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August 24, 2022 Practice Points

Ninth Circuit Enforces Arbitral Subpoena

This decision approves a method for parties in an arbitration to obtain information from third persons.

By Mark Kantor

In a unanimous opinion released on August 1, 2022, the Ninth Circuit enforced an arbitral subpoena and ordered two Orrick partners to appear with documents at a hearing before the arbitrator in San Jose, California, where Orrick and its partners were located, even though the underlying arbitration was seated in Washington, D.C. Jones Day v. Orrick, Herrington & Sutcliffe, et al (9th Cir. No. 21-16642). This decision approves an oft-discussed method for parties in an arbitration to obtain information from third persons.

The facts of the case are straightforward. Jones Day had a dispute with one of its former partners who had left to join the Orrick law firm. Jones Day’s partnership agreement provided for mandatory arbitration of all disputes in Washington, D.C. Jones Day sought testimony and documents relating to its arbitration claims from two Orrick partners who resided in the Northern District of California. Ultimately, Jones Day asked the arbitrator to issue summonses for the partners to appear at a hearing before the arbitrator in San Jose, California. The arbitrator granted Jones Day’s request, but Orrick refused to comply, so Jones Day filed an action to enforce the summonses in California federal court.

The district court denied Jones Day’s petition, holding that, pursuant to Federal Arbitration Act (FAA) Section 7, the court had authority to compel compliance with the summonses only in the district where the arbitrator was sitting. It rejected Jones Day’s argument that an arbitrator can “sit” in more than one location, and that for purposes of the hearing in San Jose, the arbitrator would be sitting in the Northern District of California.

The Ninth Circuit reversed. It recognized that Section 204 of the FAA contains a specific venue provision for federal court actions or proceedings related to an arbitration. Those actions or proceedings:

may be brought in any such [district] court in which save for the arbitration agreement an action or proceeding with respect to the controversy between the parties could be brought, or in such court for the district and division which embraces the place designated in the agreement as the place of arbitration if such place is within the United States. 9 U.S.C. § 204. 

Orrick argued that under Section 204 the only permitted venue for judicial enforcement of an arbitrator's subpoena is the district where the arbitration is located. In contrast, Jones Day argued that Section 204 is a non-exclusive venue provision that supplements, rather than supplants, other venue rules and that venue was proper in San Jose. 

The court of appeals agreed with Jones Day. It held that 28 U.S.C. § 1391, the general federal venue statute, is also applicable: 

[We] refuse to nullify general venue laws, even in the face of apparently more narrow venue provisions in specific federal statutes. . . . The general federal venue statute, 28 U.S.C. § 1391, . . . govern[s] the venue of all civil actions brought in district courts of the United States. It lists the judicial districts where “[a] civil action may be brought,” and applies “[e]xcept as otherwise provided by law.” Section 1391 ensures that so long as a federal court has personal jurisdiction over the defendant, venue will always lie somewhere. . . . Congress does not in general intend to create venue gaps, which take away with one hand what Congress has given by way of jurisdictional grant with the other. Only where there is evidence that Congress intended the specific venue provision to be exclusive or . . . restrictively applied will parties be deprived of relying on the general venue statute.

The court of appeals concluded that, under Section 1391, the Northern District of California was a proper venue because it is Orrick’s principal place of business. Therefore, the district court should have granted Jones Day’s petitions to enforce the summonses. 

This decision provides that an arbitral tribunal can find a means to enforce a summons or subpoena directed at a non-party who is located outside the judicial district where the arbitration is seated. 

Mark Kantor is a member of the College of Commercial Arbitrators in Washington, D.C.

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