June 02, 2021 Practice Points

Pre-Hearing Virtual Deposition Subpoena to Nonparty Upheld

This case not only expanded an arbitrator’s powers but also departed from many other circuits finding pre-hearing deposition or discovery subpoenas invalid.

By Dana Taylor

In Int'l Seaway Trading Corp. v. Target Corp., 2021 WL 672990 (D. Minn. Feb. 22, 2021), the court refused to quash an arbitral pre-hearing deposition subpoena issued to a former Seaway employee who had been responsible for the company's business with Target. This former employee was an out-of-state nonparty witness, and he moved to quash the subpoena on three grounds, each of which was rejected.

First, the witness argued that the arbitrator lacked the authority to issue a non-party deposition subpoena before the arbitration hearing. For the finding that a non-party could be subpoenaed for a deposition, the court relied on In re Security Life Insurance, 228 F.3rd 865 (8th Cir. 2000), which held that under 9 U.S.C. § 7 of the Federal Arbitration Act, an arbitrator has the implicit power to issue a pre-hearing subpoena to a non-party for the production of documents. The district court found that no line could be drawn between the statute's application to pre-hearing written discovery or pre-hearing deposition subpoenas.

Next, the witness claimed that the subpoena should be quashed because it violated the territorial limits found in Federal Rule of Civil Procedure 45. He reasoned that because he resided in St. Louis and the arbitrator was located in Minneapolis, the subpoena was unenforceable. The court found no barrier to enforcement based on the location of service of the subpoena, as the current version of Rule 45(b)(2) permits nationwide service. And the court was wholly unpersuaded by the witness’ Rule 45(c) argument that the subpoena could not compel him to attend because the deposition was not within 100 miles of where he resides, because the deposition was to be taken virtually, and the witness could be deposed without leaving his residence. 

Finally, the court rejected the witness’ relevance and burden arguments, noting both issues were already weighed by the arbitrator and that the court would not second-guess the arbitrator’s determinations.

The significance of this case is not only that it expands an arbitrator’s powers but it also departs from many other circuits finding pre-hearing deposition or discovery subpoenas invalid. Time will tell whether any other circuits will follow suit or if the Eighth Circuit will overturn this decision. 

Dana Taylor is a staff attorney at Novack and Macey in Chicago, Illinois. 


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