Witnesses in Arbitration – Federal Arbitration Act

Richard Chernick, Esq.

Richard Chernick, Esq.

Testimony and documents may be obtained in arbitration in accordance with the parties’ agreement, the applicable institutional arbitration rules and provisions of law (federal and state arbitration acts, as applicable).  My prior article addressed the California Arbitration Act, but there are significant differences under the Federal Arbitration Act (FAA).

The FAA provides limited authority to subpoena witnesses or a summons to a hearing under Section 7:

The arbitrators selected either as prescribed in this title or otherwise, or a majority of them, may summon in writing any person to attend before them or any of them as a witness and in a proper case to bring with him or them any book, record, document, or paper which may be deemed material as evidence in the case. The fees for such attendance shall be the same as the fees of witnesses before masters of the United States courts. Said summons shall issue in the name of the arbitrator or arbitrators, or a majority of them, and shall be signed by the arbitrators, or a majority of them, and shall be directed to the said person and shall be served in the same manner as subpoenas to appear and testify before the court; if any person or persons so summoned to testify shall refuse or neglect to obey said summons, upon petition the United States district court for the district in which such arbitrators, or a majority of them, are sitting may compel the attendance of such person or persons before said arbitrator or arbitrators, or punish said person or persons for contempt in the same manner provided by law for securing the attendance of witnesses or their punishment for neglect or refusal to attend in the courts of the United States.

This provision principally concerns summoning a witness to an arbitration hearing. It is also relevant, however, to the ability of a party to obtain documents from a third-party witness pre-hearing, and case law in this regard is quite limiting. Some federal courts have interpreted Section 7 as requiring the appearance of the witness at a hearing before one or more of the arbitrators; thus Section 7 does not authorize a documents-only arbitral subpoena for pre-hearing production of documents by a non-party. Hay Group, Inc. v. E.B.S. Acquisition Corp; Life Receivables Trust v. Syndicate 102 at Lloyd’s of London. A concurring opinion on Hay Group (Chertoff) suggests that so long as one of the arbitrators is present at the “hearing,” a party may ask the arbitrators to issue a summons for documents to be produced by the non-party at the “hearing;” once that occurs, the “hearing” is adjourned until the time set for the merits hearing. (Often once the subpoena is issued, the non-party is amenable to production of the requested documents directly to counsel, avoiding the need for anyone to attend an actual hearing.)

Presumably these holdings would apply to a pre-hearing subpoena for a discovery deposition, although neither Hay Group nor Life Receivables Trust addressed this issue. These cases also reject the view of the Eighth Circuit that Section 7 implicitly authorizes issuance of a subpoena for production of relevant documents for review by a party prior to the hearing.  In re Security Life Ins. Co. of America. The Third and Second Circuit cases also reject the view that in exceptional cases discovery subpoenas are allowed on a showing of special needs or hardship. COMSAT Corp. v. National Science Fdn. See Stolt-Nielsen SA v. Celanese AG (affirming enforcement of a subpoena issued to a non-party to give testimony in the presence of one or more of the arbitrators – there is nothing in the language of Section 7 that requires or suggests that the non-party witness may only be required to attend and testify at the merits hearing).

Subpoenas issued in arbitration are aided by the recent change to the Federal Rules of Civil Procedure, Rule 45, in 2013, which provides for nationwide service of a judicial subpoena; under the FAA that provision would by implication be applicable to summons served in connection with Section 7. A “summon(s) in writing … [is] served in same manner as subpoenas to appear and testify” in court; Stolt-Nielsen SA v. Celanese AG. The court may punish the witness for contempt.

A summons may be issued to a natural person or to a corporation. It is unclear whether Rule 30(b)(6) may be employed under Section 7. Section 7 contemplates issuance by the arbitrators or a majority of them, not by counsel. State law provisions permitting issuance by counsel are likely inapplicable under the FAA (National Broadcasting Co. v. Bear, Stearns & Co.) absent party agreement (cf. Mastrobuono v. Shearson Lehman Hutton, Inc.).

Make the Most of your Mediation: The Employment Case

Hon. Lynn Duryee (Ret.)

Hon. Lynn Duryee (Ret.)

Mediating employment disputes before legal action is filed gives parties an opportunity to settle their differences before incurring impressive attorney’s fees and expending valuable effort. Yet, it’s no easy thing to settle a case before discovery has been conducted. Here is how one set of motivated participants successfully settled a pre-filing employment dispute in four hours.

