SAMUEL DER-YEGHIAYAN, District Judge.
This matter is before the court on arbitrators Alan Esche's (Esche) and Richard Lauber's (Lauber) (collectively referred to as "Arbitrators") motion to quash subpoenas for deposition and document production. For the reasons stated below, the instant motion to quash is granted.
Plaintiff Administrative District Counsel 1 of Illinois of the International Union of Bricklayers and Allied Craftworkers, AFL-CIO (Union) contends that in May 2009, Defendant Masonry Company, Inc. (Masonry) entered into a collective bargaining agreement (CBA) with the Union. Masonry allegedly violated a wage provision in the CBA and the parties proceeded to arbitration. A Joint Arbitration Board (JAB) issued an award (Arbitration Award), ruling for the Union. Esche and Lauber were members of the JAB. The Union brought the instant action to compel Masonry to comply with the Arbitration Award. Masonry then filed a motion to vacate the Arbitration Award, which essentially constituted a counterclaim in this action. Masonry asserts that the Arbitration Award should be vacated on the basis that Esche and Lauber were not impartial members on the JAB. During discovery, Masonry issued subpoenas (Subpoenas) to Esche and Lauber to appear for a deposition and to produce documents. Esche and Lauber now move to quash the Subpoenas.
Pursuant to Federal Rule of Civil Procedure 45(c)(3) (Rule 45(c)(3)), a non-party who is the subject of a subpoena may file a motion to quash the subpoena. Fed. R.Civ.P. 45(c)(3). Rule 45(c)(3) provides the following:
Id. (emphasis in original). In addition, pursuant to Federal Rule of Civil Procedure 26(b)(2)(C), a court can limit discovery if:
Fed.R.Civ.P. 26(b)(2)(C).
The Arbitrators argue that they should not be subject to discovery in this supplemental litigation. Courts in this district have followed the general principal that "a party may not depose an arbitrator in order to inquire into the basis, reasoning or thought processes that led to the decision." T. McGann Plumbing, Inc. v. Chicago Journeymen Plumbers' Local 130, U.A., 522 F.Supp.2d 1009, 1014 (N.D.Ill. 2007). Courts in this district have not, however, made a blanket prohibition against deposing arbitrators, and have allowed a party to "depose an arbitrator who possesses directly relevant and probative evidence concerning the issue on which the party bases its challenge, so long as the testimony elicited from the arbitrator does not question the correctness of his decision." Id.
In determining whether the Subpoenas should be quashed, this court must first take into consideration the strong federal policy favoring arbitration. The Seventh Circuit has recognized that there is a "federal policy favoring arbitrability" when disputants have agreed to arbitrate a dispute.
In keeping with the federal policy favoring arbitration, the courts must limit the ability of the losing party in arbitration to challenge the arbitration ruling in supplemental litigation. As the Supreme Court has recognized, arbitration provides an economical and streamlined process by which parties can resolve their dispute. Rodriguez de Quijas v. Shearson/American Exp., Inc., 490 U.S. 477, 479-80, 109 S.Ct. 1917, 104 L.Ed.2d 526 (1989) (referencing the "legislative policy embodied in the Arbitration Act, ... which strongly favors the enforcement of agreements to arbitrate as a means of securing prompt, economical and adequate solution of controversies") (internal quotations omitted); Republic of Kazakhstan v. Biedermann Intern., 168 F.3d 880, 883 (5th Cir.1999) (stating that "[a]rbitration is intended as a speedy, economical, and effective means of dispute resolution"); Texaco Exploration and Production Co. v. AmClyde Engineered Products Co., Inc., 243 F.3d 906, 910 (5th Cir.2001) (stating that "[a]s a tangential benefit, however, arbitration usually provides a speedier, more economical form of dispute resolution").
