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UNITED STATES DI STRI CT COURT
EASTERN DI STRI CT OF NE W YORK
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MAUNA K EA RESORT,
Plaintiff(s), ORDER
CV 09-094 (L DW)(WDW)
-against-
AFFILIATED F M INSURANCE COMPANY,
Defendant( s).
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WALL, Magistrate Judge:
Before the cour t, on refe rral from District J udge Wexl er, is a motion to quash a subpoe na
and for a prote ctive orde r. Because the motion does not involve a dispositive issue, it can be
deter mined in an orde r rather than a repor t and re commendation. F or the re asons set for th
herein, the motion is GRANTED.
BACK GROUND
The motion to quash rises out of an a ction pending in the District of Ha waii in which the
plaintiff, Mauna Kea Resort, seeks to re cover damag es from defe ndant Aff iliated FM I nsuranc e
Company , for e arthqua ke dama ges to hotels owned by the plaintiff. Af filiated, the de fenda nt
insurance company , states that the insuranc e contr act be tween the parties r equire s that when, a s
here, the par ties do not ag ree as to the amount of a loss, they must submi t to binding appr aisal
upon the written de mand of e ither par ty. The a ppraisal is done by three appra isers - e ach pa rty
appoints one, and the two appra isers choose the third. Aff iliated has dema nded the a ppraisal a nd
has identified Jonathan Held of J.S. Held, I nc., as its appr aiser. Ma una Ke a has r esisted the
appra isal as pre mature a nd has not y et appointed a n appra iser, and ha s serve d the subpoena at
issue on J .S. Held. Be cause Held is locate d in Rosly n Heig hts, New Yor k, the subpoena issued
from the Ea stern District of N ew Yor k, and the motion to quash is thus before this court.
DISCUSSIO N
Federal Rule of Civil Procedur e 45(c )(3)(a) require s that a cour t quash a subpoena upon
motion if the subpoena, inter alia , “requires the disclosure of privileg ed or othe r protec ted matter
and no exception or wa iver a pplies.” Rule 26(c ) provides tha t a cour t may , “for good cause ,”
issue a prote ctive orde r. The pa rty moving to quash the subpoena be ars the bur den of
demonstrating good cause and the pr ivilege or protec tion that applies. In re Grand J ury
Subpoenas, 318 F.3d 379, 384 ( 2d Cir. 2002). Motions to quash are “ entrusted to the sound
discretion of the district court.” In re Fitch, I nc., 330 F.3d 104, 108 ( 2d Cir. 2003). Her e,
Affiliated ma kes two primar y arguments in support of the motion to quash: first, it arg ues,
discovery direc ted towar d a par ty-appointed a ppraiser is lim ited to gr ounds not present he re, and
second, the work produc t privileg e prote cts the informa tion and documents soug ht.
Affiliated a rgues that an a ppraiser is akin to an arbitra tor, and that is “we ll-founded that a
party may not seek discove ry from an a rbitrator or appra iser prior to the a rbitration or a ppraisal
proce eding s.” DE[2] at 8. Discovery of ar bitrators, it urg es, is limit ed by terms of the F ederal
Arbitration Ac t (“FAA”) and by Canon X of the A merica n Arbitration Associa tion Code of
Ethics for Ar bitrators in Commercial Disputes. Id. Appra isal is construed the sa me as
arbitra tion under both Haw aii and fe deral law, and Ha waii has c larified tha t an insuranc e policy ’s
appra isal clause, suc h as the one betwee n these pa rties, is an ag reement to arbitrate for pur poses
of the F AA. Id. (citing Wailua Assocs. v. Aetna Cas. & Sur. Co., 904 F. Supp. 1142, 1148 (D.
Haw. 1997) ; Miller v. Progressive NW Ins. Co., 07-00011, 2007 WL 1341157, at *2 (D. H aw.
May 3, 2007; Christ iansen v. First Ins. Co. of Haw., 967 P.2d 639, 649 (Haw. Ct. App. 1998,
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aff’d in part and rev’d in part on other grounds, 963 P.2d 345 (1998)). See also Mauna Ke a
Beac h Hotel Corp. v. Affiliat ed FM I nsurance Co., No. 07-00605 (D . Haw. Ma r. 7, 2008). Thus,
Affiliated c ontinues, a par ty-appointed a rbitrator is entitled to the same discovery protec tions as
an ar bitrator, prote ctions that require that the subpoena be quashe d, both as to the deposition and
document dema nd.
One c ourt has obser ved that post-dec ision depositions of ar bitrators have been
“repeate dly condemne d” by courts whe re the re is no evide nce of bias or impropriety . See Woods
v. Saturn Distrib. Cor p., 78 F.3d 424, 430 ( 9th Cir. 1996)(interna l citations omit ted); see also
Lyeth v. Chrysler Corp., 929 F.2d 891, 899 ( 2d Cir. 1991) and c ases c ited in DE[2] at 8-9. The
cases cited limit di scover y following arbitra tions, but Affiliated repor ts that it i s awa re of no rule,
case or law tha t would allow discovery from an a ppraiser prior to the appr aisal, and it is only
after completion of a n appra isal that discovery may be had on the limit ed grounds allowed by the
FAA for va cation, modifica tion or corr ection of a ppraisal a wards. See 9 U.S.C. §§10 & 11; T.
McG ann Plumbing v. Chicago Journe ymen Plumbers’ Local 130, U.A. , 522 F. Supp. 2d 1009,
1014 (N.D. I ll. 2007).
The c ourt ag rees that J onathan He ld, as a pa rty-appointed a ppraiser , is protected f rom the
discovery soug ht in the subject subpoena. I n opposition, Mauna Kea argues (in a f ootnote) that
Affiliated ha s not shown that the immunit y afforded a n arbitra tor would apply here , wher e the
appra isal has not y et occ urred and the doc uments prepa red by Held “g o to the hear t of” Mauna
Kea’s bad f aith claim. DE[7] at 15, n.4. This court notes that the H awaii District Court denied a
motion to compel appraisal, without pre judice to re newa l after issues other than the a mount of
loss have bee n deter mined or the pa rties voluntarily begin appra isal (see DE[13] ), but neither tha t
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holding nor the fa ct that the appr aisal has not y et taken pla ce controls the decision on this motion
to quash. This court re cognizes that the appraisa l has not beg un and that Mauna Kea does not
wish to procee d with it now. Nonetheless, Af filiated has c hosen Jonathan Held as its party -
appointed appr aiser, thus trig gering the discover y protec tions discussed supra . If a pa rty could
obtain discovery from anothe r party’s arbitrator or a ppraiser simply by putting off appointing its
own appr aiser, the discovery protec tions would be too easily evisce rated. Moreove r, Mauna Kea
has made no showing that the documents a nd information it seeks ar e unava ilable from a ny
source other than H eld, and this court se es no re ason why the ar bitrator/appr aiser immunity
should not apply . The plaintiff f urther a rgues that the discove ry soug ht is relevant. This cour t
takes no position on whether the information soug ht is otherwise discover able or may or may not
be subjec t to other privileg es, but finds only that it is not obtainable f rom the par ty-appointed
appra iser. The parties a lso arg ue the a pplication of the wor k-produc t doctrine to this dispute, but
the cour t need not addr ess that issue. Aff iliated has met its burden of show ing g ood cause for a
protec tive order , and the motion to quash and for a prote ctive orde r is g rante d.
Dated: Central I slip, New York SO ORDERED:
Marc h 4, 2009
/s/ W illiam D. W all
WILLIAM D. WAL L
United States Mag istrate Judge
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