express scripts and c v s caremark along with two others in the state court of new york it's a bit unusual in this case as to the procedure that took place after and it does  implications for the argument it's all going to them very briefly the provider agreements that the parties are under in order to join the networks which give them access to health plans around the country with which pharmacies can't do business and those that are part of that network those agreements provide farm clauses in the case of express scripts sending it to eastern district of missouri federal court in the case of c v s caremark the aaa arbitration in arizona and other places with other prescription benefit managers why didn't you seek relief on the protective order and reserve because we are in an arbitration and there is no link to go from the eastern district of missouri from the arbitration discovery process we are subject to the arbitrator's authority in the arbitrator's tell us what to do and what not to do and to take discovery pursuant to their rules so the you can always seek broadening of the protective order for whatever purpose in collateral litigation arbitration you still can go to the judge missouri and say can we have some relief from the protective order we could do that it would be asking for relief in a case that's not before the court though it's a it's an arbitration in arizona so i'm not sure the district court would take ours will you chose not to view that not  clued from doing that we didn't really get to that point because there was no argument or discussion about the confidentiality of the documents until we intent attempted to enforce the subpoena issued by the arbitrator's had we gotten into that and that was that's part of my reasoning for requiring that there be a response to a subpoena that's all authorized issued by an arbitrator without that response you don't get into issues of confidentiality territor jurisdiction or anything else you get nothing into until you get to the district court in arizona where you are you're attempting to enforce that subpoena and then they're raised for the first time so if we had been presented with a confidentiality issue right away in response even by letter it wouldn't really matter we could then confront that and the fact we did confront it we predicted it early on by by having the arbitrator include a protective order in the subpoena that was to be served on express scripts saying you can be governed by the same protective order that you have in your court we attach it to the subpoena and of course if there needed to be further formalities to included in this proceeding we iteration but i think we have to look at the plain language and so i guess how many hear from you how you think or do you concede that the language section seven does not support your position or you think it does support your position i think t language in section seven does not address discovery period so there's nothing in here about taking discovery in arbitration it does give subpoena power to the arbitrator to enable it to obtain witness appearance witness documents but it doesn't say these are the procedures to follow for discovery so that the discovery you don't need you you do ok especially for third parties so then if you look at the subpoena power provision how does that support your position the subpoena power allows for the arbitrator's to to require that the third party respond and appear in fact even broader than forty five would in a jurisdiction they're not not a party to and to bring documents if that's required bring with him or them any book record document or paper which may be deemed material as evidence in the case right so if you take the wording and in the third line where it says  ten before any or any of them as a witness and in a proper case to bring with him or them any book you just changed it to and or you would in essence be allowing the arbitrator to to bring in the witness to have the witness bring documents without necessarily appearing before them my argument is that's included in the powers that the powers are and if they wanted to go into the process of discovery in arbitration they would have the purpose of it was to leave arbitration to arbitrators and in order to allow them to obtain that jurisdiction and give them the subpoena power does that mean that it negates any other  efforts by them to obtain documents before it and i trust hearing where it would obviously be complex and much more efficient to digest the documents and materials before the final hearing itself it does not address it and it shouldn't address it because it was simply devised to bring about the link between the arbitrator's and the third parties in order to support your stiction so that's why yes it does specifically address bringing in the witness from a foreign jurisdiction and having them bring papers with them it does not exclude anything else and nor should the the the arbitration act wasn't drafted in a vacuum with complete lack of knowledge about how litigation works i'm sure and so isn't the absence of pre here arbitration discovery against third parties actually an intentional way to protect people that are not a party to the r recursion i think that protection is provided by allowing the courts of the united states to oversee or to intervene when about the language of a statute must be interpreted in its context to effectuate legislation that legislative intent in this case the context is and i trust action with obvious needs for third party discovery in order to bring about the case so the use of the federal arbitration act section seven to achieve that end and your honor addressed the circuit split the labor labor relations management action act case and used that provision for the purpose of finding the authority to subpoena third parties for discovery and then the section forward in order to interpret it in the context to fit to effectuate that legislative intent and in order to do that we have to do what stands to reason in a