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COA panel divided on trial court involvement with subpoena

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The Indiana Court of Appeals split today on whether an Indiana trial court had the authority to order a company to comply with a subpoena issued by arbitrators in New York.

Monsanto Co. and Monsanto Technology entered into corn and soybean license agreements with Pioneer Hi-Bred International and its parent company, E.I. DuPont de Nemours & Co. Based on those agreements, when Monsanto alleged DuPont had engaged in a sublicensing scheme involving third parties in the U.S., the dispute was to be resolved by arbitration in New York City. One of those third parties was Beck’s Superior Hybrids in Indiana.

The arbitration panel issued a subpoena duces tecum to Beck’s, ordering the company to appear at a preliminary hearing in Indiana before one of the panel members and to produce business records relating to the arbitration claim. Beck’s refused, believing the Federal Arbitration Act required Monsanto to seek enforcement of its nonparty subpoena in the Southern District of New York, based on Section 7 of the act. Monsanto then filed a petition to assist in Hamilton Superior Court pursuant to Indiana Trial Rule 28(E); the trial court ordered Beck’s to comply with the subpoena.

The majority concluded that Section 7 of the act preempts Trial Rule 28(E), and that in order to enforce the subpoena against a nonparty, Monsanto had to file its petition to compel “in the United States district court for the district” where the arbitration panel, or a majority of its members, is sitting, based on the language in Section 7. That would be the Southern District of New York, since Monsanto and DuPont agreed to arbitrate in New York City.

Judges Edward Najam and Paul Mathias also held that Monsanto’s lack of federal subject matter jurisdiction to enforce its subpoena doesn’t justify ignoring the plain text of Section 7 regarding that the petition to compel must be filed in the U.S. District Court for the district where the arbitrators are. The majority also relied on caselaw that has ruled if the party attempting to invoke Section 7 lacks federal jurisdiction to do so, then the arbitration panel’s nonparty subpoena may not be enforced by the “United States district court,” wrote Judge Najam for the majority.

The majority also held in Beck's Superior Hybrids, Inc. v. Monsanto Company, et al., No. 29A05-1008-MI-489, that Congress wrote Section 7 to require the enforcement of an arbitration panel’s nonparty subpoena to be brought in the federal forum.

“Indeed, the only reason why Monsanto petitioned an Indiana trial court in the first place is because Monsanto cannot avail itself of relief from a federal court,” wrote Judge Najam. “Both Monsanto and DuPont are Delaware corporations—and therefore Monsanto lacks federal diversity jurisdiction—and the dispute between them does not arise under the laws of the United States.”

Judge John Baker dissented because he believed as in this case, where there is no federal jurisdiction, Congress didn’t intend to “tie the hands of arbitrators and the States in this fashion.” He wrote if there was ongoing litigation in a Minnesota state court, an Indiana trial court could step in pursuant to Trial Rule 28(E), but the result reached by the majority means an Indiana court couldn’t offer the same help to a sister arbitration panel, notwithstanding the fact that there is no federal court jurisdiction.

“Indeed, this interpretation of Section 7 means, essentially, that only the largest corporations, which engage in business in all fifty states, are without recourse. Whereas an entity that does not have a presence in all fifty states would be able to achieve diversity jurisdiction, and the arbitrators in such a scenario would be able to enforce nonparty subpoenas in the federal district courts, a large entity such as Monsanto has no such option. Congress could not have intended to treat large and small corporations so disparately,” he wrote.

The majority remanded with instructions that the trial court dismiss Monsanto’s petition.
 

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  1. On a related note, I offered the ICLU my cases against the BLE repeatedly, and sought their amici aid repeatedly as well. Crickets. Usually not even a response. I am guessing they do not do allegations of anti-Christian bias? No matter how glaring? I have posted on other links the amicus brief that did get filed (search this ezine, e.g., Kansas attorney), read the Thomas More Society brief to note what the ACLU ran from like vampires from garlic. An Examiner pledged to advance diversity and inclusion came right out on the record and demanded that I choose Man's law or God's law. I wonder, had I been asked to swear off Allah ... what result then, ICLU? Had I been found of bad character and fitness for advocating sexual deviance, what result then ICLU? Had I been lifetime banned for posting left of center statements denigrating the US Constitution, what result ICLU? Hey, we all know don't we? Rather Biased.

  2. It was mentioned in the article that there have been numerous CLE events to train attorneys on e-filing. I would like someone to provide a list of those events, because I have not seen any such events in east central Indiana, and since Hamilton County is one of the counties where e-filing is mandatory, one would expect some instruction in this area. Come on, people, give some instruction, not just applause!

  3. This law is troubling in two respects: First, why wasn't the law reviewed "with the intention of getting all the facts surrounding the legislation and its actual impact on the marketplace" BEFORE it was passed and signed? Seems a bit backwards to me (even acknowledging that this is the Indiana state legislature we're talking about. Second, what is it with the laws in this state that seem to create artificial monopolies in various industries? Besides this one, the other law that comes to mind is the legislation that governed the granting of licenses to firms that wanted to set up craft distilleries. The licensing was limited to only those entities that were already in the craft beer brewing business. Republicans in this state talk a big game when it comes to being "business friendly". They're friendly alright . . . to certain businesses.

  4. Gretchen, Asia, Roberto, Tonia, Shannon, Cheri, Nicholas, Sondra, Carey, Laura ... my heart breaks for you, reaching out in a forum in which you are ignored by a professional suffering through both compassion fatigue and the love of filthy lucre. Most if not all of you seek a warm blooded Hoosier attorney unafraid to take on the government and plead that government officials have acted unconstitutionally to try to save a family and/or rescue children in need and/or press individual rights against the Leviathan state. I know an attorney from Kansas who has taken such cases across the country, arguing before half of the federal courts of appeal and presenting cases to the US S.Ct. numerous times seeking cert. Unfortunately, due to his zeal for the constitutional rights of peasants and willingness to confront powerful government bureaucrats seemingly violating the same ... he was denied character and fitness certification to join the Indiana bar, even after he was cleared to sit for, and passed, both the bar exam and ethics exam. And was even admitted to the Indiana federal bar! NOW KNOW THIS .... you will face headwinds and difficulties in locating a zealously motivated Hoosier attorney to face off against powerful government agents who violate the constitution, for those who do so tend to end up as marginalized as Paul Odgen, who was driven from the profession. So beware, many are mere expensive lapdogs, the kind of breed who will gladly take a large retainer, but then fail to press against the status quo and powers that be when told to heel to. It is a common belief among some in Indiana that those attorneys who truly fight the power and rigorously confront corruption often end up, actually or metaphorically, in real life or at least as to their careers, as dead as the late, great Gary Welch. All of that said, I wish you the very best in finding a Hoosier attorney with a fighting spirit to press your rights as far as you can, for you do have rights against government actors, no matter what said actors may tell you otherwise. Attorneys outside the elitist camp are often better fighters that those owing the powers that be for their salaries, corner offices and end of year bonuses. So do not be afraid to retain a green horn or unconnected lawyer, many of them are fine men and woman who are yet untainted by the "unique" Hoosier system.

  5. I am not the John below. He is a journalist and talk show host who knows me through my years working in Kansas government. I did no ask John to post the note below ...

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