CAN I GET A WITNESS?
Preparing for and successfully defending
depositions of corporate representatives, former
employees, and current employees
Byrons South End
101 W. Worthington
Charlotte, NC
October 5, 2016
CHARLOTTE 168680.1
CAN I GET A WITNESS
Taking and Defending Corporate Depositions in North Carolina
Agenda
I.
Depositions of Current Employees
A.
Preparing the witness to testify
B.
The Five Guidelines
C.
Privilege issues
II.
Former employees
A.
Scope of privileges
B.
Preparing the former employee
C.
Compensating the former employee
III.
Rule 30(b)(6) Depositions of Corporate Representatives
A.
Selecting the best corporate representative
B.
Responding to the 30(b)(6) Notice of Deposition
C.
Other Issues
CHARLOTTE 168680.1
2
ABOUT THE PRESENTERS
Daniel DuPré is currently an Associate General Counsel with Compass Group USA, Inc.
located here in Charlotte. His responsibilities include overseeing the team of legal professionals
that handles all employment related legal matters as well as commercial litigation for the
Company. Prior to Dan joining Compass in 2012, Dan was an in-house with Bank of America.
Before that, Dan was an associate with Smith, Currie & Hancock in Atlanta where he practiced
in the areas of labor and employment law. He is a member of the Georgia Bar and a graduate of
Washington and Lee University and Washington and Lee University School of law.
C. Bailey King, Jr. is a partner and member of the Litigation Group for the Charlotte office of
Smith Moore Leatherwood, where he concentrates on complex business disputes and commercial
litigation. Mr. King handles intellectual property matters, investment and security disputes,
antitrust matters, and class actions. He is experienced in litigating matters in the North Carolina
Business Court as well as federal courts throughout North Carolina and elsewhere. Mr. King has
been recognized for his skills in commercial litigation in The Best Lawyers in America, North
Carolina SuperLawyers, and Business North Carolina’s Legal Elite. Mr. King earned his B.A.
from Wofford College, where he graduated summa cum laude and was inducted into Phi Beta
Kappa, and he earned his law degree from the University of North Carolina, where he graduated
with high honors and was inducted into the Order of the Coif. He can be reached by phone at
704-384-2616 and by e-mail at [email protected].
John W. Reis is a partner and member of the Litigation Group for the Charlotte office of Smith
Moore Leatherwood, LLP. He is a litigator and trial attorney focusing primarily on large
property subrogation losses and secondarily on commercial litigation. He is licensed to practice
in Alabama, Florida, North Carolina, and Tennessee. Mr. Reis earned his A.B. in 1988 from
Duke University and his J.D., cum laude, in 1992 from the University of Miami School of Law
where he served as Executive Editor of the University of Miami InterAmerican Law Review and
was a member of the Moot Court Board. He can be reached at direct phone: 704-384-2692, fax:
704-3842939, email: [email protected].
Fred M. Wood, Jr. is a partner and member of the Litigation group for the Charlotte office of
Smith Moore Leatherwood LLP, where he concentrates on complex business and commercial
litigation and product liability, among others. Mr. Wood handles cases involving unfair business
practices and methods of competition, the North Carolina Trade Secrets Protection Act,
securities class actions, telecommunications industry disputes, computer software agreements,
toxic torts, and orthopedic fixation devices. Mr. Wood earned a his B.A. in 1986 from the
University of North Carolina at Chapel Hill, his M.B.A. in 1991 from Wake Forest’s Babcock
School of Management University, and his J.D. in 1991 from Wake Forest University School of
Law. He can be reached at phone: 704-384-2646, fax: 704-384-2933, email:
[email protected], website: www.smithmoorelaw.com.
CHARLOTTE 168680.1
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CAN I GET A WITNESS?
Corporate Depositions in North Carolina
Introduction
Deposing a person. It sounds like bringing someone down from the throne. In a way,
this is correct. A witness who is deposed rarely improves the case from what it was before the
deposition. More often, the deposition provides the opponent with yet another point of attack.
Proper preparation is the key to minimizing the damage your opponent seeks to inflict and
maximizing your ability to make your own headway when it is your turn.
The function and significance of depositions cannot be overstated. This was noted in the
celebrated ruling in GMAC Bank v. HTFC Corp., found at
http://online.wsj.com/public/resources/documents/Robreno.pdf, in which Judge Eduardo
Robreno of the Eastern District of Pennsylvania sanctioned both a defendant witness and his
defense attorney for their conduct during a deposition:
More than 98% of all civil cases filed in the federal courts result in disposition by
way of settlement or pretrial. See Admin. Office of the U.S. Courts, Judicial
Business of the United States Courts: 2006, Table C-4A (stating that only
1.3% of all civil cases in U.S. district courts reached trial in 2006),
http://www.uscourts.gov/judbus2006/appendices/c4a.pdf. Very often, these
results turn on evidence obtained during depositions. Thus, depositions play an
extremely important role in the American system of justice. Although the Federal
Rules of Civil Procedure inform the procedures to be followed and the duties and
rights of parties, witnesses, and counsel during and in connection with
depositions, the rules are largely self-executing. Depositions usually occur at a
lawyer’s office, outside the view of the public and without judicial supervision.
Although, in appearance, more informal than a court proceeding, they are an
integral part of the Court’s procedures and the staple of modern litigation. For the
process to succeed, it is essential that the parties, attorneys, and witnesses
participating in depositions conduct themselves with civility and decency.
CHARLOTTE 168680.1
4
I.
Depositions of Current Employees
A.
Preparing the witness to testify
"Confidence, like art, never comes from having all the answers; it comes from being open to all
the questions." - Earl Grey Stevens
"Only the man who can relax is able to create,
and ideas reach his mind like lighting." - Cicero.
The idea of allowing an opposing attorney to let loose your witness can be a scary one,
not just to the witness but also to the defending attorney. It can feel like losing control. As noted
above, it is rare that the deposition of your witness will improve your case. However, with
proper preparation, potential damage can be minimized and your witness can actually gain a
sense of control and power over the case.
Many attorneys have a laundry list of “rules” for what to do and what not to do during a
deposition when preparing a witness. Having too many so-called rules, however, can overwhelm
and confuse the witness. The goal is to make sure the witness gives truthful, accurate answers
that are difficult to impeach. Toward that goal there is only one rule: Be honest. The big
problems will be handled by following that rule. Additional guidelines to reaching that goal can
be boiled down to five that are easy to remember, especially with this mnemonic: Listen U, it’s a
D[e]PO.
B.
The Five Guidelines: (Listen U, it’s a DePO!)
Listen
Understand
Dictate
be Personal
be Objective
1.
Listen
When a question is posed, the witness should listen carefully, actively, and respectfully to
the specific question asked. Listening in a deposition requires waiting, allowing the questioner
to finish the question. When a question is posed in a conversation, the natural tendency is to
answer quickly or even before the question is asked. Tell the witness that this is not a
conversation. This is the process of building a transcript that will last far longer than the case
itself ever will. Other tips in the listening process:
- Keep good posture, which exudes and enhances confidence
- Keep eye contact with the questioning lawyer
- Minimize gestures or facial expressions
- Let the lawyer finish the question
CHARLOTTE 168680.1
5
-
-
Don’t look to your attorney for the answers: Let the witness know that once the
deposition begins, you basically become a potted plant, with the exception of limited use
of objections
An objection can sometimes be a clue
Objection or no objection, the witness should think, “Stop!” if feeling the inclination to
talk over the attorney. Stopping helps the court reporter. It also gives the witness’s attorney
time to raise an objection to the form of the question, something that should be a signal to the
witness that there is something wrong with the question.
After listening, do not answer the question yet. There is another step.
2.
Understand
Be sure you understand the question before you answer. Just because the attorney might
have a stentorian voice does not make it a good question or even an understandable one. The
question might have nuances with which the witness is unfamiliar, uncertain, or uncomfortable.
It is perfectly fair to tell the attorney you are not sure you understand the question and ask that it
be rephrased. The witness should consider the following before feeling comfortable enough to
answer:
-
Does the question make sense?
Did the lawyer use terms or statements about which you are uncertain?
Did the lawyer re-state something you said inaccurately?
Did you read and understand the documents the lawyer showed?
If a hypothetical is posed, are you qualified to actually answer it?
When in doubt, ask for a rephrase, but be mindful that doing so too often can have
downsides if it is a videotaped deposition
i.
Sub-pointer: Gotcha Questions
Many attorneys are expert at asking seemingly innocent questions with a hidden trap.
Here are some examples and how to deal with them.
“Would you agree that …”: A witness should never to say “yes” to such a question if the
witness does not agree 100 percent. The witness should listen very carefully to everything that
follows “would you agree that” to make sure everything that follows is accurate. If there is any
portion of the question to which the witness has doubts or disagrees, the witness may say, “No,
not entirely,” or “No, I don’t agree with that 100 percent,” or “No, not the way you phrase it.”
That approach, however, allows the lawyer to then press forward and ask which portion the
witness does not agree with, so the witness should be prepared to answer that question as well.
To avoid this back and forth, it can be more effective for the witness to simply re-phrase the
question that the attorney asked and phrase it in a way the witness can accurately answer and
then to answer that re-phrased question.
CHARLOTTE 168680.1
6
“Would it shock you if …” or “Would you be surprised to learn …”: The witness should
not assume that what the lawyer is positing it true. One approach to responding to such a
question is to say, “I don’t understand what you mean by ‘would you be surprised.’ Can you
rephrase the question?” But this could invite a back and forth; the lawyer might say, “I don’t
know what is unclear about what I said. I am telling you that [such and such] occurred and I am
asking if you knew that.” The witness may the tarry with: “I do not know that to be a fact” if the
witness had not heard the statement, or “I was told that after the incident occurred but did not
know it at the time.” Again, to avoid this back and forth, it can be more effective for the witness
to simply re-phrase the question that the attorney asked, framing it in a way the witness can
accurately answer and then answering that re-phrased question under the witness’s own terms.
“Why did __ tell you to do that?”: An appropriate response is: “I cannot speak for ___.”
There is no reason to volunteer this statement, however, “You would have to ask ___.” It may
be that the other person cannot be asked that question because he or she is dead or otherwise
unavailable.
“Why didn’t you …” or “Wouldn’t it have been a better practice to have …?” or “If you
had to do it over again, would you do anything differently?”: The witness should be wary of this
potential trap. A “yes” or “no” here can have very significant, unintended consequences down
the road. Again, to avoid this back and forth, it can be more effective for the witness to simply
re-phrase the question that the attorney asked, framing it in a way the witness can accurately
answer and then answering that re-phrased question under the witness’s own terms. A legitimate
response is: “There is no way to go back in time and there is no way recreate the exact same
circumstances in the future, so it is really impossible for me to be able to answer that question
sitting here today.” The lawyer may persist: “I understand, but what about now, looking back,
would you do it again exactly the same way?” A legitimate answer is: “It is impossible to go
back in time. All I can do is recall what happened and give you the facts the best I can
remember.” The lawyer may ask, “I understand we cannot go back in time, but we can go
forward, so in the future would you do it again if you were in the same circumstances?” A
legitimate answer is: “There is no way to recreate the exact same circumstances in some
hypothetical future, so it is impossible for me to answer that question yes or no. All I can tell
you for certain is that I did my very best to do what I thought was right at the time.”
