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McDERMOTT WILL & EMERY LLP JOSHUA P. KWELLER (SBN 254834) 2049 Century Park East, 38th Floor Los Angeles, CA 90067-3208 Telephone: 310.277.4110 Facsimile: 310.277.4730 MARK W. PEARLSTEIN (Mass. BBO# 542064) LAURA MCLANE (Mass. BBO# 644573) 28 State Street Boston, MA 02109-1775 Telephone: 617.535.4000 Facsimile: 617.535.3800 Attorneys for Respondents INTERACTIVE DATA CORP. and INTERACTIVE DATA PRICING AND REFERENCE DATA, INC.

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA DODGER, INC.; GOLD, INC.; BORUJ, INC.; and SALOMON HELFON TUACHI, Petitioners, v. INTERACTIVE DATA CORP.; INTERACTIVE DATA PRICING AND REFERENCE DATA, INC.; and DOES 1 through 10, Inclusive, Respondents. CASE NO. 08-CV-1476-JM-POR INTERACTIVE DATA CORP. AND INTERACTIVE DATA PRICING AND REFERENCE DATA, INC.'S OPPOSITION TO EX PA R TE APPLICATION FOR ORDER ENFORCING FINRA SUBPOENA OR, IN THE ALTERNATIVE, SETTING A HEARING AT THE EARLIEST POSSIBLE DATE WITH LEAVE TO CONDUCT DISCOVERY

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TABLE OF CONTENTS I. BACKGROUND ........................................................................................................... 2 A. The Parties, the Underlying Arbitration and the Arbitration Subpoena ................. 2 1. 2. 3. 4. 5. B. C. II. IDCO and PRD ........................................................................................ 2 Petitioners, Brookstreet and NFS.............................................................. 3 The Subprime Mortgage Crisis................................................................. 3 Petitioners' Claims Against Brookstreet and NFS in the FINRA Arbitration ............................................................................................... 3 The Arbitration Subpoena to Interactive Data........................................... 4

The Initiation of this Action Against Interactive Data .......................................... 5 Efforts to Minimize The Subpoena's Burdens...................................................... 6

THE ARBITRATION SUBPOENA IS UNENFORCEABLE AS A MATTER OF LAW .............................................................................................................................. 8 A. The Arbitration Subpoena Seeks Pre-Hearing Discovery from a Non-Party in Violation of the Federal Arbitration Act........................................................... 8 1. 2. 3. B. The FAA Applies to FINRA Arbitrations. ................................................ 8 The FAA Does Not Authorize Arbitrators to Issue Subpoenas for Pre-Hearing Discovery to Non-Parties...................................................... 9 FINRA's Procedural Rules Do Not Override the FAA. .......................... 13

California Law Does Not Provide a Basis for Enforcing the Subpoena............... 14 1. 2. The FAA Trumps California Arbitration Law......................................... 14 The Subpoena is Unenforceable Under California Law. ......................... 16

III.

THE ARBITRATION SUBPOENA IS OVERLY BROAD, UNDULY BURDENSOME, AND SEEKS INFORMATION THAT IS IRRELEVANT TO THE CLAIMS AND CAN BE OBTAINED FROM PARTIES TO THE ARBITRATION. ......................................................................................................... 19 A. The Subpoena's Requests Are Sweeping, Seek Irrelevant Information, and Petitioners Have Advanced No Reasonable Proposals for Narrowing Them....... 19 1. The First Request Seeks An Enormous Volume of Information over a Four-Year Period That is Irrelevant, Proprietary and Would Be Extremely Costly to Produce. ................................................................. 20 -iiCASE NO. 08-CV-1476-JM-POR

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V. IV. B. C.

2.

The Second Request is Overbroad, Enormously Burdensome, and Seeks Documents That Are Available From Parties to the Arbitration. ............................................................................................ 21 A Review of Interactive Data's Legal Files Would Be Time Consuming, Expensive and Would Not Yield Information That Is Relevant to the Arbitration. .................................................................... 22 The Documents Sought in Request No. 4 Have Been Produced By NFS and, In Any Event, Interactive Data Has Also Offered to Produce Them. ....................................................................................... 23 The Documents Sought in Request No. 5 are Available From Brookstreet, but Interactive Data Has Offered to Produce Them............. 23 Request Number 6 Seeks Irrelevant Information, and Petitioners Already Have Documents That Satisfy the Request................................ 23 The Seventh Request is Excessively Broad and Would Subject Interactive Data to Enormous Burden and Expense. ............................... 24 The Eighth Request Constitutes Nothing More Than An Onerous and Expensive Fishing Expedition.......................................................... 25

3.

4.

5. 6. 7. 8.

The Subpoena Imposed an Unreasonably Short Response Time of Two Business Days. .................................................................................................. 25 If the Court is Inclined to Enforce the Subpoena, it Should Order Petitioners to Pay the Costs Associated Therewith. ............................................ 26

DISCOVERY REGARDING THE BURDENS ASSOCIATED WITH PRODUCTION IS UNNECESSARY, AND SHOULD NOT BE PERMITTED...... 26 CONCLUSION ........................................................................................................... 27

