Depuy Synthes Sales, Inc. v. Smith+Nephew
ORDER GRANTING 11 MOTION TO DISMISS PETITIONER DEPUY SYNTHES SALES, INC.'S 2 PETITION TO ENFORCE ARBITRATION SUBPOENA. Signed by Judge Matthew W. McFarland on 01/07/2022. (kaf) Modified on 01/07/2022 to add link to Motion to Dismiss and link to Petition to Enforce Arbitration Subpoena (kaf).
Case: 1:21-mc-00011-MWM Doc #: 14 Filed: 01/07/22 Page: 1 of 9 PAGEID #: 78
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
DEPUY SYNTHES SALES, INC.
Case No. 1:21-mc-11-MWM
Judge Matthew W. McFarland
SMITH+ NEPHEW, INC.,
ORDER GRANTING MOTION TO DISMISS
PETITIONER DEPUY SYNTHES SALES, INC'S
PETITION TO ENFORCE ARBITRATION SUBPO EN A
This matter is before the Court on Respondent Smith+ Nephew, Inc.'s ("Smith")
Motion to Dismiss Petitioner Depuy Synthes Sales, Inc.'s ("Depuy") Petition to Enforce
Arbitration Subpoena Against Non-Party Smith+ Nephew, Inc. (Doc. 11). Depuy has
filed its Response in Opposition (Doc. 12), and Smith has filed its Reply brief (Doc. 13).
Because the underlying arbitration hearing began on September 27, 2021, the Court
issued a Notation Order on September 23, 2021 granting Smith's Motion to Dismiss and
denying Depuy's Petition. Per that order, the Court issues this opinion and order.
Having carefully reviewed the briefing of the parties, the Court finds Smith's Motion to
be well-taken and will thus GRANTS it.
FACTS AND PROCEDURAL HISTORY
Depuy filed a petition asking this Court to enforce an arbitration subpoena against
Smith (the "Petition"). (Doc. 2.) According to the Petition, the arbitrator approved and
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issued the subpoena to Smith ("Subpoena") on April 21, 2021. (Id. at
Subpoena's caption identifies the administering body as
Association, Indianapolis, Indiana." (See Doc. 2-1, Subpoena, Pg. ID 13.) The Subpoena
is addressed to Smith+Nephew, Inc., 150 Minuteman Road, Andover, Massachusetts
01810. (Id.) It reads in pertinent part as follows:
YOU ARE COMMANDED to appear at 10 a.m. ET on May 12, 2021, at
Blank Rome LLP, 1700 PNC Center, 201 East Fifth Street, Cincinnati, OH
45202, to testify at a deposition to be taken in the above-captioned
arbitration proceeding. The deposition will be taken before a Notary Public
or before some other officer authorized by law to administer an oath. The
deposition will be recorded by stenographic means.
YOU ARE FURTHER COMMANDED to produce true and complete
copies of the documents and other tangible items, including electronically
stored information, listed on Exhibit A" to this subpoena on May 5, 2021,
at Blank Rome LLP, 130 N. 18th Street, Philadelphia, Pennsylvania 19103.
(Id. at Pg. ID 13-14.)
Smith initially refused to comply with the Subpoena and challenges its
enforceability in this matter.
LAW AND ANALYSIS
Depuy directs the Court to§ 7 of the Federal Arbitration Act ("FAA") as support
for its Petition. Section 7 provides an arbitrator with authority to issue a subpoena in
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 . . .. Said summons shall issue in the name of the
arbitrator or arbitrators, or a majority of them, and shall be signed by the
arbitrators, or a majority of them, and shall be directed to the said person
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and shall be served in the same manner as subpoenas to appear and testify
before the court;
9 U.S.C.A. § 7.
Section 7 also provides an enforcement mechanism in the event of
if any person or persons 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 or persons before said arbitrator or
arbitrators, or punish said person or persons 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
According to Smith, this Court is the improper venue for Depuy to enforce the
Subpoena and Depuy is not entitled to pre-hearing discovery, which is what Smith
contends the Subpoena seeks. The Court will address each point in turn below.
Smith argues that the plain language of § 7 of the FAA requires that any
enforcement action be brought in the jurisdiction where the arbitrator is sitting. (See
Motion, Doc. 11, Pg. ID 49.) According to Smith, the place where the arbitrator is " sitting"
is the place where the underlying arbitration is being administered. (Id.) Depuy sees it
differently and argues that the arbitrator is "sitting" where the arbitrator is located
generally. (See Response, Doc. 12, Pg. ID 66.) Depuy contends that place is Cincinnati
because the arbitrator practices law and has an office in Cincinnati.
