Comsat case analysis

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Comsat case analysis

Introduction Under Section 7 of the Federal Arbitration Act, arbitrators are empowered to subpoena third parties.

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When a subpoenaed third party objects, however, courts are enlisted to resolve the objection—and, when appropriate, to enforce the subpoena. Should these courts allow arbitrators to manage such disputes at the outset, considering the objection only after an arbitrator has ruled unfavorably to the objecting party?

Moreover, it is advantageous from a policy standpoint. Rule 45 protects subpoena recipients by precluding the issuing party Comsat case analysis imposing an undue burden. Objections to Third-Party Arbitral Subpoenas: That is, the arbitrator should hear the objection in the first instance, and if his non-binding determination is not to sustain it, he should then move to compel.

At that time, a court would make a de novo ruling on the objection. Why Adopt This Approach? As a general matter, this approach is advisable for some of the same reasons that administrative law often imposes an analogous exhaustion requirement—specifically, promoting judicial efficiency and protecting the authority of the body deciding the merits.

Comsat case analysis

Two common grounds for challenging a discovery subpoena under Rule 45 are relevance and privilege, both of which require reference to the underlying dispute. In typical litigation, for example, relevance[14] is inextricably related to the pleadings,[15] suggesting that in arbitration, these objections are best resolved by the arbitrator.

Similarly, when privilege[16] is invoked in litigation, a court will balance the need for the subpoenaed information against the public interest protected by the privilege.

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This balancing inquiry will necessarily reference the merits of a dispute. Some trial courts have adopted this approach,[18] while others have heard motions to quash in the first instance. This reading comports with the framework of Rule 45, which provides certain excuses allowing a person to ignore a subpoena.

Thus, Rule 45 establishes a framework where, if the court has the power to compel compliance, punishment for contempt may occur only after exercise of that compulsion power.

Indeed, the Fourth Circuit seems to have adopted this interpretation, holding that the recipient of an arbitral subpoena is under no obligation to challenge the subpoena,[28] implying that the person cannot be punished for contempt if he does nothing. Current Trends Despite some earlier decisions in which the court ruled on relevance,[29] the emerging consensus is deference to arbitrators on this question.

Accordingly, even as courts seem willing to defer to arbitrators on relevance, some are more active in their review of questions of privilege. Conclusion The FAA intends to encourage and foster effective arbitration. Because the scheme is not contrary to the text of the FAA, its adoption need not wait for legislative action.

While the proposed approach has already been accepted in some measure, arbitral outcomes would benefit from further judicial adoption. He will receive his Juris Doctor degree in May Thanks to Professor Alan S. Rau for guidance and helpful comments.

Comsat case analysis

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