Closing the Enforcement Gap: Third Party Discovery under the FAA and the Federal Rules of Civil Procedure

Abstract

Procedural flexibility and the prospect of a shorter and cheaper dispute resolution process have made arbitration one of the most common mechanisms for resolving commercial disputes in the United States. At the same time, parties should be aware of procedural and evidentiary issues that may arise in arbitration and that have yet to be resolved by the courts. This article examines one such issue, namely the scope of arbitral power to issue pre-hearing subpoenas to third parties pursuant to the Federal Arbitration Act. Federal circuit courts are split as to whether this power is available to arbitrators, with the majority judicial view adopting a restrictive interpretation of the Act and arbitral power. This split sends mixed signals to parties, counsel, and arbitrators, frustrating the objectives of the Act. The article proposes a novel rationale for a more flexible judicial approach. The article argues that the dominant narrow interpretation, when combined with a strict application of geographic limitations under the Federal Rules of Procedure with respect to compliance with subpoenas, may make enforcement of arbitral subpoenas to third parties impossible. The article then proposes several ways in which this enforcement gap may be overcome.