Virtually Impossible: Eleventh Circuit's Denial of Non-Parties Attending Arbitration Hearings Via Video or Telephone

Vandeventer Black LLP

[author: Gaela Normile]

In the age of COVID, it is a rarity for hearings, oral arguments, client meetings, or any other legal proceeding to be held in-person. Instead, lawyers, judges, arbitrators, and all other legal figures are relying on their computers and telephones to keep the dockets moving. With the relative ease of logging into a hearing or meeting online, it is important to verify whether certain matters are authorized by statute or caselaw to be conducted virtually.

For example, a few months before the national lockdown for COVID, the Eleventh Circuit held that non-parties can only be compelled to attend in-person, physical arbitration hearings and not by video. Managed Care Advisory Grp., LLC v. CIGNA Healthcare, Inc., 939 F.3d 1145 (11th Cir. 2019). The Eleventh Circuit’s holding was based on its narrow interpretation of Section 7 of the Federal Arbitration Act (“FAA”), which allows arbitrators to subpoena non-parties and their documents. According to the Eleventh Circuit, the ordinary meaning of Section 7 “does not authorize district courts to compel witnesses to appear in locations outside the physical presence of the arbitrator.” Id. at 1160. In its reasoning, the Eleventh Circuit relied heavily on the fact that Section 7 was passed in 1925 and, “[l]ooking to dictionaries from the time of Section 7’s enactment,” it is “clear that a court order compelling ‘attendance’ of a witness ‘ before’ the arbitrator meant compelling the witness to be in the physical presence of the arbitrator.” Id.

In the same opinion, the Eleventh Circuit also held that because the FAA does not allow non-parties to be compelled to appear by video, “the FAA implicitly withholds the power to compel documents from non-parties without summoning the non-party to testify.” Id. In other words, the FAA does not allow “pre-hearing” discovery whereby parties may summon non-parties to produce documents prior to the in-person hearing.

The Second, Third, Fourth, and Ninth Circuits have previously reached similar conclusions as the Eleventh Circuit “that Section 7 is unambiguous and does not provide arbitrators with the authority to order non-parties to provide documents outside the presence of the arbitrator.” Id. at 1159. However, other appellate courts have disagreed, including the Sixth and Eighth Circuits.

Although other circuits have reached similar conclusions regarding an arbitrator’s inability to compel non-parties to produce documents prior to a hearing, the Eleventh Circuit is the first circuit to explicitly rule that non-parties cannot be compelled to appear by video. Although it was not a possibility to virtually appear at an arbitration hearing in 1925, such a strict interpretation of Section 7 of the FAA may unnecessarily burden arbitration in Florida, Georgia, and Alabama during a time when traveling poses an unnecessary risk and in-person legal proceedings remain almost non-existent.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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