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CASES

TABLE OF AUTHORITIES

Alexander v. Blue Cross of Cal., 88 Cal. App. 4th 1082 (2001)............................................ 16-17 Armendariz v. Found. Health Psychcare Servs., 24 Cal. 4th 83 (2000) ...................................... 16 Barbier v. Shearson Lehman Hutton, Inc., 948 F.2d 117 (2d Cir. 1991) ...................................... 8 Berglund v. Arthroscopic & Laser Surgery Ctr. of San Diego, L.P., 44 Cal. 4th 528 (2008) .............................................................................................................. 17 Bernhardt v. County of Los Angeles, 339 F.3d 920 (9th Cir. 2003)........................................... 15 Brock v. Kaiser Found. Hosps., 10 Cal. App. 4th 1790 (1992) .................................................. 18 Certain Underwriters at Lloyd's, London v. Argonaut Ins. Co., 264 F. Supp. 2d 926 (N.D. Cal. 2003) (Chen, U.S.M.J.)....................................................................................... 14-15 Chem. Mfrs. Ass'n v. Nat. Res. Def. Council, Inc., 470 U.S. 116 (1985) .................................. 14 Coast Plaza Doctors Hosp. v. Blue Cross of Cal., 83 Cal. App. 4th 677 (2000) ................... 16, 18 COMSAT Corp. v. NSF, 190 F.3d 269 (4th Cir. 1999) .................................................. 11-13, 25 Credit Suisse First Boston Corp. v. Grunwald, 400 F.3d 1119 (9th Cir. 2005)...................... 13-14 Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213 (1985) ......................................................... 15 Engine Mfrs. Ass'n v. S. Coast Air Quality Maint. Dist., 498 F.3d 1031 (9th Cir. 2007) ........... 15 Festus & Helen Stacy Found., Inc. v. Merrill Lynch, Pierce Fenner, & Smith, Inc., 432 F. Supp. 2d 1375 (N.D. Ga. 2006)................................................................................ 12­13 Fidelity Fed. Bank, FSB v. Durga Ma Corp., 386 F.3d 1306 (9th Cir. 2004) ............................ 14 Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) .............................................. 16-17 Hay Group, Inc. v. E.B.S. Acquisition Corp., 360 F.3d 404 (3rd Cir. 2004) ..................... 9-13, 16 Hillsborough County v. Automated Med. Labs., Inc., 471 U.S. 707 (1985) .............................. 15 In re Dual-Deck Video Cassette Recorder Antitrust Litig., 10 F.3d 693 (9th Cir. 1993) .............. 6 Irwin v. Mascott, 370 F.3d 924 (9th Cir. 2004) .......................................................................... 6 Lambert v. Carneghi, 158 Cal. App. 4th 1120 (2008)................................................................ 16 Legion Ins. Co. v. John Hancock Mut. Life Ins. Co. (In re Arbitration), 2001 U.S. Dist. LEXIS 15911, No. 01-162, 2001 WL 1159852 (E.D. Pa. Sept. 5, 2001) ................................... 10 Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52 (1995) ..................................... 8, 14 Max Marx Color & Chem. Co. Employees' Profit Sharing Plan v. Barnes, 37 F. Supp. 2d 248 (S.D.N.Y 1999) .......................................................................................... 13
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Meadows Indem. Co., Ltd. v. Nutmeg Ins. Co., 157 F.R.D. 42 (M.D. Tenn. 1994).............. 10, 13 Miranda v. 21st Century Ins. Co., 117 Cal. App. 4th 913 (2004) ............................................... 17 Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) ................................. 8 New Regency Prods., Inc. v. Nippon Herald Films, Inc., 501 F.3d 1101 (9th Cir. 2007) ........... 14 Odjfell ASA v. Celanese AG, 328 F. Supp. 2d 505 (S.D.N.Y. 2004)......................................... 11 Olympic Pipe Line Co. v. City of Seattle, 437 F.3d 872 (9th Cir. 2006) .................................... 15 Painewebber, Inc. v. Hofmann, 984 F.2d 1372 (3rd Cir. 1993) ................................................. 10 Pub. Employees Ret. Sys. v. Betts, 492 U.S. 158 (1989) .......................................................... 14 Reno Air Racing Ass'n v. McCord, 452 F.3d 1126 (9th Cir. 2006) ............................................ 6 SEC v. Int'l Swiss Inv. Corp., 895 F.2d 1272 (9th Cir. 1990) ..................................................... 6 Sec. Life Ins. Co. of Am. v. Ducanson & Holt, Inc., 228 F.3d 865 (8th Cir. 2000) .................... 10 Shuffler v. Heritage Bank, 720 F.2d 1141 (9th Cir. 1983) .......................................................... 6 Sovak v. Chugai Pharm. Co., 280 F.3d 1266 (9th Cir. 2002), modified on other grounds, 289 F.3d 615 (9th Cir. 2002) (en banc), cert. denied, 537 U.S. 825 (2002)................................ 14 United States v. Baker, 641 F.2d 1311 (9th Cir. 1981) ............................................................... 6 Volt Info. Servs., Inc. v. Bd. of Trs. of Leland Stanford Univ., 489 U.S. 468 (1989) ........ 8, 15-16 Watson v. Proctor (In re Watson), 161 F.3d 593 (9th Cir. 1998) ............................................... 14

STATUTES 9 U.S.C. §§ 1, et seq. ............................................................................................................. 1, 5 9 U.S.C. § 2 ................................................................................................................................ 8 9 U.S.C. § 7 ..................................................................................................... 2, 9­13, 15, 19, 21 Cal. Civ. Proc. Code §§ 1141.10­1141.12................................................................................. 17 Cal. Civ. Proc. Code § 1282.6............................................................................................. 17­18 Cal. Civ. Proc. Code § 1283.05............................................................................................ 16-18 Cal. Civ. Proc. Code § 1283.1.............................................................................................. 16-18 Mass. Gen. Laws c. 251, § 7 .................................................................................................... 15

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RULES Fed. R. Civ. P. 45................................................................................................................ 19, 26 CivLR 83.3, U.S. Dist. Ct., S.D. Cal. .......................................................................................... 7 Cal. Ct. R. 3.810 ....................................................................................................................... 17 Cal. Ct. R. 3.811 ....................................................................................................................... 17 Cal. Ct. R. 3.822 ....................................................................................................................... 17

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The Respondents, INTERACTIVE DATA CORP. ("IDCO") and INTERACTIVE DATA PRICING AND REFERENCE DATA, INC. ("PRD") (collectively, "Interactive Data"), hereby oppose Petitioners' Ex Parte Application for Order Enforcing FINRA Subpoena or, in the Alternative, Setting a Hearing at the Earliest Possible Date with Leave to Conduct Discovery (the "Application"). This is not a garden-variety discovery dispute. While Petitioners assert that the sole issue involved is the enforceability of a FINRA arbitration subpoena, see Petitioners' Memorandum1 at 2, this characterization omits the most critical information: The arbitration subpoena was issued to Interactive Data, which is not a party to the arbitration proceeding, and seeks from it an enormous volume of documents that are not relevant or material to Petitioners' claims against the defendants in the arbitration, and required that the documents be produced only two business days after the subpoena was served. Indeed, the subpoena represents nothing more than a disguised fishing expedition, evidently initiated in the hope that it will uncover information leading to a claim against Interactive Data.2 However, the Federal Arbitration Act, 9 U.S.C. §§ 1, et seq., which governs the arbitration, prohibits just this type of fishing expedition, as it does not permit arbitrators to issue subpoenas for pre-hearing discovery to those, like Interactive Data, who are not parties to the arbitration and did not agree to submit to the authority of a particular arbitral forum. Accordingly, the arbitration subpoena is unenforceable as a matter of law. Moreover, responding to the subpoena would be enormously burdensome, expensive (producing documents in response to the subpoena, as written, would cost Interactive Data close to $2 million3) and time-consuming for Interactive Data, and, as such, would cause substantial Petitioners' "Memorandum of Points and Authorities in Support of Ex Parte Application for Order Enforcing FINRA Subpoena or, in the Alternative, Setting a Hearing at the Earliest Possible Date with Leave to Conduct Discovery" is referred to herein as "Petitioners' Memorandum."
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As the facts below demonstrate, there would be no basis for a claim against Interactive Data, and Petitioners would not have standing to assert one. However, that is beside the point, as Petitioners clearly are not entitled to documents that are not relevant to the existing claims and defenses in the arbitration proceeding out of which the subpoena issued.
3

