Chapter 13 - § 13.6 • SUBPOENAS

• Jurisdiction: Colorado

§ 13.6 • SUBPOENAS

See Benson, "Discovery to Nonparties in Colorado Arbitrations," 45 Colo. Law. 25 (April 2016).

Most jurisdictions uphold compulsory discovery to third parties under the arbitration statutes. However, see discussion under the Colorado and federal statutes.⁵²

See§ 15.9.2.

§ 13.6.1—Scope Of Arbitrator's Subpoena Power

FAA

FAA § 7 provides:

The arbitrators . . . may 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. The fees for such attendance shall be the same as the fees of witnesses before masters of the United States courts. Said summons . . . shall be directed to the said person and shall be served in the same manner as subpoenas to appear and testify before the court. . . . [T]he United States district court for the district in which such arbitrators . . . are sitting may compel the attendance of such person. . . .

Multiple questions have arisen under the statute, such as:

• Does § 7 authorize issuance of subpoenas for discovery, as distinguished from subpoenas for attendance at the hearing or perpetuation of testimony? Only for documents, or also persons?
• Must the subpoena be served in the same state or judicial district in which the arbitration hearing or deposition is to be held?
• If subpoenas can be issued for depositions, where must the deposition be taken?

These issues have been the subject of articles and court decisions.⁵³ The topic is too extensive for in-depth consideration in this chapter.

Subpoenas and subpoenas duces tecum are potentially used in three circumstances:

1) To compel a witness to give testimony (and produce documents) at trial;
2) To compel a witness to give testimony (and produce documents) at a deposition prior to the arbitration because the witness will not be available at trial, e.g., because not subject to being compelled at the forum, absence from country, etc.; and
3) To compel a witness to provide testimony (and produce documents) as a part of discovery. It is not anticipated that the deposition will be introduced at the arbitration.

Under both statutes, the authority of the arbitrator to issue subpoenas for the first two purposes — trial testimony — is clear.⁵⁴ In addition, the CRUAA permits the arbitrator to issue discovery subpoenas. It is not clear, however, whether the arbitrator has power to issue subpoenas for discovery under the FAA and CUAA. (Insofar as subpoenas for discovery to parties are concerned, they should not be an issue. The arbitrator has power to simply order a party to produce documents and/or to appear for deposition. See § 13.5.)

There are conflicting decisions as to an arbitrator's authority to issue subpoenas for discovery, as distinguished from preservation of testimony for the hearing.⁵⁵ The Eighth Circuit held that under the FAA the arbitrator could issue a subpoena for documents only to a non-party, and that the 100-mile territorial limit of service of a subpoena under F.R.C.P. 45(b)(2) does not apply to a subpoena issued pursuant to 9 U.S.C. § 7 — in sum, the subpoena may be served anywhere in the United States — there is no territorial limitation.⁵⁶

A similar compromise was imposed by the Southern District of New York,⁵⁷ holding that a subpoena to a third party for discovery of documents could be issued, but not for discovery testimony.

The Second Circuit holds a minority position that arbitrators do not have power under FAA § 7 to issue subpoenas to compel preheating document production by a non-party.⁵⁸ Rather, the arbitrator may subpoena a non-party to produce documents to him or her at a hearing convened in essence for that purpose. A panel can compel the non-party to produce documents before a single arbitrator, who can then adjourn the proceedings.

In COMSAT Corp. v. National Science Foundation,⁵⁹ when the subpoena issued by the arbitrator called for documents and testimony of a non-party, the Fourth Circuit held that the FAA grants arbitrators the power to issue subpoenas solely to compel testimony of non-parties at the arbitration, not to require non-parties to provide documents during pre-hearing discovery.

