In Re: ProShares Trust Securities Litigation, No. 1:2009cv06935 - Document 153 (S.D.N.Y. 2010)

Court Description: MEMORANDUM OPINION AND ORDER: #99694 Defendant ProShares Trust's motion to quash a third-party document subpoena served on ProShares Trust by plaintiffs Steven and Scherri Schnall, as issued by an arbitrator for the Financial Industry Regulatory Authority ("FINRA"), is hereby granted. The FAA "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 t he documents at that time." Life Receivables Trust v. Syndicate 102 at Lloyd's of London, 549 F.3d 210, 215 (2dCir. 2008) (quoting Hay Group, Inc. v. E.B.S. Acquisition Corp., 360 F.3d 404, 407 (3d Cir. 2004) (Alito, J.)). FINRA's in ternal rules cannot expand this power against parties who have not consented to the FINRA arbitration proceeding at issue. Because the subpoena was plainly inappropriate under the holding of Life Receivables Trust, there is no need to consider the parties' other arguments. (Signed by Judge John G. Koeltl on 11/30/2010) Filed In Associated Cases: 1:09-cv-06935-JGK, 1:10-cv-03042-JGK (lnl) Modified on 12/2/2010 (ajc).
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In Re: ProShares Trust Securities Litigation Doc. 153 "- FILED United States District Court Southern District of New York IN RE PROSHARES TRUST SECURITIES LITIGATION 09 Civ. 6935 (JGK) 10 Civ. 3042 (JGK) STEVEN AND SHERRI SCHNALL, MEMORANDUM OPINION AND ORDER Plaintiffs, - against PROSHARES TRUST I Defendant. JOHN G. KOELTL , District Judge: Defendant ProShares Trust1s motion to quash a third-party document subpoena served on ProShares Trust by plaintiffs Steven and Scherri Schnall, as issued by an arbitrator for the Financial Industry Regulatory Authority (IIFINRAII), is hereby granted. The FAA lIunambiguously restricts an arbitrator1s 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. II Life Receivables Trust v. Syndicate 102 at Lloyd1s of London, 549 F.3d 210, 215 (2d Cir. 2008) (quoting Hay Group, Inc. v. 360 F.3d 404, 407 (3d Cir. 2004) Corp., (Alito, J.)). FINRAls internal rules cannot expand this power against parties who have not consented to the FINRA arbitration proceeding at issue. 1 Dockets.Justia.com Because the subpoena was plainly inappropriate under the holding of Life ivables Trust, there is no need to consider the parties' other arguments. 1 SO ORDERED. Dated: New York, New York November 30 I 2010 Koeltl District Judge ProShares Trust is not a party in the Schnalls' pending FINRA arbitration. The Schnalls and ProShares Trust are parties to a litigation that is pending before this Court in which discovery is currently stayed under the Private securities Litigation Reform Act of 1995, 15 U.S.C. ยง 77z-1(b) (1), while the Court decides a motion to dismiss. See Schnall v , Nos. 10 Civ. 3042, 09 Civ. 6935, 2010 WL 1962940, at *2 S.D.N.Y. May 17, 2010). None of the parties disputes this Court's power to decide a motion to quash the FINRA subpoena. 1 2