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disruption to its business. Enforcement should be denied on this basis, as well. Even if the subpoena were styled not as a discovery subpoena, but as a subpoena directing Interactive Data to bring documents with it to the arbitration hearing, its burden and overbreadth, and the immateriality of the documents it seeks, would be grounds to deny enforcement. See, e.g., 9 U.S.C. § 7 (arbitrators may only issue subpoenas for witnesses to bring to an arbitration hearing documents that are "material as evidence in the case."). Notwithstanding the unenforceability of the subpoena on multiple grounds, Interactive Data engaged in good faith negotiations with Petitioners in an attempt to reach an agreement on a reasonable, more narrowed production in response to the subpoena. Last week, Interactive Data sent a written proposal to Petitioners, outlining such a proposed, narrowed production. Petitioners rejected that proposal and filed the Ex Parte Application that is now before the Court. I. BACKGROUND A. 1. The Parties, the Underlying Arbitration and the Arbitration Subpoena IDCO and PRD

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IDCO is a global provider of financial market data, analytics and related services to financial institutions, active traders and individual investors. Its businesses supply real-time market data, pricing, evaluations and reference data for millions of securities traded around the world, including hard-to-value instruments. PRD, a subsidiary of IDCO, is a source to the institutional investment community for market data and financial information. It collects, edits, maintains and delivers data on more than six million securities, including daily evaluations for approximately 2.5 million fixed income and international equity issues. Declaration of Sigal Lewkowicz ("Lewkowicz Decl.") (Exhibit B to Declaration of Laura McLane ("McLane Decl.")) ¶¶3-4. Among the securities evaluated by PRD are Collateralized Mortgage Obligations, commonly referred to as "CMOs." CMOs are securities backed by pools of mortgages. See Petitioners' Memorandum at 7. PRD considers information including its proprietary models, available quotes, trade, and other market data to determine evaluations for CMOs and other Petitioners' Application).
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securities. Evaluations constitute Interactive Data's good faith opinions as to the price that an institutional buyer in the marketplace would pay for a security in a current sale. Supplemental Declaration of Sigal Lewkowicz ("Supp. Lewkowicz Decl.") (Ex. L to McLane Decl.) ¶3. 2. Petitioners, Brookstreet and NFS

According to their submissions, Petitioners were purchasers of certain high-risk classes of CMOs. Petitioners used Brookstreet Securities Corporation ("Brookstreet"), a respondent in the underlying arbitration, as their brokerage firm, and Brookstreet contracted with National Financial Services, LLC ("NFS") to provide clearing services to Brookstreet. See generally Statement of Claim ("Arbitration Complaint") (Ex. 2 to Miller Decl.). NFS used pricing data obtained from Interactive Data4 and another vendor to provide daily pricing estimates for CMOs. See Respondent National Financial Services, LLC's Answer (Ex. 3 to Miller Decl.) at 10. Interactive Data functioned solely as a source of evaluated pricing information for NFS, among numerous other customers. Interactive Data provides the same evaluations to all of its thousands of customers. Supp. Lewkowicz Decl. ¶4. Interactive Data was not involved with what NFS did with that information, in extending margin credit to Brookstreet, or in dealing with Petitioners, and there are no contrary allegations. Id. Moreover, Petitioners acknowledge that when NFS received evaluated prices for the CMOs from Interactive Data, NFS was not provided with the underlying data used by Interactive Data to determine those evaluations. See Petitioners' Memorandum at 6. 3. The Subprime Mortgage Crisis

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In 2007, the so-called housing bubble in the United States effectively burst. Many properties purchased with subprime and adjustable rate mortgages could not be refinanced, resulting in numerous defaults and foreclosures. Many investors in CMOs suffered losses. Petitioners purport to be among the investors who sustained such losses. 4. Petitioners' Claims Against Brookstreet and NFS in the FINRA Arbitration

As a result of their alleged losses, Petitioners have asserted claims in a FINRA arbitration PRD is the entity that actually performs this work, but PRD and IDCO, as the recipients of the subpoena, are referred to collectively herein as "Interactive Data."
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proceeding pending in California against Brookstreet, NFS, and others for securities fraud, common law fraud, breach of fiduciary duty, negligence, and other claims. The essence of Petitioners' claims is that Brookstreet invested their funds that "were earmarked for conservative fixed income investments ­ on margin" in much higher-risk securities, such as the CMOs at issue here, and that Brookstreet and NFS "systematically overstated" the value of the CMOs held by Petitioners. When those values declined in 2007, margin calls were triggered, forcing the CMOs to be sold and Petitioners to realize losses. See Arbitration Complaint generally and ¶¶8, 11. 5. The Arbitration Subpoena to Interactive Data

At Petitioners' request, the arbitration panel issued a subpoena to Interactive Data ­ not a party to the arbitration ­ seeking a vast amount of information covering a nearly four-year period relating to its evaluations of CMOs, Brookstreet, and NFS. See Subpoena to Interactive Data Corporation (Ex. A to McLane Decl.). As a non-party to the arbitration proceeding, Interactive Data received no notice of the request to the arbitration panel that the subpoena be issued, and had no opportunity to object to the scope of the subpoena. While the subpoena is dated April 25, 2008, Interactive Data was not served with the subpoena until May 16, 2008, two business days before the date on which the documents were purportedly due. Id.; McLane Decl. ¶3. The information sought in the subpoena includes "all documents relating to the pricing" of the CMOs from January 2004 through September 2007, a request which purportedly includes all of the underlying data, information and processes used by Interactive Data to determine the value of particular securities. See Ex. A to McLane Decl. at Request No. 1. This is a voluminous and proprietary body of information. It is also not relevant to Petitioners' claims in the arbitration: the materials, data and information on which Interactive Data based the evaluations provided to NFS simply bear no relationship to whether NFS or Brookstreet improperly invested Petitioners' funds, or whether they misrepresented the market value of those investments. Rather, this is a fishing expedition into the records of Interactive Data, against whom no claim is pending.5 These It appears that Petitioners are looking to uncover information suggesting that Interactive Data somehow misapplied the underlying data, or committed some other kind of error, in determining the evaluations that were provided to NFS. However, there is no claim pending against Interactive Data of any kind, and allowing Petitioners to use an arbitration subpoena as a means to
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issues are discussed more fully in the Argument, below. See Section III, infra. B. The Initiation of this Action Against Interactive Data

