A subpoena against Orrick Herrington & Sutcliffe in a partnership dispute Jones Day initiated must be enforced, the U.S. Court of Appeals for the Ninth Circuit ruled Monday.
Judges Kim Wardlaw, Sandra Ikuta and Bridget Bade reversed a district court order that denied Jones Days’ petitions to compel Orrick to comply with a summons, which stemmed from international arbitration Jones Day commenced against one of its partners in its Paris office, who allegedly violated an agreement when he left the firm for Orrick in 2019.
The central issue on appeal was whether the federal trial court in California has the power to enforce the subpoena against Orrick, a third-party in the dispute, even though the District of Columbia is the designated “seat” in Jones Days’ arbitration agreement with the ex-partner.
The panel sided with Jones Day, and several other circuit courts that faced similar questions.
The judges said a federal court has jurisdiction over an arbitration action if there’s an underlying agreement that falls under the New York Convention, which governs international arbitrations, and if the action–in this case the petitions to enforce the subpoena–relates to that arbitration agreement.
“Not only are these proceedings ‘related to’ an arbitration agreement falling under the convention, petitions to enforce a summons issued by the arbitrator are necessary ancillary proceedings that ensure the proper functioning of the underlying arbitration,” the judges wrote.
Jones Day tried, but failed, to first get the Superior Court of the District of Columbia to issue the summons, before turning to the California court, where Orrick is headquartered.
Last year, U.S. District Judge Jon S. Tigar of the Northern District of California ruled he couldn’t make Orrick comply because the arbitrator, according to the arbitration agreement, sits in the District of Columbia and only a court in that jurisdiction has authority to enforce the summons.
But the panel on Monday said the Northern District of California is a proper venue because it is Orrick’s principal place of business.
“Therefore, it was error to dismiss the petitions on venue grounds,” the panel said.
While the Ninth Circuit sealed portions of the record relating to the arbitration, a court order last year revealed some details.
According to a court order, former Jones Day partner Michael Bühler negotiated his employment with Orrick around the time he was also representing a Jones Day client before an arbitral tribunal, of which an Orrick attorney was a member. Jones Day said Bühler didn’t inform the firm of the conflict of interest. The Orrick arbitrator was eventually replaced, but Jones Day’s client wanted the firm to pay for the costs of the delayed proceedings.
Sarah Harris of Williams & Connolly argued for Orrick. Jones Days’ Craig E. Stewart represented the firm.