The Court Of Appeal Chose Substance Over Form.
The subpoena provisions of the California Arbitration Act do not give an arbitrator the power to issue “prehearing discovery subpoenas.” Aixtron, Inc. v. Veeco Instruments, Inc., 52 Cal.App.5th 360 (2020).
Tim McConnell v. Advantest America, Inc., D080532 (4/1 filed 5/4/23 pub. 6/15/23) (Do, Huffman, O'Rourke) involves a variation of the facts in Aixtron leading to the same result. In the McConnell matter, an arbitrator issued a hearing subpoena requiring McConnell and other third-parties to produce electronic communications at a hearing some 12 months before the hearing scheduled on the merits in the arbitration. At the merits hearing, the nonparties would be summoned to appear and testify. Provisions were also made allowing the producing party to directly upload documents for the requesting party, a procedure in which the arbitrator did not need to be directly involved. The arbitrator also made a finding that the third parties who were the target of the hearing subpoena "are likely to have discoverable information." (italics added in the Court of Appeal opinion).
"Under the specific facts of this case" the Court of Appeal agreed with the third parties that the subpoena was improper, reversing the superior court judge who had found the subpoena proper. The workaround of subpoenaing the documents to a "hearing" was not successful, because under the specific facts, the subpoena was a discovery subpoena, whatever the label. "If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck."
COMMENT: The result should have been different if the subpoena had been carefully tailored to preserve evidence, rather than broadly to find discoverable information.
Parties in California can incorporate by reference in to their arbitration agreement the broad discovery provisions of the Code of Civil Procedure: "Section 1283.1 - Provisions of section 1283.05 deemed incorporated into agreement. (a) All of the provisions of Section 1283.05 shall be conclusively deemed to be incorporated into, made a part of, and shall be applicable to, every agreement to arbitrate any dispute, controversy, or issue arising out of or resulting from any injury to, or death of, a person caused by the wrongful act or neglect of another. (b) Only if the parties by their agreement so provide, may the provisions of Section 1283.05 be incorporated into, made a part of, or made applicable to, any other arbitration agreement." However, in cases that do not involve injury to a person or death, one party often wants more discovery than its opponent. And if there is no agreement, the default position of the Code of Civil Procedure is to limit third-party discovery.
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