  1. Plaintiff submitted a reasonable demand far in advance of the mediation. Four months before the mediation was even set, plaintiff’s counsel sent his adversary a 10-page, beautifully written, old-school demand letter. The letter laid out the facts and law in support of plaintiff’s claim. It gave a demand that was aspirational, but not astronomic. And, most importantly, the letter was served in plenty of time for all the defendant decision-makers to review and consider in advance of the mediation.
  1. The lawyers agreed to exchange all the information they had well before the mediation. The lawyers appreciated that they would be able to better advise their clients about the benefits of settlement if each were in a position to evaluate the case as fully as possible. Accordingly, they exchanged the evidence available to them: wage statements, overtime records, emails, names of witnesses and expected areas of testimony, as well as current legal theories. This helped lawyers on both sides start the mediation feeling fully prepared to discuss the case with the mediator and with their clients.
  1. The lawyers cultivated a respectful relationship with one another. In separate pre-mediation calls with counsel, each side told the mediator that his opponent was a “good guy.” Although the lawyers disagreed on the facts and the value of the case, they had made a genuine effort to understand the position of the other side and respect the views of the opponent. The respect they had for one another contributed to the professional ambience of the mediation.
  1. All principals attended the mediation. The employee and employer were present in separate rooms, and both came prepared to speak openly with the mediator. Defense counsel had not had the opportunity to meet with plaintiff, and so, with counsel’s permission, the mediator invited defense counsel to meet the plaintiff and hear her story. The plaintiff came fully prepared to speak about her experience regarding pregnancy discrimination, while defense counsel rose to the occasion and listened carefully and compassionately. This brief session in itself was one big reason the case ultimately settled.
  1. The parties maintained momentum by remaining optimistic about settlement and making changes to their positions. Both sides were clear that they wanted to settle the case, and both were clear that their number (and not their opponent’s) was in the fair range. The parties were quite far apart during most of the negotiations, but each side continued to make baby steps to move closer together. Ultimately, each side offered a bracket, and after brackets were exchanged, the case settled easily. During the day, each side remained fully committed to settling. Neither side threatened to walk out. Neither side accused the other of bad faith. Each lawyer greeted the news about the change in position of his opponent with optimism. There was a feeling all during negotiations that settlement was just around the corner.

Early preparation. Excellent briefs. Professional lawyers. Presence of decision-makers. Mutual respect. There’s the prize-winning recipe for settling a case in just a few hours.

Achieving Workable – and Just – ADR Results in Family Law

Judge Deborah Fleck (Ret.), JAMS mediator and arbitrator

Judge Deborah Fleck (Ret.), JAMS mediator and arbitrator

Mediation, the ADR vehicle most commonly used in family law cases, frequently results in a final settlement – but often only after a marathon session dealing with the many important issues in the lives of family members.

There are ways to improve the process and results of family law mediation. The keys are open communication, adequate preparation, proper timing and mediator selection.

Open Communication – With the Opposing Party and With the Mediator.  Pick up the telephone early in the case.  The working relationship you develop by actually speaking with reasonable opposing counsel can save time and money.  While it may seem that using email is more efficient, it often takes more time and creates additional conflict.

Once discovery is reasonably complete, and the parties have had sufficient time to begin addressing the emotional and financial upheaval of separation, you can develop creative potential solutions with your client.   Exchanging mediation letters with legal issues defined and important documents attached far in advance of mediation can streamline the mediation process, and increase the likelihood of resolution on mediation day. Also, many mediators make a pre-mediation call, in which attorneys can provide information that is often helpful to the mediator in finessing trouble spots.

Preparation – Worth the Effort.  An attorney who is well prepared for mediation has not wasted time – if the case doesn’t settle, it is well on the road for trial.  If it settles, as most cases do, mediation will have saved time, money, and emotional stress for the parties.

Proper Timing and Mediator Selection.  Family law cases have emotional timelines, distinct from other types of litigation.  In many cases, it takes several months for one party to reach a stage of partial equilibrium.  It is not helpful to attempt to settle family law cases before both parties have reached that comfort level.  But when both sides are emotionally ready and have enough information regarding the facts and the law, mediation can allow them to avoid the financial and emotional costs of trial and move on with their lives.

When attorneys have worked together for several months, they can identify a mediator with the listening skills, depth of knowledge, temperament, and creativity to help the parties achieve resolution.   By focusing on what is just and equitable for both parties, attorneys and the mediator can achieve a compromise solution that is acceptable, one that meets the needs and abilities of both parties.

Hon. Deborah Fleck (Ret.) is a neutral with JAMS based in Seattle. She served for more than 20 years on the King County Superior Court and handles a wide range of complex civil, estate/probate, family law and personal injury cases. She can be reached at dfleck@jamsadr.com.

What is . . . ADR in Health Care

ADR is the practice of resolving disputes through processes other than litigation. The most common forms of ADR are mediation and arbitration, but many other forms exist in the Health Care arena to address specific types of disputes and their need for tailored processes for unique situations. Some of these include hearing officers for hospital hearings, referees for discovery disputes and early neutral evaluation of cases.
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As the ADR leader for more than 35 years, JAMS has neutrals who have developed unmatchable expertise in the resolution of Health Care disputes. Written by some of our top health care panelists, What Is…ADR In Heath Care Disputes is the latest addition to the What Is… book series published by the ABA. In this volume, Viggo Boserup, Brian Parmelee, Jerry Roscoe, Hon. Janice Symchych (Ret.), Wayne Thorpe and Cathy Yanni offer valuable insights on ADR and how these tools can help to avoid costly litigation.

Attorneys in Health Care must remain up-to-date on regulatory changes, industry trends, the economic climate and changes in the law to help resolve disputes for their clients. JAMS is committed to helping our clients and our neutrals stay informed on developments in Health Care. More information about our experienced panel can be found on our Health Care practice page.