June 01, 2020

MONTH-IN-BRIEF: Business Litigation & Dispute Resolution

Mac R. McCoy, Sara Bussiere

Business Litigation

Second Circuit Allows for Third Party Subpoenas

By Leslie A. Berkoff, Moritt Hock & Hamroff LLP

Over the years, courts have differed as to whether arbitration subpoenas issued under Section 7 of the Federal Arbitration Act ("FAA") are enforceable against third-party witnesses. In Washington National Insurance Co. v. Obex Group LLC, No. 19-225-cv, 2020 U.S. App. LEXIS 14062 (2d Cir. May 1, 2020), the Second Circuit  found that the panel had the authority to issue the witness and document subpoenas. In this case, the third-parties had failed to appear or produce documents in response to the subpoenas.  The compelling party petitioned for enforcement of the subpoenas and the third-parties moved to dismiss the petition and to quash the subpoenas contending the panel had no authority to compel production of immaterial documents pre-hearing and that Rule 45 of the FRCP should govern the scope of production.

The court found that the only parties relevant for jurisdictional consideration were the parties to the petition and jurisdiction over them existed. The court further found that Section 7 contained no limit on the number of documents, but merely requires that they “be deemed material as evidence in the case.”  Finally, the court rejected the motion to quash finding that it was not required to analyze the demands under Rule 45 of the FRCP, as requiring a court to entertain a full bore review of the demands would undermine the strong federal policy in favor of embracing arbitration as an alternative means of resolving disputes. 

Mac R. McCoy

United States Magistrate Judge, Middle District of Florida

Mac R. McCoy is a United States Magistrate Judge in the Fort Myers Division of the United States District Court for the Middle District of Florida.  Prior to his federal judicial appointment on July 1, 2015, Judge McCoy was a Shareholder in the National Trial and National Class Actions Practice Groups at Carlton Fields, P.A. in Tampa, Florida.

Sara Bussiere

Associate, Bayard

Sara E. Bussiere is an associate in Bayard’s Litigation Department. Sara concentrates her practice on corporate and commercial litigation in the Delaware Court of Chancery, Delaware Superior Court, and the United States District Court for the District of Delaware. Sara counsels clients concerning the General Corporation Law of the State of Delaware and Delaware’s alternative entity statutes. Sara has experience in a broad range of corporate matters, including fiduciary duty claims, corporate and alternative entity control disputes, advancement and indemnification claims, trade secret and noncompetition agreement disputes, and other breach of contract claims. Sara also has experience advising corporate entities in receivership or seeking dissolution.