Let’s begin by defining what a “third-party subpoena” is. A third-party subpoena is any subpoena issued in the course of a proceeding to someone who is not a plaintiff, defendant or intervenor in the lawsuit, or, in the arbitral forum, someone who is not a claimant or respondent. This includes eyewitnesses and custodians of records for organizations. California’s Civil Discovery Act allows parties to obtain evidence from a third party via three methods: oral deposition, in which a witness provides sworn testimony on the record; written deposition, in which a witness provides written answers under penalty of perjury; and production of business records and other materials.
A third-party subpoena in California can compel the recipient to appear in person to provide testimony, to produce documents for copying or to do both. Of course, the person or organization served with the subpoena may object to all or part of it, or they may file a motion for a protective order or to quash the subpoena.
Authorization and Enforcement of Subpoenas for Arbitration
Section 1282.6 of the California Code of Civil Procedure (CCP) authorizes the issuance of subpoenas for an arbitration hearing and depositions. Under this statute, the arbitrator can exercise subpoena powers at the behest of the parties. It is clear that the use of court subpoena forms is appropriate. Most private arbitration firms have subpoena forms that can be used if the firm administers the arbitration process. Most dispute resolution providers, such as JAMS, AAA and ADR Services, provide rules that generally state that the arbitrator may issue subpoenas for the attendance of witnesses or the production of documents either prior to or at the hearing.
Enforcement of a subpoena is by court order under CCP sections 1985 to 1997. It is clear that the arbitrator has no inherent enforcement powers and that the powers of an arbitrator are limited and circumscribed by the agreement or by stipulation. (Application of O'Malley (1957) 48 Cal. 2d 107, 110.) After all, arbitration is a creature of contract. However, the parties can expressly or impliedly enlarge that authority. (United Food & Commercial Workers Union v. Clougherty Packing Co. (1984) 154 Cal. App. 3d 282.) Nonetheless, it remains unclear to what extent that agreement may affect the arbitrator’s power to compel pre-hearing discovery from third parties. As the California Supreme Court addressed in Berglund v. Arthroscopic & Laser Surgery Ctr. of San Diego, L.P. (2008): “the arbitrator's authority is derived from the parties' consent” and “nonparties have not consented to arbitration.” (Berglund, supra, 44 Cal.4th at p. 537.)
Under CCP section 1282.6, any party, through the arbitrator, can have a subpoena served for witness attendance or document production at the hearing or if section 1283.05 applies [NB, Subdivision (a) of section 1283.1 provides that section 1283.05 is incorporated into and made part of every agreement to arbitrate any dispute arising out of a claim for wrongful death or for personal injury.] Subpoenas requiring attendance of witnesses and subpoena duces tecum for “production of books, records documents, and other evidence” may be issued at the discretion of the neutral arbitrator. (CCP § 1282.6(a).)
Nonparties present a special concern. The procedure for issuing subpoenas described in section 1282.6 may be used for discovery only if section 1283.05 applies. (See Aixtron, Inc. v. Veeco Instruments Inc. (2020) 52 Cal.App.5th 360, 399, and where the arbitration agreement incorporates the discovery rights granted by section 1283.05.) The court in Aixtron held that a nonparty discovery deposition subpoena for production of documents was invalid and unenforceable. Under the facts seen in Aixtron, the court held that the Federal Arbitration Act does not grant an arbitrator freestanding power to order prehearing discovery from third parties, that the nonparty discovery provision of the California Arbitration Act (CAA) did not apply to the parties’ dispute, that the CAA did not authorize the arbitrator to compel prehearing discovery from a nonparty and that the arbitration provider’s rules did not authorize the arbitrator to compel pre-hearing discovery from a nonparty. Central to the Aixtron court’s ruling was the fact that the parties to the arbitration “did not provide for full discovery rights in their arbitration agreement.” It was also unclear whether the Federal Arbitration Act or the CAA was to apply. Saliently, the court held as follows: “As originally enacted, the subpoena power granted by section 1282.6 applied only to subpoenas for the arbitration hearing. When amended in 1982, the subpoena power granted by section 1282.6 was broadened to the three circumstances described in the first sentence of subdivision (a): (1) for the arbitration hearing, (2) for a section 1283 deposition, and (3) for the purposes of discovery, but only if section 1283.05 applies. (§ 1282.6, subd. (a).) We conclude these limitations on circumstances in which a subpoena may issue in arbitration apply to subpoenas issued by both a party to the arbitration and the arbitrator.” (Id. at p. 402.)
The question of whether an arbitrator in a private, contractual arbitration can compel a nonparty to the arbitration to respond to a subpoena duces tecum for the production of business records issued by the arbitrator for the purpose of pre-hearing discovery has recently again been addressed in McConnell v. Advantest America, Inc. (2023) 92 Cal.App.5th 596. In that case, the parties attempted a “workaround” to the Aixtron court’s holding: A document subpoena for a nonparty was written as a pre-hearing subpoena, but it was held as an inoperative discovery subpoena for the nonparty. The mislabeling of the subpoena as one for the hearing was found to be a deception and an impermissible subpoena for the deposition of a nonparty. Arbitrators and parties need to be aware of this issue. Because of the lack of clarity in Berglund and Aixtron (and now McConnell), it may be wise to consider coupling arbitration discovery agreements and related orders to CCP section 1283.05.
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