Arbitral Subpoenas: Where to Issue and Enforce Them

In the last article, we looked at a recent Eleventh Circuit case that took a fairly narrow view of arbitral subpoenas,  Managed Care Advisory Group, LLC v. Cigna Healthcare, Inc., No. 17-13761 (11th Cir., September 18, 2019).  There the Court overturned a district court’s order enforcing an arbitral subpoena, called a “summons” by the Court, that required non-parties to provide requested documents before a hearing and summoned witnesses to appear by video rather than in the physical presence of the arbitrator.  Pre-hearing discovery of parties is not allowed in arbitration, it said, and witnesses must testify “before” the arbitrator under the language of the Federal Arbitration Act (FAA), 9 USC §

The Court’s decision on the place of issuance and enforcement of arbitral subpoenas was quite expansive in contrast to its narrow view of arbitrators’ power over non-party witnesses and documents. 

Place of issuance

The party opposing the subpoenas argued that the subpoenas were invalid because they were not issued from the jurisdiction in which the witnesses resided.  The Court made fairly short work of this. It noted that 9 U.S.C. § 7 says that arbitral summonses shall issued “in the same manner as subpoenas to appear and testify before a court.”  This, it said, was a reference to Rule 45 of the Federal Rules of Civil Procedure that now allows nationwide service of subpoenas.  While an earlier Second Circuit case said section 7 did not allow nationwide service of process, that was before Rule 45 was amended in 2013 to allow it.

Place of enforcement

The Court acknowledged there was an apparent in consistency between FAA section 7 and Rule 45 as to the place of enforcement for arbitral subpoenas.  Section 7 says a motion to require compliance with an arbitral summons or subpoena is to be filed in the district where the arbitrator sits.  It then says a court may compel compliance with an arbitral subpoena “in the same manner for securing attendance of witnesses . . . in  the courts of the United States.”  Again, the Court took this to be a reference to Rule 45.  That rule requires the motion to be filed in the district where compliance is required.  So, if the witness is outside the jurisdiction where the arbitrator sits, there is a potential problem.

But the Court made short work of this seeming inconsistency by saying FAA rule 7 incorporates the way subpoenas are enforced  under rule 45 – by a motion in court – but not the place of enforcement. So, enforcement is to take place where the arbitrator sits. 

This led to a question of personal jurisdiction.  The subpoenaed parties argued it was unfair for them to have to travel to “distant jurisdictions” to defend against arbitral subpoenas.  But the Court decided they had not shown the inconvenience of traveling to litigate their objections to the subpoena rose to the level of a constitutional concern.  It noted “there is nothing inherently burdensome about crossing a state line.”

Now what?

This decision is quite favorable to a party seeking to enforce an arbitral subpoena.  Arbitrators can issue subpoenas from anywhere in the nation, and they can be enforced where the arbitrators sit.  That’s true even if the witness is in a distant state. 

But be careful before relying on this case next time you want to enforce an arbitral subpoena or summons.  First, the personal jurisdiction challenge was given short shrift.  Recall that the case involved a very large class action settlement.  The subpoenaed parties were well-heeled and travel was no big deal for them.  But what of a case involving a small business or individual?  That could be more of a concern.

Second, the Eleventh Circuit hears appeal from federal courts in Alabama, Florida and Georgia.  If your arbitration is in a different jurisdiction, you will need to check the law there if the courts have decided the issue.

If there is no clear indication where you can seek to enforce the subpoena –or if you want to avoid a personal jurisdiction challenge — there is a fairly safe way to go.  Take advantage of  rules like AAA Commercial Rule 35 or JAMs Rule 19(c), which provide arbitrators the power to hold the hearing where the witnesses can be compelled to testify.  That way any possibility of inconsistency between section 7 and Rule 45 is rendered moot.  The arbitrator will be sitting and witness will be in the same jurisdiction.