Non-Party Discovery in Arbitration: A Potential Trap for the Unwary


Damon Gunnels is an attorney at Smith, Currie & Hancock LLP in Atlanta, Georgia.  He practices in construction law, government contracts, and commercial litigation.

Arbitration continues to proliferate and supplement or replace traditional civil litigation as a method of resolving disputes.  Practitioners should be aware of the distinctions between these methods – at least one of which can create a potential landmine in large complex arbitrations.  The issue of pre-hearing discovery can create some hazards and obstacles in the necessary gathering of information from third party sources in arbitration. Consider for example the following situation: you represent a subcontractor in litigation with a general contractor on a construction project.  During the preparation for the arbitration hearing, you are engaged in discovery when you determine that a number of documents are not in either your client’s or the general contractor’s possession – but instead are kept by the Architect, who is not a party. How can you go about getting those documents?

            In many instances, non-parties to the arbitration will refuse to recognize an arbitrator-issued subpoena based on a variety of grounds – including that the service of the subpoena was improper under state law.  Unfortunately, the Federal Arbitration Act (“FAA”) does not provide a mechanism for establishing service of arbitrator-issued subpoenas.  In fact, there is serious dispute regarding the power of an arbitrator to compel discovery from non-parties. 

Federal circuits are split on whether or not an arbitrator has the authority to issue a subpoena for documents prior to the hearing.  While it is undisputed that the FAA allows an arbitrator to summon witnesses and documents for a hearing, the debate lies over whether this can occur prior to a hearing.  For example, the 8th Circuit says that there are implicit powers in the FAA that authorize the arbitrator to subpoena documents prior to the arbitration hearing.  The 3rd Circuit takes the opposite view, holding that the FAA only authorizes production of document at the actual hearing.  The 4th Circuit takes an intermediate approach, holding that in certain, specific circumstances an arbitrator may compel pre-hearing discovery.  Other circuits have not conclusively weighed in on the question, but individual district courts have taken positions all along the spectrum.

            So what is the practitioner to do?  One option, if the case is in a district that allows the arbitrator pre-hearing discovery powers, is to procure a subpoena from the arbitrator and file suit in the district court having jurisdiction to have the subpoena enforced.  Alternatively, the party seeking discovery can move a local district court to issue its own subpoena for the information.  A fairly common practice is to file suit and a concurrent motion to stay pending arbitration in a state or federal court having jurisdiction at the same time as the filing of a demand for arbitration.  This gives the party a court to which it can turn to seek subpoenas if a non-party resists the arbitrator’s subpoena, and provides a forum for the confirmation of the arbitration award at the close of arbitration.  Another option is to request a special hearing before the arbitrator, have the arbitrator subpoena the non-party production of documents at the hearing, then have the arbitrator recess the hearing to allow the party seeking discovery an opportunity to review the documents.  Obviously, none of these options are ideal.

            Until or unless the United States Supreme Court decisively weighs in on the pre-hearing discovery issue, practitioners will continue to have to utilize creative methods to procure discovery from uncooperative non-parties in arbitration.  This may cause some practitioners to reconsider whether arbitration is the proper vehicle for resolving a particular dispute.