ILNews

COA panel divided on trial court involvement with subpoena

Back to TopCommentsE-mailPrintBookmark and Share

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.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. What is the one thing the Hoosier legal status quo hates more than a whistleblower? A lawyer whistleblower taking on the system man to man. That must never be rewarded, must always, always, always be punished, lest the whole rotten tree be felled.

  2. I want to post this to keep this tread alive and hope more of David's former clients might come forward. In my case, this coward of a man represented me from June 2014 for a couple of months before I fired him. I knew something was wrong when he blatantly lied about what he had advised me in my contentious and unfortunate divorce trial. His impact on the proceedings cast a very long shadow and continues to impact me after a lengthy 19 month divorce. I would join a class action suit.

  3. The dispute in LB Indiana regarding lake front property rights is typical of most beach communities along our Great Lakes. Simply put, communication to non owners when visiting the lakefront would be beneficial. The Great Lakes are designated navigational waters (including shorelines). The high-water mark signifies the area one is able to navigate. This means you can walk, run, skip, etc. along the shores. You can't however loiter, camp, sunbath in front of someones property. Informational signs may be helpful to owners and visitors. Our Great Lakes are a treasure that should be enjoyed by all. PS We should all be concerned that the Long Beach, Indiana community is on septic systems.

  4. Dear Fan, let me help you correct the title to your post. "ACLU is [Left] most of the time" will render it accurate. Just google it if you doubt that I am, err, "right" about this: "By the mid-1930s, Roger Nash Baldwin had carved out a well-established reputation as America’s foremost civil libertarian. He was, at the same time, one of the nation’s leading figures in left-of-center circles. Founder and long time director of the American Civil Liberties Union, Baldwin was a firm Popular Fronter who believed that forces on the left side of the political spectrum should unite to ward off the threat posed by right-wing aggressors and to advance progressive causes. Baldwin’s expansive civil liberties perspective, coupled with his determined belief in the need for sweeping socioeconomic change, sometimes resulted in contradictory and controversial pronouncements. That made him something of a lightning rod for those who painted the ACLU with a red brush." http://www.harvardsquarelibrary.org/biographies/roger-baldwin-2/ "[George Soros underwrites the ACLU' which It supports open borders, has rushed to the defense of suspected terrorists and their abettors, and appointed former New Left terrorist Bernardine Dohrn to its Advisory Board." http://www.discoverthenetworks.org/viewSubCategory.asp?id=1237 "The creation of non-profit law firms ushered in an era of progressive public interest firms modeled after already established like the National Association for the Advancement of Colored People ("NAACP") and the American Civil Liberties Union ("ACLU") to advance progressive causes from the environmental protection to consumer advocacy." https://en.wikipedia.org/wiki/Cause_lawyering

  5. Mr. Foltz: Your comment that the ACLU is "one of the most wicked and evil organizations in existence today" clearly shows you have no real understanding of what the ACLU does for Americans. The fact that the state is paying out so much in legal fees to the ACLU is clear evidence the ACLU is doing something right, defending all of us from laws that are unconstitutional. The ACLU is the single largest advocacy group for the US Constitution. Every single citizen of the United States owes some level of debt to the ACLU for defending our rights.

ADVERTISEMENT