Federal District Court Quashes Subpoena of Non-Party Deposition, Cites FAA
The United States District Court for the Northern District of Illinois recently held in Ware v. C.D. Peacock, Inc., 2010 WL 1856021 (N.D. Ill. 2010), that Section 7 of the Federal Arbitration Act does not authorize arbitrators to issue subpoenas for depositions of non-parties outside the physical presence of the arbitrator. Plaintiff, a former employee of C.D. Peacock, filed an action with the American Arbitration Association alleging employment discrimination. Following some discovery, C.D. Peacock filed a summary judgment motion. In opposition, Plaintiff submitted an affidavit from a former co-worker, Helene Tomasian. The motion for summary judgment was denied based in large part on Tomasian's affidavit. On C.D. Peacock's request, the arbitrator issued a subpoena for Tomasian's deposition.
At issue before the court was Tomasian's motion to quash the subpoena for deposition. She argued that she could not be compelled to participate in a deposition without her consent. The court began by noting that an arbitrator's authority over parties that are not contractually bound by the arbitration agreement is strictly limited by the Federal Arbitration Act. Ware, 2010 WL 1856021, at *1. And, because the Seventh Circuit had not addressed the specific issue in question, the court analyzed the split opinions of the other Circuit Courts of Appeal, ultimately adopting the position of the Second and Third Circuits. Id., at *3.
While it is true that non-parties can consent to discovery in arbitrations, the court stated that Tomasian clearly did not do so in this case. Id. In addition, C.D. Peacock would not be prejudiced by its inability to depose Tomasian prior to the arbitration. To the contrary, C.D. Peacock was in possession of Tomasian's affidavit and could expect that her testimony would be consistent with her affidavit. Id. Finally, the court commented that by voluntarily entering into arbitration with Plaintiff, C.D. Peacock could not have reasonably expected to obtain full-blown discovery from non-parties. Id. "Parties to a private arbitration agreement forego certain procedural rights attendant to formal litigation in return for a more efficient and cost-effective resolution of their disputes... A hallmark of arbitration-and a necessary precursor to its efficient operation-is a limited discovery process." Id. (citing COMSAT Corp. v. National Science Foundation, 190 F.3d 269, 276 (4th Cir. 1999). Tomasian's motion to quash the subpoena was granted.
The Ware Court's holding serves as a reminder of the limited, and hopefully efficient, nature of arbitration.
Thank you for this helpful information.