Snyder v. Wilson et al

Filing 38

MEMORANDUM AND ORDER GRANTING 24 Motion of Plaintiff to DeclareUnenforceable Subpoena to Counsel. Signed by Judge Marvin J. Garbis on 3/31/14. (hmls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
TODD SNYDER, ESQUIRE

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Plaintiff
vs.

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DAVID P. WILSON, et al.

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Defendants
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CIVIL ACTION NO. MJG-13-3595

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MEMORANDUM AND ORDER RE: ENFORCEABILITY OF SUBPOENA
The Court has before it Plaintiff/Counter-Defendant's
Motion to Declare Unenforceable Subpoena to Counsel [Document
24]1 and the materials submitted relating thereto.

The Court has

held a hearing and has had the benefit of the arguments of
counsel.

I.

BACKGROUND
In August 2012, David and Jeanette Wilson (the "Wilsons")

initiated an arbitration case before the Financial Industry
Regulatory Authority ("FINRA") concerning claims against their
financial advisor, Robin Tom Naylor, a now-defunct broker-

1

In the Initial Scheduling Order, "[t]he Court deem[ed] the
parties to have asserted cross-motions for summary judgment,
presenting the question whether the Court should decline to
enforce the subpoena at issue." [Document 22]. These motions
are deemed resolved by the instant Order.

dealer, Pacific West Securities, Inc., and other respondents.
The arbitration is proceeding in Seattle, Washington.
On June 12, 2013, upon the Wilsons' request, the FINRA
arbitration panel issued a discovery subpoena duces tecum (the
"Subpoena") to Todd Snyder, a Maryland lawyer, and his law firm
(collectively "Snyder") requiring production of certain
documents allegedly relevant2 to the arbitration proceeding.

The

Subpoena purports to require Snyder, a non-party to the FINRA
arbitration, to produce the documents at the offices of counsel
for the Wilsons in San Diego, California.
Snyder filed the instant lawsuit seeking, among other
things, a Judgment declaring that the Court will not enforce the
Subpoena.

Both sides seek summary judgment, and no party

contends that there is a genuine issue of material fact
regarding the question of whether the arbitrators had the
authority to issue the Subpoena at issue, i. e. a subpoena for
the purpose of discovery rather than for the presentation of
evidence at a hearing.
For the reasons stated on the record of proceedings held
Thursday, March 27, 2014, as supplemented herein, the Court
holds that it shall not enforce the Subpoena.

2

Snyder denies the relevancy of the documents, makes various
other allegations regarding the scope and intent of the
Subpoena, and presents privilege claims on behalf of his
clients. These issues are not reached by the instant decision.
2

II.

DISCUSSION
The Court assumes, without deciding,3 that the Subpoena was

issued pursuant to the authority provided by the Federal
Arbitration Act ("FAA").
In COMSAT Corp. v. National Science Foundation, the United
States Court of Appeals for the Fourth Circuit stated that
"[n]owhere does the FAA grant an arbitrator the authority to
order non-parties to appear at depositions, or the authority to
demand that non-parties provide the litigating parties with
documents during pre-hearing discovery."

190 F.3d 269, 275 (4th

Cir. 1999).
Reasoning that Section 7 of the FAA does not provide an
arbitrator with subpoena authority that is coextensive with a
federal court's subpoena authority, the COMSAT court concluded
that Section 7 "does not expand the arbitrator's subpoena
authority, which remains simply the power to compel non-parties
to appear before the arbitration tribunal."

Id. at 275-76.

The

COMSAT court also stated that "a party might, under unusual
circumstances, petition the district court to compel prearbitration discovery upon a showing of special need or
3

The Subpoena does not state that it is issued pursuant to
the Federal Arbitration Act ("FAA"). Rather, it states that it
was issued pursuant to Washington state law. The Court will,
however, assume that the arbitrators intended to utilize the
authority provided by the FAA and that the Subpoena is therefore
subject to the terms of the FAA when issues regarding its
enforceability come before a federal district court.
3

hardship."

Id. at 276.

Query whether, in the instant case, the

district court to be petitioned would be the court having
jurisdiction over the place of arbitration or over the non-party
witness.

In any event, there has been no such petition in

regard to the Subpoena.
By virtue of the COMSAT decision, the Court holds that it
does not have the authority to enforce the Subpoena.

III. CONCLUSION
For the foregoing reasons:
1.

Plaintiff/Counter-Defendant's Motion to Declare
Unenforceable Subpoena to Counsel [Document 24] is
GRANTED.

2.

This action is without prejudice to the rights of
the parties hereto with regard to any other subpoena
that may be, or has been,4 issued in the pending
arbitration proceeding.

3.

Judgment shall be entered by separate Order.

SO ORDERED, on Monday, March 31, 2014.

/s/__________
Marvin J. Garbis
United States District Judge

4

A second subpoena, dated February 14, 2014, purports to
require Snyder to appear in Seattle, Washington at a FINRA
hearing to testify and produce documents. Snyder has yet to be
served with this second subpoena.
4