In 1948, the United States first promulgated a unique statutory mechanism by which, via its 1964 amendment, an interested person could receive judicial assistance in obtaining evidence in the U.S. for “use in a proceeding in a foreign or international tribunal . . . .”  See, 28 U.S.C. § 1782(a).  Whether a private arbitration was such a “foreign or international tribunal” became a prominent issue after the U.S. Supreme Court arguably opened the door in that regard via dictum in its decision in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004).  While the federal District Courts have broadly split on the question, the current momentum in the federal Circuit Courts of Appeals favors the applicability of the statute with respect to such arbitration proceedings.

A federal court in the Northern District of California has adopted the reasoning and conclusion of a recent Sixth Circuit decision in holding that 28 U.S.C. § 1782 applies to private foreign/international arbitrations.  See, HRC-Hainan Holding Company, LLC v. Hu, 19-MC-80277, 2020 U.S. Dist. LEXIS 32125 (N.D. Cal. Feb. 25, 2020).  This adds to the split among federal courts concerning the issue of the applicability of this federal “judicial assistance” statute to private commercial adjudicatory proceedings.

Are there circumstances in which forum non conveniens is a viable defense in the U.S. to a petition to confirm an arbitration award that is subject to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”)?  Could or should a U.S. court having jurisdiction abstain from taking up the matter in favor of a foreign court on the grounds that the U.S. court is “inconvenient”?  A federal court in the D.C. Circuit recently reaffirmed that it should not. 

Battles persist concerning the enforceability of insurance policy arbitration clauses due to the conflict between (a) the U.S. Constitution’s Supremacy Clause (Art. VI, cl. 2), which gives federal laws and international treaties preemptive authority over conflicting State law, and (b) the McCarran-Ferguson Act, which gives State insurance laws reverse-preemptive authority over federal statutes that interfere with State regulation of the insurance business.  A recent federal District Court decision in the Ninth Circuit offers support for the proposition that a key provision of an important arbitration-related treaty -- the New York Convention -- is self-executing, is not reverse-preempted by McCarran-Ferguson, and thus may be a basis, where applicable, for compelling arbitration of insurance coverage disputes. 

Under the Federal Arbitration Act (“FAA”), “a party may not be compelled . . . to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.”  Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 684 (2010).  The Eighth Circuit Court of Appeals recently sharpened that rule a bit to require “an affirmative contractual basis” to conclude that the parties agreed to class arbitration.  See Catamaran Corp. v. Towncrest Pharm., 2020 U.S. App. LEXIS 753 (8th Cir. Jan. 10, 2020) at *5.

As discussed in earlier posts, the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1, et seq., does not itself provide an independent basis for subject matter jurisdiction over federal court proceedings concerning domestic arbitrations. (In contrast, where the New York Convention applies -- in cases of international or non-domestic arbitrations -- the FAA does itself establish a federal district court’s subject matter jurisdiction over such matters. See FAA § 203, 9 U.S.C. § 203.) Therefore, absent diversity or maritime jurisdiction, a post-award petitioner to confirm or vacate or modify a domestic arbitral award in federal court (under FAA §§ 9, 10, or 11, respectively) must show federal question jurisdiction under 28 U.S.C. § 1331. And, as is often the case regarding jurisdiction issues in the U.S., the federal courts of appeals are split on the analysis that should be made in that regard.

“Class arbitration” signifies the utilization of the Fed.R.Civ.P. 23 protocol in an arbitration proceeding.  A fundamental question among many concerning the legal viability of “class arbitration” is whether an arbitrator can issue an award that binds a person who is not a party to or otherwise deemed by law bound by the bilateral arbitration agreement upon which the arbitral proceeding and the arbitrator’s authority are founded -- e.g., a non-appearing non-party putative class member.  SCOTUS has signaled, but not held, that that is a dubious proposition.  The Second Circuit recently identified circumstances in which, it opined, the courts may not vacate an arbitral award permitting “class arbitration,” and that award may bind all putative members of a class, including non-appearing non-parties to the controlling arbitration agreement.  See Jock v. Sterling Jewelers, 2019 U.S. App. LEXIS 34205 (2d Cir. Nov. 18, 2019) (“Jock”).  That decision is open to criticism.

The increasingly popular federal statute concerning cross-border judicial assistance, 28 U.S.C. § 1782, enables a District Court to order a “person” that “resides or is found” within its jurisdiction to produce evidence for use in a proceeding in a foreign or international tribunal.  The Second Circuit recently addressed two questions concerning the application of this unique legislation:  (1) on what bases does a District Court have personal jurisdiction over a non-party for purposes of the statute (how does a court interpret and apply the “resides or is found” criteria in jurisdictional terms); and (2) can the District Court order such a person to produce evidence that it maintains outside of the U.S.? 

The increasingly popular federal statute concerning cross-border judicial assistance, 28 U.S.C. § 1782, enables a District Court to order a “person” that “resides or is found” within its jurisdiction to produce evidence for use in a proceeding in a foreign or international tribunal.  The Second Circuit recently addressed two questions concerning the application of this unique legislation:  (1) on what bases does a District Court have personal jurisdiction over a non-party for purposes of the statute (how does a court interpret and apply the “resides or is found” criteria in jurisdictional terms); and (2) can the District Court order such a person to produce evidence that it maintains outside of the U.S.?  See In re del Valle Ruiz, 2019 U.S. App. LEXIS 30002 (2d Cir. Oct. 7, 2019).

The U.S. Supreme Court may at last get the opportunity to determine definitively whether a foreign or international private commercial arbitration proceeding constitutes a “tribunal” under 28 U.S.C. § 1782(a), which affords U.S. discovery “for use in a proceeding in a foreign or international tribunal . . . .”