Aixtron Is Not So Easily Evaded

McConnell v. Advantest Am., Inc., No. D080532 (D4d1 Jun. 15, 2023).

Back in 2020, the Court of Appeal decided in the Aixtron case that, although arbitrators have the authority to subpoena witnesses to attend and bring documents to plenary arbitration hearings, the California Arbitration Act does not give them authority to enforce a third party discovery subpoenas. 

Which begs a question—one that I’ve actually heard arbitrators raise since Aixtron: If the arbitrator believes a party really needs third party discovery, can she convene a “plenary” hearing to take the necessary discovery, and then “adjourn” the hearing for some length of time before “reconvening” a hearing on the merits?

That’s what happened here. A party to an arbitration allegedly spoliated some WhatsApp messages. The arbitrator permitted the opposing party to subpoena the messages from a non-party who was purportedly on the other side of those messages. To get around Aixtron, the arbitrator required the recipient to attend an arbitration hearing convened for the limited purpose of receiving documents from subpoenaed third parties. The actual merits hearing was not set for a year later.

After the arbitrator compelled production, the recipients filed a petition to vacate the order in superior court. The superior court denied the petition and the recipients appealed. 

The Court of Appeal holds that an arbitrator is not permitted to “work around” Aixtron in the manner that occurred here. An arbitrator cannot open up unauthorized third party discovery by deeming a non-merits hearing conducted months before the actual arbitration hearing to be the “arbitration hearing” for which witness attendance could be compelled under Code of Civil Procedure § 1282.6. That the hearing here wasn’t actually an arbitration hearing was established by the fact that it occurred nearly a year before the actual hearing on the merits commenced and because the scope of the documents the arbitrator authorized to be subpoenaed vastly exceeded the kind of limited scope materials that third party witnesses are typically compelled to produce under a trial subpoena or notice to appear and produce. 

Reversed.