Plaintiffs Matria Healthcare LLC f/k/a Matria Healthcare, Inc. (“Matria”) moved to compel the depositions of Angus M. Duthie and Thomas Hannon, non-parties in an arbitration that was pending before the American Arbitration Association. See Matria Healthcare, LLC, et al. v. Duthie, et al., No. 08-C-5090 (N.D. Ill. Oct. 6, 2008). The U.S. District Court for the Northern District of Illinois denied Matria’s motion to compel, finding that “[b]y its own terms, the [Federal Arbitration Act’s (“FAA”)] subpoena authority is defined as the power to compel non-parties to appear before them; that is, to compel testimony by non-parties at the arbitration hearing. A deposition simply does not fall within those terms.” Relying on decisions addressing this issue from the U.S. Court of Appeals for the Third and Fourth Circuit, as well as numerous other federal district courts, the court held that the arbitrator lacked authority to compel prehearing depositions under the FAA.
Notably, in Matria Healthcare, the Northern District of Illinois refused to follow a prior decision by that same court, Amgen Inc. v. Kidney Center of Delaware County, Ltd., 879 F. Supp. 878, 879-80 (N.D. Ill. 1995), dismissed on appeal for lack of subject matter jurisdiction, 101 F.3d 110 (7th Cir. 1996), which held that Section 7 of the FAA empowers arbitrators to compel non-parties to appear for depositions and produce documents prior to the hearing. The court distinguished Amgen Inc. on the grounds that the non-party in that case did not challenge the arbitrator’s authority to compel prehearing discovery. Further, the court found that subsequent decisions from the Third and Fourth Circuits have essentially overruled Amgen Inc.
Moreover, the Matria Healthcare court also made no reference to an unpublished decision from the Northern District of Illinois, In re Arbitration Between Scandinavian Reinsurance Co. Ltd. v. Continental Cas. Co., No. 04-C-7020, at 3-4 (N.D. Ill. Dec. 10, 2004), which held that an arbitration panel has the authority to order prehearing non-party depositions under the FAA.
Click here to review a copy of the district court’s decision.