“Tell me all the facts that support your contention that …” : This is the technique of
confronting the witness an allegation in the Complaint or an affirmative defense in an Answer or
a statement in an interrogatory and trying to pressure the witness into giving every factual and
legal basis in support of it. There is nothing wrong with the witness saying, “That was prepared
with help by my attorney, so that is not something I would be able to answer as a lay person
sitting here today with total completeness. I can tell you some things I understand that might
relate to that statement if you want to know what I personally know, but I probably cannot tell
you each and every single fact that relates to that allegation.” The questioning attorney should
eventually focus not on what is in the document but what facts the witness actually knows and
recalls.
3.
CHARLOTTE 168680.1
Dictate
7
The word “dictate” has more than one meaning, just as the word “depose” does. To
depose someone can mean to bring down a king or dictator. In this context, the word “dictate”
is intended to have two meanings: speaking precisely and taking control.
a. Speaking Precisely
Speaking precisely means thinking about the question and dictating the answer as if
speaking into a Dictaphone for someone else to type into the written word. That does not mean
speaking in the tone of a robot, but it does mean being very careful about the words being used.
When the deposition is over, what will be created is not merely a dialogue, but a hard, cold
transcript. The transcript will last far longer that the memories of the participants and what they
think was said. With that in mind, dictating by speaking precisely should involve these
principles:
-
-
Resist sarcasm
Resist filler words or phrases, e.g., “basically,” “you know,” “like,” “okay,” “kind of,”
“sort of,” “I guess,” “technically speaking,” “to be honest with you,” “quite frankly,”
“with all due respect”
Resist filling in the lawyer’s silent pause
b. Taking Control
Dictate also connotes taking control. We usually think of the questioning lawyer as the
one taking control. But it is really the witness who controls the testimony. Dictating in this
sense empowers the witness. If the witness has a story to tell, it is sometimes good to simply tell
it, on the witness’s own terms and in a way that enhances the ultimate goal of giving truthful,
accurate answers that are difficult to impeach.
Most attorneys actually set up their questions in a way that will empower the witness, if
witness so chooses. For example, the questions will often be open-ended, in the hope that the
witness will offer a golden nugget that the lawyer did not expect. These are questions such as:
-
“Tell me everything you recall about the event”
“Is that everything that happened that day?”
“What else happened?”
“What happened next”
“Tell me about that”
“Would anything refresh your recollection?
These are not to be feared and can actually be opportunities to tell your story exactly the way
you want to tell it
The opposite approach, and lawyers often take both approaches, is to ask a question that is
intended to call only for a yes or no answer. In fact, the lawyer may insist that simply a yes or
no will do. The witness should know to be wary of this technique as well. Just as in life, most
answers in a deposition will not call for simply a yes or a no answer. The question may be
CHARLOTTE 168680.1
8
partially correct or the answer may require additional information to explain the “yes” or the
“no.”
Witnesses are often told by their preparing attorney to answer yes or no and then, only if
necessary, ask to explain the answer. There is a downside to this advice. In a transcript, when
the words “yes” or “no” appear as the first answer, they are typically blown up as exhibits or
used in impeachment and the “yes” or “no” word is highlighted, while the explanation can get
lost. This is particularly true with expert witness depositions. One bit advice to the witness
might be to reverse the “yes, but” order. The witness may decide to qualifying information first
and then provide the yes or the no at the end based on the qualifying information. For example:
ATTORNEY: Is it your conclusion that building is more than 20 feet tall, yes or
no?
WITNESS: I actually measured the building with a tape measurer, starting from
the top of the parapet and bringing the tape down to the sidewalk. I did this on all
four sides of the building. I also measured it from the flat roof itself and brought
the tape down to the sidewalk for that area on all four sides of the building. The
first four hose measurements showed a distance of 26 feet. The second four
measurements shows a distance of 22 feet, so yes the building is more than 20 feet
tall based on those measurements.
4.
Be Personal
Know thyself and be thyself.
a. Know thyself:
Focus on what you personally know, not what you think others know or why they said or did
something. Speak only to the knowledge you have. Do not speculate on the knowledge of
others. You can testify to what you know, saw, heard, smelled, did, and so forth. You cannot
truly know what was done 10 years ago by your friend, your neighbor, your co-workers, former
workers, or a corporation (even if you own it).
The lawyer may ask a seemingly simply question, such as, “Why did Joe Smith say that to
you?” It is unwise to “assume” or speculate. Most lawyers cringe when they hear their witness
answer a question like this:
-
“I assume the reason he said that is …”
“If I were to speculate, I would say …”
Sometimes the witness will say, “You would have to ask” so-and-so. That answer can have
downsides. For example, that so-and-so may already have been deposed and this may be the
lawyer’s opportunity to quote what that other person actually did say and ask the witness to
comment on whether he or she agrees with that other person’s statement. Alternatively, that soand-so may be a person that the lawyer previously never heard of, but by bringing in that
person’s name, the witness may just have put that so-and-so in the lawyer’s cross hairs.
CHARLOTTE 168680.1
9
When speaking on behalf of a company or someone else, it may be natural for the witness
to be emphatic on a point they feel emphatic about, such as, “Our company has never, not once,
not ever, engaged in that practice.” If the other attorney finds just once instance of that practice
that the witness did not know about, that can hurt the witness’s credibility. It is better for the
witness so say, if truthful, “In my twenty years of experience in this company, I can say that I
have never seen that practice occur or heard of that practice occurring.” That is still a powerful
statement. If the other attorney then brings up that one instance where the practice did occur.
The witness can now say, without looking foolish, “I was not aware of that instance.”
ii.
Sub-pointer: Forgetting details
When the witness cannot recall a particular detail, the witness should know to say, “I
can’t remember that right now” or “That is a detail that is just not coming to me right now as I sit
here.” If the witness just does not know the answer to a question, there is nothing wrong with the
witness simply saying, “I don’t know.” The witness should avoid extreme statements such as “I
have no earthly idea” or “how am I supposed to know that?”
iii.
Sub-pointer: Use of Documents
If not subpoenaed to bring documents, the witness should be told that there is no need to
bring any documents to the deposition. The witness also should be told that the lawyer will
likely use a number of documents that the witness has never seen. The witness should be told
that there is no way to predict how many or which documents or what purpose the lawyer will
have in mind, but that there is not much the witness’s lawyer can do to shape how they are used
once the questions start.
Witnesses and lawyers often fall back on the phrase, “The document speaks for itself.” It
is not always wise to say this, because it is not always the case. The document may have been
amended or superseded or doctored.
The witness should be told that the lawyer may pull up certain pleadings in the case that
were drafted by the attorney and may be asked, “Tell me all the facts that support this
allegation.” Each attorney has different advice on how the witness might answer a question like
that, but it is generally regarded as undesirable for the witness to say, “You would have to ask
my attorney.”
b. Be thyself
Speak from the heart. Be authentic. It matters.
5.
Be Objective
In our culture, it has become common to use extreme, absolutes, and even omniscient
language. A well-used example is, “He never cleans the house. Ever.”
CHARLOTTE 168680.1
10
a.
Sub-pointer: Use precise, not general, descriptions.
In a conversation, it is normal to use general descriptive words like “heavy” or “light,”
“tall” or “short,” “cheap” or “expensive.” However, those can be relative terms depending on
the audience. One person’s cheap, might be another person’s expensive. One person’s rich is
another person’s poor. One person’s tall is a another person’s short. For example, a child who is
five feet tall might be considered a “tall child” or a “short child” depending on the child’s age
and the perspective of the witness. A phrase like “tall for her age” also opens up a host of
questions about the knowledge base of the witness regarding what the average height is for
female children of a certain age in certain cultures. It is better to describe that person as “about
five feet in height” rather than “short” or “tall,” to the extent the witness is able to make that
estimate.
b.
Sub-pointer: Avoid Absolutes
A good way to hurt someone’s credibility is when they say, “I never do” such and such
and you find them doing such and such, even if one time. Better for the witness to say, “I can’t
recall doing” such and such.
c.
Sub-pointer: Avoid Omnipresent or Omniscient Words
When speaking on behalf of a company or someone else, it may be natural for the witness
to be emphatic on a point they feel emphatic about, such as, “Our company has never, not once,
not ever, engaged in that practice.” If the other attorney finds just one instance of that practice
that the witness did not know about, that can hurt the witness’s credibility. It is better for the
witness so say, if truthful, “In my twenty years of experience in this company, I can say that I
have never seen that practice occur or heard of that practice occurring.” That is still a powerful
statement. If the other attorney then brings up that one instance where the practice did occur.
The witness can now say, without looking foolish, “I was not aware of that instance.”
C.
Privilege Issues
The extent to which an opposing attorney can ask questions of a current employee that
explore the employee’s communications with the employer’s counsel will typically depend on
the extent of the attorney-client privilege and work product doctrine. The attorney-client
privilege protects communications: (1) between a client and his or her attorney; (2) that are
intended to be, and in fact were, kept confidential; (3) for the purpose of obtaining or providing
legal advice. United States v. Mejia, 655 F.3d 126, 132 (2d Cir. 2011); see also Fisher v. United
States, 425 U.S. 391, 403 (1976). The purpose of this privilege is, of course, to encourage clients
to make full disclosure to their attorneys. Fisher, 425 U.S. at 403.
In North Carolina, the purpose of the attorney-client privilege “is to encourage full and
frank communication between attorneys and their clients and thereby promote broader public
interests in the observance of law and administration of justice.” Brown v. American Partners
Fed. Credit Union, 645 S.E.2d 117, 121 (N.C. Ct. App. 2007) (quoting Upjohn Co. v. United
States, 449 U.S. 383, 389 (1981)). North Carolina uses a five factor test, or Murvin test, to
CHARLOTTE 168680.1
11
determine if the privilege applies. The Murvin test is as follows: (1) the relation of attorney and
client existed at the time the communication was made, (2) the communication was made in
confidence, (3) the communication relates to a matter about which the attorney is being
professionally consulted, (4) the communication was made in the course of giving or seeking
legal advice for a proper purpose although litigation need not be contemplated and (5) the client
has not waived the privilege. Raymond v. N. Carolina Police Benevolent Ass'n., Inc., 365 N.C.
