Opinion
05 Misc. M8-85.
June 15, 2005
OPINION ORDER
On April 25, 2005, A.P. Moller (Maersk Gas Carriers) ("Moller") and Igloo Shipping A/S ("Igloo") (collectively "Movants") filed a motion to compel compliance with a subpoena duces tecum issued to Dynegy Midstream Services, LP ("Dynegy" or "Respondent") by an arbitration panel ("Arbitration Panel") sitting in the Southern District of New York. The matter was assigned to Part I and wassub judice on May 17, 2005 following oral argument. For the reasons set forth below, Movants' motion to compel compliance with a subpoena duces tecum is GRANTED.
I. BACKGROUND
A. Factual History
On November 27, 2003, Trammochem, a Division of Transammonia, Inc., ("Trammochem"), and Movants entered into a "Charter Party Agreement" ("Charter") whereby the owners agreed to transport cargo of polymer grade propylene ("Cargo") by sea from Houston, Texas to Antwerp, Belgium and Stade, Germany aboard the LPG/C IGLOO NORSE. (Aff. of C. Mansuy, Att'y for Movants, at ¶ 4.) The terms of the Charter included an arbitration clause. (Aff. of C. Mansuy at ¶ 5; Ex. A.)
In December 2002, the Cargo was loaded aboard the vessel and transported to the first discharge point, Antwerp, Belgium. Upon arrival, however, the Cargo was discovered to be contaminated. (Mem. of Law In Support of Mot. to Compel Compliance with Subpoena Duces Tecum, ("Trammochem Mot."), filed May 16, 2005, at 1.)
Upon discovery of the contamination, a dispute arose between Trammochem, Dow Benelux N.V. ("Benelux"), Atofina-Petrofina S.A. ("Atofina"), and Movants as to the cause of the contamination and the subsequent responsibility and liability. Pursuant to the terms of the Charter, the Arbitration Panel was chosen, duly constituted, sworn, and commenced proceedings in New York, New York in December, 2004. According to the Movants, additional hearings were held in February 2005 and March 2005, a fourth round of hearings is scheduled for June 2005, and further hearings are in the offing.
B. Procedural Background
On February 9, 2005, the Arbitration Panel issued a subpoena duces tecum which, in pertinent part, directed Respondent, a nonparty to the arbitration, to produce certain documents as follows:
Logbooks, ledgers, list, official logbooks, electronic entries, records or other writings prepared, kept or maintained by Dynegy Midstream Services, Limited Partnership pertaining to or reflecting shore flare system utilization, product stream information for the shore flare system, repairs to the shore flare system in berth tires of vessels at Berths 1 through 5 and identification of their cargoes or residues for the period 1200 hours, December 8, 2002 through and including 0440 hours, December 9, 2002.
(Aff. of C. Mansuy at ¶ 9; Ex. B.) The subpoena duces tecum was allegedly served on the Respondent on February 16, 2005 in Houston, Texas and was returnable on March 11, 2005 in Houston, Texas. Respondent failed to produce the documents at that time and place, or otherwise respond. Subsequently, Respondent informed Movants that they would not comply with the subpoena.
As a result, on April 25, 2005, Movants, joined by Trammochem, Indemnity Insurance Company of North America ("Indemnity"), Benelux, and Atofina, filed a motion to compel compliance with a subpoena duces tecum issued to nonparty Dynegy.
II. DISCUSSION
In this case, as in every case, we must determine whether the Court has personal jurisdiction. The analysis requires the Court to consider whether a district court in the Southern District of New York has the authority to order compliance with a subpoena duces tecum issued by an Arbitration Panel sitting in this district and directed to a nonparty witness located in Houston, Texas. Respondent argues that this Court lacks jurisdiction to enforce the arbitration subpoena. In contrast, and citing to language in the Federal Arbitration Act ("FAA"), 9 U.S.C. § 7, Movants maintain that no territorial boundaries restrict the service and compliance with subpoenas issued by arbitrators and, indeed, the language is to that effect.