case like this there's a good  pelleas papers there's a practice pointer written on this point and and this just shows the issue of the absurdity of the result if you do interpret the statute according to the drafters words precisely as they're telephone or video conference have the court reporter in that office and let them bring the documents to the court reporter and essentially the witness is then appearing before the court well kno vast amount of documents required and i trust as you know right now you could bring it in the palm of your hands and a hard drive in fact in an e mail and deliver them so there it's an absurd result to suggest that we now are in an age where you can do that yet if you interpret the words as they're written without the ability to imply any powers then you have to bring those documents printed because  that that's all they had at the time a million documents or so and hand them to the arbitrator or fight over protective order on confidentiality and how to protect their policy considerations i mean i don't know for sure but it seems like arbitration was meant to avoid litigation and not have a parallel trial with everything that some balled in litigation in trial i mean so there may be reasons that the i understand time has changed you pointed that out but there may be other reasons that these provisions were intended to and i think that's right i think that's i think that's absolutely right and i think that we've now shifted to the point where major corporations are relying on arbitration for major cases and i trust cases much more often and unless we shift our interpretation and as you're on a road center for biological diversity recently craft appropriate standards in great relief for that good for two and achieve that clear legislative purpose because we have a clear legit legislative purpose here there's no doubt efficient and expeditious resolution of cases how efficient how expeditious can you be with me and i trust case it's difficult but it would be a lot more difficult if you can't take any third party discover isn't also a rational distinction between people who have contracted to engage in arbitration and third parties who have not i think there is a reason to do that and i think that's why the district courts are left with the power to over see any burdens that may be put on third parties like express scripts and i just want to point out the obvious in this case express scripts as a defendant and one of the cases and still is in the eastern district of missouri so i don't think the district court would be convinced by burden especially where we're asking them to produce the same very hard drive that they produced in their case in arbitration because it's the only way we can get benefits so i do think that there is a reason for  arbitration act is now a bit beyond beyond the times because it doesn't cover the issue of discovery and tough complex cases are being handled arbitration how do you answer the argument that changing the language is something that that really congress congress should do as opposed to it in the by court interpretation i think that the courts have done it and will do it and to the extent that the federal arbitration act does not address discovery at all and leaves it to the arbitration it is unique in the sense that it is divesting itself of the burden of overseeing the process or procedure by which these arbitrations are held and simply says when you need  come to the district court and we'll deal with the issues that we have to be dealt with otherwise you're in arbitration deal with their rules let the arbitrator's decide so i don't think congress has felt the need to intervene in a morning your honour's may please the court derek schaefer here on behalf of the appellee express scripts your honors we respectfully urge the court to affirm the lower ford's straightforward careful well reasoned ruling as to why arbitrators cannot third party such as express scripts to produce documents outside of any live hearing and testimony and i propose to focus on why the district court judges statutory construction comport with both the express unambiguous terms of the federal arbitration ack nine u s c section seven and also the judicial consensus has emerged around those terms and just to focus on your question judge maria as to the circuit split that exists here i want to emphasize is as i start with section seven the courts really have not disagreed about the explicit terms of section up the eighth circuit in parting ways as it did in the in recent curity s life insurance company case didn't find explicit it is dispositive that's what this court has repeatedly held that's what your honour's have written and that's exactly what judge tucci felt bound by for purposes of this issue below and in that sense we submit that the arguments are friends for the other side make really our arguments for congress judge cool if the if section seven is to be revised in any way the circuit inferred that in order to gain the goals of arbitration and do it in a reasonable fashion that the power that is there to bring people to a hearing allows for some pre hearing discovery anything else is just not a fish and and so they inferred that from the power that is is that wrong well your honor i just want to emphasize i think they did it by implication just as your honor says and i think the doctrine on this from the supreme court and from the ninth circuit says that if the plain terms of the statute are clear that's really the end of the in osas it would be incumbent upon mr ashton shows something he doesn't even purport to show really which is that that is absurd that is an indefensible reading congress could not have meant it and when you look at the plain terms of section seven i just want to emphasize clear those are that the key portion says the arbitrator's make compel any person to attend before the end in a proper case to bring with them any book record documents so that compulsion of the documents follows from the witness at a