However, the court noted that its earlier decision recognized that "a party might, under unusual circumstances, petition the district court to compel pre-arbitration discovery upon a showing of special need or hardship."⁶⁰ Lastly, the court noted that a party who is subpoenaed by an arbitrator "is under no obligation to move to quash the subpoena. By failing to do so, the recipient does not waive the right to challenge the subpoena on the merits if faced with a petition to compel."⁶¹

In Hay Group, Inc. v. E.B.S. Acquisition Corp.,⁶² prior to the hearing, the plaintiff sought to enforce subpoenas issued by the arbitrator to non-parties. The plaintiff's subpoena sought solely the production of documents, but prior to the arbitration hearing. The third party refused to comply. The Third Circuit held that the FAA did not authorize the arbitrators to issue a pre-hearing discovery subpoena to a non-party, leaving the remedy to subpoena the documents for the hearing. The court also stated, as dictum, that a subpoena duces tecum for the hearing may require production of documents located outside the district in which it was served.

In Odfjell v. Celanese AG,⁶³ the U.S. District Court for the Southern District of New York rejected an arbitration panel's attempt to issue discovery subpoenas in the absence of an evidentiary hearing, given the language of § 7. Thereafter, the panel convened a special hearing for the purpose of subpoenaing discovery testimony and documents from a non-party and issued subpoenas. This procedure was approved by the district court and affirmed by the Second Circuit.⁶⁴

If the arbitrator's power is limited to subpoena of documents for the hearing, the subpoena can issue for a hearing, and, upon production, the hearing can be continued until a later date.

Other courts, however, have held that § 7 does authorize arbitrators to compel non-parties to appear and testify in discovery prior to the hearing on the merits.⁶⁵

CRUAA

The CRUAA attempts to answer or avoid the issues under the FAA and its predecessor, the CUAA. C.R.S. § 13-22-217 (2016) provides:

• The arbitrator may issue subpoenas for persons and documents at the hearing;
• The subpoena shall be served in the manner of a subpoena issued in a civil action, i.e., C.R.C.P. 45(c);
• Enforcement is by the court in the same manner as civil actions;
• The arbitrator can issue a subpoena for the deposition of a witness to be used as evidence at the hearing;
• The arbitrator may issue subpoenas to third parties for discovery; and
• The court may enforce a subpoena for the attendance of a witness and production of documents within this state in an arbitration proceeding in another state.

Thus, the CRUAA specifically provides that discovery subpoenas can be issued to third parties.

If the state statute is broader concerning subpoenaing non-parties for discovery depositions, when the FAA is applicable, may a party proceed under the state arbitration subpoena statute? See § 4.3.6, "The Scope of Federal (FAA) Preemption of State (CRUAA) Arbitration Law." It would not seem that a "broader" state subpoena statute need be preempted to give full force and effect to the FAA. There is no inconsistency. Moreover, there seems no reason an arbitrator cannot apply both the FAA and the CRUAA, as best serves the arbitration.

The CRUAA, C.R.S. § 13-22-217(7) (2016), permits parties in an out-of-state arbitration proceeding to secure necessary subpoenas for witnesses located inside Colorado. "A subpoena or discovery-related order issued by an arbitrator in another state shall be served in the manner provided by law for service of subpoenas in a civil action . . . and enforced in the manner provided by law for enforcement of subpoenas in a civil action." The CRUAA allows a party to take the arbitrator-issued subpoena directly to a Colorado state court for enforcement. The statute also allows discovery subpoenas.

"Colorado courts . . . have no authority to enforce civil subpoenas against out-of-state nonpar-ties. . . . Instead, such enforcement, if any, is left to the states in which discovery is to take place."⁶⁶ The long-arm statute, C.R.S. § 13-1-124, does not provide any basis for enforcing a civil subpoena against an out-of-state non-party. When a subpoena is sought in another state for an arbitration proceeding in Colorado, and if the state in which the subpoena is to be obtained and served has adopted the Revised Uniform Arbitration Act, the procedure as defined by the CRUAA, C.R.S. § 13-22-217(7) (2016), applies. Otherwise, one is dependent upon the comity of the court to issue a subpoena in aid of arbitration. Hopefully, the court might follow the...