Turning to the FAA, in concert with the Federal Rules of Civil Procedure, the Court must engage in a two-step inquiry to determine whether the Arbitration Panel has the authority to issue such a subpoena. First, the court must determine whether it has personal jurisdiction over the Respondent. See generally Nat'l Broad. Co., Inc. v. Bear Stearns Co., Inc., 165 F.3d 184, 188 (2d Cir. 1999); see also Legion Ins. Co. v. John Hancock Mut. Life Ins. Co., 33 Fed. Appx. 26, 2002 WL 537652 (3rd Cir. Apr. 11, 2002) (unpublished); In re Sec., 228 F.3d 865, 870-71 (8th Cir. 2000). Second, whether, under the Federal Rules of Civil Procedure, and the facts here, this Court has the authority to compel Respondent's compliance with the Arbitration Panel's subpoena. See e.g., 9 U.S.C. § 7 ("Section 7"); see In re Edelman, 295 F.3d 171, 174 (2nd Cir. 2002); see also Legion Ins., 33 Fed. Appx., at 27; In re Sec., 228 F.3d at 870-71.
A. Personal Jurisdiction
First, Respondent vigorously argues that this Court lacks personal jurisdiction and, therefore, it may not compel compliance.
Section 7 provides, in relevant part:
The arbitrators . . . may summon in writing any person to attend before them or any of 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. . . .9 U.S.C. § 7 (emphasis added); see SchlumbergerSema, Inc. v. Xcel Energy, Inc., No. 02 Civ. 4304, 2004 WL 67647, at *3 (D. Minn. Jan. 9, 2004). Section 7 permits arbitrators to subpoena a witness and documents at a hearing before them and authorizes a "United States district court for the district in which such arbitrators, or a majority of them, are sitting" to adjudicate any petition to compel compliance with a subpoena that an arbitrator may issue. 9 U.S.C. § 7. Except for the condition that the petition to compel be filed where the arbitrators are sitting, which was done here, the congressional grant of jurisdictional authority was explicit, unequivocal, and without jurisdictional limitation on district courts. See e.g., Odfjell ASA v. Celanese AG, 328 F. Supp. 2d 505, 507 (S.D.N.Y. 2004) (a district court in the Southern District of New York compelled the production of documents from an individual incarcerated in Fort Dix, New Jersey) (citation omitted);SchlumbergerSema, No. 02 Civ. 4304, 2004 WL 67647, at *3 (a district court in Minnesota compelled the production of documents located in New York and held that "personal jurisdiction is not relevant to the enforcement of a subpoena.") (emphasis added);see Amgen Inc. v. Kidney Ctr. of Del. County, Ltd., 879 F. Supp. 878, 881 (N.D. Ill. 1995) (a district court in the Northern District of Illinois held that an arbitrator's subpoena duces tecum, issued to a third person not party to the arbitration proceeding and located outside the district in which the arbitrator sat or beyond 100 miles of the site of the arbitration, was valid and enforceable); Amgen Inc. v. Kidney Ctr. of Del. County, Ltd., No. 94 Civ. 202, 1994 WL 594372, at *1 (E.D.Pa. Oct. 20, 1994) ("Since the arbitrator in the underlying arbitration is sitting in Chicago, it was incumbent upon Amgen, pursuant to the plain language of Section 7, to bring its petition to compel compliance in the United States District Court for the Northern District of Illinois.").
See also Fed.R.Civ.Proc. 45, Committee Notes, 1991 Amendment Subdivision (a) ("Paragraph (a)(2) makes clear that the person subject to the subpoena is required to produce materials in that person's control whether or not the materials are located within the District or within the territory within which the subpoena can be served. The nonparty witness is subject to the same scope of discovery under this rule as the person would be as a party to whom a request is addressed pursuant to [ Fed.R.Civ.P.] 34.") (emphasis added); see also 9 James WM Moore, et. al., Moore's Federal Practice, ¶ 45.03 (3d ed. 2000) ("The subpoena should [be] issue[d] from the Court where the production of documents is to occur, regardless of where the documents are located.").
