No Nonparty Discovery in Arbitration

• Author: Frances Codd Slusarz
• Pages: 23-24

Published in Litigation News Volume 46, Number 1, Fall 2020. © 2 020 by the American Bar A ssociation. Repro duced with permissi on. All rights reser ved. This informati on or any portion the reof may not be copie d or disseminated in any form

or by any means or stored i n an electronic database o r retrieval syst em without the expr ess written co nsent of the American B ar Association.

a Facebook “fri endship” between a

judge and an attorney appearing be-

fore the judge, s tanding alone, is not

enough to disqu alify the judge. As

the majority observed, “[p]articular

friendship relationships may present

such circumstances requiring disqual-

if‌ication. B ut our case law clearly es-

tablishes that n ot every relationship

characterized a s a friendship provides

a basis for disqua lif‌ication.” The court

continued, “And the re is no reason

that Facebook ‘f riendships’—which

regularly involve strangers—should be

singled out an d subjected to a per se

rule of disqualif‌ication.” Specif‌ically,

“Facebook ‘ friendship’ varies in de-

gree from greatest i ntimacy to ‘virtual

stranger’ o r ‘complete stranger,’” said

the majority. Facebo ok friendships on

their own provide “no si gnif‌icant infor-

mation” about any actual relationship

between the par ties.

The majority d isapproved the prec-

edent set by the Four th District in

Domville v. State and a 200 9 Judicial

Ethics Advisory C ommittee (JEAC)

Opinion, whi ch prohibited judges

from adding lawyers who appear be-

fore them as Faceboo k friends. “The

JEAC’s position s imply cannot be rec-

onciled with this Co urt’s longstanding

treatment of disqu alif‌ication motions

based on mere al legations of tradi-

tional ‘frie ndship,’” the court held .

The dissent woul d adopt a rule that

“social media friendships between

judges and law yers who appear in

the judge’s courtroom should not be

permitted.” Th e concurrence advises

judges to “steer cl ear of social media”

entirely, “becau se misperception is all

too easy,” explains Joh n M. Barkett,

Miami, FL, co chair of the ABA Section

of Litigation’s Ethics & Prof essionalism

Committee. H e predicts that the ma-

jority opinio n in Herrsein will govern

as a majority view a cross jurisdictions.

The majority p osition in Herrsein is

in line with a majorit y of other states’

ethics commit tees. At least ei ght

other states have foun d that Facebook

friendship a lone does not create an

appearance of i mpropriety. But at

least four other states (California,

Connecticut, Massachusetts, and

Oklahoma) allow disqualif‌ication on

this basis alone .

Barkett can envi sion scenarios in

which additional evidence could point

to disqualif‌ica tion “if the judge starts

to post on a website, rais ing questions

about the judg e’s bias, or if a ‘friend’

posts things th at he or she wants the

judge to see.” Unfo rtunately, the re-

quired case- by-case analysis prevents

clear guidan ce on the issue moving

forward, Ba rkett observes.

Barkett agree s with the concur-

rence that “the sa fest course is not

to participate at all .” He would ad-

vise judges the s ame way. “Don’t be

on Facebook; it ’s just not worth it,”

he opines. “ You cannot put yours elf

in the position whe re the public ever

sees you as erring . You’re held to a

dierent standard.”

No Nonparty

Discovery in

Arbitration

By Frances Codd Slusarz, Litigation

News Contributing Editor

Section 7 of the Fed eral Arbitration

Act (FAA) does not auth orize pre-

hearing discover y from nonparties

and requires no nparties to testify in

the physical prese nce of the arbitra-

tor, according to a federal a ppellate

court. It is a ca utionary tale about

the importa nce of carefully crafted

arbitration clau ses. Without on e, liti-

gants can f‌ind t hemselves locke d into

arbitration without access to critical

evidence.

In Managed Care Advisory Group,

LLC v. CIGNA Healthcar e, Inc., health-

care providers al leged that insurers

wrongfully reje cted claims for pay-

ment. Under the settlement agree-

ment, class me mbers submitted claims

to CIGNA. Independent third-party re-

viewers examined d enied claims and

made f‌inal decisions about whether to

pay the claimants . Disputes arose over

reviewer rejections.

Managed Ca re Advisory Group, LLC

(MCAG), was not a part y to the set-

tlement agree ment but purported to

act on behalf of c lass members to re-

solve the disputes . It agreed to ar-

bitrate the disputes with C IGNA, al-

though arbitrati on was not required.

The reviewers did not a gree to arbi-

trate, but the arbitr ator summoned

them to particip ate in the arbitration

hearing by video conference, or to pro-

duce documents.

CIGNA argu ed that section 7 does

not authorize prehearing nonparty

discovery. Section 7 a llows an arbitra-

tor to “summon in writin g any person

to attend before the m . . . as a witness

and in a proper ca se to bring with him

. . . any book, record , document, or

paper which may be d eemed material

as evidence in the c ase.”

The Eleventh Circuit Co urt of

Appeals held t hat “the plain language

of [section 7 of the FAA] is unambig-

uous in requiri ng witnesses to appear

before an arbitrator and bring any

documents with t hem, thus prohibit-

ing prehearin g discovery from non-

parties.” Se ction 7 makes no mention

of whether the arb itrator can com-

pel nonparties to produce documents

or appear for de positions before the

hearing. Th us, the court conclud-

ed that “the FAA im plicitly withholds

the power to compel do cuments from

non-parti es without summoning the

non-part y to testify.” Simply put, if

Congress meant to confer broader

power to the arbitrator, it would have

done so. The Eleven th Circuit joins

the Second, Th ird, Fourth, and Ninth

Circuits with this ruling.

“It has always bee n somewhat risky

to rely upon nonparty testimony and

nonparty documents” when making

your case in arbitr ation, says Henry R.

Chalmers, Atl anta, GA, cochair of the

ABA Section of Liti gation's Alternative

Dispute Resolution Committee. Parties

should think critically about the kinds

of disputes that may ari se and where

to f‌ind evidence relat ing to the dis-

putes. If a par ty expects to rely on

nonparty d ocuments or testimony, ar-

bitration is not a goo d idea.

“It is a little mis leading to say you

don’t get any preh earing nonparty

discovery. You can get it, but it ha p-

pens in a diere nt way from what

people are use d to in litigation,” po ints

out Betsey A. H ellmann, New York, NY,

cochair of the Sec tion of Litigation’s

Alternative Dispute Resolution

Committee.

The party se eking discovery must

convince the arbitra tor that the infor-

mation is necess ary for its case and

ask to open the hea ring for the limit-

ed purpose of get ting the necessary

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