On May 20, 2008, Counsel for Interactive Data notified Petitioners' Counsel that the subpoena was unenforceable because (1) it purports to seek pre-hearing discovery from a nonparty in aid of an arbitration proceeding, in violation of the Federal Arbitration Act, 9 U.S.C. §§ 1, et seq. ("FAA"); (2) it is enormously overbroad and unduly burdensome; and (3) it imposed an unreasonably short return date for production within two business days of service. Ex. C to McLane Decl. On June 3, 2008, Counsel for Petitioners requested more information from Interactive Data about the undue burden and expense that responding to the subpoena would impose upon them. Ex. D to McLane Decl. On June 10, 2008, Counsel for Interactive Data sent Petitioners' counsel a letter detailing the enormous amount of effort, time and expense that responding to the subpoena would require.6 Ex. E to McLane Decl. For example, responding just to the subpoena's first request would have required, among other things, at least 33,750 hours of work, review of over 100 million evaluations, and an expensive and time consuming restoration of employees' e-mail databases. Id. Moreover, the letter informed counsel for Petitioners that the majority of the information sought in the subpoena was available from the parties to the arbitration. Id. At no time did Petitioners' counsel initiate any discussions or advance any proposals for narrowing the subpoena's sweeping requests, or otherwise seek to reach an agreement short of litigation. McLane Decl. ¶8. Instead, on July 15, 2008 ­ nearly one month after the last

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attempt to manufacture such a claim ­ even assuming they could establish standing, which they cannot ­ is improper. Moreover, such a claim would lack merit, as Interactive Data supplied evaluated pricing information based on proprietary models, analysis and review of market factors, and had no relationship with Petitioners. Indeed, it appears that Petitioners' alleged losses were caused by nothing more than the decline of the housing market and its effect on the risky mortgages that backed the securities into which Petitioners invested. The letter also reiterated that fact that, even leaving aside the subpoena's overbreadth and undue burden, the subpoena is unenforceable under the FAA. Id.
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correspondence between counsel for Petitioners and counsel for Interactive Data ­ Petitioners served Interactive Data with a Petition for Order to Show Cause re Contempt for Failure to Comply with Subpoena issued by FINRA Arbitrator in the Superior Court of California for the County of San Diego, Case No. 37-2008-00056017-CU-PT-NC.7 Respondents removed the action to this Court, and filed an Answer to the Petition, on August 13, 2008. Petitioners' counsel never advanced any proposals or engaged in any substantive discussions with Interactive Data's counsel in an effort to reach agreement regarding the subpoena's requests before the action was removed and Interactive Data's Answer was filed. It was not until August 15, 2008, two days after removal and the filing of the Answer, that counsel for the Petitioners for the first time sought to initiate discussions to seek agreement regarding production "on a narrowed basis." Ex. F to McLane Decl. C. Efforts to Minimize The Subpoena's Burdens

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On August 19, 2008, counsel for Petitioners and counsel for Interactive Data participated in a telephone conversation in which they discussed the subpoena, and potential proposals for narrowing it. McLane Decl. ¶9. On August 21, 2008, counsel participated in a follow-up telephone conversation. Id. During that call, proposals for narrowing were discussed further, and Interactive Data's counsel asked Petitioners' counsel for more information regarding the requests, including information about their relevance to the claims in the arbitration. Id. ¶10. Interactive While Petitioners have styled their action as one for "Contempt," a contempt action must be founded upon disobedience to a court order. Reno Air Racing Ass'n v. McCord, 452 F.3d 1126, 1130 (9th Cir. 2006); accord, e.g., Irwin v. Mascott, 370 F.3d 924, 932 (9th Cir. 2004). Here, there is no court order at all but, rather, a discovery subpoena issued by an arbitral forum to which Interactive Data did not agree to submit. Moreover, several Ninth Circuit decisions indicate that a person cannot be adjudged in contempt unless her disobedience of the court order in question was willful. See, e.g., Irwin, 370 F.3d at 932 (citing Shuffler v. Heritage Bank, 720 F.2d 1141, 1146 (9th Cir. 1983)); see, e.g., SEC v. Int'l Swiss Inv. Corp., 895 F.2d 1272, 1277 (9th Cir. 1990) (citing same) (superseded by statute on other grounds); see also United States v. Baker, 641 F.2d 1311, 1317 (9th Cir. 1981) ("Willfulness is defined as a volitional act done by one who knows or should reasonably be aware that his conduct is wrongful.") (citations and internal quotation marks omitted). All agree at least that "a person should not be held in contempt if his action appears to be based on a good faith and reasonable interpretation of [such an] order." See, e.g., Reno Air Racing, 452 F.3d at 1130 (quoting In re Dual-Deck Video Cassette Recorder Antitrust Litig., 10 F.3d 693, 695 (9th Cir. 1993)) (internal quotation marks omitted). Interactive Data has not willfully disobeyed the subpoena, as the subpoena is unenforceable because it violates the FAA, it imposed an unreasonably short time of two business days to respond, and it is unreasonably overbroad and unduly burdensome.
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Data's counsel indicated a willingness to continue working with Petitioners' counsel in order to reach an agreement, notwithstanding the unenforceability of the subpoena, but also indicated that the person at Interactive Data with the most knowledge of the issues was out of the country (on vacation in Israel) until Labor Day, so a definitive agreement would not be reachable until after the holiday. Id. ¶11; see also Ex. G to McLane Decl. Counsel for Petitioners subsequently sent a letter to counsel for Interactive Data, claiming that Petitioners could not wait until after Labor Day to seek resolution, notwithstanding the fact that they waited three months after serving the subpoena to initiate discussions regarding an agreement for production. Petitioners' counsel also failed to provide any answers to Interactive Data's counsel's previous requests for information regarding certain of the requests. Ex. H to McLane Decl. On August 25, 2008, in a final effort to resolve the issue, and after several conference calls with the Interactive Data representative on vacation in Israel, counsel for Interactive Data sent a written proposal to counsel for Respondents, agreeing to a production of documents on a narrowed basis, despite the subpoena's unenforceability under the FAA (the specifics of the proposals are discussed in Section III, below, and are set forth in the letter attached as Exhibit I to the McLane Decl.). No response to this proposal was received before Petitioners filed the instant Application with this Court on an ex parte basis.8 On August 28, 2008, Petitioners' counsel, claiming they had not received the fax transmission containing the August 25, 2008 letter, sent a reply to that letter, the substance of which indicated that, notwithstanding Interactive Data's proposed production, no agreement could be reached. Petitioners' counsel again failed to provide any information responsive to Interactive Data's questions regarding the subpoena's individual requests. Ex. J to McLane Decl.

