A federal district court in New York has awarded sanctions against a litigant for the improper issuance of a third-party subpoena during an arbitration proceeding.

In Kenney, Becker LLP v. Kenney, No. 06 Civ. 2975(JSR), 2008 WL 681452 (S.D.N.Y. Mar. 6, 2008), the Court stayed the original action and compelled arbitration. After the Court's orders were entered, but before the start of the arbitration proceedings, Becker issued a subpoena to a third-party to appear at the arbitration and to produce certain documents. Becker did not provide notice to Kenney of the subpoena until the first day of the arbitration proceedings.

Upon discovering the subpoena, Kenney notified the trial court. Becker withdrew the subpoena, but the trial court granted leave to Kenney to file a motion for sanctions.

The Court held that the subpoena was "blatantly improper for numerous reasons." First, the Court had fully stayed the case, making Becker's invocation of the Court's authority as to that case through a subpoena improper under the circumstances. Second, the Court observed that the arbitration's controlling law – the Federal Arbitration Act – only allowed arbitrators, not parties, to issue subpoenas. Third, Becker had failed to give Kenney the required notice of the subpoena. Finally, the subpoena improperly sought production of documents that the arbitrator already determined were not discoverable.

These improprieties, together with a history of other "vexatious conduct," lead the Court to impose sanctions on Becker. The Court awarded Kenney attorneys' fees and costs incurred in preparing, filing, and arguing the motion.