If the losing party in arbitration is able to compel the arbitrators to submit to discovery in supplemental litigation, the delay and costs associated would undermine the streamlined and economical nature of the arbitration process. Other courts have recognized the potential devaluation of the arbitration process by allowing such discovery. For example, in In re National Risk Underwriters, Inc., 1989 WL 100649 (4th Cir.1989), the Fourth Circuit stated "that to permit this kind of searching inquiry into the arbitral decision-making process would work an erosion of the integrity of that process as well as inject an impermissible degree of judicial supervision into arbitration proceedings." Id. at *4. The court in National Risk Underwriters, Inc. further stated that "it would defeat the whole purpose of arbitration as a faster and cheaper forum for dispute resolution if the courts were forced to step in and order the depositions of arbitrators whenever a party is displeased with a decision." Id. at *4. Similarly, in Arizona Elec. Power Co-op., Inc. v. Berkeley, 59 F.3d 988 (9th Cir.1995), the Ninth Circuit recognized that an "arbitration's purpose-to be an expeditious and economical dispute resolution process-would be frustrated by open-ended judicial inquiries into relative expertise versus relative impartiality." Id. at 993. In Republic of Kazakhstan v. Biedermann Intern., 168 F.3d 880 (5th Cir.1999), the Fifth Circuit also recognized that "[a]rbitration is intended as a speedy, economical, and effective means of dispute resolution." Id. at 883. The court in Biedermann further stated that "arbitration's principal advantages may be destroyed if the parties succumb to fighting over burdensome discovery requests far from the place of arbitration." Id. at 883. Thus, consistent with the federal policy favoring arbitration, the ability
On the other hand, a losing party in an arbitration that has a legitimate basis in fact, and is not merely speculating, is not barred from raising the issue of partiality in court, regardless of whether the arbitration process includes certain mechanisms to ensure impartiality. Underlying the federal policy favoring resolution in arbitration is the principle that parties in arbitration have contractually agreed to have their dispute resolved by an alternate resolution method. See Gore, 666 F.3d at 1032 (stating that "because arbitration is a matter of contract, `a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit'") (quoting Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002)). A party would not normally consent to have a dispute resolved by an arbitrator that the party knew would act partially toward the other side. Thus, if it turns out that a party in arbitration unwittingly submitted himself to an arbitrator who did not act as a neutral arbiter, there should be some limited means to seek judicial review regarding the partiality of that arbitrator.
In order for a losing party in arbitration to compel an arbitrator to submit to discovery concerning his partiality, the losing party in arbitration must first satisfy a threshold requirement. The losing party in arbitration in the first instance must provide more than a conclusory statement as to partiality. The losing party must offer factual allegations as to impartiality on the part of the arbitrator. The mere fact that there are circumstances that suggest the possibility that an arbitrator might have been partial to the prevailing party, or that there is an allegation of an appearance of partiality, is not sufficient to meet the threshold burden. The losing party in arbitration must show that partiality is more than just possible or plausible by pointing to sufficient concrete evidence that would enable a reasonable person to conclude that there is a legitimate question as to the partiality of the arbitrator. If the threshold requirement is met, the court then will evaluate other factors in determining whether to compel the arbitrators to submit to discovery.
In this case, Masonry contends that the Arbitrators are executives of two of Masonry's direct competitors. However, as discussed above, the mere appearance of partiality is not alone sufficient to justify the discovery sought by Masonry. In fact, courts have recognized that in order to have arbitrators familiar with the technical matters relevant to arbitration, it may not be feasible to always have arbitrators that lack the appearance of partiality. See, e.g., Health Services Management Corp. v. Hughes, 975 F.2d 1253, 1264 (7th Cir.1992) (noting, in deciding whether to set aside an award based on partiality, that "[a]s arbitrators are usually knowledgeable individuals in a given field, often they have interests and relationships that overlap with the matter they are considering as arbitrators" and "[t]he mere appearance of bias that might disqualify a judge will not disqualify an arbitrator") (internal quotation omitted) (quoting Florasynth, Inc. v. Pickholz, 750 F.2d 171, 173 (2nd Cir. 1984)); Arizona Elec. Power Co-op., Inc., 59 F.3d at 993 (stating that "parties agree to arbitrate precisely because they prefer a tribunal with expertise regarding the particular subject matter of their dispute," and that "[f]amiliarity with a discipline often comes at the expense of complete impartiality"). Masonry consented to have its dispute with the Union resolved in arbitration, and, as the Seventh Circuit has stated, "[t]he parties to an arbitration choose their method of dispute resolution,
Based on the foregoing analysis, the instant motion to quash is granted.