Chapter 13 - § 13.5 • DISCOVERY
| Jurisdiction | Colorado |
See Benson, "Discovery to Nonparties in Colorado Arbitrations," 45 Colo. Law. 25 (April 2016).
Discovery is the bread and butter of a litigation lawyer. It has only been in the last few years that discovery has become common in arbitration, and a major issue.
A court may choose to exercise continuing jurisdiction over discovery conducted in arbitration. Block 175 Corp. v. Fairmont Hotel Management Co.26 involved the defendant's motion to compel arbitration and stay court proceedings. Prior to ruling on the motion, the court granted the plaintiff's motion for expedited discovery. After granting the defendant's motion, the court considered discovery. The judge first noted that "[s]ome courts have permitted discovery to proceed in the face of arbitration 'where the taking of discovery would not unnecessarily delay the arbitration proceedings and the plaintiff could obtain evidence to prove his case to the arbitrators that was otherwise unavailable.'"27 Second, he noted that he had already expedited the litigation "by refusing to succumb to defendants' requests to delay discovery,"28 stating that he would continue this course through the arbitration. To implement this course, he placed a time limit on the arbitration.
This is the same course I took with Otis Armstrong v. Bert Bell Player Retirement Plan et al, 646 F. Supp. 1094 (D. Colo. 1986), where arbitration actually became a dilatory tool rather than a facilitator of case resolution. As a result of sad experience with delay in other arbitrations, I will probably continue to impose time limits.29
The court noted that arbitration under the FAA has a limited type of discovery of its own, but "the disadvantage is that it militates against a speedy resolution of the controversy if the parties immerse themselves in a sea of discovery."30 The court ordered that the entire case be sent to arbitration, but retained certain jurisdiction at least as to discovery.
Discovery by written or oral deposition may continue in this court. To avoid the concurrency of arbitration and discovery leading to untoward delay, I order the arbitration to be completed and an award made by March 26, 1987. I will not permit discovery to delay the arbitration. I will impose sanctions where necessary. If arbitration is not completed as ordered, I will recall the case and inquire into the reasons for its failure.31
Earlier in the decision, in connection with defining the court's power to issue a preliminary injunction as a preventative measure to preserve the status quo, Judge Kane stated, "The court unquestionably retains jurisdiction over a case sent to arbitration. . . ."32
This can be compared to the Texas Court of Appeals, which rejected that the trial court, prior to enforcing an arbitration clause, had discretion to enter orders that do not constitute trial.33 (Trial court cannot defer ruling on motion to compel arbitration until after discovery completed.) The court vacated the trial court's order that the parties mediate, because it "undermines the expectation of the parties that their dispute will be resolved by proceedings directed by an arbitrator."34
In a subsequent case, after granting a motion to compel arbitration, the judge retained "jurisdiction to monitor the progress of arbitration. Accordingly, the parties shall submit quarterly joint status reports governing the progress of ADR efforts. . . ."35
Notwithstanding the best of motives, it would appear that a court's supervision of the arbitral process may be contrary to the arbitral process and to an arbitrator's control of the arbitration. See Chapter 19, "Jurisdiction and Venue of the State and Federal District Courts and of the Arbitrator."36
• Annot., Discovery in Aid of Arbitration Proceedings, 98 A.L.R. 1247.
§ 13.5.1—Discovery Under The FAA
The FAA does not directly address the issue of discovery, either as between the parties or as directed to third parties. However, the common law has addressed it. Absent a grant of power by statute, the arbitrator has no power over third parties. While the parties by agreement grant or deny the arbitrator certain powers over themselves, they cannot grant such power over third parties. As to an arbitrator's ordering third parties to allow discovery in the form of production of documents or appearing for depositions, see the discussion of subpoenas in § 13.6.
Where a potential witness cannot be subpoenaed for the hearing or is unable to attend the hearing, the arbitrator under both acts has authority to permit the taking of the witness's deposition to perpetuate testimony.37 Any deposition to be taken is for use as evidence, and is to be taken in the manner and upon the terms designated by the arbitrator.38
In Booker v. Robert Half International, Inc.,39 Booker challenged the arbitration clause because it provided only minimal discovery. Judge (now Chief Justice) Roberts summarized the differences between the AAA Commercial Arbitration Rules, which the agreement referenced, and the AAA Employment Rules, which normally would apply to a dispute such as was before the court. With respect to discovery, the commercial rules provided that "[a]t the request of any party or at the discretion of the arbitrator, consistent with the expedited nature of arbitration, the arbitrator may direct (i) the production of documents and other information, and (ii) the identification of any witnesses to be called."40 The employment rules, however, give the arbitrator "the authority to order such discovery, by way of deposition, interrogatory...
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