94, 100, 721 S.E.2d 923, 927-28 (2011) (quoting State v. Murvin, 284 S.E.2d 289, 293 (1981)).
If the communication between the attorney and current employee falls outside of these
factors, the attorney-client privilege will not apply. Assume, for example, that a current
employee is being deposed about prior complaints that employee asserted about superiors in the
company. If during that time the current employee was not seeking or giving legal advice, those
other complaints are not likely to be privileged.
The case often cited to for determining whether the attorney-client privilege protects
communications with current employees is Upjohn Co. v. United States, 449 U.S. 383 (1981).
There, the Supreme Court rejected the “control test” of whether the employee was in the zone of
protection, in favor of a four-factor test. Upjohn held that attorney-client privilege applies to
communications between corporate counsel and corporate employees when the communications:
(1) were made to the corporation's counsel in counsel’s capacity as an attorney (not, e.g., as a
business consultant); (2) were made at the direction of corporate management for the purpose of
securing legal advice from counsel; (3) concerned a subject within the scope of the employee’s
corporate duties; and (4) were known by the employee to be for the purpose of the corporation
procuring legal advice. Id. at 394-95.
II.
Former Employees
A.
Scope of Privileges
1.
Ex Parte Communications by Opposing Party
Before discussing the right of corporation to keep protected their conversations with a
former employee, one question to consider is whether an opposing attorney can engage in direct
ex parte contact with that former employee in the first place, and talk freely without a deposition.
Such communications by opposing counsel are addressed under Rule 4.2 of both the Model
Rules of Professional Conduct and the North Carolina Rules of Professional Conduct. The text
of Rule 4.2 of the Model Rules of Professional Conduct Rule 4.2 states:
In representing a client, a lawyer shall not communicate about the subject of the
representation with a person the lawyer knows to be represented by another
lawyer in the matter, unless the lawyer has the consent of the other lawyer or is
authorized to do so by law or a court order.
The rule allows opposing counsel to talk to a former employee unless that former
employee is retained by counsel.
CHARLOTTE 168680.1
12
2.
Attorney-Client Privilege
The general rule, as adopted in this state, is that discussions between a corporation’s
attorney and its former employees are protected under the attorney-client privilege so long as the
communication relates to the former employee's conduct and knowledge at the time of
employment. The case of Upjohn Co. v. United States, 449 U.S. 383 (1981) addresses the extent
of the privilege for current employees. In a concurring opinion, Chief Justice Burger addressed
the extent to which the privilege applies to former employees, writing that “a communication is
privileged at least when, as here, an employee or former employee speaks at the direction of the
management with an attorney regarding conduct or proposed conduct within the scope of
employment.”
Since then, the case of Peralta v. Cendant Corp., 190 F.R.D. 38, 40 (D. Conn. 1999)
addressed “whether, under federal law, counsel for an employer can claim a privilege as to its
attorney’s communications in preparing an unrepresented former employee for deposition by
opposing counsel, and/or such attorney's communications during the deposition about her
testimony in that deposition.” The court held that the protection applies to discussions with
former employees if the communication was (1) obtained by a former employee while employed
by the corporation; and (2) between the former employee and corporation's counsel for the
purpose of educating counsel about relevant facts known to the former employee. The court did
not extent the protection to communications beyond the scope of the former employee’s
knowledge acquired during the course of employment. The former employee's independent
knowledge acquired outside the scope of employment is not protected. Peralta gave as an
example of what is not privileged the scenario whereby the corporate attorney informs the former
employee of testimony given by other witnesses. Id. at 41. The court expressed the concern that
an attorney may seek to “influence a witness to conform or adjust her testimony . . . consciously
or unconsciously.” Id. Thus, a conversation between a former employee and counsel at a
deposition preparation session is not protected under the attorney-client privilege. Id.
Some decisions have questioned the Peralta holding. In Infosystems, Inc. v. Ceridian
Corp., 197 F.R.D. 303, 304-305 (E.D. Mich. 2000), the court said Peralta “sweeps too broadly"
as to the former employee's activities or knowledge acquired during their employment. On the
one hand, the court noted that “counsel's communications with a former employee of the client
corporation generally should be treated no differently from communications with any other thirdparty fact witness.” Id. at 306. On the other hand, the court recognized exceptions to this rule,
such as “where the former employee retains a present connection or agency relationship with the
corporation, or where the present-day communication concerns a confidential matter that was
uniquely within the knowledge of the former employee when he worked for the client
corporation, such that counsel's communications with this former employee must be cloaked
with the privilege in order for meaningful fact-gathering to occur.” Id.
Although North Carolina state courts have not weighed in on the whether and to what
extent to adopt the Peralta view, our federal courts have. In Winthrop Resources Corp. v.
Commscope, Inc. of N.C., No. 5:11-CV-172, 2014 WL 5810457 (W.D.N.C. Nov. 7, 2014),
Magistrate Judge David Cayer was faced with ruling twenty-one (21) instances where an
attorney instructed a former employee not to answer questions posed by the opposing attorney
CHARLOTTE 168680.1
13
during a deposition. Judge Cayer found as a matter of fact that the twenty-one questions in
dispute involved “communications occurring years after Kim's employment terminated . . . [and]
[r]elate to deposition preparation and matters that may have influenced his testimony.” He thus
ruled that all the questions should be answered, a ruling to which exception was taken before
Judge Richard Voorhees. In his decision, Judge Voorhees agreed with Judge Cayer on most of
his rulings and disagreed only on one – the one that asked the deponent to describe conversations
with counsel that occurred during the deponent’s employment.
The decision goes through certain categories of inquiry that the questioning attorney
sought to explore, and whether the category was or was not fair game. Judge Voorhees’ opinion
gives us excellent real-life examples of what is proper and what is improper to ask about during a
deposition, with the following rulings:
First, there are questions that directly relate to deposition preparation. (Kim Dep.,
77:6-7; 77:20; 77:24-25; 85:10-12; 85:21-22; 86:2-5; 86:19; 87:3-5; 87:9-10). In
others, counsel for Winthrop ask about the substance of conversations that
occurred during a deposition break. (Kim Dep. 129:4-5; 129:9-10; 129:14-16).
These are squarely covered by the holding in Peralta. Therefore, the Magistrate's
finding is not clearly erroneous. The privilege inquiry, and the deposition that
follows this Order, must center on the following questions:
[D]id the communication relate to the former employee's conduct
and knowledge, or communication with defendant's counsel,
during his or her employment? If so, such communication is
protected from disclosure by defendant's attorney-client privilege
under Upjohn. As to any communication between defendant's
counsel and a former employee . . . no attorney-client privilege
applies.
Peralta, 190 F.R.D. at 41-42.
One question seeks the substance of conversation with counsel that occurred
during employment. (Kim Dep. 262:25-263:-4). This is clearly subject to the
privilege under Peralta and In re Allen. See also King v. Allred, 333 S.E.2d 758,
760 (N.C. Ct. App. 1985). Therefore, the Court reverses Magistrate Judge Cayer's
Order compelling the answer of that question.
Another question asks whether Kim has had any discussion with any lawyers
about the language of the lease agreement and “who's right, Winthrop or
CommScope.” (Kim Dep. 278:11-20). Kim does not have to reveal the substance
of conversations while he was employed with Commscope. However, gaining
insight into other opinions regarding the lease agreement could influence Kim's
opinion regarding the agreement. Therefore, the Magistrate was not clearly
erroneous.
CHARLOTTE 168680.1
14
One asked Kim whether he “expect[ed] Commscope lawyer's [sic] to go back and
reread the actual language in the lease agreement.” (Kim Dep. 281:10-12). The
Court finds that the Magistrate was not clearly erroneous in finding that this was
not subject to the attorney-client privilege.
The final two questions ask whether attorney Jeff Mayer had told, or if Kim had
asked, Mayer's “personal view on whether Winthrop or Commscope is correct in
their interpretation of the lease language in the case.” (Kim Dep. 281:16-19;
281:23-25). Mayer's personal view on the litigation is outside the scope of Kim's
personal knowledge or his scope of employment with Commscope. Gaining
insight into Mayer's view would have a tendency to influence Kim's testimony.
Therefore, the Court holds that this matter is not protected by the privilege.
A series of questions ask whether Kim had asked any lawyer to determine
whether CommScope's or Winthrop's interpretation of the lease was correct. (Kim
Dep. 280:13-17; 280-21-24; 281:3-6). Of course, if this occurred during Kim's
employment with Commscope it would be subject to the privilege. However, if it
did not it would not be subject to the privilege and would tend to influence Kim's
testimony. Therefore, the Court holds that the Magistrate's finding was not clearly
erroneous.
The lesson from this case is to assume that nearly any pre-deposition, post-termination
conversation between a corporation’s counsel and the former employee could be considered fair
game, with no recognition of the attorney-client privilege.
CHARLOTTE 168680.1
15
III.
Rule 30(b)(6) Depositions of Corporate Representatives
“Do the thing and you will have the Power.” - Ralph Waldo Emerson
One of the most powerful tools in the arsenal of litigation is the deposition of the
corporate representative. The pressure put on a corporation or other business entity to designate
just the right person to address the several issues that might be designated can be tremendous.
Often times, it will cause a business entity that is a party to the case to re-evaluate its position on
the value and importance of the case and look for a way to resolve the litigation.
The procedure is set forth in Rule 30(b)(6), which is similar in many states as the federal
versions. Rule 30(b)(6) of the North Carolina Rules of Civil Procedure is the same as the federal
rule. It provides:
(6) A party in his notice and in a subpoena names as the deponent a public or
private corporation or a partnership or association or governmental agency and
describe with reasonable particularity the matters on which examination is
requested. In that event, the organization so named shall designate one or more
officers, directors, or managing agents, or other persons who consent to testify in
its behalf, and may set forth, for each person designated, the matters on which he
will testify. A subpoena shall advise a non-party organization of its duty to make
such a designation. It shall not be necessary to serve a subpoena on an
organization which is a party, but the notice, served on a party, without an
accompanying subpoena shall clearly advise such of its duty to make the required
designation. The persons so designated shall testify as to matters known or
reasonably available to the organization. The subdivision (b)(6) does not preclude
taking a deposition by any other procedure authorized in these rules.
Note that nothing in the rule says the person designated by the corporation has to have
“the most knowledge” about the designated issue, but case law on this point, noted below, is
instructive.
A.
Selecting the Best Corporate Representative
1.
No Obligation to Select “The Most Knowledgeable Person”
It is a common misperception that the person designated must be the one in the
organization “most knowledgeable” on the specified issue. The designee need not, in fact, be
that person. Indeed, if that person is one who is likely to make a poor appearance on behalf of
the organization, it can be wise not to designate such person. Rather, the designee should be
someone best able to convey the issues in ways that are truthful, accurate, and difficult to
impeach. There is no shortcut for finding the right person. It will often involve extensive
interviewing and retrieval and review of documentation. Here are tips:
• Pick a designee who is coachable, has a presentable demeanor, has a good memory, and
is familiar with the deposition process.
