## Facts

- Alliance HealthCare Services, Inc. purchased membership interests in Medical Outsourcing Services, LLC under an agreement with an arbitration clause.
- Alliance retained Grant Thornton LLP (headquartered in Chicago) to perform acquisition due diligence; Marc Chiang, a Grant Thornton director, supervised the engagement from the San Francisco area.
- Alliance initiated arbitration in Chicago against Argonaut Private Equity, LLC and Medical Outsourcing Services, Inc., alleging fraud and breach of warranty relating to the sale.
- At respondents’ request, the arbitration panel issued subpoenas to nonparties Grant Thornton and Chiang requiring document production and oral testimony.
- The subpoenas commanded compliance at a preliminary hearing in San Francisco before one arbitrator, not at the final merits hearing.
- The subpoenas were served in San Francisco; Grant Thornton and Chiang refused to comply.
- Argonaut and MOS Inc. petitioned the Northern District of Illinois to enforce the subpoenas.

## Issues

1. Whether FAA § 7 authorizes arbitrators to compel nonparties to provide pre-hearing discovery (documents and testimony) at a preliminary proceeding rather than at the merits hearing.
2. Whether a federal court may enforce arbitral subpoenas that command compliance outside the enforcing court’s district and beyond Rule 45’s geographic limits.

## Decision

- The court denied the motion to enforce the subpoenas.
- The court held FAA § 7 did not permit compelling nonparty discovery via a preliminary hearing designed to obtain pre-hearing evidence.
- The court further held that, even assuming arbitral authority, it lacked power to enforce subpoenas requiring compliance in San Francisco under the FAA’s enforcement mechanism and Rule 45’s territorial limits.

## Legal Principles

- FAA § 7 permits arbitrators to summon a person to attend before the arbitrators as a witness and, in a proper case, to bring documents material as evidence at a hearing.
- FAA § 7 does not authorize generalized pre-hearing discovery from nonparties; parties may not obtain the equivalent of civil discovery subpoenas by styling discovery as a “preliminary hearing.”
- Judicial enforcement of arbitral subpoenas must comply with FAA § 7’s venue directive (petition in the district where the arbitrators, or a majority, are sitting) and with the geographic constraints applicable to compelled attendance and production under Rule 45.

## Conclusion

The court refused to enforce arbitral subpoenas directed to nonparties because the requested testimony and document production functioned as pre-hearing discovery not authorized by FAA § 7, and because the subpoenas’ San Francisco compliance location fell outside the enforceable geographic limits governing federal subpoena enforcement.


Alliance HealthCare Servs., Inc. v. Argonaut Priv. Equity, LLC, 804 F. Supp. 2d 808 (N.D. Ill. 2011)