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Both parties direct the Court to consider Rembrandt Vision Techs. v . Bausch & Lomb,
Inc., Civ. No. 1:11-cv-2829-JEC, 2011 WL 13319343, *1 (N.D. Ga. Oct. 7, 2011) in support
of their respective arguments. In that case, the movant sought to enforce an arbitral
subpoena against a non-party. The arbitration was being administered by the American
Arbitration Association out of its offices in New York. Id. at *2. The arbitrators had issued
a subpoena for the non-party to appear at its own offices (located in Georgia) to give
testimony before one or more of the arbitrators. Id. at *1. When the non-party refused to
comply with the subpoena, the movant filed a petition to enforce the subpoena in the
Northern District of Georgia. Ultimately, that court denied the petition to enforce,
finding that it lacked jurisdiction to do so because the Northern District of Georgia was
not the district where the arbitrators were "sitting."
In reaching this conclusion, the court analyzed§ 7 and concluded that the place
where the arbitrator is sitting is not the place of production pursuant to the subpoena,
but instead is "the place in which the arbitrators are sitting when a party is seeking to
enforce a subpoena or in general, not the place in which the hearing where the nonparty
was to respond to the subpoena in the past." Id. at *2. That court concluded that "the
place where the arbitrators are sitting is New York."
Id. at *3.
In reaching this
determination, the court emphasized that the arbitration was being administered in New
York and the arbitrators were members of the New York bar. Id. Indeed, the arbitration
had no connection with Georgia, as no other proceedings had occurred there. Id.
In analyzing this same question, multiple other courts have similarly concluded
that the arbitrator "is sitting" where the underlying arbitration is being administered4
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not the place of production. See Jones Day v. Orrick, Herrington & Sutcliffe LLP, Case No.
21-mc-80181-JST, 2021 WL 4069753, *1 (N.D. Cal. Sept. 7, 2021) (concluding that the
arbitral seat of the matter was Washington, D.C.-not San Jose, California where the
hearing underlying the summons was to set be held); Alliance Healthcare Servs. v. Argonaut
Private Equity, LLC, 804 F. Supp. 2d 808, 811-12 (N.D. Ill. 2011) (finding that "[b]ecause
the arbitration proceeding is being conducted in Chicago, only a court in this district may
enforce a subpoena issued by the arbitrators"); Dynegy Midstream Servs. v. Trammochem,
451 F.3d 89, 95 (2d Cir. 2006) (concluding that the arbitrators were sitting in the Southern
District of New York, where the arbitration was being administered, not Houston, Texas,
where the documents were to be produced).
Based on this case law, the Court concludes that the arbitrator is not sitting in the
Southern District of Ohio.
First, and most importantly, the arbitration is being
administered by the AAA in Indianapolis, Indiana. (See Subpoena, Doc. 2-1, Pg. ID 13).
Neither party disputes, and another court has found, that the arbitration is to be held in
Indiana. Where the arbitrator maintains a law practice is irrelevant. The focus is on the
arbitration and the arbitrator's role as to the arbitration. Thus, the arbitrator is sitting in
Indianapolis, Indiana as it pertains to the administration of this arbitration.
Depuy's reliance on the physical location of the arbitrator when he signed the
Subpoena or where the arbitrator has an office to determine the location of where the
arbitrator "is sitting" for enforcement purposes has no support in the law. First, while it
is true that Rembrandt identified the jurisdiction where the arbitrators were members of
the bar, it did so immediately following its identification that the arbitration was being
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administered in New York-also where the arbitrators were members of the bar. See
Rembrandt, 2011 WL 13319343, at *3. That court emphasized the lack of connection
between the arbitration, the arbitrators, and the Northern District of Georgia. The Court
does not read Rembrandt to hold that the jurisdiction where the arbitrator holds a bar
membership or maintains his law practice is where he "is sitting" as it relates to the
arbitration. Indeed, arbitrators may live or have offices in locations with no connection
to where the underlying arbitration occurs. To hold that an arbitrator "is sitting" in a
jurisdiction where he is a bar member and which may have no connection to the
underlying arbitration bends the plain language of§ 7 to its breaking point and creates
no certainly as to the jurisdiction where enforcement may occur.
