February 13, 2020 Articles

Obstacles—and Workarounds—to Obtaining Third-Party Documents in Arbitration

Where courts refuse to allow document production from third parties, there are workarounds.

By Charles F. Forer

The Problem

Section 7 of the Federal Arbitration Act (FAA) states that an arbitrator can “summon in writing any person to attend before them . . . as a witness and in a proper case to bring with him . . . any book, record, document, or paper which may deemed as material in the case.” 9 U.S.C. § 7 (emphasis added). Respecting this statutory language, federal courts customarily prevent arbitrating parties from using a subpoena to get documents and things from third parties outside the presence of the arbitrator or panel of arbitrators. For instance, the Third Circuit has held that section 7 “unambiguously restricts an arbitrator’s subpoena power to situations in which the non-party has been called to appear in the physical presence of the arbitrator and to hand over documents at that time.” Hay Grp., Inc. v. E.B.S. Acquisition Corp., 360 F.3d 404, 407 (3d Cir. 2004).

Under Hay Group, Inc., an arbitrating party cannot force a third party to hand over documents the way litigating parties do all the time. Instead, the arbitrator or panel must be present during the document handover. This means the arbitrator or panel must preside over a “mini-arbitration hearing” whose sole purpose is document production. Accordingly, there is no document production from third parties outside a hearing.

This “mini-hearing” process increases the complexity of arbitration. It also can hold up the merits proceeding; accommodating the parties’ schedules and the arbitrator’s schedule often will lead to delays. And this process can increase the costs and expenses of arbitration, especially when the arbitrator or panel must travel to the place—possibly hundreds or even thousands of miles away from where the merits hearing will take place—where the documents will be produced. 

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