In recent years, arbitration clauses—particularly in employment and consumer contracts—have been a frequent topic before the U.S. Supreme Court.
Throughout this period, the Court has consistently upheld the enforceability of arbitration clauses against a variety of challenges. The resulting decisions have often been controversial, with dissenters and critics citing employees’ and consumers’ lack of bargaining power, the prohibitive cost of individual claims, and a perceived pro-business bias among arbitrators.
Of course, arbitration isn’t unique to consumers and employment contracts. Parties often include arbitration provisions in their contracts, believing that arbitration will be a more efficient way to resolve disputes. Whatever one may think about the merits of the Supreme Court’s decisions, or the wisdom of arbitration generally, a growing number of litigants of all types and sizes must submit their disputes to arbitration.
As the frequency of arbitration increases, an issue percolating through the federal courts could dramatically limit a litigant’s ability to obtain discovery from third parties. The issue is currently the subject of a circuit split and, absent congressional action, could be the next arbitration-related question before the Supreme Court.
The issue concerns the use of subpoenas to obtain discovery prior to a final evidentiary hearing. Section 7 of the Federal Arbitration Act, 9 U.S.C. § 7, generally permits arbitrators to compel third parties to produce documents or testimony. It states in relevant part:
The arbitrators . . . may summon in writing any person to attend . . . 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. . . . [I]f any person or persons so summoned to testify shall refuse or neglect to obey said summons, . . . the United States district court for the district in which such arbitrators . . . are sitting may compel the attendance of such person or persons before said arbitrator or arbitrators, or punish said person or persons for contempt . . . . Read more.