|
 | |
|
Subpoenaed Non-Party Must Produce Documents, Testify Before Arbitrators
|
| |
|
July 17, 2006
|
|
(A revised version of this article will appear in The Construction Lawyer, Volume 26, No. 2, Spring 2006, published by the American Bar Association's Forum on the Construction Industry.)
|
|
|
|
Thelen Reid Brown Raysman & Steiner LLP
Courts have recently addressed the scope of arbitrators' power to obtain evidence from non-parties.
Section 7 of the Federal Arbitration Act authorizes the issuance of non-party subpoenas to "summon in writing any person to attend before them or any of them as a witness and in a proper case to bring with him or them any book, record, document, or paper which may be deemed material as evidence in the case."
In the recent case, arbitrators issued subpoenas for non-party depositions and document discovery, which the U.S. District Court for the Southern District of New York held were beyond the scope of §7. Odjfell ASA v. Celanese AG, 328 F.Supp.2d 505 (S.D.N.Y. 2004) Later, the arbitrators issued subpoenas to other non-parties directing them to appear and testify in an arbitration proceeding and to produce certain documents. The non-parties in this second round of subpoenas objected, claiming that the subpoena was "a thinly disguised effort to obtain pre-hearing discovery." Because the testimony and document production were made returnable before the panel, the U.S. District Court for the Southern District of New York compelled compliance. Odjfell ASA v. Celanese AG, 348 F.Supp.2d 283 (S.D.N.Y. 2004).
The 2nd U.S. Circuit Court of Appeals affirmed the second decision and set forth several key factors that persuaded the court that the subpoenas should be enforced. Stolt-Nielsen SA v. Celanese AG, 430 F.3rd 567 (2nd Cir. 2005). First, the witness gave his testimony in the physical presence of the arbitration panel. Second, the panel ruled on evidentiary issues such as admissibility and privilege. Third, the testimony given became part of the arbitration record to be used by the arbitrators in deciding the case. All of these factors distinguished the testimony from a deposition and were consistent with the powers granted by §7. The court declined to address whether §7 authorizes arbitrators to issue pre-hearing nonparty discovery subpoenas.
If you would like to receive legal reports and updates more quickly, by e-mail, click here and fill out the mailing list form.
For more information about the issues covered in this report, please contact John Ralls in our San Francisco office at 415-369-7210 or at jralls@thelen.com or contact your Thelen attorney. For more information about Thelen's Construction and Government Contracts Department, click here.
©2006 Thelen Reid Brown Raysman & Steiner LLP
|
| | |