Additionally, Depuy attempts to distinguish certain caselaw based on the fact that
the cases were decided before Federal Rule of Civil Procedure 45 was revised to provide
for nationwide service. (Response, Doc. 12, Pg. ID 67.) However, Depuy does not explain
why that revision affects the analysis of the appropriate jurisdiction for enforcement, and
at least one court has determined that it does not. See Managed Care Advisory Grp., LLC v.
CIGNA Healthcare, Tnc., 939 F.3d 1145, 1158 (11th Cir. 2019); Jones Day, 2021 WL 4069753,
at *2. The Court agrees with this analysis and conclusion.
Depuy's reliance on OBEX Group is similarly misplaced, as the arbitration in that
case was occurring in New York-the same place where the production was to be made.
See Wash. Nat'l Ins. Co. v. OBEX Grp. LLC, 958 F.3d 126, 139 (2d Cir. 2019) (concluding that
the arbitrators were sitting in New York when it was where the arbitration was to occur,
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the production was to be made, and the hearing was to take place). Thus, OBEX Group
does not support Depuy's position.
Accordingly, under these facts, the arbitrator was sitting in Indianapolis, Indiana,
not Cincinnati, Ohio as it pertains to the underlying arbitration because that is where the
arbitration was being administered. This is not the proper venue for Depuy to seek
enforcement of this Subpoena.
Failure to State a Claim
Alternatively, here, even if venue were proper, the Court finds that Depuy's
Petition must be dismissed because it seeks prehearing discovery, which is prohibited by
the FAA. The plain language of§ 7 is unambiguous: "[t]he 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 . ..." 9 U.S.C.A. § 7 (emphasis
Although there is a split of authority, majority of the courts that have spoken on
this issue have concluded that section 7 forbids pre-hearing discovery, permitting only
live testimony in front of the arbitrator at a hearing. See Hay Grp., Inc. v. EBS Acquisition
Corp., 360 F.3d 404, 407 (3d Cir. 2004) (Alito, J.) (holding that "Section 7's language
unambiguously restricts an arbitrator's subpoena power to situations in which the nonparty has been called to appear in the physical presence of the arbitrator and to hand over
the documents at that time."). See also Managed Care Advison; Grp., LLC, 939 F.3d at 1159;
CVS Health Corp. v. Vividus, LLC, 878 F.3d 703, 708 (9th Cir. 2017); Life Receivables Tr. v.
Syndicate 102 at Lloyd's of London, 549 F.3d 210, 216 (2d Cir. 2008). In fact, only the Eighth
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Circuit has permitted pre-hearing discovery. See In re Sec. Life Ins. Co. of Am., 228 F.3d
865, 870-71 (8th Cir. 2000) (permitting the pre-hearing production of documents so that
the party can review them prior to the hearing).
The Sixth Circuit has not weighed in on this issue. In American Federation of
Television & Radio Artists, AFL-CIO v. WJBK-TV (New World Communications of Detroit,
Inc.), 164 F.3d 1004 (6th Cir. 1999), the court permitted pre-hearing discovery pursuant to
Section 301 of the Labor Management Relations Act. See id. at 1009. However, the Sixth
Circuit expressly limited its holding to that provision, as noted by the dissent. See id. at
1014 (recognizing that "the majority declined to address the application of the FAA to
t his case... ") .
This Court agrees with the reasoning of the majority of courts to address this issue
and finds that pre-hearing discovery is not permitted pursuant to the plain language of§
7 of the FAA. Having reviewed the Subpoena, that is exactly what Depuy seeks. Per the
terms of the Subpoena, Depuy seeks Smith to appear "to testify at a deposition" ...
"before a Notary Public" and to bring documents with it. (See Subpoena, Doc. 2-1, at Pg.
ID 13-14.) According to the face of the Subpoena, no arbitrator will be present at this
deposition, which renders it impermissible under § 7. See Hay Grp., Inc., 306 F.3d at 407;
Westlake Vinyls, Inc. v. Cooke, Case No. 3:18-mc-000180DJH-LLK, 2018 WL 4868993, at *5
(W.D. Ky. Aug. 21, 2018).
Accordingly, the Subpoena seeks pre-hearing discovery, which is not permitted
under § 7 of the FAA. The Court thus declines to enforce it.
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For the reasons discussed above, Smith's Motion to Dismiss (Doc. 11) is
GRANTED and the Petition (Doc. 2) is DENIED.
IT IS SO ORDERED.
UNITED STATES DISTRICT COURT
~~Tr ERN DISTRICT OF OHIO
JUDGE MATTHEW W. McFARLAND
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