When we last checked, Bob had sought to compel a nonparty to comply with a deposition subpoena that the arbitrator without fuss had issued at Bob’s request. Bob expected the nonparty to provide critical evidence that the respondent had deprived Bob’s client of her partnership interest. As his adversary knows all too well, Bob could not prove the scheme without this testimony. However, the trial court granted the nonparty’s motion to quash the subpoena. Basis: the Federal Arbitration Act (FAA) does not authorize an arbitrator to subpoena a party to testify at a deposition.

Could Bob have avoided being stymied? Could he have convinced the court to enforce the subpoena?

Section 7 of the FAA empowers arbitrators to summon a nonparty to appear “before them … as a witness.” 9 U.S.C. § 7. Many courts have stated that this statutory language is crystal clear because “before them” can mean only one thing – that arbitrators can issue a subpoena to a nonparty only to testify at an evidentiary hearing before the arbitrators. As the 3rd Circuit has stated, if Congress had meant to give more powers to the arbitrators, “the drafters would have said so.” Hay Group, Inc. v. E.B.S. Acquisition Corp., 360 F.3d 404, 408 (3d Cir. 2004). These decisions seem to avoid expensive and time-consuming pretrial discovery, and thereby achieve the efficiency and speed that are supposed to be the hallmarks of arbitration.

As Bob reflected, however, the parties may choose arbitration for reasons other than efficiency and speed. For instance, the parties may want to take as much time and spend as much money as if they were litigating in court – but be able to select an arbitrator with the expertise and experience to determine complex factual and legal issues. After all, Bob thought, arbitration is a matter of contract, and courts should not disregard the intent of parties who choose arbitration solely to select the person who will adjudicate the dispute. Should courts undercut the intentions of the parties by telling them why they entered into their arbitration agreement?

Bob knows this argument may have appeal in a law review article, but not before the 3rd Circuit. Bob then did something out of character – he read the concurring opinion in Hay Group, Inc. v. E.B.S. Acquisition Corp. There, Judge Chertoff noted that an arbitrator would have the power to issue a documents subpoena, compelling a nonparty to produce documents before the arbitration hearing, because “arbitrators have the power to compel a third-party witness to appear before a single arbitrator, who can then adjourn the proceedings.” Id. at 413 (Chertoff, J. concurring).

The light bulb went off for Bob: if an arbitrator can compel a nonparty to produce documents before a single arbitrator, an arbitrator likewise can compel a nonparty to testify at a deposition before a single arbitrator. After all, the nonparty producing documents and the nonparty testifying at deposition are both appearing “before” the arbitrator “as a witness.”

Bob’s musings are not original. In In re Nat'l Fin. Partners Corp., No. 09-mc-00027-JF, 2009 U.S. Dist. LEXIS 34440 (E.D. Pa. April 21, 2009), for instance, a nonparty sought to quash an arbitrator-issued subpoena compelling her to appear at a deposition before the arbitrator. The arbitration hearing was to take place in Philadelphia; the deposition of the third party was to take place in Florida. In denying the nonparty’s motion to quash and her later motion for reconsideration, Judge Fullam held that “[t]he arbitrator apparently has concluded that the third-party testimony is relevant and is important enough to warrant travel to Florida, and I see no basis to disturb that determination.” Id. at *1.

So there may be a way to convince a court to enforce an arbitration subpoena to compel a nonparty to appear at a deposition. All Bob has to do is the following:
• Bob should ask the arbitrator to issue a prehearing subpoena to compel the nonparty to appear at a deposition before the arbitrator.

• Bob should summarize the anticipated deposition testimony.
• Bob should not chant in talismanic fashion “relevant” and “material.” He should state in detail the reasons why this testimony is critical. Plus, he should set forth the hardships that he would face if he were unable to depose the third party.
• Bob should demonstrate that a prehearing deposition will be more efficient and cost-effective for the parties; and that it will be less burdensome to the nonparty because the deposition can take place at a time and place that accommodates the nonparty.
• Bob should point out that the alternative to a deposition – having the nonparty appear at the arbitration hearing without a prior deposition – will prolong the hearing because Bob then must ask question after question as he seeks to pin down the nonparty. This will drive up everyone’s costs.

As Bob confidently explained to his client, “This will be a snap.” Some “snap”:

• What will Bob do if the arbitrator refuses to issue the pre-hearing deposition subpoena?
• What will Bob do if he cannot convince the arbitrator or the Judge that the nonparty’s testimony is crucial?
• What will Bob do if the arbitrator believes that arbitrating parties never should take depositions?
• What will Bob do if his adversary and the nonparty both scream (in talismanic fashion), “Delay, costly, inconvenient, and burdensome”?

There is one other consideration. Courts have refused to enforce nonparty deposition subpoenas in order to minimize the costs and length of arbitration proceedings. However, a nonparty deposition “before” an arbitrator drives up costs and delays the process; arbitrators are not cheap and they are not instantly available. By complying with the crystal clear language of the FAA – to have nonparties appear as witnesses “before” one or more arbitrators – is Bob seeking a result that is more expensive and time-consuming than an old-fashioned deposition?