Pre-Hearing Discovery in Federal Arbitration Not Guaranteed

So, you think a party has the right to conduct discovery in arbitration? Think again. Unlike the Federal Rules of Civil Procedure, which provide for “broad discovery” in civil litigation, there is no “right” to discovery in federal arbitration. Indeed, only one provision of the Federal Arbitration Act (“FAA”) contemplates discovery in federal arbitration:

The arbitrators selected either as prescribed in this title or otherwise, or a majority of them, 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 issue in the name of the arbitrator or arbitrators, or a majority of them, and shall be signed by the arbitrators, or a majority of them, and shall be directed to the said person and shall be served in the same manner as subpoenas to appear and testify before the court; if any person or persons so summoned to testify shall refuse or neglect to obey said summons, upon petition the United States district court for the district in which such arbitrators, or a majority of them, are sitting may compel the attendance of such person or persons before said arbitrator or arbitrators, or punish said person or persons for contempt in the same manner provided by law for securing the attendance of witnesses or their punishment for neglect or refusal to attend in the courts of the United States.

See 9 U.S.C. § 7 (emphasis added). The right to discovery in arbitration becomes even more difficult when one seeks to obtain pre-hearing discovery from a non-party. While the federal jurisprudence is clear that the plain language of Section 7 of FAA does not contemplate pre-hearing depositions of non-parties, there is a split among the circuits concerning the extent to which Section 7 authorizes pre-hearing document discovery from non-parties. For example, while the U.S. Eighth Circuit allows pre-hearing document discovery from non-parties (e.g. In re Security Life Ins. Co. of America, 228 F.3d 865 (8th Cir. 2000)), the Second and Third Circuits do not (e.g. Hay Group Inc. v. EBS Acquisition Corp., 360 F.3d 404 (3d Cir. 2004), Life Receivables Trust v. Syndicate 102 at Lloyd’s of London, 549 F.3d 210 (2d Cir. 2008)). Further, while the Fourth Circuit agreed with the findings of the Second and Third Circuits, it carved out an exception to that rule: when a party demonstrates “a special need or hardship.” (COMSAT Corp. v. National Science Foundation, 190 F.3d 269 (4th Cir.1999)).

Although the Fifth Circuit is silent with respect to pre-hearing document production from non-parties to an arbitration, the Eastern District of Louisiana has, at least once, ruled on the issue and has agreed with the holdings in Hay and Life Receivables. In Chicago Bridge & Iron Co. N.V. v. TRC Acquisition, LLC, No. 14-1191, 2014 WL 3796395, at *3 (E.D. La. July 29, 2014), Judge Engelhardt “agree[d] with the Second, Third, and Fourth Circuits that Section 7 provides only for the issuance and enforcement of a subpoena duces tecum against non-parties who are compelled to testify as witnesses before the arbitrator, not for a subpoena seeking merely the production of documents by a non-party who is not summoned to testify as a witness before the arbitrator.”

Megan T. Jaynes
mjaynes@mblb.com