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Vividus LLC v. Express Scripts, Inc., No. 16-16187 (9th Cir. Dec. 21, 2017) [click for opinion]

Petitioners-Appellants Vividus, LLC f/k/a HM Compounding Services and HMX Services, LLC (collectively, “HMC”) and other individuals filed suit in New York state court against a number of pharmacy benefit managers, including Express Scripts and CVS/Caremark Corp., alleging violations of antitrust laws. The case was removed to the U.S. District Court for the Eastern District of New York, where the district court severed HMC’s claims against the various defendants, ordering that the claims be litigated or arbitrated in separate proceedings based on forum selection and arbitration clauses in HMC’s preexisting agreements with the defendants. As a result, HMC’s claims against CVS/Caremark were moved to arbitration in Arizona (the “Arizona Arbitration”), and HMC’s claims against Express Scripts were transferred to the U.S. District Court for the Eastern District of Missouri (the “Missouri Litigation”). Express Scripts was not a party to the Arizona Arbitration.

In the Missouri Litigation, Express Script produced documents to HMC pursuant to a protective order. Shortly thereafter, the arbitrators in the Arizona Arbitration issued a subpoena directing Express Scripts to produce certain of these documents at the offices of HMC’s counsel in Miami for use in the Arizona Arbitration. Express Scripts did not respond. HMC then filed a petition pursuant to section 7 of the Federal Arbitration Act (“FAA“), 9 U.S.C. § 7, to enforce the arbitrators’ subpoena in the U.S. District Court for the District of Arizona. HMC requested that the district court issue an order directing Express Scripts to respond to the subpoena or to assert its legal objections to the subpoena.

The district court denied HMC’s request, concluding that section 7 of the FAA does not confer upon an arbitrator authority to compel pre-hearing document discovery from a non-party to the arbitration outside the presence of an arbitrator. The district court ruled instead that the statute only allows an arbitrator to subpoena testimony and documents from a non-party during a hearing.

HMC appealed this ruling to the Ninth Circuit Court of Appeals, which reviewed the question de novo, and confirmed the district court findings. The Ninth Circuit disagreed with HMC’s assertion that it would be absurd to grant an arbitrator the power to compel witnesses to testify at an arbitration hearing and to bring any relevant documents, while not also allowing such witnesses to produce those documents on an earlier date. Instead, the court relied on a plain reading of the FAA, finding that the text of section 7 of the FAA grants an arbitrator no freestanding power to order third parties to produce documents other than in the context of a hearing, and rejecting the proposition that section 7 grants arbitrators implicit powers to order document discovery from third parties prior to a hearing. In so finding, the Ninth Circuit aligned itself with the Second, Third, and Fourth Circuits, and disagreed with the Eight Circuit.

A version of this post originally appeared in the March 2018 edition of Baker McKenzie’s International Litigation & Arbitration Newsletter, which is edited by David Zaslowsky.


Teisha C. Johnson is a member of the Dispute Resolution team at Baker McKenzie in Chicago where she focuses on antitrust counseling and compliance matters. She has considerable experience representing clients in government investigations, complex commercial and civil litigation, white collar criminal and regulatory investigations, including international corruption arising under the Foreign Corrupt Practices Act, and health care fraud and abuse (including qui tam actions). Teisha C. Johnson can be reached at and + 1 202 835 6146.