New York Court Refuses to Enforce Arbitral Subpoenas

A New York trial court recently addressed the availability of discovery in a pretrial arbitration hearing.

The Empire State Building Company moved for an order compelling defendant Michael Day and non-party Carmen Canas to comply with subpoenas for documents and testimony issued by an arbitration panel of the American Arbitration Association. Empire State Bldg. Co. LLC v New York Skyline, Inc. (Sup. Ct., N.Y. County, Feb. 11, 2014).

The Supreme Court of New York (the trial court), held that neither the Federal Arbitration Act (FAA) nor the New York Uniform Code authorize the issuance of a subpoena for the production of documents or the taking of testimony during a pretrial arbitration hearing. Id. Instead, subpoenas can be issued only for the production of documents or the presentation of testimony at the arbitration hearing on the merits. Accordingly, the court refused to enforce either subpoena. Id.

The court examined the limitations of the subpoena powers granted to the arbitration panel under the relevant provisions of the New York procedural code (CPLR 2302 and CPLR 7505). The court found that CPLR 2302 and 7505 empower an arbitrator to issue subpoenas only to procure evidence at a hearing on the dispute and not to compel attendance at deposition. The court also determined that CPLR 2302 is not intended to require non-parties to engage in pre-arbitration hearing disclosures or steps preparatory to the hearing. Similarly, the court determined that CPLR 7505 is limited to procuring evidence at the hearing of the dispute itself. Id.

The court also examined federal law. The court determined that The Empire State Building is a national and worldwide tourist destination and that the case therefore involved interstate commerce. As a result, the Federal Arbitration Act (FAA) applied. Citing Life Receivables Trust v. Syndicate 102 at Lloyds of London, 549 F3d 210 (2d Cir 2010), the court held that section 7 of the FAA does not authorize an arbitrator to compel pre-hearing document discovery from non-parties to the arbitration. The court also noted that: “One commentator has called an “emerging rule” that the arbitrator’s subpoena authority under section 7 of the FAA “does not include the authority to subpoena non-parties for prehearing discovery even if a special need or hardship is shown.” Thomas H. Oehmke, 3 Commercial Arbitration sec. 91:5 (2008). Id.

In summarizing the applicability of FAA section 7, CPLR 2302, and CPLR 7505 the court stated, “Based upon this legal authority, a judicial order to enforce the arbitration panel’s subpoenas of these non-party witnesses would be imprudent.”

Key words: litigation, alternative dispute resolution, CPLR 2302, CPLR 7505, subpoenas, discovery, prehearing, Federal Arbitration Act

_{Pritesh Patel is a 2016 J.D. candidate at DePaul University College of Law in Chicago, Illinois.}

_{Copyright © 2016, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).}