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8

Petitioners did not comply with the prerequisites for seeking ex parte relief, which is inexcusable, particularly given that Petitioners' Application seeks dispositive relief on the merits of this action. Interactive Data only learned of the Application after being served with a copy of it the day after it was filed; no efforts were made by Petitioners' counsel to inform Interactive Data of the impending filing; and there is no reason (nor is one offered by Petitioners) that Interactive Data should not have been so informed. See CivLR 83.3(h). -7CASE NO. 08-CV-1476-JM-POR

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II.

THE ARBITRATION SUBPOENA IS UNENFORCEABLE AS A MATTER OF LAW. A. The Arbitration Subpoena Seeks Pre-Hearing Discovery from a Non-Party in Violation of the Federal Arbitration Act. 1. The FAA Applies to FINRA Arbitrations.

Petitioners contend that FINRA securities arbitrations are not "circumscribed" by the FAA. See Petitioners' Memorandum at 12. This contention is without merit. "The FAA applies when there is federal subject matter jurisdiction, i.e., diversity jurisdiction, and when the contract calling for arbitration `evidences a transaction involving interstate commerce.'" Barbier v. Shearson Lehman Hutton, Inc., 948 F.2d 117, 120 (2d Cir. 1991) (quoting 9 U.S.C. § 2; citing Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 n.32 (1983)) (rejecting claim that securities arbitration before New York Stock Exchange9 was not subject to the FAA). There is no question that these requirements are met here. Moreover, lest there be any doubt, FINRA itself actually incorporates the entirety of the FAA in numerous places on its website. Ex. K to McLane Decl. 10
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As Petitioners point out, FINRA "was created in July 2007 through the consolidation of the National Association of Securities Dealers (NASD) and the member regulation, enforcement and arbitration functions of the New York Stock Exchange." Petitioners' Memorandum at 9.
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Petitioners cite Volt Information Services, Inc. v. Board of Trustees of Leland Stanford Univ., 489 U.S. 468 (1989) ­ which did not involve a FINRA securities arbitration ­ for the proposition that the FAA does not govern FINRA arbtrations. However, Volt merely held that the FAA does not preempt a conflicting state statute authorizing a stay of arbitration "where the parties have agreed that their arbitration agreement will be governed by the [state statute]." Id. at 470 (emphasis added). That holding is irrelevant to this matter: (1) Volt dealt with a dispute between the parties to the arbitration agreement and the effect of a choice of law clause contained therein, but here, Interactive Data is not a party to the arbitration agreements in question; (2) Volt did not address the issue of non-party discovery in arbitration; and (3) Interactive Data understands that, if the parties' agreements are governed by any state's procedural arbitration law (and they are not), it would be Massachusetts law, which, consistent with the FAA and as discussed below, does not permit pre-hearing discovery subpoenas to non-parties. Indeed, the Volt court held that "it is undisputed that this contract falls within the coverage of the FAA, since it involves interstate commerce...." Id. at 476. However, as the parties in Volt had selected California law to govern, the FAA did not preempt a California provision staying arbitration. Moreover, after Volt, the Supreme Court confirmed that the FAA's rules concerning the powers of arbitrators govern when the parties' agreement does not specify otherwise. See Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 58-64 (1995) (holding that New York law restricting ability of arbitrators to award punitive damages was inapplicable despite the fact that the agreement selected New York law to govern, as the FAA permitted arbitrators to award punitive damages; the choice-of-law clause encompassed the "substantive principles that New York courts would apply, but [did] not
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Thus, while Petitioners claim that they "are not aware of a single case on-point holding that FINRA arbitrations are circumscribed by the FAA," Petitioners' Memorandum at 12, such cases nevertheless exist, and they dispose of Petitioners' contention. The FINRA arbitration at issue in this case is subject to the FAA. 2. The FAA Does Not Authorize Arbitrators to Issue Subpoenas for PreHearing Discovery to Non-Parties.

Section 7 of the FAA provides, in relevant part, as follows: § 7. Witnesses before arbitrators; fees; compelling attendance The arbitrators selected either as prescribed in this title or otherwise, or a majority of them, may summon in writing any person to attend before them or any of them as a witness and in a proper case to bring with him or them any book, record, document, or paper which may be deemed material as evidence in the case. The fees for such attendance shall be the same as the fees of witnesses before masters of the United States courts. Said summons shall issue in the name of the arbitrator or arbitrators, or a majority of them, and shall be signed by the arbitrators, or a majority of them, and shall be directed to the said person and shall be served in the same manner as subpoenas to appear and testify before the court; . . . . 9 U.S.C. § 7 (emphasis added). Section 7 of the FAA does not permit arbitrators to issue subpoenas for pre-hearing discovery from non-parties. In the most recent federal appellate case to decide the issue, the United States Court of Appeals for the Third Circuit squarely held that Section 7 of the FAA prohibits arbitrators from issuing subpoenas for pre-hearing discovery to non-parties. See Hay Group, Inc. v. E.B.S. Acquisition Corp., 360 F.3d 404, 411 (3rd Cir. 2004). In Hay, a claimant in an arbitration concerning alleged violations of a non-solicitation agreement served discovery subpoenas for production of documents on non-parties to the arbitration. 360 F.3d at 405. The Third Circuit Court of Appeals reversed the District Court's order enforcing the subpoenas, and in doing so engaged in a careful analysis of Section 7 of the FAA. See id. at 406-13. The Court first noted that "[a]n arbitrator's authority over parties that are not contractually bound by the arbitration agreement is strictly limited to that granted by the Federal Arbitration Act." Id. at [] include special rules limiting the authority of arbitrators.").
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406 (emphasis added). The Court then analyzed the text of Section 7 of the FAA, quoted above, and held as follows: This language speaks unambiguously to the issue before us. The only power conferred on arbitrators with respect to the production of documents by a nonparty is the power to summon a non-party "to attend before them or any of them as a witness and in a proper case to bring with him or them any book, record, document or paper which may be deemed material as evidence in the case. 9 U.S.C. § 7 (emphasis added). The power to require a non-party "to bring" items "with him" clearly applies only to situations in which the non-party accompanies the items to the arbitration proceeding, not to situations in which the items are simply sent or brought by a courier. In addition, the use of the word "and" makes it clear that a non-party may be compelled "to bring" items "with him" only when the non-party is summoned "to attend before [the arbitrator] as a witness." Thus, Section 7's language unambiguously restricts an arbitrator's subpoena power to situations in which the non-party has been called to appear in the physical presence of the arbitrator and to hand over the documents at that time. Id. at 407 (italics in original). The Hay court rejected the holdings of the few courts that have held that Section 7 impliedly confers upon arbitrators the power to issue pre-hearing subpoenas for discovery to nonparties, 11 finding that, "[b]y conferring the power to compel a non-party witness to bring items to an arbitration proceeding while saying nothing about the power simply to compel the production of items without summoning the custodian to testify, the FAA implicitly withholds the latter power. If the FAA had been meant to confer the latter, broader power, we believe that the drafters would have said so. . . ." 360 F.3d at 408-09. Finally, the Hay court held that "a literal reading of Section 7 actually furthers arbitration's goal of `resolving disputes in a timely and cost efficient manner.'" Id. at 409 (quoting Painewebber, Inc. v. Hofmann, 984 F.2d 1372, 1380 (3rd Cir. 1993)). The court stated: [I]t is not absurd to read the FAA as circumscribing an arbitration panel's power to affect those who did not agree to its jurisdiction. See Legion Ins. Co. [v. John Hancock Mut. Life Ins. Co. (In re Arbitration), 2001 U.S. Dist. LEXIS 15911 at *4 (E.D. Pa. Sept. 5, 2001)] ("the authority of arbitrators with respect to non-parties
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See, e.g., Security Life Ins. Co. of Am. v. Ducanson & Holt, Inc., 228 F.3d 865, 870-71 (8th Cir. 2000); Meadows Indem. Co., Ltd. v. Nutmeg Ins. Co., 157 F.R.D. 42, 45 (M.D. Tenn. 1994). - 10 CASE NO. 08-CV-1476-JM-POR

