e-Merging Market Technologies, LLC v. ELK Automotive Components Shanghai Gaoqi Automotive Components

Filing 34

ORDER denying as moot 15 Motion to Compel; denying 22 Motion to Compel - Signed by Magistrate Judge Mona K. Majzoub. (LBar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
e-MERGING MARKET
TECHNOLOGIES, LLC,
Plaintiff,

CIVIL ACTION NO. 08-15150

vs.
DISTRICT JUDGE JULIAN ABELE COOK
ELK AUTOMOTIVE COMPONENTS
SHANGHAI GAOQI AUTOMOTIVE
COMPONENTS,

MAGISTRATE JUDGE MONA K. MAJZOUB

Defendant.
___________________________/
ORDER DENYING AS MOOT PLAINTIFF’S MOTION TO COMPEL COMPLIANCE
WITH SUBPOENAS (DOCKET NO. 15) AND DENYING PLAINTIFF’S MOTION TO
COMPEL COMPLIANCE WITH ARBITRATION HEARING SUBPOENA
(DOCKET NO. 22)
This case comes before the Court on two motions. The first motion is Plaintiff’s Motion to
Compel Compliance with Subpoenas. (Docket no. 15). Third-parties SL America and SL
Tennessee filed a response. (Docket no. 20). Plaintiff filed a reply. (Docket no. 21). The second
motion is Plaintiff’s Motion to Compel Compliance with Arbitration Hearing Subpoena. (Docket
no. 22). Third-party SL America filed a response. (Docket no. 25). Plaintiff filed a reply. (Docket
no. 30). Plaintiff and SL America filed a Joint Statement of Resolved and Unresolved Issues.
(Docket no. 33). The motions have been referred to the undersigned for action pursuant to 28 U.S.C.
§ 636(b)(1)(A). (Docket nos. 18, 24). The Court dispenses with oral argument on the motions
pursuant to E.D. Mich. LR 7.1(f). The motions are now ready for ruling.
Plaintiff e-Merging Market Technologies brought this lawsuit against Chinese automotive

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component supplier ELK Automotive Components on December 15, 2008 for past due sales
commissions. On March 11, 2010 the Court entered a stipulated order compelling arbitration.
(Docket no. 12). The dispute is being arbitrated by the Honorable Thomas Brookover in Troy,
Michigan. The arbitration began on March 1, 2011. Plaintiff contends that the arbitration is
currently adjourned in order to allow time for the instant dispute to be resolved.
In December 2010 Plaintiff and ELK Automotive, with the authority of the arbitrator, jointly
issued two subpoenas to third-party “SL America Michigan” of Sterling Heights, Michigan. The
subpoenas commanded SL America Michigan to produce documents and a designee to testify on
behalf of the corporation at a deposition scheduled prior to the arbitration hearing. (Document no.
15, exs. 3, 4). The parties also issued a subpoena to third-party SL Tennessee of Clinton, Tennessee,
commanding it to produce documents prior to the arbitration hearing at Plaintiff’s counsel’s law firm
in Detroit, Michigan. (Docket no. 15, ex. 5). On December 28, 2010 counsel for SL America and
SL Tennessee served written objections to the subpoenas. (Docket no. 15, ex. 6). Plaintiff now
seeks an order compelling SL America Michigan to produce a corporate designee for a pre-hearing
deposition. Plaintiff also requests an order compelling SL America Michigan and SL Tennessee to
produce the documents requested in the subpoenas and award it $500 in costs incurred in filing this
motion. (Docket no. 15).
On February 17, 2011, again with the authority of the arbitrator, Plaintiff issued a subpoena
to Jin Min Kim, an employee of SL America Corporation. This subpoena commanded Mr. Kim to
produce corporate documents and appear to testify before the arbitrator on March 3, 2011. Plaintiff
served Mr. Kim with the subpoena by hand delivering the subpoena to the SL America office in
Sterling Heights, Michigan and by leaving the subpoena with the SL America receptionist, Michelle