CHARLOTTE 168680.1
16
• Pick one person. A corporation can designate more than one witness if there are
multiple topics. Usually, however, it wise to designate only one. The deposing party will only
have 7 hours and this will minimize the extent of “off-topic” questioning during the deposition.
If more than one person is designated, the attorney can argue that this gives another 7 hours per
designee.
• Avoid a designee that will potentially invoke the Fifth Amendment privilege against
self-incrimination, such as in a matter involving a Department of Justice investigation. You can
select someone outside the corporation, such as an expert witness, if the person consents to so
testify.
2.
Duty to Designate Appropriate Person
The word “shall designate” is mandatory language. Even when a corporation has no
actual employee with significant knowledge on a designated subject matter because the person is
no longer employed there or for other reasons, the corporation cannot refuse to designate a
representative on that subject matter. United States v. Taylor, 166 F.R.D. 356, 361, 363
(M.D.N.C. 1996). Nor can a corporation simply present a human body to the deposition and
comply with the rule. Quantachrome Corp. v. Micrometritics Inst. Corp., 189 F.R.D. 697, 699
(S.D. Fla. 1999). The corporation has a duty to make a good faith effort to find an “appropriate”
person to testify on the designated topic(s). Protective Nat’l Ins. Co. of Omaha v.
Commonwealth Ins. Co., 137 F.R.D. 267, 278 (D. Neb. 1989).
3.
Duty to Educate the Witness and Effect on Attorney-Client Privilege
“Learning is the beginning of wealth. Learning is the beginning of health.
Learning is the beginning of spirituality. Searching and learning
is where the miracle process all begins.” - Jim Roehn.
“The more you know, the less you need to say.” - Jim Roehn
The organization “must make a conscientious good-faith endeavor to designate the
persons having knowledge of the matters sought by [the requesting party] and to prepare those
persons in order that they can answer fully, completely, and unevasively, the questions posed.”
Wilson v. Lakner, 228 F.R.D. 524, 528 (D. Md. 2005) (citing Mitsui & Co. v. Puerto Rico Water
Res. Auth, 93 F.R.D. 62, 67 (D.P.R. 1981)). Even when the topic goes beyond the designated
deponent’s personal knowledge, the deponent must be prepared to discuss it based upon
information available to the corporation. Bank of New York v. Meridien Biao Bank Tanzania
Ltd., 171 F.R.D. 135, 151 (S.D.N.Y. 1997). The duty to educate the designee requires a
conscientious, good-faith effort to find the person who best knows about the matters sought and
also to prepare the designated person to answer fully and completely any questions you may
pose. Protective Nat’l Ins. Co. of Omaha v. Commonwealth Ins. Co., 137 F.R.D. 267, 278 (D.
Neb. 1989); Marker v. Union Fidelity Life Ins. Co., 125 F.R.D. 121, 126 (M.D. N.C. 1989);
Meridien, 171 F.R.D. at 151. The designee has a duty to gather and review information
reasonably available to the corporation on the designated topics, including from documents,
depositions, past employees, or other sources. Meridien, 171 F.R.D. at 151. A corporation’s
CHARLOTTE 168680.1
17
failure to educate its representative can be treated the same as a failure to respond to an
interrogatory. Plantation-Simon Inc. v. Al Bahloul, 596 So. 2d 1159, 1160 (Fla. 4th DCA. 1992).
A corporation cannot simply talk to its attorney for preparation and then claim the shield
of the attorney-client privilege when asked to provide the information learned. In State Farm
Mut. Auto. Ins. Co. v. New Horizon, Inc., 2008 U.S. Dist. LEXIS 37571 (E.D. Pa. May 7, 2008),
the defendants took the 30(b)(6) witness of State Farm, whose designee did nothing to prepare
for his deposition other than speak to its counsel, who instructed the designee not to answer
questions that the designee could only answer from those conversations. On a motion for
summary judgment by the defense, on grounds that State Farm could not present facts in support
of its case given the binding effect of a 30(b)(6) deposition, the court did not grant the motion,
but did state the following:
• Improper to Object to Facts Learned by 30(b)(6) Witness from Counsel in
Preparation for Deposition. “State Farm argues that counsel properly instructed
Bowles not to disclose any facts learned from discussions with counsel in
preparation for the Rule 30(b)(6) deposition because such facts constitute attorney
work product and are thus protected from disclosure. State Farm is incorrect:
[T]he courts have consistently held that the work product concept furnishes no
shield against discovery, by interrogatories or by deposition, of the facts that the
adverse party's lawyer has learned, or the person from whom he has learned such
facts, or the existence or nonexistence of documents, even though the documents
themselves may not be subject to discovery. 8 Wright et al., supra, § 2023; In re
Linerboard Antitrust Litig., 237 F.R.D. 373, 384 (E.D. Pa. 2006) (‘[T]here is
simply nothing wrong with asking for facts from a deponent even though those
facts may have been communicated to the deponent by the deponent's counsel'
(quoting Protective Nat'l Ins. Co. v. Commonwealth Ins. Co., 137 F.R.D. 267, 280
(D. Neb. 1989))).”
• Duty to Prepare 30(b)(6) Witness. “[A] corollary to the corporation's duty to
designate a Rule 30(b)(6) witness is that the corporation must ‘prepare its
designee to be able to give binding answers on its behalf . . . [and] perform a
reasonable inquiry for information’ that is noticed and reasonably available to it.
[Citation and quotation omitted]. Therefore, if a Rule 30(b)(6) witness is asked a
question concerning a subject that was not noticed for deposition or that seeks
information not reasonably available to the corporation, the witness need not
answer the question. Moreover, certain questions may seek details so minute that
a witness could not reasonably be expected to answer them. See, e.g., United
States ex. rel. Faqo v. M&T Mortgage Corp., 235 F.R.D. 11, 25 (D.D.C. 2006)
("Without a photographic memory, [the witness] could not reasonably be
expected to testify as to the loan numbers . . . for sixty-three different loans.").
However, if a Rule 30(b) (6) witness is asked a question concerning a subject that
was noticed with particularity, is seeking information that is reasonably available
to the corporation, and is not unreasonably obscure, and the witness is unprepared
to answer the question, the purpose of the deposition is completely undermined.
See Constellation NewEnergy, Inc. v. Powerweb, Inc., No. 02-2733, 2004 WL
1784373, at *5 (E.D. Pa. Aug. 10, 2004) (‘In reality if a Rule 30(b)(6) witness is
CHARLOTTE 168680.1
18
unable to give useful information he is no more present for the deposition than
would be a deponent who physically appears for the deposition but sleeps through
it.’).
4.
Binding Effect of the Testimony
The purpose of a 30(b)(6) deposition is for the testimony to bind the corporation itself.
But does this mean that other evidence inconsistent with the testimony can be presented at trial
or on a motion for summary judgment? This was the issue in State Farm Mut. Auto. Ins. Co. v.
New Horizon, Inc., 2008 U.S. Dist. LEXIS 37571 (E.D. Pa. May 7, 2008). There, State Farm
was noticed for deposition and designated a Mr. Bowles. The only thing Mr. Bowles did to
prepare for his testimony was to meet with counsel. The defense attorney questioned Mr.
Bowles about the basis of certain claims asserted by State Farm. Bowles was not able to state
any facts that supported the claims outside of his discussions with counsel, who instructed
Bowles not to answer regarding the subject matter of those conversations. The defendants
moved for summary judgment on the ground that State Farm, having no information supporting
its claims and being bound by the testimony to this effect, was precluded from presented any
facts supporting the challenged claims. The trial judge held that although the 30(b)(6) testimony
was an admissible admission, it was not a binding judicial admission, i.e., State Farm could still
present inconsistent evidence on summary judgment or perhaps even at trial. The opinion states:
• Binding Admission. “In prior decisions, judges of this Court have elaborated on
this concept by stating that ‘[t]he purpose behind Rule 30(b)(6) is to create
testimony that will bind the corporation.’ Resolution Tr. Corp. v. Farmer, No. 923310, 1994 WL 317458, at *1 (E.D. Pa. June 24, 1994); Ierardi v. Lorillard, Inc.,
No. 90-7049, 1991 WL 158911, at *2 (E.D. Pa. Aug. 13, 1991) (‘Admissions
made by the [Rule 30(b)(6)] deponent will be binding on his principal.’).
However, the use of the word ‘binding’ in the opinions has caused some
confusion, prompting litigants to argue, as Defendants do here, that Rule 30(b)(6)
testimony is something akin to a judicial admission--a statement that conclusively
establishes a fact and estops an opponent from controverting the statement with
any other evidence. This is not quite the case.”
• Not Unassailable Judicial Admissions. “Although the Third Circuit has yet to
address the issue, the better rule is that ‘the testimony of a Rule 30(b)(6)
representative, although admissible against the party that designates the
representative, is not a judicial admission absolutely binding on that party.’ 8A
Charles Alan Wright et al., Federal Practice and Procedure § 2103 (Supp. 2007);
A.I. Credit Corp. v. Legion Ins. Co., 265 F.3d 630, 637 (7th Cir. 2001)
(‘[T]estimony given at a Rule 30(b)(6) deposition is evidence which, like any
other deposition testimony, can be contradicted and used for impeachment
purposes’ (quotation omitted)); R&B Appliance Parts, Inc. v. Amana Co., 258
F.3d 783, 786 (8th Cir. 2001); Diamond Triumph Auto Glass, Inc. v. Safelite
Glass Corp., 441 F. Supp. 2d 695, 723 n.17 (M.D. Pa. 2006); Indus. Hard
Chrome, Ltd. v. Hetran, Inc., 92 F. Supp. 2d 786, 791 (N.D. Ill. 2000); A&E
Prods. Group, L.P. v. Mainetti USA Inc., No. 01-10820, 2004 WL 345841, at *7
(S.D.N.Y. Feb. 25, 2004); Media Servs. Group, Inc. v. Lesso, Inc., 45 F. Supp. 2d
CHARLOTTE 168680.1
19
1237, 1254 (D. Kan. 1999); W.R. Grace & Co. v. Viskase Corp., No. 90-5383,
1991 WL 211647, at *2 (N.D. Ill. Oct. 15, 1991).”
• Direct Contradiction Barred on Summary Judgment on Analogy to Rule
Barring Affidavit that Conflicts with Deposition. “This does not mean,
however, that the party may retract prior testimony with impunity. In some cases
‘where the non-movant in a motion for summary judgment submits an affidavit
which directly contradicts an earlier [Rule 30(b)(6)] deposition and the movant
relied upon and based its motion on the prior deposition, courts [have]
disregard[ed] the later affidavit.’ Hyde v. Stanley Tools, 107 F. Supp. 2d 992, 993
(E.D. La. 2000); see, e.g., Rainey v. Am. Forest & Paper Ass'n, Inc., 26 F. Supp.