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who have never agreed to be involved in arbitration is severely limited."). The requirement that document production be made at an actual hearing may, in the long run, discourage the issuance of large-scale subpoenas upon non-parties. This is so because parties that consider obtaining such a subpoena will be forced to consider whether the documents are important enough to justify the time, money and effort that the subpoenaing parties will be required to expend if an actual appearance before an arbitrator is needed. Under a system of pre-hearing document production, by contrast, there is less incentive to limit the scope of discovery and more incentive to engage in fishing expeditions that undermine some of the advantages of the supposedly shorter and cheaper system of arbitration. Id. at 409 (emphasis added) (citing COMSAT Corp. v. NSF, 190 F.3d 269, 276 (4th Cir. 1999)). See also Odjfell ASA v. Celanese AG, 328 F. Supp. 2d 505, 507 (S.D.N.Y. 2004) ("The Court agrees with the Third Circuit, and adds only that, inasmuch as arbitration is largely a matter of contract, it would seem particularly inappropriate to subject parties who never agreed to participate in the arbitration in any way to the notorious burdens of pre-hearing discovery. Arbitration, which began as a quick and cheap alternative to litigation, is increasingly becoming slower and more expensive than the system it was designed to displace, and permitting prehearing discovery of non-parties would only make it more so.") (emphasis added). The subpoena at issue here underscores the concerns explained in Hay. Its breadth indicates that it is truly nothing other than a fishing expedition seeking a vast volume of documents, the majority of which are not relevant to the claims in the underlying arbitration. This runs contrary to both the general purposes of arbitration, and the mandates of the FAA. COMSAT, the Fourth Circuit's decision cited in Hay, similarly held that Section 7 of the FAA does not give an arbitrator the authority to issue subpoenas for pre-hearing discovery to nonparties. See 190 F.3d at 278. The COMSAT court held that "[t]he subpoena powers of an arbitrator are limited to those created by the express provisions of the FAA. . . . Nowhere does the FAA grant an arbitrator the authority to order non-parties to appear at depositions, or the authority to demand that non-parties provide the litigating parties with documents during prehearing discovery." 190 F.3d at 275. The court reasoned that: The rationale for constraining an arbitrator's subpoena power is clear. Parties to a private arbitration agreement forego certain procedural rights attendant to formal
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litigation in return for a more efficient and cost-effective resolution of their disputes. A hallmark of arbitration ­ and a necessary precursor to its efficient operation ­ is a limited discovery process. Id. at 276 (citations omitted).12 Petitioners attempt to distinguish the foregoing cases on the grounds that they do not involve FINRA arbitrations, but that is a distinction without a difference. See Petitioners' Memorandum at 13 (claiming that, because Hay was not a FINRA arbitration, it is inapposite). If an arbitration of any type is governed by the FAA ­ as the instant arbitration clearly is ­ then the FAA's provisions, and limitations, apply. The FAA's provisions are not selective, and do not become less potent depending upon the subject matter of the arbitration in question. Petitioners also rely heavily on the North District of Georgia's opinion in Festus & Helen Stacy Foundation, Inc. v. Merrill Lynch, Pierce Fenner, & Smith, Inc., 432 F. Supp. 2d 1375 (N.D. Ga. 2006), but that case is an outlier that runs contrary to the reasoned case law discussed above. In Festus, the court applied little reasoning to its determination that Section 7 of the FAA permits arbitrators to issue pre-hearing discovery subpoenas to non-parties, and relied primarily upon the fact that the NASD panel itself determined it had the authority to issue the subpoena in question. See 423 F. Supp. 2d at 1379. The Festus court's reasoning thus suggests that an NASD arbitration panel can unilaterally act without regard to the federal statute governing arbitration. This conclusion defies logic and, as discussed in the following subsection, is simply not an accurate statement of the law. See subsection 3, infra. The Festus court also stated that "[t]he parties in the instant matter do not dispute that they agreed to arbitrate the underlying suit. Accordingly, the NASD Panel had the authority to determine the scope of discovery and it did so." Festus, 432 F. Supp. 2d at 1379. This rationale ignores the fact that the subpoena in question in that case, as here, was to a non-party who had not agreed to submit arbitration. Such non-parties should be afforded all of the protections of the FAA which, by its own terms, does not The COMSAT court stated that in unusual circumstances, special need or hardship could permit a party to petition the district court to allow some amount of pre-hearing discovery, but that, "at a minimum, a party must demonstrate that the information it seeks is otherwise unavailable." 190 F.3d at 276. Here, much of the information sought is available from parties to the arbitration, and the rest is wholly immaterial to the claims and defenses therein. See Section III, infra.
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authorize arbitrators to issue pre-hearing discovery subpoenas to non-parties. This Court is not bound to follow Festus, nor should it (tellingly, no other published court decision has).13 Rather, this Court should conclude, consistent with the Third and Fourth Circuits and the cases following them, that Section 7 of the FAA does not allow arbitrators to issue subpoenas for pre-hearing discovery to non-parties, rendering the present subpoena unenforceable. 3. FINRA's Procedural Rules Do Not Override the FAA.

