Amgen, Inc. v. Kidney Ctr.

Amgen, Inc. v. Kidney Ctr.

Opinion

 [*563]  CUDAHY, Circuit Judge. Through the Federal Arbitration Act (FAA), 9 U.S.C. § 1, et seq., Congress has adopted a policy favoring arbitration as a means of resolving certain contractual disputes. The FAA creates a body of substantive law that regulates arbitration agreements involving interstate [**2]  commerce or maritime transactions, and this law generally attempts to make arbitration agreements easier to enforce and arbitration proceedings easier to administer. Towards these ends, it authorizes the federal courts to enforce the arbitration agreements to which it applies. In addition, it creates some elementary procedural rules to facilitate the conduct of arbitrations. First, it gives arbitrators broad authority to order the collection of evidence relevant to the arbitration. Although it does not give the arbitrators themselves any power to enforce these orders, it does give the district courts authority to compel compliance with them. This case raises questions about the authority created by these two procedural rules. The parties here disagree about the extent of an arbitrator's authority to summon witnesses to participate in prehearing discovery, and they dispute the extent of the federal courts' authority to enforce these summonses. Before we can decide these issues, however, we must address problems relevant to our own jurisdiction and the jurisdiction of the district court.

Amgen, Inc. has a patent for erythropoietin, something that it describes as a "genetically engineered [**3]  health care product." In 1985, Amgen and Ortho Pharmaceutical Corp. entered into an agreement by which Ortho acquired a limited license for the use of erythropoietin. This license did not include the right to use and sell erythropoietin for use by patients receiving kidney dialysis therapy, a right that Amgen retained. The  [*564]  licensing agreement provided that the parties would arbitrate any dispute pertaining to the agreement and that the arbitration would take place in Chicago, Illinois. Such a dispute arose in 1989, and Amgen and Ortho agreed that Frank J. McGarr, former Chief Judge of the United States District Court for the Northern District of Illinois, would preside over the arbitration. During the course of the arbitration, the arbitrator determined that he required evidence from several parties who were unconnected with the contract between Amgen and Ortho. One of those parties was the Kidney Center of Delaware County (KCDC), which provides dialysis services and apparently purchases a great deal of erythropoietin. The arbitrator issued a summons to KCDC, ordering it to appear at a deposition in Pennsylvania and to produce relevant documents. KCDC refused to comply with the summons.

 [**4]  Seeking to compel KCDC's compliance, Amgen filed a petition (styled as a motion) in the district court for the Eastern District of Pennsylvania under § 7 of the FAA. That section authorizes the federal district courts to confirm the authority underlying an arbitrator's summons and to compel compliance with such a summons. The Pennsylvania court pointed out that § 7 gives this authority only to the district court for the district in which the arbitrator sits. Because Judge McGarr was sitting in Chicago, the Pennsylvania court concluded that it had no authority either to confirm the authority behind the summons or to enforce it; but it did note that a district court for the Northern District of Illinois could issue the order that Amgen sought. Hence it sent its case file to Chicago and gave Amgen leave to refile its petition there.

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