Campaign Registry, Inc. v. Tarone
- Colleen McMahon
- 1:24-cv-02314
- U.S. District Court · Southern District of New York
- 13
In Campaign Registry v. Tarone, Judge McMahon denied enforcement of arbitration subpoenas because Delaware, not New York, was the proper federal district.
Campaign Registry, Inc., Giovanni Tarone, and Alan Quayle. Campaign could not obtain enforcement of the arbitration subpoenas in the Southern District of New York; the ruling identified a federal court in Delaware as the proper forum for seeking enforcement.
What happened
Campaign Registry, Inc. asked a federal court in New York to force Giovanni Tarone and Alan Quayle, who were not parties to the arbitration, to comply with subpoenas for documents and testimony. The arbitration agreement specified Delaware as the arbitration location, although the subpoenas required a hearing in New York.
The court held that the Federal Arbitration Act allows only the federal court in the district where the arbitrators are sitting—or where the arbitration is legally based—to enforce these subpoenas. Because the arbitration was to be administered in Delaware, the court concluded that only a federal court in Delaware could enforce them. The court rejected Campaign’s argument that a hearing in New York or the arbitration rules changed that result.
Judge Colleen McMahon denied Campaign’s motion to compel, dismissed the underlying petition, and dismissed Tarone and Quayle’s motions as moot. She also denied their request for attorneys’ fees and denied their motion to strike a letter that Campaign submitted after the court invited additional authorities.
The detailed version
- Campaign Registry, Inc. v. Tarone · No. 1:24-cv-02314
- Colleen McMahon
- June 24, 2024
Background
Campaign Registry, Inc. sought an order compelling Giovanni Tarone and Alan Quayle to comply with subpoenas issued by an arbitration panel. Tarone and Quayle were non-parties to the underlying arbitration. The subpoenas sought documents and materials and required them to appear before the panel at a hearing in New York.
The arbitration arose from William Peters’s employment agreement with Buc Mobile, Inc., a company later acquired by Campaign. The agreement provided that disputes would be resolved by binding arbitration in Delaware and governed by Delaware law. Peters later filed an arbitration demand against Campaign and Buc. The demand identified Delaware as the hearing location.
Campaign petitioned the Southern District of New York to enforce the subpoenas and moved to compel compliance. Tarone and Quayle moved to dismiss the petition or, alternatively, to quash the subpoenas for ineffective service. They also requested attorneys’ fees.
Court’s Analysis
Section 7 of the Federal Arbitration Act allows arbitrators to issue summonses and permits a federal district court to compel compliance when a person refuses to obey. The statute identifies the relevant court as the court in the district where the arbitrators, or a majority of them, are sitting. The court explained that this authority is limited and is governed alongside Federal Rule of Civil Procedure 45, which addresses federal subpoenas.
The court concluded that the arbitration’s legal seat and place of administration were in Delaware. It rejected Campaign’s argument that the panel was sitting in New York because the subpoenas required a New York hearing. The court also rejected the argument that nationwide service of arbitration subpoenas allowed enforcement in any federal district. In the court’s view, the ability to serve a subpoena anywhere did not change the statutory requirement that enforcement occur where the arbitrators were sitting.
The court further held that the American Arbitration Association’s Rule R-12 did not change the result. That rule could allow a special hearing to occur elsewhere, but it did not allow the arbitration’s seat to be changed without the parties’ consent. Campaign had not shown that the parties consented to changing the seat from Delaware to New York. A hearing location therefore did not determine which federal court could enforce the subpoenas.
Rulings
The court denied Campaign’s motion to compel compliance with the subpoenas. Because that ruling resolved the matter, it dismissed the underlying petition to compel and dismissed Tarone and Quayle’s motions as moot. The court did not decide the ineffective-service argument.
The court denied Tarone and Quayle’s motion to strike Campaign’s letter because the court had invited the parties to submit additional authorities. It also denied their request for attorneys’ fees, stating that the request was unsupported and that no provision authorizing such an award had been identified. The Clerk was directed to close the motions at Docket Numbers 13, 15, and 38.
Read the full 13-page opinion on CourtListener, the free public archive maintained by the Free Law Project.