2d 82, 95 (D.D.C. 1998) (‘[T]he Kurtz affidavit's quantitative assertion works a
substantial revision of defendant's legal and factual positions. This eleventh hour
alteration is inconsistent with Rule 30(b)(6), and is precluded by it.’); Caraustar
Indus., Inc. v. N. Ga. Converting, Inc. , No. 04-187, 2006 WL 3751453, at *7
(W.D.N.C. Dec. 19, 2006); Ierardi, 1991 WL 158911, at *3; see also Joseph v.
Hess Oil, 867 F.2d 179, 183 (3d Cir. 1989) (non-30(b)(6) context) (‘In cases
where a party has filed an affidavit which contradicts earlier deposition testimony,
summary judgment has been granted where the court found that the contradictory
affidavit was filed in order to defeat the summary judgment motion.’). Yet, where
the affidavit ‘is accompanied by a reasonable explanation’ of why it was not
offered earlier, courts have ‘allowed a contradictory or inconsistent affidavit to
nonetheless be admitted’ to supplement the earlier-submitted Rule 30(b)(6)
testimony. Hyde, 107 F. Supp. 2d at 993.”
• Impact at Trial. “The testimony of Bowles (on behalf of State Farm) might
nonetheless be damaging to State Farm's position at trial. See United States v.
Taylor, 166 F.R.D. 356, 362 (M.D.N.C. 1996) (‘[I]f a party states it has no
knowledge or position as to a set of alleged facts or area of inquiry at a Rule 30(b)
(6) deposition, it cannot argue for a contrary position at trial without introducing
evidence explaining the reasons for the change.’); Ierardi, 1991 WL 158911, at
*3 (‘If the designee testifies that H&V does not know the answer to plaintiffs'
questions, H&V will not be allowed effectively to change its answer by
introducing evidence at trial. The very purpose of discovery is to avoid trial by
ambush’ (quotations omitted)). For example, if State Farm seeks to contradict its
Rule 30(b)(6) testimony at trial with new evidence, and it offers no valid
explanation why the earlier testimony should be amended, the Court may preclude
State Farm from presenting such new evidence, or permit the new evidence and
allow State Farm's explanation to be submitted to the jury along with the earlier
testimony. See Fed. R. Evid. 403 (providing for exclusion of evidence if ‘its
probative value is substantially outweighed by the danger of unfair prejudice . . .
or by considerations of undue delay’).
Another example of what happens when a corporation fails to designate a witness on
certain 30(b)(6) issues is QBE Insurance Corporation v. Jorda Enterprises, Inc., 2012 WL
266431, ___ F.3d ___ (S.D. FL. Jan. 30, 2012). The case was a subrogation lawsuit for water
damages to a condominium building insured by QBE Insurance Corporation. The defendant
issued a Rule 30(b)(6) notice on QBE Insurance, listing 47 topics. Thirty-five of the 47 topics
CHARLOTTE 168680.1
20
concerned electronically stored information (ESI). The court noted what it appears to have
viewed as significant mistakes QBE made before the deposition by seeking no court intervention
in advance:
QBE did not object to any of the 12 non-ESI topics. It did not contend that the
topics were beyond the scope of discovery, it did not object to the wording of the
listed topics and it did not suggest that the descriptions were vague or in any way
unworkable. Although it threatened Jorda with a stated intent to file a motion for
a protective order concerning the 35 ESI topics, it never did so (and it never filed
a motion for protective order as to any of the other topics). At a later hearing,
Jorda explained that QBE issued a similar discovery request, designating virtually
the same ESI topics in its reciprocal 30(b)(6) deposition notice. Jorda suggests
that QBE backed down from its threat to file a motion for protective order
because QBE sought the identical discovery. Whatever the reason for its decision
not to pursue the informally threatened motion for protective order, the important
fact for present purposes is that QBE never sought a protective order or any other,
similar relief from the Court regarding Jorda’s Rule 30(b)(6) deposition notice.
After some squabbling about deposition scheduling, the parties ultimately
agreed to a November 14, 2011 30(b)(6) deposition date. QBE provided only one
designee for the 47 topics noticed for the corporate representative deposition:
Timothy O’Brien, the senior claims representative for Florida Intracoastal
Underwriters, QBE’s managing general agent in Florida. FIU is an independent
company, not an affiliate or subsidiary of QBE.
The court also described the deficiency in QBE’s witness’s knowledge, and thus the
resulting sanctions, as follows:
First, in response to a 30(b)(6) corporate deposition notice listing 47 topics, QBE
produced one witness, a claims examiner, and announced for the first time at the
deposition that its designee did not have knowledge on many issues but agreed to
produce another corporate representative who would have the requisite
knowledge. QBE intended to secure one or more representatives from the insured
condominium association, but that plan was thwarted. Nevertheless, the one
representative it did produce was unable to adequately answer questions on many
topics and he reviewed only a small portion of the documents which QBE had or
had access to before the deposition.
For this first scenario, sanctions are appropriate. Because the discovery deadline
has expired, because QBE did not fulfill its obligation to properly prepare its own
designee, because QBE waited until the corporate representative deposition began
to give notice of its designee’s partial inadequacy and because its designee could
have (but did not) review substantially more
material in order to be a more-responsive witness, Defendant’s requested sanction
will be imposed. Specifically, QBE will be precluded from offering any testimony
at trial on the subjects which its designee was unable or unwilling to testify about
at the 30(b)(6) deposition.
CHARLOTTE 168680.1
21
Second, because this is a subrogation case, QBE is not directly familiar with
many of the underlying facts and was relying on its insured to consent to be the
corporate representative designee for many of the issues listed in the 30(b)(6)
corporate deposition notice. According to QBE, but for reasons not provided to
the Court, the insured has refused to cooperate with QBE, even after receiving a
written demand threatening to sue the insured condominium association for
breach of the cooperation clause in the insurance contract.
For this second scenario, the result will be the same -- precluding QBE from
introducing any testimony at trial on the subjects which it hoped its insured would
have testified about had it agreed to send a representative to the corporate
representative deposition. This result is not a sanction, however, because the
30(b)(6) sanctions apply only if the corporation has collective corporate
knowledge but refuses to produce and/or adequately prepare a representative.
Instead, it is a natural consequence of QBE’s inability to obtain knowledge from
its insured on the relevant subjects listed in the 30(b)(6) notice.
It would be patently unfair to permit QBE to avoid providing a corporate
deposition designee on certain topics (because its insured refuses to cooperate) yet
allow it to take a position at trial on those very same issues by introducing
testimony which Defendant Jorda was unable to learn about during a pre-trial
30(b)(6) deposition.
The court in QBE Insurance Company noted that had QBE sought to force its insured to
provide information through a deposition of its own, this would have showed a good faith effort.
At the same time, the court cited, with approval, case law holding that a party need not go to
extraordinary extremes to educate itself, stating:
The rule does not expressly require the designee to personally review all
information available to the corporation. So long as the designee is prepared to
provide binding answers under oath, then the corporation may prepare the
designee in whatever way it deems appropriate – as long as someone acting for
the corporation reviews the available documents and information. Reichold, Inc.
v. U.S. Metals Ref. Co., No. 03-453 (DRD), 2007 WL 1428559, at *9 (D.N.J.
May, 10, 2007) (the rule “does not require that the corporate designee personally
conduct interviews,” but, instead, requires him to testify to matters known or
reasonably available to the corporation).
5.
Production of Documents by 30(b)(6) Witness
Under Rule 30(b)(5), a party cannot issue a subpoena duces tecum upon corporate party
designee but can attach a request for documents, items or things in accordance with Rule 34 so
long as party gives 15 extra days notice beyond the 10 or 15 days required by 30(b)(1).
B.
Responding to the 30(b)(6) Notice
1.
CHARLOTTE 168680.1
Does It Designate with “Reasonable Particularity”?
22
Federal and many state rules require that the areas of inquiry be designated in the notice
with “reasonable particularity” but do not otherwise define the degree of specificity the rule
requires. The rule requires more than a generic notice stating that the witness may be
questioned on “any matters relevant to this case,” and a notice which states a nonexclusive list of
topics also will not suffice. Alexander v. FBI, 188 F.R.D. 111, 121 (D.D.C. 1998). Some courts
require the requesting party to “designate, with painstaking specificity, the particular subject
areas that are intended to be questioned, and that are relevant to the issues in dispute.”
See Prokosch v. Catalina Lighting, Inc., 193 F.R.D. 633, 638 (D. Minn. 2000). A recent
example of the “reasonable particularity” language is discussed in QBE Ins. Corp. v. Jorda
Enterprises, __ F.R.D. ___ (S.D.FL Jan. 30, 2012).
2.
Merely Filing Objections Is Not Enough Protection
Is it common practice, in response to a 30(b)(6) notice, for the opposing attorney to serve
the noticing attorney with a letter or notice asserting objections to the particular topics set forth
in the deposition. Courts have ruled that such objections are not enough. In Beach Mart, Inc. v.
L&L Wings, Inc., (Lawyers Weekly No. 14-02-0950, 34 pp.) (James Fox, Sr. J.) 2:11-cv-00044
(E.D.N.C., 2014), the court actually sanctioned a party that lodged such a set but had failed to
follow up on it:
Beach Mart served L&L with a Rule 30(b)(6) deposition notice that included the
topic, "Requests, discussions, or negotiations between L&L, Beach Mart, . . . or
any other third party concerning any consent, authorization, license and/or
permission to use [L&L's Wings trademark] or the term 'Wings.'" Rule 30(b)(6)
Dep. Notice [DE-166-15] at Schedule A, p.3. L&L designated Shaul Levy as its
Rule 30(b)(6) witness, see First Levy Dep. [DE-166-10], but objected to the scope
of Beach Mart's deposition notice, see L&L's Objections 30(b)(6) Dep. Notice
[DE-166-17]. Specifically, L&L attempted to limit the scope of Category 8 to
"any consent, authorization, license and/or permission provided by Wings to
Beach Mart to use 'Wings' in any form." Id. at 5 (emphasis added). While L&L's
suggested scope would eliminate any discussion covering the undisclosed
agreements, L&L never moved for a protective order. Instead, L&L "file[d]
objections and then state[d] that it [would] only produce general answers to the
topics in accordance with its objections." Espy v. Mformation Techs., Inc., No. 082211-EFM-DWB, 2010 WL 1488555, at *3 (D. Kan. Apr. 13, 2010). L&L's
actions were improper and entitle it to no protection from sanctions based on
its objections to the Rule 30(b)(6) deposition notice. L&L's objections exhibit
exactly the type of technical objection-crafting the Rules seek to deter and for
which Rule 37 sanctions were created. See Fed. R. Civ. P. 37, Advisory
Committee's Notes (1993 Amendments).