Petitioners contend that FINRA's rules permit arbitrators to issue pre-hearing discovery subpoenas to non-parties. See Petitioners' Memorandum at 11-12. This argument fails. First, Interactive Data is not a party to the arbitration agreements in question, and as such did not agree to submit to ­ and therefore is not bound by ­ FINRA's procedural rules. Thus, while the parties to the arbitration may invoke FINRA's rules as against one another, Interactive Data, as a nonparty, is not bound by such rules. See Hay, 360 F.3d at 406. Moreover, "NASD rules are not `law.'" Max Marx Color & Chem. Co. Employees' Profit Sharing Plan v. Barnes, 37 F. Supp. 2d 248, 253 (S.D.N.Y 1999) ("Petitioners must point to a statutory violation to warrant vacatur of an arbitral award, not a violation of the [NASD] code of arbitration procedure."). Thus, to the extent FINRA's rules are construed to conflict with the FAA, the federal statute promulgated by Congress, and not the rules promulgated by FINRA (a self-regulatory organization) must govern.14 Petitioners' construction of FINRA's rules to permit Petitioners also rely on a magistrate judge's decision from the Middle District of Tennessee in Meadows, 157 F.R.D. 42, and suggest that it involved a FINRA arbitration. See Petitioner's Memorandum at 16 (characterizing Meadows as holding that "the FINRA arbitrator [is] empowered to issue and enforce the subpoena"). First, Meadows did not involve a FINRA (or NASD) arbitration. More importantly, it was decided before the decisions in Hay and COMSAT; it is not binding on this Court; and it improperly reads an "implied" power to issue discovery subpoenas to non-parties into the FAA, notwithstanding the absence of any such power in the actual terms of the statute. See 157 F.R.D. at 45. Again, a reasoned analysis of the terms of Section 7 yields the conclusion that its "language unambiguously restricts an arbitrator's subpoena power to situations in which the non-party has been called to appear in the physical presence of the arbitrator and to hand over the documents at that time." See Hay, 360 F.3d at 407.
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While the 9th Circuit has held that, because certain NASD rules have been approved by the SEC, they preempt conflicting state law, Credit Suisse First Boston Corp. v. Grunwald, 400 F.3d 1119, 1121 (9th Cir. 2005), those rules do not ­ and cannot ­ preempt a federal statute, such as the FAA. Indeed, to the extent the FINRA rules are characterized as akin to federal regulations, they are invalid if they conflict with the FAA. "A federal regulation in conflict with a federal
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the issuance of pre-hearing discovery subpoenas to non-parties conflicts with the FAA, which does not confer such powers on arbitrators for the reasons discussed above. B. California Law Does Not Provide a Basis for Enforcing the Subpoena.

Petitioners contend that irrespective of the FAA, California arbitration law applies, and that the subpoena is enforceable under California law. First, California law is inapplicable. Moreover, even if California law did apply, it does not permit arbitrators to issue subpoenas to non-parties in arbitrations of the type at issue here. 1. The FAA Trumps California Arbitration Law.

The Ninth Circuit has repeatedly recognized that "there is a strong default presumption that the Federal Arbitration Act, not state law, supplies the rules for arbitration." See New Regency Prods., Inc. v. Nippon Herald Films, Inc., 501 F.3d 1101, 1104 (9th Cir. 2007) (quoting Fidelity Fed. Bank, FSB v. Durga Ma Corp., 386 F.3d 1306, 1311 (9th Cir. 2004)); accord Sovak v. Chugai Pharm. Co., 280 F.3d 1266, 1269 (9th Cir. 2002), modified on other grounds, 289 F.3d 615 (9th Cir. 2002) (en banc), cert. denied, 537 U.S. 825 (2002). Parties to an arbitration agreement can choose different rules by contract, but their agreement must "clearly evidence" their intent to do so. Sovak, 280 F.3d at 1268 (citing, inter alia, Mastrobuono, 514 U.S. at 6162). The presence of a "general choice-of-law clause within an arbitration provision" is insufficient. Id. at 1269 (citations omitted). Here, Interactive Data understands that the agreements among the parties to the arbitration do not select California law, and Petitioners have not suggested otherwise. McLane Decl. ¶19. Indeed, it is Petitioners' burden to demonstrate such clear intent to select law other than the FAA, see Certain Underwriters at Lloyd's, London v. Argonaut Ins. Co., 264 F. Supp. 2d 926, 933

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statute is invalid as a matter of law." Watson v. Proctor (In re Watson), 161 F.3d 593, 598 (9th Cir. 1998) (citing Chem. Mfrs. Ass'n v. Natural Res. Defense Council, Inc., 470 U.S. 116, 126 (1985)) (emphasis in original). Relatedly, "no deference is due to agency interpretations at odds with the plain language of the statute itself. Even contemporaneous and longstanding agency interpretations must fall to the extent they conflict with statutory language." Pub. Employees Ret. Sys. v. Betts, 492 U.S. 158, 171 (1989) (superseded by statute on other grounds) (emphasis added). Moreover, Grunwald did not involve arbitration discovery at all, much less arbitration subpoenas to non-parties. 400 F.3d at 1121-23.
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(N.D. Cal. 2003) (Chen, U.S.M.J.), and they have not done so. In fact, Interactive Data is aware that the various agreements among the parties to the arbitration selected Massachusetts law to govern aspects of their relationship. McLane Decl. ¶19. It is not clear to what extent that choiceof-law clause applies here (Interactive Data is not privy to the agreements) but, in any case, Massachusetts law, like the FAA, does not authorize arbitrators to issue subpoenas for prehearing discovery to non-parties. See Mass. Gen. Laws c. 251, § 7(e) ("Any party to an arbitration proceeding may serve upon any other party a request for the production of documents . . . .") (emphasis added). Moreover, Interactive Data is not a party to the arbitration or to any of the agreements to arbitrate, and thus has not agreed to submit to the arbitration law of any state. In these circumstances, the Federal law of arbitration governs. Even if the FAA were not the default rule in the absence of a contrary arbitration agreement, a finding that California law permits arbitrators to issue subpoenas for pre-hearing discovery to non-parties would be in direct conflict with Section 7 of the FAA, and would therefore be preempted. The Supremacy Clause of the United States Constitution "invalidates state laws that interfere with, or are contrary to, federal law." Engine Mfrs. Ass'n v. S. Coast Air Quality Maint. Dist., 498 F.3d 1031, 1039 (9th Cir. 2007) (quoting Hillsborough County v. Automated Med. Labs., Inc., 471 U.S. 707, 712 (1985)) (internal quotation marks omitted). This occurs when, inter alia, state law "actually conflicts with federal law," Volt, 489 U.S. at 477; Engine Mfrs. Ass'n., 498 F.3d at 1039 (citation omitted); more specifically, "where compliance with both federal and state regulations is a physical impossibility, or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Olympic Pipe Line Co. v. City of Seattle, 437 F.3d 872, 877 (9th Cir. 2006) (citation and internal quotation marks omitted); accord Bernhardt v. County of Los Angeles, 339 F.3d 920, 929 (9th Cir. 2003). The Supreme Court has recognized that Congress' primary purpose in passing the FAA was "to enforce agreements into which parties had entered," including "not requir[ing] parties to arbitrate when they have not agreed to do so." Volt, 489 U.S. at 478 (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 219­220 (1985)) (emphasis added). Indeed, this purpose
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expressly informed the Hay court's decision, discussed above. 360 F.3d at 406 ("An arbitrator's authority over parties that are not contractually bound by the arbitration agreement is strictly limited to that granted by the Federal Arbitration Act"). Interactive Data did not agree to arbitrate any dispute with Petitioners. Thus, the FAA awards them protection against fishing expeditions masquerading as pre-hearing document subpoenas issued by an arbitral forum that was selected by others. To the extent that the California Arbitration Act compels a different result, it directly conflicts with the FAA, and is preempted.15 2. The Subpoena is Unenforceable Under California Law.