hearing before the arbitrator's it's clear in that on point language but the sentence goes on to specify the substantive touchstone that governs the arbitrator's determination and what is that substantive touched on it's very different from what we're accustomed to under the federal rules and sprawling federal civil discovery it says the arbitrator's may be compelling that which may be deemed material as evidence in the case so that is a very design of the narrow touch tone and it's pegged of course to what's happening at the actual hearing before the arbitrators is this material as evidence that's what determines the compulsion and when you go on to the end of section seven when it comes to what a district court may be compelling after the arbitrator's have subpoenaed it says upon petition the united states district court goes on may compel the attendance of such a person or persons before said arbitrator of our prayers so the statutory provision it's not just clear your honors it is triply clear that congress thought about this and meant to say arbitrator's can compel specifically as to a third party is can find it is confined to a live hearing before the arbitrator's and the witness and evidence that may be deemed go and so we think congress has resolved this appeal and dictated permits affirm and based upon that plain language and it's surprising to hear mr ash say well that's not really of the discovery provision at all mr ashes because they weren't thinking about anything preceding the hearing well you can't make that argument or ours with all due respect the reason why is that rule forty five federal rule of civil procedure forty five as to third party discovery had the same rule built into it all the way up until one thousand nine hundred one under federal rule of civil procedure forty five it was understood that as to a third party a district court power of compulsion was was pegged to actually having a witness and if a witness a third party would it was compelled to attend then that witness might be required to bring documents and congress made a judgment judge cool it decided in one thousand nine hundred one that that rule would be changed through the power of congress to expand third party discovery in say the requirement of a witness would be shed and so now federal rule of civil procedure reads differently but it's telling and i think confirmatory that congress did not make that change to section seven and instead made the reasonable policy choice than it is evident from the face of the statute but judge then judge alito for the writing for the third circuit in the hay group case went on and page after page after page to explain why this explicit language that we were just focusing on is perfectly consistent with multiple policies behind the federal arbitration act one is just as you were saying judge grants hurd's it's that this is a third party after all they haven't agreed contractually to arbitrate so congress wants to be that much more solicitous of third parties what do you make of the distinction of the huge circuit seem to be making that there is a difference depending upon how involved the third party is in the subject matter of the arbitration your honor i certainly understand the court's reasoning i don't see where they get that from the statute it's congress that makes the policy choices and there's no express statutory hook there's no suggestion of that book in section seven and i would simply emphasize in this case your honor the arbitration in question is clearly between h m c and s a competitor of express scripts express scripts has no dog in that fight it is it is a total third party and it never agreed to that arbitration and in some of these cases you see relationships between the parties were a coalition of contract that was entered simply between h m c and c v s again c v s a competitor of express scripts so express script is a total stranger to that arbitration and we would submit even if it made some difference to section seven whether there was some relationship a third party had to the underlying arbitration here we would be on the right side of that rule and i want to emphasize one other aspect of the development of the case law here which is the cases that my friends for the other side rely upon that that thread of case law ends in two thousand it really ends with the eight circuits decision in recent you're the life insurance company subsequent to two thousand you can look at all the cases that have been cited to you  page fifteen footnote one of our brief you'll find a collection of district court decisions just citing the looking at the precedents that are out there and determining what's pretty persuasive every single one of those cases aside in the briefs goes our way so the pas seventeen years the courts have been looking at the same expressed terms of section seven that we were looking at they've been looking it then judge alito has decision for the third circuit the second circuit decision that then follows that  in the in the court below it refers to that is the emerging rule you can find that at seventy six and your trials one section thirteen and so h m c can't get around expressed terms of the statute in less it shows it to be absurd again i was mentioning that there's a clear ninth circuit precedent for that proposition there's also clear supreme court precedent for that proposition and h m c doesn't come close to showing that the language of section seven and the rule followed by the district court below results in any certainty to the contrary there is a rational and fair policy choice that congress has made that they don't want discovery in arbitration certainly discovery from third parties to be sprawling to be vast to be reaching into thousands upon thousands of documents and i'd simply note from roger's that is the scope of the subpoena in question the amount of documents that were produced produced in the misery action between express scripts agency that is upwards of seven hundred thousand all those documents