Furthermore, even were L&L to have properly objected to the notice or moved for
a protective order, it would have waived its objections to Category 8 when
Levy began to testify concerning parties to whom L&L had given licenses to
use the Wings trademark. During Levy's deposition, Beach Mart's counsel
asked Levy, "How many different people or companies have ever had a license to
CHARLOTTE 168680.1
23
use the Wings trademark?" First Levy Dep. [DE-166-10] at 279:9-11. Levy then
named five parties with whom L&L had a license to use the Wings trademark. Id.
at 279:12-281:15. He went on to speak at great length about these parties and the
agreements.
L&L contends that Levy spoke only in his personal capacity when he spoke on
topics to which L&L had previously objected. In support, L&L cites to Moore's
Federal Practice § 30.25[4] (3d ed. 2013). However, a closer reading of that text
undermines L&L's arguments in three ways. First, Moore's addresses what might
happen when a Rule 30(b)(6) witness speaks outside the bounds of the notice, not
what happens when the witness speaks outside the scope of the objections. Id.
Second, the authorities cited by Moore's merely provide different ways that courts
have handled such situations—these are prudential guidelines, not rules of law.
The method suggested by L&L is only one of several such potential methods. See
id. Third, all of the methods suggested by Moore's require that counsel, before
allowing the witness to answer, note on the record that the question is beyond
the scope of the deposition notice. Id. In this case, no such objection was
made. Even if L&L were entitled to some protection based on its objections to
Category 8, L&L would have waived that protection once Levy began to testify
concerning the licensing agreements.
(boldface added).
3.
Practical Tips to Addressing Proposed Notice
What do you do when a party sends out a Rule 30(b)(6) notice as to your corporate client
listing a series of issues that you know your client cannot possibly answer through a corporate
designee? For example, assume the defendant in an insurance company and Plaintiff has sent
out a notice seeking a designee to testify as to the following issues:
1.
Any and all facts, witnesses, documents, and evidence defendant intends to
present at trial regarding the subject incident.
2.
Any and all facts, witnesses, documents and evidence supporting the allegations
raised in your Affirmative defenses.
3.
Any all investigation of the allegations of any party or parties involved in this
litigation regarding the cause of the subject incident.
4.
Any and all facts, witness, documents and evidence that you will contend at trial
establish the terms of any contract at issue and what aspect of the contract(s) was breached by
whom in what way.
5.
Any and all facts, witness, documents and evidence that would show each and
every aspect of damages that you dispute and the method of calculating the damages you will
contend at trial establish the proper measure of damages.
6.
Any investigation that was done by your or on your behalf in order to determine
what caused the subject incident, who caused it, and what the damages were that resulted from
the incident.
CHARLOTTE 168680.1
24
All of these issues are arguably relevant. But are they appropriate for a Rule 30(b)(6)
designee of a subrogated corporation? A response might go like this.
This responds to your request that we produce a Rule 30(b)(6) corporate designee
of Big Insurance Company to testify regarding six (6) issues that you have
listed. Unfortunately, we are not in a position to make anyone at Big Insurance
Company available for most of the issues that you have designated in this notice,
certainly not by the time you desire, December 11, 20__. As you know, Big
Insurance Company is an insurance company. You are seeking information that
would more appropriately come from witnesses not a party to this lawsuit. Either
one of us can issue and serve a notice to the insured for many of these same
issues. If you prefer, I will send out that notice, but you may prefer to do so if
you wish to assure that it is done to your standards and under your lead.
If we cannot come to an agreement on this, I am going to have to send this Notice
up the chain at Big Insurance Company and have it reviewed. That is probably
going to take some time and simply cannot be completed by Dec. 11.
More fundamentally, this Notice is really an attempt to bypass the expert witness,
fact witness, and exhibit list disclosure deadlines. It is not a fair or proper use of
Rule 30(b)(6). Under Rule 30(b)(6), a party is only obligated to produce a
witness to testify regarding matters “known or reasonably available to” it. Big
Insurance Company cannot, and has no obligation to, produce witnesses to testify
to designated matters with respect to which it has no corporate knowledge
whatsoever. “We are aware of no requirement that a Rule 30(b)(6) deponent
must undertake an investigation, outside of the party he represents, in order to
respond to questions that properly should be directed to a different party, or
entity”. Arctic Cat, Inc. v. Injection Research Specialists, Inc., 210 F.R.D. 680,
685 (D. Minn. 2002).
Looking at the issues you have designated, it is obvious that no Big Insurance
Company employee can possibly be expected to be a lone spokesperson for the
events leading up to the incident, the cause of the incident, and the breaches of
duty involved. Those are matters within the purview of experts and other
witnesses (most of which are non-parties or on the defense side) and through
presentation of documents with assistance of counsel. The discovery process is
still ongoing not only as to the information and opinions of the expert witnesses,
but as to their very identity, as you have disclosed none. The process is also
ongoing as to the information and identity of lay witnesses and the production of
documents.
If for some reason we cannot reach an agreement on this and the Court hears our
Motion for Protective Order, I anticipate the court will not allow questions that
delve into attorney-client discussions, work product matter, or opinions of experts
not yet designated to testify. As to any other matters, I ask that you consider
what will happen even if the Court allows you to go forward with what is left on
CHARLOTTE 168680.1
25
the list. As you ask the witness your first question regarding, for example, issue
1, the witness will tell you that because he or she had no knowledge on that issue
prior to the deposition, he or she reviewed the complaint, the answers, the claims
file, the answers to interrogatories, the responses to request for production of
documents, and the deposition transcripts to determine the identity and
information available from the witnesses and documents disclosed between the
parties. Such derivative information can be of no practical value to you and
certainly is not an example of judicial economy or efficiency.
I hope to avoid having to file a Motion for Protective Order on this. We can
agree to a deposition of Mr. Joe Smith of Big Insurance Company on the date you
desire, December 11, 20__. He was the adjuster on the loss and is the only one at
Big Insurance Company in any position to go through some of the issues you wish
to cover, such as the steps taken to investigate and assess the cause of the incident
and the damages that resulted. I can work with Joe Smith to try to answer issues
7 and 8. If you still want to go forward with the deposition December 11, 20__ of
Joe Smith to go through those issues and see what he knows or has investigated,
this is fine. In addition, if you want to go through these other issues with Mr.
Smith, but with the understanding that he is not prepared to serve as the corporate
designee of Big Insurance Company on these issues, we can go forward as well.
Let me know your position so that I can work to address it with the Court if
needed.
C.
Other Issues
1.
Dealing with Questions “Outside the Scope” of the Designated Topics
Although there is a split of authority as to whether the examining party may ask questions
outside the scope of the issue set forth with “reasonable particularity” in the notice, the
prevailing view is that the examining party may ask such questions though the answers will not
necessarily bind the corporation. For example, in King v. Pratt & Whitney, 161 F.R.D. 475 (S.D.
Fla. 1995), the court held that the examining party may ask questions outside the scope of the
notice noting that “[t]he Rule is not one of limitation but rather of specification within the broad
parameters of the discovery rules.” However, if the examining party asks questions outside the
scope of the issue set forth with “reasonable particularity,” the general deposition rules govern
such questions in that the deponent does not necessarily bind the corporation. This contrast with
a prior holding in Paparelli v. Prudential Ins. Co., 108 F.R.D. 727 (D. Mass 1985), wherein the
court held that the scope of a Rule 30(b)(6) notice is limited to the issue described with
reasonable particularity in the notice. However, the court noted that it is improper for the
defending attorney to instruct the witness not to answer question outside the scope. The case of
Detoy v. City and County of San Francisco, 196 F.R.D. 362 (N.D. Ca. 2000) examined both
Paparelli and King and concluded that King provided the better approach:
CHARLOTTE 168680.1
26
While the court in Paparelli interpreted the “reasonable particularity” requirement
of the Rule as limiting the scope of the deposition, the court in King interpreted
the requirement as ensuring that the party produces a witness prepared to testify.
This renders the description of the scope of the deposition in the notice as the
minimum about which the witness must be prepared to testify, not the maximum.
… The “reasonable particularity” requirement as interpreted in King facilitates
discovery as the Advisory Committee intended, instead of hampering discovery as
Paparelli does.
196 F.R.D. at 36-67. See also Cabot Corp. v. Yamulla Enterprises, Inc., 194 F.R.D. 499 (M.D.
Pa. 2000) (holding that Rule 30(b)(6) does not limit the scope of deposition to contents of
deposition notice); Overseas Private Inv. Corp. v. Mandelbaum, 185 F.R.D. 67 (D.D.C. 1999)
(the scope of inquiry of a Rule 30(b)(6) witness is limited only by Rule 26(b)(1)’s general
discovery standards). But see State Farm Mut. Auto. Ins. Co. v. New Horizon, Inc., 2008 U.S.
Dist. LEXIS 37571 (E.D. Pa. May 7, 2008) (“[I]f a Rule 30(b)(6) witness is asked a question
concerning a subject that was not noticed for deposition or that seeks information not reasonably
available to the corporation, the witness need not answer the question. Moreover, certain
questions may seek details so minute that a witness could not reasonably be expected to answer
them. See, e.g., United States ex. rel. Faqo v. M&T Mortgage Corp., 235 F.R.D. 11, 25 (D.D.C.
2006)).
2.
the Corporation
Introductory Questions Establishing Deponent Knows He/She Is Binding
Q. Let me mark as Exhibit ___ a copy of the Notice of Taking Deposition. I show that to
you now. Have you seen this document before?
A. Yes.
Q. Do you understand that this deposition is not just of you but of the corporation,
_____?
A. [answer is usually yes.]
Q. Do you understand that you have been designated to testify regarding these issues on
behalf of the corporation, ____?
A. [answer is usually yes.]
Q. Looking at the notice, do you see how it requires corporation ___ to designate one of
its “officers, directors, or managing agents, or other persons who consent to testify in its
behalf”?
A. Yes.
Q. Which of these things -- an officer, director, managing agent, or “other person” – are
you?
A. [answer will vary]
Q. As to that language “who consent to testify in its behalf,” do you consent to testify on
behalf of ___ corporation.
A. [answer is usually yes]
Q. Have you had a chance to look over all of the issues that have been designated in this
Notice that is marked as Exhibit ___?
CHARLOTTE 168680.1
27
A. [answer is usually yes]
Q. For which of the issues set forth in this Notice have you been designated to testify
today?
A. [answer varies]
Q. Are you prepared to discuss these issues?
A. [answer is usually yes]
Q. Do you understand that your answers to the issues that have been designated will be
answers of the entire corporation, _____?
A. [answer is usually yes]
Q. Do you understand that what you answer today to the issues that have been designated
will bind the corporation to those answers?
