PRECEDENTIAL KEVIN M. TOTH Reed Smith L.L.P. UNITED STATES COURT OF 2500 One Liberty Place APPEALS 1650 Market Street FOR THE THIRD CIRCUIT Philadelphia, PA 19103 ____________ PETER C. WOODFORD (argued) No. 03-1161/1162 CHRISTOPHER E. PAETSCH ____________ SEYFARTH SHAW 55 East Monroe Street HAY GROUP, INC. Suite 4200 Chicago, Illinois 60603 v. Counsel for Appellant, E.B.S. ACQUISITION CORP. ET AL, PriceWaterhouseCoopers, L.L.P. PRICEWATERHOUSECOOPERS L.L.P. MARY J. HACKETT Reed Smith, L.L.P. Appellants 435 Sixth Avenue Pittsburgh, PA 15230 ____________________ KEVIN M. TOTH ON APPEAL FROM THE UNITED Reed Smith L.L.P. STATES DISTRICT COURT 2500 One Liberty Place FOR THE EASTERN DISTRICT OF 1650 Market Street PENNSYLVANIA Philadelphia, PA 19103 District Court Judge: Honorable Mary A. Counsel for Appellant, McLaughlin E.B.S. Acquisition Corp. (D.C. No. 02-MC-252, 253 (consolidated)) NICHOLAS SANSERVINO, Jr. (argued) ____________________ WILLIS J. GOLDSMITH SARA B. McCLURE Argued: September 15, 2003 Jones Day 51 Louisiana Avenue, N.W. Before: ALITO, AMBRO, and Washington, D.C. 20001-2113 CHERTOFF, Circuit Judges Counsel for Appellee (Opinion Filed: March 12, 2004) ____________________ produced prior to the panel’s arbitration OPINION OF THE COURT hearing. PwC and E.B.S. objected to these ____________________ subpoenas, but the arbitration panel disagreed. When PwC and E.B.S. still ALITO, Circuit Judge: refused to comply with the subpoenas, Hay asked the United States District Court for PriceWaterhouseCoopers (“PwC”) the Eastern District of Pennsylvania to and E.B.S., non-parties to an arbitration, enforce the subpoenas. PwC and E.B.S. seek to avoid compliance with an again objected, claiming, among other arbitration panel’s subpoena requiring things, that the Federal Arbitration Act them to turn over documents prior to the (“FAA”) did not authorize the panel to panel’s hearing. The District Court issue subpoenas to non-parties for pre- enforced the subpoena. We reverse. hearing document production and that the Federal Rules of Civil Procedure I. prohibited the District Court from enforcing a subpoena on a non-party for Hay Group (“Hay”) is a documents outside the Court’s territorial management consulting firm. David A. jurisdiction. Hoffrichter left Hay’s employment and joined PwC in September 1999. In early In November 2002, the District 2002, PwC sold the division employing Court issued a decision enforcing the Hoffrichter to E.B.S. subpoenas and ordering the parties to resolve any remaining differences. In Hoffrichter’s separation agreement doing so, the District Court accepted the from Hay contained a clause that forbade view of the Eighth Circuit and several him from soliciting any of Hay’s district courts that the FAA authorizes employees or clients for one year. The arbitration panels to issue subpoenas on agreement further provided for arbitration non-parties for pre-hearing document to resolve any dispute arising under the production. The District Court also held agreement. In February 2000, Hay that even under the view of the Fourth commenced such an arbitration proceeding Circuit, which permits such production in Philadelphia, Pennsylvania, against only when there is a “special need,” the Hoffrichter, claiming that he had violated panel’s subpoenas would be valid. In the non-solicitation clause. addition, the District Court held that it had the power to enforce subpoenas on non- In an attempt to obtain information parties for document production even if for the arbitration, Hay served subpoenas the documents were located outside the for documents on E.B.S. at its Pittsburgh territory within which the court’s office and on PwC at its Philadelphia subpoenas could be served. office. Hay sought to have the documents 2 PwC and E.B.S. then filed the may issue a subpoena requiring pre- present appeal. The District Court denied hearing document production by a person their motion to stay its order pending or entity that is not bound by the appeal, but our Court granted their arbitration agreement (hereinafter a “non- emergency motion for a stay. party”). II. In interpreting a statute, we must, of course, begin with the text. “The Supreme A. Court has repeatedly explained that recourse to legislative history or On appeal, PwC and E.B.S. first underlying legislative intent is unnecessary argue that, under Section 7 of the FAA, 9 when a statute’s text is clear and does not U.S.C. § 7, a non-party witness may be lead to an absurd result.” United States ex compelled to bring documents to an rel. Mistick PBT v. Housing Authority of arbitration proceeding but may not simply City of Pittsburgh, 186 F.3d 376, 395 (3d be subpoenaed to produce documents. We Cir. 1999). Furthermore, a court’s policy