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Klucka. (Docket no. 22, ex. 2; Docket no. 25, ex. A). On March 2, 2011 counsel for SL America
served written objections to the subpoena. (Docket no. 22, ex. 3). In the present motion Plaintiff
requests that the Court enter an order compelling SL America to produce Mr. Kim and the
documents identified in the subpoena for testimony at the arbitration hearing. (Docket no. 22).
Section 7 of the Federal Arbitration Act (“FAA”) provides that arbitrators may subpoena
“any person to attend before them ... as a witness and in a proper case to bring with him ... any book,
record, document, or paper which may be deemed material as evidence in the case.” 9 U.S.C. § 7.
The Act further states that
if any person ... so summoned to testify shall refuse or neglect to obey said summons,
upon petition the United States district court for the district in which such arbitrators,
or a majority of them, are sitting may compel the attendance of such person ... before
said arbitrator ..., or punish said person ... for contempt in the same manner provided
by law for securing the attendance of witnesses or their punishment for neglect or
refusal to attend in the courts of the United States.
Id.
Plaintiff seeks an order compelling pre-arbitration deposition testimony from a corporate
designee of SL America Michigan and pre-arbitration document production from SL America
Michigan and SL Tennessee. Because arbitration began March 1, 2011 Plaintiff’s motion is moot.
Accordingly, the Court declines to address whether the FAA implicitly allows an arbitrator to issue
subpoenas to third-parties for the pre-hearing production of documents and deposition testimony.
Next, Plaintiff seeks an order compelling SL America to produce Mr. Kim and subpoenaed
corporate documents for testimony at the arbitration hearing. (Docket no. 22). Section 7 of the FAA
unequivocally allows the arbitrator to compel testimony and the production of documents of any
person, including a non-party, for the purpose of the hearing. The FAA provides that arbitration
subpoenas must be served “in the same manner as subpoenas to appear and testify before the court.”
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9 U.S.C. § 7. Rule 45 of the Federal Rules of Civil Procedure governs service of subpoenas in
federal district court. Thus, under the FAA, service of arbitration subpoenas is also governed by
Rule 45.
Rule 45 requires Plaintiff to personally serve Mr. Kim with the subpoena. See Fed.R.Civ.P.
45(b)(1) (“Serving a subpoena requires delivering a copy to the named person....”). Service of the
subpoena on the SL America receptionist did not fulfill the requirement for personal service on Mr.
Kim. Furthermore, the Court cannot order SL America to compel Mr. Kim to appear and testify at
the arbitration hearing, or produce corporate documents, when the subpoena was directed to Mr.
Kim and not to a corporate designee. The subpoena does not identify Mr. Kim as an officer,
custodian of records at SL America, or corporate designee. Hence it is not clear what authority Mr.
Kim has to produce corporate documents at the arbitration hearing.
For these reasons the Court will deny Plaintiff’s Motion to Compel Compliance with
Arbitration Hearing Subpoena. (Docket no. 22). Nothing in this order should be read to preclude
Plaintiff from issuing a proper subpoena against Mr. Kim for testimony, or against a corporate
designee of SL America for documents and testimony at the arbitration hearing. Plaintiff should be
mindful, however, that this Court cannot enforce a subpoena and compel the production of
documents held in Tennessee or the testimony of witnesses who reside outside the one hundred mile
territorial limit imposed by Rule 45(b)(2). See, e.g., Legion Ins. Co. v. John Hancock Mut. Life Ins.
Co., 33 Fed.Appx. 26, 27-28 (3rd Cir.2002). If witnesses and relevant documents are in Tennessee
in the possession of SL Tennessee only as the third-parties contend, Plaintiff may have to attempt
other means of securing that information. See, e.g., Fazio v. Lehman Bros., Inc., No. 02-CV-157,
2004 WL 5613816 (N.D. Ohio June 21, 2004).

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IT IS THEREFORE ORDERED that Plaintiff’s Motion to Compel Compliance with
Subpoenas (docket no. 23) is DENIED AS MOOT, and Plaintiff’s Motion to Compel Compliance
with Arbitration Hearing Subpoena (docket no. 22) is DENIED.
IT IS FURTHER ORDERED that Plaintiff’s request for costs in the amount of $500 and
SL America’s request for costs in the amount of $2,000 are DENIED.
NOTICE TO THE PARTIES
Pursuant to Fed. R. Civ. P. 72(a), the parties have a period of fourteen days from the date of
this Order within which to file any written appeal to the District Judge as may be permissible under
28 U.S.C. § 636(b)(1).
Dated: August 8, 2011

s/ Mona K. Majzoub
MONA K. MAJZOUB
UNITED STATES MAGISTRATE JUDGE

PROOF OF SERVICE
I hereby certify that a copy of this Order was served upon Counsel of Record on this date.
Dated: August 8, 2011

s/ Lisa C. Bartlett
Case Manager

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