Even if the Court were to hold that California law applies, California law ­ including the provisions and case law cited by Petitioners ­ does not allow arbitrators to issue subpoenas seeking pre-hearing discovery from non-parties in arbitrations such as this. Rather, California arbitration law evinces a clear policy limiting discovery ­ including non-party discovery ­ in most arbitrations, except those involving personal injury or wrongful death, or where the parties have expressly agreed otherwise. "As a general rule, the right to discovery is highly restricted in arbitration proceedings." Alexander v. Blue Cross of Cal., 88 Cal. App. 4th 1082, 1088 (2001); accord, e.g., Lambert v. Carneghi, 158 Cal. App. 4th 1120, 1131 (2008) ("California law does not automatically guarantee the right to discovery in arbitration proceedings, except in certain types of cases or unless the parties agree") (citing, inter alia, Cal. Civ. Proc. Code §§ 1283.05, 1283.1); accord, e.g., Coast Plaza Doctors Hosp. v. Blue Cross of Cal., 83 Cal. App. 4th 677, 690 (2000) ("Unquestionably, discovery is limited in arbitrations (except in injury or death cases or where the parties have expressly agreed otherwise)"); see also Armendariz v. Found. Health Psychcare Servs., 24 Cal. 4th 83, 106 (2000) ("a limitation on discovery is one important component of the `simplicity, informality, and expedition of arbitration'") (quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 31 (1991)). Volt does not support a different conclusion. While the Volt Court declined to rule that the FAA preempted a CAA provision before the court concerning a stay of arbitration, it clearly based that determination on the parties' express contractual choice of California procedural law to govern their arbitration. See 489 U.S. at 477­79. See also fn. 10, supra. Here, neither the parties to the arbitration provision, nor Interactive Data, made such a choice.
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California Code of Civil Procedure Section 1283.05 governs depositions and discovery in arbitration, and contains exceptions to the general rule of limited discovery, but only in certain types of arbitrations. See, e.g., Alexander, 88 Cal. App. 4th at 1090­91. Here, Petitioners are mistaken to rely on Section 1283.05 and the case of Berglund v. Arthroscopic & Laser Surgery Ctr. of San Diego, L.P., 44 Cal.4th 528 (2008), which interprets it. Section 1283.05, entitled "Depositions and Discovery", applies only when an arbitration agreement either: (1) addresses claims for personal injury/wrongful death or (2) specifically incorporates it by reference. Cal. Civ. Proc. Code § 1283.1(b) ("Only if the parties by their agreement so provide, may the provisions of Section 1283.05 be incorporated into, made a part of, or made applicable to" any arbitration agreement for disputes other than those for personal injury or wrongful death) (emphasis added); Miranda v. 21st Century Ins. Co., 117 Cal. App. 4th 913, 925 (2004); Alexander, 88 Cal. App. 4th at 1090. Section 1283.05 was thus only relevant in Berglund, which is quoted at length in Petitioners' Memorandum at page 18, because that case involved a claim for personal injury. See 44 Cal. 4th at 533, 535. This case involves a FINRA securities arbitration, not personal injury or wrongful death claims, and the parties to the arbitration did not incorporate Section 1283.05 into their agreement to arbitrate. McLane Decl. ¶19. Accordingly, neither Section 1283.05 nor Berglund have any relevance here, and they do not provide support for the arbitration panel's issuance of the subpoena. Petitioners also point to two other provisions of California law, neither of which provide them with support. See Petitioners' Memorandum at 17. Petitioners cite California Court Rule 3.822(a) but that rule is completely inapplicable to this matter. By its own terms Rule 3.822 (and the surrounding rules) applies only to cases falling under the mandatory judicial arbitration system for "small civil cases" set forth in California Code of Civil Procedure §§ 1141.10, et seq. Cal. Ct. Rs. 3.810 & 3.811; Cal. Civ. Proc. Code §§1141.10­1141.12. This is not such a case. Petitioners are similarly incorrect to invoke the second sentence of California Civil Procedure Code § 1282.6(a). That subsection applies only to arbitration hearings, not to prehearing discovery. As discussed above, Section 1283.05 ­ entitled "Depositions and Discovery" ­ is the section that governs discovery matters in arbitration, and it is limited to arbitrations of the
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type that this is decidedly not. In contrast, Section 1282.6 is housed among the sections of the California Arbitration Act addressing arbitration hearings, not pre-hearing discovery, and subsection (a) of Section 1282.6, on which Petitioners rely, provides: (a) A subpoena requiring the attendance of witnesses, and a subpoena duces tecum for the production of books, records, documents and other evidence, at an arbitration proceeding or deposition under Section 1283 [governing situations where a witness will be unavailable at the hearing], and if Section 1283.05 is applicable, for the purposes of discovery, shall be issued as provided in this section. In addition, the neutral arbitrator upon his own determination may issue subpoenas for the attendance of witnesses and subpoenas duces tecum for the production of books, records, documents and other evidence. Cal. Civ. Proc. Code § 1282.6(a) (emphasis added). Subsections (b) and (c) of Section 1282.6 address the mechanics for issuing hearing subpoenas when they have been requested by the parties. The second sentence of the subsection (a), quoted above, simply applies to situations where the arbitrator determines, sua sponte, that it is necessary to issue a hearing subpoena, in the absence of a request from a party, and makes no mention of an arbitrator's powers with respect to pre-hearing discovery -- those powers are governed exclusively by Section 1283.05. See Brock v. Kaiser Found. Hosps., 10 Cal