Beck's Superior Hybrids, Inc. v. Monsanto Co. & Monsanto Technology LLC
940 N.E.2d 352
Ind. Ct. App.2011Background
- Monsanto and DuPont entered seed license agreements providing that disputes be resolved by arbitration in New York.
- Monsanto filed a 2009 arbitration demand against DuPont alleging a sublicensing scheme involving third parties, including Beck's in Indiana.
- Arbitration issued nonparty subpoenas to Beck's and other customers for documents; Beck's objected citing FAA §7 and lack of authority/jurisdiction.
- Monsanto sought to enforce the subpoenas in Indiana via Trial Rule 28(E), resulting in a Hamilton Superior Court order requiring Beck's to comply.
- Beck's appealed, arguing §7 preempts Trial Rule 28(E); tribunal argued federal forum not available and Indiana rule permissible.
- Indiana Court of Appeals held §7 is unambiguous and preempts Trial Rule 28(E); enforcement must be in a U.S. district court where arbitrators sit (SDNY in New York).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §7 preempt Trial Rule 28(E)? | Beck's: TR 28(E) conflicts with §7's enforcement scheme. | Monsanto: TR 28(E) can assist when federal forum unavailable; no exclusive federal forum barred by text. | §7 preempts TR 28(E); enforcement must be in SDNY, not Indiana court. |
| What is the proper enforcement forum under §7 for a nonparty subpoena? | Monsanto: Indiana court could aid discovery via 28(E) if no federal jurisdiction. | Beck's: §7 directs enforcement in the federal district where arbitrators sit; not Indiana. | Enforcement must be in the district where arbitrators sit; here, SDNY, New York. |
| Does lack of federal subject matter jurisdiction affect enforceability under §7? | Monsanto lacks federal jurisdiction yet seeks enforcement. | Beck's: federal jurisdiction deficiency not matter; §7 governs enforcement venue. | Jurisdictional lack does not permit enforcement in state court; §7 controls. |
Key Cases Cited
- Hay Group, Inc. v. E.B.S. Acquisition Corp., 360 F.3d 404 (3d Cir.2004) (arbitrators may compel third-party to appear with documents before a single arbitrator)
- Life Receivables Trust v. Syndicate 102 at Lloyd's of London, 549 F.3d 210 (2d Cir.2008) (documents discoverable when brought before arbitrators by a testifying witness; limits on nonparty enforcement)
- Dynegy Midstream Services, L.P. v. Trammochem, 451 F.3d 89 (2d Cir.2006) (section 7 enforcement limited to district where arbitrators sit; no nationwide service)
- Stolt-Nielsen S.A. v. Celanese A.G., 430 F.3d 567 (2d Cir.2005) (federal jurisdiction basis for enforcement independent of FAA sought)
- Southland Corp. v. Keating, 465 U.S. 1 (1984) (FAA preempts state law for arbitration enforcement, but see limits for procedural provisions)
- Amgen, Inc. v. Kidney Center of Delaware County, Ltd., 95 F.3d 562 (7th Cir.1996) (discusses jurisdictional limits of §7 and enforcement approaches)