As of January 1, 2025, whether a party can obtain prehearing documents or testimony from third parties in an arbitration depends in large part on whether the California Arbitration Act (“CAA”) or Federal Arbitration Act (“FAA”) governs their dispute.
Recent Amendment to the CAA Permits Expansive Discovery, Including Third Party Subpoenas
At the turn of this year, the CAA was amended to significantly broaden the scope of discovery allowed in arbitration proceedings. Prior to this year’s amendment, Code of Civil Procedure (“CCP”) §§ 1283.05 and 1283.1(b) only allowed parties to an arbitration agreement governed by the CAA to take depositions and obtain discovery if their arbitration agreement allows it (or if they are arbitrating a personal injury or wrongful death dispute). The new law repealed CCP § 1283.1 and amended CCP § 1283.05(a) to afford CAA arbitration participants more expansive discovery rights.
Section 1283.05(a) as amended provides that:
“the parties to the arbitration shall have the right to take depositions and to obtain discovery regarding the subject matter of the arbitration, and, to that end, to use and exercise all of the same rights, remedies, and procedures, and be subject to all of the same duties, liabilities, and obligations in the arbitration with respect to the subject matter thereof, … as if the subject matter of the arbitration were pending before a superior court …”
Parties to arbitration under the CAA can even obtain the deposition testimony and documents of third parties by having a subpoena issued by the arbitrator in accordance with the procedures set forth in amended CCP § 1282.6. Note that some restrictions remain: The arbitrator or arbitrators must be appointed before discovery can commence (see CCP § 1283.05(a)), and depositions for discovery may not be taken unless leave to do so is first granted by the arbitrator or arbitrators (CCP § 1283.05(e)).
The FAA’s Silence on the Issue of Discovery
The overarching purpose of the FAA is “to ensure the enforcement of arbitration agreements according to their terms so as to facilitate informal, streamlined proceedings.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 131 S. Ct. 1740, 1743 (2011). Consistent with its purpose, while some courts have recognized a right to limited discovery related to the making or alleged violation of the arbitration agreement, the FAA does not provide a mechanism for parties to obtain discovery related to their dispute.
For that reason, parties to an arbitration agreement governed by the FAA can – and often do – expressly provide for discovery in one of two ways.
First, parties may agree that their arbitration will be subject to an identified arbitration organization’s rules, which in turn do or may permit discovery. For instance, the American Arbitration Association Commercial Rules (“AAA Rules”) do not expressly provide for the deposition of witnesses, but they do give the arbitrator the authority to “manage any necessary exchange of information among the parties” and to respond to “reasonable document requests.” See AAA Rule 23(a) and (b). And the JAMS Comprehensive Arbitration Rules & Procedures (“JAMS Rules”) provide for the “voluntary and informal exchange of all non-privileged documents and other information … relevant to the dispute or claim” and the names of all individuals they may call as a witness at the arbitration hearing. See JAMS Rule 17(a). The JAMS Rules allow each party to take one deposition of an opposing party or an individual under the control of the opposing party. Id. 17(b). Parties can take additional depositions if permitted to do so by the arbitrator based on their weighing of the reasonable need for the information, availability of other discovery options, and burdensomeness of the request. Id.
Second, parties may incorporate customized language into their arbitration agreement whereby they agree, for example, to arbitrate pursuant to the Federal Rules of Civil Procedure, or pursuant to another discovery process similar to that in litigation.
Arbitrators Have No Ability to Issue Discovery Subpoenas Under the FAA
Even where parties have incorporated the AAA Rules, JAMS Rules or custom discovery language into their arbitration agreement governed by the FAA, one question remains: How, if at all, can a party obtain pre-hearing deposition testimony or documents from non-parties to the dispute? The answer is that they cannot.
The only authority given to an arbitrator under the FAA to compel the appearance of a witness or the production of documents is set forth in FAA § 7, which gives arbitrators authority to:
“summon in writing any person to attend before 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 Ninth Circuit in CVS Health Corp. v. Vividus, LLC, 878 F.3d 703, 706-08 (2017) addressed for the first time whether Section 7 of the FAA empowered arbitrators to order third parties to produce document for review prior to an arbitration hearing. Based on a plain reading of Section 7, the Ninth Circuit concluded that the statute granted the arbitrator “no freestanding power to order third parties to produce documents other than in the context of a hearing.” Id. at 706. Other courts in California, applying the holding in CVS, have similarly recognized that the FAA does not grant an arbitrator authority to issue prehearing discovery subpoenas for documents. See e.g., Harris v. T-Mobile US, Inc., No. EDMC204JGBPLAX, 2020 WL 4032289, at *2 (C.D. Cal. May 5, 2020); Aixtron, Inc. v. Veeco Instruments Inc., 52 Cal.App.5th 360, 404 (2020). Although the Ninth Circuit has yet to consider whether Section 7 affords arbitrators the power to issue subpoenas for prehearing deposition testimony, it is likely that courts in this Circuit would apply the reasoning of the CVS court to find that such power is also prohibited.
The Takeaway
Many cases are won or lost on discovery, and third parties often have critical documents and/or testimony to give. Laying the foundation to obtain and present the evidence one needs in litigation—even before any dispute arises—can pay dividends later on.
For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.
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