Since it is uncontested by the parties that the Arbitration Panel is currently sitting in this district, this Court has jurisdiction over the parties and issues before it.
B. 100 Mile Rule
While this Court has jurisdiction, it does not necessarily follow that it has the authority to compel compliance with the subpoena duces tecum. The FAA provides that arbitration subpoenas "shall be served in the same manner as subpoenas to appear and testify before the court." 9 U.S.C. § 7. Indeed, Rule 45 of the Federal Rules of Civil Procedure ("Rule 45") controls court issued subpoenas:
A subpoena may be served at any place within the district of the court by which it is issued, or at any place without the district that is within 100 miles of the place of the deposition, hearing, trial, production, or inspection specified in the subpoena or at any place within the state where a state statute or rule of court permits service of a subpoena issued by a state court of general jurisdiction sitting in the place of the deposition, hearing, trial, production, or inspection specified in the subpoena.
Fed.R.Civ.P. 45. The language is unequivocal; a subpoena duces tecum issued by a federal district court in New York cannot be served "at any place" outside 100 miles of this district. See generally Jawbone, LLC v. Donohue, No. 01 Civ. 8066, 2002 WL 1424587, at *3 (S.D.N.Y. Jun. 28, 2002).
Here, however, the Arbitration Panel, sitting in New York,not this Court, issued the subpoena duces tecum upon a nonparty, located in Texas, for the production of documents located in Texas. Respondent does not contest a court issued subpoena, and such a subpoena would unquestionably be beyond the geographical limitations specified in Rule 45 (e.g., outside the 100 miles of the Court's jurisdiction). Rather, the Arbitration Panel issued the subpoena and the Arbitration Panel now seeks this Court's "assistance" in compelling compliance with the subpoena.
Such assistance is clearly within this Court's bailiwick, "Section 7 provides statutory authority for invoking the powers of the federal district court to assist the arbitrators in obtaining evidence." Nat'l Broad. Co., 165 F.3d at 187 ("[Section] § 7 explicitly confers authority only upon arbitrators"). Had Congress intended to restrict arbitrators' authority to issue a subpoena duces tecum to those enumerated in the Federal Rules of Civil Procedure, as it does courts, the FAA would have explicitly included such language. Instead, by explicitly limiting the court's jurisdictional authority to issue subpoenas, without any indication of such a limitation on arbitrators, Section 7 implicitly grants arbitrators greater authority to issue subpoenas than it does this Court. Odfjell, 2004 WL 1752603, at *2; Arbitration Between Brazell v. Am. Color Graphics, No. M-82, 2000 WL 364997, at *1 (S.D.N.Y. Apr. 7, 2000). Such authority is commensurate with the intended purpose of the FAA, "to facilitate and expedite the resolution of disputes, ease court congestion, and provide disputants with a less costly alternative to litigation."Integrity Ins. v. American Centennial Ins., 885 F.Supp. 69, 72 (S.D.N.Y. 1995).
Indeed, while Rule 81(a)(3) of the Federal Rules of Civil Procedure expressly states that the Federal Rules of Civil Procedure apply to all subpoenas "issued by an officer or agency of the United States," the rule places no restrictions on the issuance of subpoena duces tecums by arbitrators.
Accordingly, pursuant to Section 7, and the congressional delegation of authority to arbitrators to subpoena nonparty documents, Movants' motion for an order-compelling Respondent to comply with the subpoena duces tecum is GRANTED.
III. CONCLUSION
For the reasons set forth above, Movants' motion to compel is GRANTED. Respondent is hereby ORDERED to produce the documents subpoenaed by the Arbitration Panel within thirty (30) days from the date hereof. The Clerk of Court is instructed to CLOSE this motion and REMOVE this case from my docket.
IT IS SO ORDERED.