A. [answer is usually yes]
Q. Are there certain issues about which you are not designated to testify?
A. [answer varies]
Q. Let me do this, just to be absolutely clear about these designated issues and your role
as to those issue. What I would like to do is to read each issue out loud, one at a time,
beginning with issue 1 and after I read an issue I will ask you to confirm whether or not
you are prepared to discuss that issue as the corporate designee of ___ corporation.
If there is any issue I read out loud about which you are not prepared to discuss as
the corporate designee, please tell me so, okay?
A. Okay.
Q. As to any such issue I read out loud about which you are not prepared to discuss as the
corporate designee, I will then ask you if this is nonetheless an issue about which you
have some knowledge or no knowledge at all, okay?
A. Okay.
Q. Let me begin then with issue 1. Issue 1 states: “__”
Are you prepared to testify regarding that issue which I just read on behalf of
corporation, _______?
A. [Assume witness says, Yes]
Q. Issue 2 reads: “___”
Are you prepared to testify regarding that issue which I just read on behalf of
corporation, _______?
A. [Assume witness says, No]
Q. Even though you are not prepared to testify regarding that particular issue as the
corporate designee, is this nonetheless an issue about which you have some knowledge or
information?
A. [Assume witness says, No]
Q. Are you absolutely certain that you have no information or knowledge regarding that
issue which I just read?
A. I am certain
Q. Let’s move to issue 3, which reads: “__.”
Are you prepared to testify regarding that issue which I just read on behalf of
corporation, _______?
A. [Assume witness says, No]
CHARLOTTE 168680.1
28
Q. Even though you are not prepared to testify regarding that particular issue as the
corporate designee, is this nonetheless an issue about which you have some knowledge or
information?
A. [Assume witness says, Yes, I do have some knowledge]
Q. Thank you. [Note that down and come back to it later in the deposition and ask
witness what he knows about that issue even though it will not be something about which
the witness can testify as the corporate designee but would something that involves the
witness’s own personal knowledge.]
3.
Deposing a Defunct Entity Under Rule 30(b)(6) Deposition
Many cases will involve business entities that have gone out of business but remain
active in a lawsuit because they have insurance. The attorney retained for that entity will often
be involved through the liability insurer of the defunct entity. It can be particularly frustrating
for such an attorney to be able to properly address things like interrogatories, requests for
production, and depositions – particularly the 30(b)(6) deposition. When faced with a 30(b)(6)
notice, can the attorney representing the defunct client use that fact as an valid reason to object to
producing a witness to address the topics listed. The answer is no, at least according to the case
of Weintraub v. Mental Health Authority of St. Mary's, Inc., 2010 U.S. Dist. LEXIS 5131 (D.
Md. January 22, 2010). In Weintraub, plaintiff sought to depose a defunct corporate defendant
with a Rule 30(b)(6) notice. The defense attorney for the defunct corporation filed a motion for
protective order, asserting that the company was no longer in business, had no employees or
authorized representatives who could address the questions, and thus should not be compelled to
comply with Rule 30(b)(6). The defense attorney conceded, however, that there might exist a
former director who could be found for deposition, but asserted that it was unlikely such a person
would have knowledge of the designated topics. The court denied the motion for protective
order and ordered the defendant to designate an individual who could testify on the issues listed,
cautioning that the company could not “throw up its hands” and do nothing to adequately prepare
the witness.
4.
Taking a 30(b)(6) Deposition After Deposing Individual Officers
With the advent of Rule 30(b)(6), it has become common practice for a party to take
depositions of individual witnesses in the case, including individual officers of an opposing party
corporation, and then seek to shore up the issues in the case through the use of a Rule 30(b)(6)
deposition of the corporation itself. While the corporation sought to be deposed will often try to
get the other side to narrow down the designated issues, most attorneys representing corporations
understand that the 30(b)(6) deposition will go forward. Occasionally, however, an attorney for
a corporation may go so far as to file or threaten to file a motion for protective order to block the
entirety of the deposition on the following basis: that the examining party already deposed one or
more of the corporation’s officers and, therefore, there is no longer a right to take a Rule 30(b)(6)
deposition of the corporation itself. Is this a valid basis for an order of protection?
The few cases addressing the issue speak to how rare it is that someone tries it. Indeed, only two
have been found by this author. Miller v. Union Pacific Railroad Company, 2008 WL 4724471
(D. Kan. Oct. 24, 2008); ICE Corp. v. Hamilton Sundstrand Corp., 2007 WL 1500311 (D. Kan.
2007). But those cases are consistent and categorical in rejecting the argument, denying motions
CHARLOTTE 168680.1
29
for protective order and allowing the Rule 30(b)(6) deposition to proceed despite prior
depositions of individual corporate officers.
In Miller v. Union Pacific Railroad Company, 2008 WL 4724471 (D. Kan. Oct. 24,
2008), the plaintiff had taken several depositions of individual officers of the defendant and then
sought to shore up 15 designated issues in the case by deposing the corporation under Rule
30(b)(6). The defendant filed a motion for protective order on the same grounds posed here,
arguing that several of the issues in the notice had been addressed in prior depositions of its
officers and agents.
In denying the motion, the court began by noting the distinction between deposing an
individual in a corporation and deposing the corporation itself:
With respect to a Rule 30(b)(6) deposition, no distinction exists between the
designated corporate representative and the corporation. During the Rule 30(b)(6)
deposition, the designated corporate representative does not give his or personal
opinion like an individual does, but rather presents the corporation's position on
the topic. In other words, ‘[t]he designee testifies on behalf of the corporation and
thus holds it accountable.” Most importantly, the designated representative's
testimony is binding on the corporation. In contrast, the testimony of a
corporation's employee, when taken in his or her individual capacity, does not
bind the corporation.
Id. at *2 (footnotes omitted). The court then addressed the position taken by the defendant and
explicitly rejected it:
Union Pacific objects to providing a representative to testify regarding this topic
on the basis that Plaintiff and Waste Management have previously deposed
certain Union Pacific employees, i.e., the Manager of Track Maintenance (Larry
Huddleston), the Track Inspector (Elmer Hulse), and the Relief Track Inspector
(David Anderson), and that none of them had any knowledge of any such
complaints. In light of their testimony, Union Pacific objects to producing still
“another individual” to testify regarding the alleged complaints of Mr. Taylor and
Mr. Tidquist. It objects to producing “any additional witnesses” as it “has no
knowledge as to whom Mr. Taylor and Mr. Tidquist made these alleged
complaints on or about May 27, 2006.”
The Court finds this objection to be without merit and not a sufficient basis for a
protective order. As noted above, a Rule 30(b)(6) deposition presents the
testimony of the corporation and is binding on the corporation. It is separate and
distinct from the deposition of an individual employee. Here, only three
individual employees have testified as to the lack of complaints. Their testimony
is their own, individual testimony, and is not that of the corporation. Thus, it is
not binding on the corporation. Waste Management is entitled to know what the
corporation's position is on this topic, and a Rule 30(b)(6) deposition is the proper
vehicle to determine that position. In short, the fact that individually-named
witnesses have testified concerning a subject is no obstacle to a 30(b)(6)
CHARLOTTE 168680.1
30
deposition on the same subject. See ICE Corp. [v. Hamilton Sundstrand Corp.]
2007 WL 1500311, at *3 [D. Kan. 2007] (fact that party has already taken
depositions of individuals does not insulate corporation from producing the same
individuals as corporate representatives to give Rule 30(b)(6) depositions on the
same topics).
(boldface added).
In the case cited above, ICE Corp. v. Hamilton Sundstrand Corp., 2007 WL 1500311 (D.
Kan. 2007), the court addressed and rejected the same argument. The court noted:
Plaintiff argues: “[j]ust because Ratier may choose to designate certain
individuals as its corporate designees whose fact depositions have already
occurred does not insulate Ratier from the requirements of Rule 30(b)(6). Such a
finding would eviscerate Rule 30(b)(6 .” The court agrees.
(boldface added). This strong wording, that allowing a party to block a corporate deposition on
grounds that an officer was already deposed actually eviscerates the rule, was then followed by
the following rationale:
Rule 30(b)(6) itself provides that “subdivision (b)(6) does not preclude taking a
deposition by any other procedure authorized in these rules.” Moreover, as a
general principle “methods of discovery may be used in any sequence ...” In the
instant case, defendants fail to cite, and the court has failed to find, any authority
whereby the previous deposition of certain witnesses prevents 30(b)(6)
depositions of those same witnesses. In fact, Rule 30(b)(6) anticipates such an
occurrence, wherein a party believes the opposing party's witnesses have
“sandbagged” during their testimony in their individual capacities. See
Fed.R.Civ.P. 26(d)
As articulated in Sprint Communications Co., L.P. v. The.globe.com, Inc., [236
F.R.D. 524 (D. Kan. 2006)].
Thus, Rule [30(b)(6)] makes clear that a party is not permitted to
undermine the beneficial purpose of the Rule by responding that no
witnesses is available who personally has knowledge concerning
the areas of inquiry. If need be, the responding party ‘must prepare
deponents by having them review prior fact witness deposition
testimony as well as documents and deposition exhibits.’ Any
other interpretation of the Rule would allow the responding
corporation to ‘sandbag’ the deposition process.
Id. at 528. That such depositions could be onerous to the corporation party makes
little difference.
Although the Court readily acknowledges that the requirements
listed above may be onerous, the burden upon such a responding
entity is justified since a corporation can only act through its
employees. These requirements negate any possibility that an
inquiring party will be directed back and forth from one corporate
CHARLOTTE 168680.1
31
representative to another, vainly searching for a deponent who is
able to provide a response which would be binding upon that
corporation.
Id. (citations omitted). Here, plaintiff argues that Ratier's corporate
representatives, when testifying in their individual capacities, “repeatedly claimed
lack of knowledge and deferred to other Ratier witnesses.” Regardless of whether
or not “sandbagging” occurred, plaintiff was entitled to notice 30(b)(6) witness
depositions of Ratier, especially where, as here, more than a month of discovery
remained. To hold otherwise, as defendants argue, would negate the purpose
of Rule 30(b)(6) to prevent “the ‘bandying’ by which officers or managing agents
of a corporation are deposed in turn but each disclaim knowledge of facts that are
clearly known to persons in the organization and thereby to it.”
(emphasis added) (footnotes omitted).
The rationale of the above two case is similar to that argued in the following excerpt from
an article written before the cases were written:
Historically, no single person was likely to have enough information to speak for
a corporation. Adversaries had to guess which person, within an organization,
could answer as to a given topic. Under 30(b)(6), however, on notice a
corporation or other entity's obligation is to designate a person or persons who
will speak for the corporation, beyond their own personal knowledge. C. Wright,
A. Miller & R. Marcus, Federal Practice & Procedure: Civil 2d § 2103 (1994)
(Wright & http://hpf-law.com/hpf/attorneys/ronald-coleman-deposition.phn.
