In the 

United States Court of Appeals 

For the Seventh Circuit ____________________ 

No. 092377 

GOTHAM HOLDINGS, LP, et al., 

PlaintiffsAppellees, 

v.

HEALTH GRADES, INC., DefendantAppellant. 

____________________ 

Appeal from the United States District Court for the 

Northern District of Illinois, Eastern Division. 

No. 09 C 1843  James B. Zagel, Judge. 

____________________ 

SUBMITTED AUGUST 28, 2009  DECIDED SEPTEMBER 3, 2009†

____________________ 

Before EASTERBROOK, Chief Judge, and WILLIAMS and 

SYKES, Circuit Judges. 

EASTERBROOK, Chief Judge. Gotham Holdings is a plaintiff, and Health Grades a defendant, in litigation pending in the 

Southern District of New York. Although there are multiple 

plaintiffs, we use one name to denote all. Health Grades con

tends in the New York case that an arbitration award supports 

its view of the merits. It tendered the award and some of the 

documents exchanged in the arbitration. When Gotham Hold

ings asked to see related documents, Health Grades balked, ob

serving that the parties to the arbitration Health Grades and 

Hewitt Associates, LLC had pledged confidentiality. Gotham 

Holdings rejoined that, by relying on the award, Health Grades 

 

† This opinion is being issued in typescript. A printed copy will follow. 
No. 092377 Page 2 

had waived confidentiality. When Health Grades refused to 

budge from its position, Gotham Holdings served a subpoena 

on Hewitt Associates and moved to enforce it in the Northern 

District of Illinois, where Hewitt Associates’ principal offices 

are located. See Fed. R. Civ. P. 34c, 45. 

No one contends that the subpoena exceeds the bounds set 

by Fed. R. Civ. P. 26b1, and the district court directed 

Hewitt Associates to produce the documents. Hewitt Associ

ates is willing to hand them over. But the district court issued a 

stay pending Health Grades’ appeal. Appellate jurisdiction 

rests on the doctrine of Perlman v. United States, 247 U.S. 7 1918. Because the discovery deadline in the New York suit is 

approaching, and the documents covered by the subpoena may 

lead to additional discovery requests in New York, we granted 

Gotham Holdings’ request to expedite the appeal. It has been 

submitted on the briefs to the motions panel that granted the 

request for expedited consideration. 

We affirm the district court’s decision, for two reasons. 

First, ¶6 of the agreement between Health Grades and Hewitt 

Associates provides that materials from the arbitration may be 

disclosed in response to a subpoena. Second, even if the agree

ment had purported to block disclosure, such a provision would 

be ineffectual. Contracts bind only the parties. No one can 

“agree” with someone else that a stranger’s resort to discovery 

under the Federal Rules of Civil Procedure will be cut off. We 

applied this principle in Jepson, Inc. v. Makita Electric Works, 

Ltd., 30 F.3d 854 7th Cir. 1994, to confidentiality agreements 

reached during litigation. That conclusion is equally applicable 

to confidentiality agreements that accompany arbitration. In

deed, we have stated more broadly that a person’s desire for 

confidentiality is not honored in litigation. Trade secrets, privi

leges, and statutes or rules requiring confidentiality must be re

spected, see Fed. R. Civ. P. 45c3Aiii, but litigants’ prefer

ence for secrecy does not create a legal bar to disclosure. See

Baxter International, Inc. v. Abbott Laboratories, 297 F.3d 544 7th 

Cir. 2002; United States v. Foster, 564 F.3d 852 7th Cir. 2009 

Easterbrook, C.J., in chambers. 

Health Grades and Hewitt Associates were entitled to agree 

that they would not voluntarily disclose any information related 

to the arbitration. See ITT Educational Services, Inc. v. Arce, 533 

F.3d 342, 34748 5th Cir. 2008. Disclosure would be author

ized only when a third party had a legal right of access. That’s 
No. 092377 Page 3 

what ¶6 of this agreement does: The parties promised to keep 

their mouths and files shut unless a subpoena required a turn

over. Gotham Holdings is entitled to compulsory process to 

acquire documents from third parties. Health Grades does not 

argue that any privilege protects this material. The Supreme 

Court has expressed reluctance to create new privileges, see

University of Pennsylvania v. EEOC, 493 U.S. 182 1990 declin

ing to create an “academic deliberations privilege”, and Health 

Grades does not attempt to show that an “arbitration privilege” 

would be appropriate under the Court’s standards. 

According to Health Grades, access to the information would undermine the national policy favoring arbitration. 

There is no such policy. Arbitration agreements are optional 

and enforced just like other contracts. 9 U.S.C. §2. The Federal 

Arbitration Act eliminates hostility to private dispute resolu

tion; it does not create a preference for that process. “There is 

no federal policy favoring arbitration under a certain set of pro

cedural rules; the federal policy is simply to ensure the enforce

ability, according to their terms, of private agreements to arbi

trate.” Volt Information Sciences, Inc. v. Stanford University, 489 

U.S. 468, 476 1989. See also, e.g., Arthur Andersen, LLP v. Car

lisle, 129 S. Ct. 1896, 1901 2009 federal policy is “to place ar

bitration agreements upon the same footing as other con

tracts”. People do not “violate” or “undermine” any federal pol

icy if they litigate rather than arbitrate. Federal policy favors 

arbitration only in the sense that it favors contracts in general. 

The Federal Arbitration Act does not promote arbitration 

at the expense of strangers. Suppose Health Grades and Hewitt 

Associates had agreed between themselves that Gotham Hold

ings would pay the arbitrators’ fees. That would make arbitra

tion more attractive, but no one would think the agreement en

forceable; third parties’ rights may be affected only with their 

consent. Just so here. Gotham Holdings has an entitlement to 

material information in the hands of Hewitt Associates. Noth

ing that Health Grades and Hewitt Associates can do or say, 

separately or collectively, can affect that legal right. We con

cluded in Teamsters Negotiating Committee v. Troha, 328 F.3d 325 

7th Cir. 2003, that parties to a labor arbitration may use sub

poenas to obtain information from third parties. It would be 

weird to treat this as a oneway street, so that parties to arbitra

tion may obtain, but need not divulge, information relevant to 

the resolution of other disputes. 
No. 092377 Page 4 

Hewitt Associates does not contend that the subpoena is 

unduly burdensome. No one contends that a recognized privi

lege applies to these documents. So the subpoena was properly 

enforced. The stay is lifted, and the judgment is affirmed. The 

mandate will issue today.