re Security Life Ins. Co. of Am, 228 F.3d 865 (8th Cir. 2000). This implicit power, it found,” facilitated resolution of disputes” by allowing parties to “review and digest” the documents before the hearing.
But, finding the language of section 7 was plain, the Ninth Circuit determined that a court’s sole function was to enforce that section as written. And that meant it would not provide power to arbitrators not given them by the statute.
So, what does this mean for obtaining documents from non-parties needed for an arbitration? In the Eighth Circuit, you probably can rely on Security Life to enforce the subpoena. Even there, though, you could run into some trouble. As the Ninth Circuit noted, the Eight Circuit made a point of stating in its Security Life opinion that the subpoenaed non-party was “not a mere bystander,” but “integrally related to the underlying arbitration.” That may suggest that, under different circumstances, there could be room for argument.
Stolt-Nielsen to the Rescue
In most cases, if the evidence is important enough, you should be able to persuade the arbitrator to follow the example set in Stolt-Nielsen SA v. Celanese AG, 430 F.3d 547, 577 (2d Cir. 2005). There, a hearing was held before the main hearing during which non-party witnesses were subpoenaed to produce documents and give testimony. That hearing became part of the hearing record, so it was within the arbitrators’ power to subpoena witnesses and documents for that session. Because there was a hearing before the arbitrators, it was not merely a ruse to obtain discovery prior to the real “merits hearing,” which would otherwise not be allowed under Section 7.
To use this procedure, you may need to persuade the arbitrator to locate the site of a portion of the hearing to a place where the witness can be subpoenaed or is willing to appear. AAA Commercial Rule 35(b) now specifically recognizes this possibility.
Once the non-party’s counsel understands this procedure is available, you may well be able to negotiate with the non-party and your opponent to forego the hearing and just produce the needed documents and any needed explanatory testimony by deposition. You can accommodate the non-party and your opponent in a way that is more convenient than appearing at a specific time and place directed by a subpoena.
A deposition at a convenient place at a convenient, agreed time may encourage cooperation, for example. In many cases, you might be able to get by with a production of documents followed by a short telephone deposition. This would be less expensive for everyone and may provide all you need. Make sure the document requests are specific and as narrow as possible so that everyone can understand the importance of the information sought to the case.
While a little less straightforward than subpoenaing documents from non-parties in litigation, with a little planning, you should be able to get the information you need from non-parties in your arbitration. But to do that you need to know the arbitration rules you are operating under, know the law of the applicable jurisdiction, and plan ahead.
Bring this issue up at the first scheduling conference with the arbitrator or panel or as soon as you know about it, so you can get the needed logistics in place. If arbitrators are convinced the needed the requested information to make an informed decision, they can usually be persuaded to hold a portion of the hearing in the right jurisdiction to allow a party to subpoena documents and testimony. You may even be able to take advantage of arbitration rules that allow testimony by telephone or video conference.
As with all things arbitration, think ahead and use the flexibility of arbitration to get what you need, but keep the expense down.
David Allgeyer is an arbitrator and mediator, focusing on commercial and intellectual property disputes. After 35 years of litigating commercial and intellectual property matters — and over 15 years arbitrating and mediating such matters — he formed Allgeyer Law and ADR, devoted to arbitration and mediation. You can reach David at firstname.lastname@example.org and can visit his website at daveadr.com, where you will find information about commercial and IP law and adr. David’s book, published by the ABA, Arbitrating Patent Disputes: A Practical Guide (available at ababooks.org), provides specific information and guidance for patent arbitration, but also has a great deal of practical information useful in any commercial arbitration.