2/5/2010 Hoffman, Polland & Furman PLLC Page 2 of 3 Miller) at 30; see also
United States v. J.M. Taylor, 166 F. R.D. 356 , 361 (M.D .N.C. 1996). The
premise of Rule 30( b)(6) is that adversaries of a corporate party are entitled to
straight answers from single, cogent source about the claims that party is
asserting. “It is both the privilege and the duty of the corporation to designate
who speaks for it." 8A Wright & Miller at 11 n.2, cited to Hi-Plains Elevator
Machinery, Inc. v. Missouri Cereal Processors , Inc., 571 S.W.2d 273, 277 (Mo.
Ct. App. 1978). Thus, the Rule contemplates that parties receive the legal
benefits of deposition answers given on behalf of and attributable to the
corporation.
To say that a deponent designated pursuant to Rule 30(b)(6) truly speaks “for the
corporation” is to contrast his or her deposition with that of a “mere corporate
employee,” J.M. Taylor, supra, id., citing Wright & Miller. The J.M. Taylor court
explained that an employee's statement made “for the corporation” is no more
than “a statement of the corporate person,” subject to explanation, elucidation or
even alteration by other testimony. Id., citing W. R. Grace & Co. v. Viskase Corp.,
No. 90C5383, 1991 WL 211647 (N. D. III. 1991).
In contrast, a statement by the designee under Rule 30(b)(6) is a statement against
interest under Fed . R. Evid . 804(b)(3), and binding against the corporation. J.M.
Taylor, citing Irardi v. Lorillard, Inc., No. 90-7049, 1991 WL 158911 at *3 (E.D.
Pa. 1991 ). For this reason, a party cannot seek to avoid producing a 30(b)(6)
CHARLOTTE 168680.1
32
witness by claiming that any particular person has already been deposed, in
his or her individual capacity, on a given topic. To do so is to deprive the
discovering party of a legitimate benefit bestowed by the Rule.
Ronald D. Coleman, Depositions and Wrongful Profits in Infringement Cases: Cornering Your
Prey with Rule 30(b)(6), at http://hpf-law.com/hpf/attorneys/ronald-coleman-deposition.phn
(originally published at Mondag.com) (emphasis added).
Florida’s seminal case on corporate depositions takes a similar view, though the facts
were different that those posed in our scenario. In Plantation-Simon, Inc. v. Bahloul, 596 So. 2d
1159 (Fla. 4th DCA 1992), the court addressed the taking of an Indiana corporation under Rule
1.310(b)(6) of the Florida Rules of Civil Procedure. The court noted that the Florida rule was
modeled after the federal rule, F.R.C.P. 30(b) and has the same language and the same expansive
purpose. That purpose was to serve as an additional deposition tool, to supplement the
deposition options previously available to a party in relation to a corporation, allowing party to
depose not only the officers of an organization but also the corporation itself. Previously, noted
the court, an examining party could not depose an entire corporation; it had to pick individuals
and hope for the best. But this led to problems, especially where the individuals would disclaim
knowledge, forcing the examining party to depose person after person in the often vain hope that
someone would commit to an answer on certain issues.
As a consequence, a corporate party could frustrate the opposing party's discovery
by simply playing “ping-pong” with him: the first official would disclaim
knowledge, as would the second, and so on. It was to cure this problem that rule
30 was amended by the addition of what is now found in rule 30(b)(6), Federal
Rules of Civil Procedure. See 8 Wright & Miller, Federal Practice and Procedure
(Civil) § 2103 (1970 & Supp. 1991).
596 So. 2d at 1160. The court noted that, as with Rule 30(b)(6), Rule 1.310(b)(6) is intended to
stop this game of bandying back forth and provides an added tool to prevent this tactic, quoting
the following language from the Notes of the Advisory Committee on Rules:
The new procedure should be viewed as an added facility for discovery, one
which may be advantageous to both sides as well as an improvement in the
deposition process. It will reduce the difficulties not [sic-now?] encountered in
determining, prior to the taking of a deposition, whether a particular employee or
agent is a “managing agent.” * * * It will curb the “bandying” by which officers
or managing agents of a corporation are deposed in turn but each disclaims
knowledge of facts that are clearly known to persons in the organization and
thereby to it. * * * The provision should also assist organizations which find that
an unnecessarily large number of their officers and agents are being deposed by a
party uncertain of who in the organization has knowledge
596 So. 2d at 1160. The court thus affirmed the trial court’s denial of a motion for protective
order against the taking of a corporate designee of an Indiana partnership. The court noted that
CHARLOTTE 168680.1
33
the partnership can designate any person it wants to address the questions. In ending the opinion
the court stated:
Clearly, a party has the right to take a deposition of an officer, director or
managing agent of a corporation or partnership or government agency, already
named and served as a party, by simple notice and without the necessity of
serving the official with a witness subpoena. To hold otherwise would allow a
virtual return to the very pre-1970 game of corporate ping-pong that the
amendment was designed to end. We deny the petition for certiorari.
5.
Taking a Second 30(b)(6) Deposition on Different Issues
There is a split of authority in the federal courts on whether a party who has once taken a
Rule 30(b)(6) deposition on certain designated issues may re-notice another Rule 30(b)(6)
deposition on different issues without first seeking leave of court. In the Eastern District of
North Carolina, no leave of court was required for a second Rule 30(b)(6) notice. Quality Aero
Technology v. Telemetrie Electronic GMBH, 212 F.R.D. 313 (E.D. N.C. 2002). The court in that
case noted that the topics in the two deposition notices related to different subject areas and
stated, “Rule 30(b)(6) depositions are different from depositions of individuals” and observed
that “no aspect of the Rules ... either restricts a party to a single 30(b)(6) deposition or restricts
the allotted time for taking a 30(b)(6) deposition.”
This decision was expressly rejected in the case of Foreclosure Management Co. v. Asset
Management Holdings, LLC, 2008 WL 3895474 (D. Kan. Aug. 21, 2008). The court’s analysis
was as follows:
1. Was Asset Management required to seek leave of court prior to noticing a
second Rule 30(b)(6) deposition of FMC?
The starting point for the Court's analysis is Federal Rule of Civil Procedure
30(a)(2), which governs when a deponent may be deposed more than once. The
Rule provides that “[a] party must obtain leave of court, and the court must grant
leave to the extent consistent with Rule 26(b)(2) ... if the parties have not
stipulated to the deposition and ... the deponent has already been deposed in the
case.” A threshold question that the Court must decide is whether this rule applies
to a corporate entity such as FMC that is deposed pursuant to Rule 30(b)(6) . In
other words, should Asset Management have sought leave to take a second Rule
30(b)(6) deposition prior to serving its second deposition notice on FMC? FMC
contends that Rule 30(a)(2) required Asset Management to obtain leave before
noticing a second Rule 30(b)(6). FMC relies on Ameristar Jet Charter, Inc. v.
Signal Composites, Inc. [ 244 F.3d 189 (1st Cir.)] in which the First Circuit held
that the district court “correctly granted” a motion for protective order and
quashed a subpoena to take the second Rule 30(b)(6) deposition of a non-party
corporation. In so ruling, the First Circuit observed that Rule 30(a)(2) requires a
party to obtain leave of court to depose a person, including a corporation, that has
been previously deposed. The Court held that because the second Rule 30(b)(6)
deposition subpoena was issued without leave of court, the subpoena was
CHARLOTTE 168680.1
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“invalid.” Applying this holding to the instant case, FMC maintains that the
second deposition notice in this case was invalid and requests that a protective
order be entered precluding the second deposition from going forward.
Asset Management does not attempt to distinguish Ameristar. Nor does it cite any
case law which holds that leave of court is not required to take a second Rule
30(b)(6) deposition. The Court's own research reveals that only one court has
taken such a position. In Quality Aero Technology v. Telemetrie Electronic
GMBH, [212 F.R.D. 313 (E.D. N.C. 2002)], the District Court for the Eastern
District of North Carolina held that leave of court was not required for a second
Rule 30(b)(6) deposition, at least where the topics in the two deposition notices
related to different subject areas. In so ruling, the Court held that “Rule 30(b)(6)
depositions are different from depositions of individuals” and observed that “no
aspect of the Rules ... either restricts a party to a single 30(b)(6) deposition or
restricts the allotted time for taking a 30(b)(6) deposition.”
*3 This Court respectfully disagrees with the Court's ruling in Quality Aero
Technology, and holds that leave of court is required before a party may take a
second Rule 30(b)(6) deposition of a corporation or other entity. This conclusion
is based on the plain meaning of Rule 30(a)(2)(A)(ii). It expressly provides that
“[a] party must obtain leave of court ... if the parties have not stipulated to the
deposition ... and the deponent has already been deposed in the case.” There is
nothing in the text of Rule 30 that supports the conclusion that Rule 30(b)(6)
depositions should be treated differently from depositions of individuals. Indeed,
by using the generic word “deponent,” the drafters must have intended to include
not only individuals but also corporations and other organizations and entities
within the rule that leave of court is required for a second deposition.
Courts are required to “give the Federal Rules of Civil Procedure their plain
meaning,” and when the terms are unambiguous, “judicial inquiry is complete.” If
the drafters of Rule 30 wanted Rule 30(b)(6) deponents to be excluded from the
rule that leave must be obtained before deposing a deponent for a second time,
then the drafters would have included such a provision in the Rule. They did not,
however, and no basis exists for this Court to carve out an exception to the rule
for Rule 30(b)(6) depositions. Accordingly, the Court concludes that Asset
Management was required to obtain leave before issuing its second Rule 30(b)(6)
deposition notice, and because it did not, its second notice to take FMC's
deposition was invalid. The Court therefore grants Asset Management's Motion
for Protective Order as it pertains to the second, April 22, 2008 notice to take
FMC's Rule 30(b)(6) deposition.
(footnotes omitted).
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CONCLUSION
The protections of attorney-client privilege and work product doctrine are not absolute.
Lawyers assume the strength of these doctrines at their own risk. It is wise to assume that your
communications with employees and even former employees will at least be explored during a
deposition – and that a judge may overrule an instruction not to answer such questions.
Similarly, it is wise to assume that the documents you use in preparing a witness for deposition
will be asked about and potentially ordered to be produced. On the other hand, to err on the side
of under preparing the witness in order to avoid a privilege challenge can be equally risky, if not
more so. There is no cookie cutter approach. Sometimes, the right call is to let the witness
testify with minimal input to the witness on the facts and documents exchanged in the case.
Sometimes, the right call is to show the witness everything available, and allow full exploration
by opposing counsel. How to prepare each witness depends on good judgment based on the
particular facts and issues in your case and the role of the witness in relation to those facts and
issues.
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