are called for by the orbital subpoena and congress has made a conspicuous choice it i think it's clear from section seven itself that especially when you look at section seven in ju position to rule forty five congress has gone a different route with third party discovery under the federal rules and it's kept orbital discovery from third parties narrow and circumscribed and you also have judge alito writing for the third circuit in h group and looking specifically at the policies that he saw reflected in section seven explaining why they're perfectly reasonable choices for congress to have made and so the only argument they're left with i think judge britain is the one you were suggesting that it's  kind of reasoning by implication or greater includes the lesser power that's how i think it's formulated by our friends of the other side in their brief here with all due respect i don't think that this is a lesser power it is a new in additional power for arbitrator's outside the context of any hearing to subpoena a third party to produce untold numbers of documents might be accustomed to that happening in sprawling federal civil to discovery but of course arbitrations are meant to be different they are meant to be more narrow and streamlined and that is a valid policy choice for congress of to have made and for congress to stick to it and again you see that you see that in how congress is modified the one federal rule but not it's in page one hundred one of the excerpts of record it says on its face this is not to be a deposition there is no witness testimony happening that makes it all of your is it makes it on authorized under section seven and again in the closing part of section seven the power that it district court has to compel is power to compel witnesses attendance that's the decision the district court's making should a witness be made to attend consistent with an orbital subpoena or not there's no contemplation in section seven that a district court be compelling response to a subpoena in even terms of this the other circuits if you look at for instance what the second circuit did in life receivable trust there was no suggestion there that a party resisting a subpoena a third party resisting a subpoena would have to respond to arbitrators after all it's a stranger to the arbitration there's no obligation to do that it's really a question for the district court it was teed up for the district court and decided by the district court of this was not a valid subpoena for all the reasons we've submitted and that leaves me slowly turning to the alternative ground for ferman and i think judge pritzker you put your finger on this right at the outset it is i think undisputed at this point that h m c has not gone ever to the eastern district of missouri and s modification of the protective order that is governing there all the documents that quote in question were turned over by express scripts soley pursuant to that protective order and in reliance upon the protective order it is critical from express scripts perspective that competitors like c v s not see this information is extremely sensitive it is proprietary it's kind of this is the secret sauce for a pharmacy benefits manager about how they make determinations as to what compounds will be covered under what circumstances and what pricing reflects all sorts of data that is unique to express scripts and it includes patient from asian provider information things that are protected by hip so the terms of that protective order are sacrosanct it was never contemplated by express scripts that these documents would be seen by c v s as soon as mr ass word is secure compliance with this is we would lose control over the documents we wouldn't even have a witness who'd be present in an arbitration or would we as counsel be present  arbitration c v s would be getting from our perspective unfettered problematic access to these materials if mr ash has an argument to make as to why he should be able to contravene the terms he agreed to in misery and go beyond the limited purposes that these are these documents are being produced for he should have made that argument to the district court in missouri there's no dispute he has not done that nor is there any dispute that federal courts looking at this question what deference is owed to an issue in court that has a governing protective order that should or should not be the last stop and should not be an afterthought here there's an effort in our view to circumvent the missouri corp and the missouri courts protective order and that is a reason to why this subpoena should not have been in force in fact it's not even clear from the record that the arbitrators knew that what they were ordering what they were compelling would be at odds with the governing protective order so for both of those reasons we would or did you have any time remaining i don't think you did i'll give you one one minute one minute i think the the issues that counsel raised about the confidentiality really bring out the purpose to the federal arbitration acts linking of the district court supervision so if the district court felt it necessary to compel a witness to produce documents but heard argument from express scripts that they would be highly confidential documents and should not be reviewed by s the district court certainly has the authority to dictate the terms under which those documents would be produced so it shows how the federal arbitration act does have the tools necessary to devise a method by which the documents could be produced the the subpoena power that it gives of the absurdity of the result is the whole issue of extraterritoriality and it gives that two parties that they're not in the district of arizona but they're here because the f a a requires him to do so it's those powers that allow the arbitration to do what it's doing by forcing third parties to produce documents or to make appearances and that is the bird we're trying to avoid the burden ok thank you very much appreciate it thank you for