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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. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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