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COMSAT Corp. v. NSF

United States Court of Appeals for the Fourth Circuit

June 8, 1999, Argued ; August 23, 1999, Decided

No. 99-1348, No. 99-1446

Opinion

 [*271] OPINION

ERVIN, Circuit Judge:

 [**2]  The National Science Foundation ("NSF") appeals from an order requiring the agency to comply with subpoenas issued by an arbitrator during prehearing discovery. The subpoenas demanded that the agency, which was not a party to the arbitration agreement, produce documents and employee testimony related to a construction contract between appellee COMSAT, Inc. ("COMSAT"), and an NSF awardee. We reverse the district court's order and hold as follows: (1) The Federal Arbitration Act, 9 U.S.C.A. §§ 1-307 (West 1999) (the "FAA"), does not authorize an arbitrator to subpoena third parties during prehearing discovery, absent a showing of special need or hardship; (2) when the government is not a party to the underlying action, an agency's refusal to comply with a subpoena must be reviewed under the standards established for final agency actions by the Administrative Procedure Act ("APA"), 5 U.S.C.A. §§ 702 - 8301 (West 1996 & Supp. 1999); and (3) NSF did not violate its own regulations or the APA when the agency decided not to comply with the subpoenas at issue in this case.

Appellant NSF is the government agency charged with supporting much of this [**3]  nation's federally-funded basic science and engineering research. See 42 U.S.C.A. § 1862(a) (West 1994). In accordance with its congressional mandate, NSF awards grants and fellowships to researchers and enters contractual or cooperative agreements with research institutions. 1 The agency does not engage directly in scientific research. See 42 U.S.C.A. §§ 1862(a)-(c).

 [**4]  Associated Universities, Incorporated ("AUI") is a not-for-profit corporation organized for the purpose of conducting scientific research and education. In 1988 AUI entered a cooperative agreement with NSF, by the terms of which AUI agreed to administer the National Radio Astronomy Observatory, a network of research telescopes. The cooperative agreement imposed no obligation upon NSF or the government  [*272]  to fund AUI operations beyond the upper limits of the award, which was provisional and subject to congressional appropriations. NSF retained the right to terminate the agreement due to a lack of available funds or for other reasons. The agreement also specified that in the absence of written notice to the contrary from NSF's Grants and Contracts Officer, "the Government shall not be obligated to reimburse the Awardee for any costs in excess of the total amount then allotted to the agreement."

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190 F.3d 269 *; 1999 U.S. App. LEXIS 20017 **

COMSAT CORPORATION, Plaintiff-Appellee, v. NATIONAL SCIENCE FOUNDATION, Defendant-Appellant, and NATIONAL SCIENCE FOUNDATION DOCUMENT CUSTODIAN; ROBERT J. DICKMAN; HUGH VAN HORN, Defendants. COMSAT CORPORATION, Plaintiff-Appellee, v. NATIONAL SCIENCE FOUNDATION; NATIONAL SCIENCE FOUNDATION DOCUMENT CUSTODIAN; ROBERT J. DICKMAN; HUGH VAN HORN, Defendants-Appellants.

Prior History:  [**1]  Appeals from the United States District Court for the Eastern District of Virginia, at Alexandria. James C. Cacheris, Senior District Judge. (CA-98-108-MC).

Disposition: REVERSED.

CORE TERMS

subpoena, arbitration, documents, agency's action, regulations, discovery, non-parties, employees, district court, compliance, telescope, sovereign immunity, federal court, third-party, deposition, parties, refuse to comply, general counsel, final decision, magistrate judge, private litigant, special needs, third party, prehearing, responded, waived

Civil Procedure, Appeals, Standards of Review, De Novo Review, Administrative Law, Judicial Review, General Overview, Discovery & Disclosure, Discovery, Subpoenas, Pensions & Benefits Law, Governmental Employees, US Civil Service Retirement System, Abuse of Discretion, Environmental Law, Administrative Proceedings & Litigation, Judicial Review, Reviewability, Reviewable Agency Action, Arbitrary & Capricious Standard of Review, Arbitration, Federal Arbitration Act, International Trade Law, Dispute Resolution, International Commercial Arbitration, Arbitration, Business & Corporate Compliance, Pretrial Matters, Alternative Dispute Resolution, Mandatory ADR, Sovereign Immunity, Governments, Federal Government, Employees & Officials, Claims By & Against, Misconduct During Discovery, Scope of Authority, Methods of Investigation