agree. preferences cannot override the clear meaning of a statute’s text. See Eaves v. An arbitrator’s authority over County of Cape May, 239 F.3d 527, 531- parties that are not contractually bound by 32 (3d Cir. 2000)(“We do not find the the arbitration agreement is strictly limited reasoning of the courts adopting the to that granted by the Federal Arbitration ‘majority view’ persuasive, because they Act. See, e.g., Legion Insurance ignore a textual analysis of § 1961(a) and, Company v. John Hancock Mutual Life instead, base their result on policies they Ins. Co., No. 01-162, 2001 WL 1159852, find to underlie post-judgment interest and 2001 U.S. Dist. LEXIS 15911 at *3 (E.D. attorney's fee awards.”) Pa. Sept. 5, 2001)(“It is clear, and undisputed, that the cited statute is the only Section 7 of the FAA provides as source of the authority for the validity and follows: enforceability of the arbitrators’ subpoena [over a nonparty]”); Integrity Ins. Co., in The arbitrators selected Liquidation, v. Am. Centennial Ins. Co., either as prescribed in this 885 F. Supp. 69, 71 (S.D.N.Y. title [9 U.S.C. §§ 1 et seq.] 1995)(“Because the parties to a contract or otherwise, or a majority cannot bind nonparties, they certainly of them, may summon in cannot grant such authority to an writing any person to arbitrator. Thus, an arbitrator’s power attend before them or any over nonparties derives solely from the of them as a witness and in FAA.”). Accordingly, we must look to the a proper case to bring with FAA to determine whether an arbitrator him or them any book, 3 record, document or paper T h is language speaks which may be deemed unambiguously to the issue before us. The material as evidence in the only power conferred on arbitrators with case. The fees for such respect to the production of documents by attendance shall be the same a non-party is the power to summon a non- as the fees of witnesses party “to attend before them or any of before masters of the United them as a witness and in a proper case to States courts. Said bring with him or them any book, record, summons shall issue in the document or paper which may be deemed name of the arbitrator or material as evidence in the case.” 9 U.S.C. arbitrators, or a majority of § 7(emphasis added). The power to them, and shall be directed require a non-party “to bring” items “with to the said person and shall him” clearly applies only to situations in be served in the same which the non-party accompanies the items manner as subpoenas to to the arbitration proceeding, not to appear and testify before situations in which the items are simply the court; if any person or sent or brought by a courier. In addition, persons so summoned to the use of the word “and” makes it clear testify shall refuse or that a non-party may be compelled “to neglect to obey said bring” items “with him” only when the summons, upon petition to non-party is summoned “to attend before the United States district [the arbitrator] as a witness.” Thus, court for the district in Section 7's language unambiguously which such arbitrators, or a restricts an arbitrator’s subpoena power to majority of them, are sitting situations in which the non-party has been may compel the attendance called to appear in the physical presence of of such person or persons the arbitrator and to hand over the before said arbitrator or documents at that time.1 arbitrators, or punish said person or persons for contempt in the same 1 manner as provided by law Some states have recently adopted for securing the attendance versions of the Uniform Arbitration Act, of witnesses or their which differs from the Federal punishment for neglect or Arbitration Act. Some of these state refusal to attend in the statutes explicitly grant arbitrators the courts of the United States. power to issue pre-hearing document production subpoenas on third parties. 9 U.S.C.§ 7 (emphasis added). See, e.g., 10 Del. Code §5708(a) (2003)(“The arbitrators may compel the attendance of witnesses and the 4 This interpretation is supported by or a subpoena for the the interpretation of similar language in a production of documentary previous version of Federal Rule of Civil evidence, signed and sealed Procedure 45. From its adoption in 1937 but otherwise in blank, to a until its amendment in 1991, Rule 45 did party requesting it, who not allow federal courts to issue pre- shall fill it in before service. hearing document subpoenas on non- (b) For Production of parties. This restriction was based on a Documentary Evidence. A reading of the first two paragraphs of the subpoena may also command the person to whom it rule, which provided as follows: is directed to produce the books, (a) For Attendance of papers, Witnesses; Form; documents, or Issuance.