By Hayes Hunt and Joshua Ruby
In a world where the overwhelming majority of cases never make it to trial, depositions take on outsized importance. They will almost certainly be the only in-person testimony either party has the opportunity to elicit and the only opportunity for live cross-examination. That means every deposition requires careful preparation.
Corporations and other entities have unique obligations regarding the depositions of corporate designees pursuant to Federal Rule of Civil Procedure 30(b)(6) and its state cognate, Pennsylvania Rule of Civil Procedure 4007.1(e). An entity must prepare a designated witness to answer its adversary’s questions, and the designee’s answers bind the entity in the litigation. Avoiding costly mistakes and discovery sanctions requires that both in-house and outside counsel for such entities take care to prepare for such depositions and understand the rules that govern them.
Adversary’s Responsibilities In Noticing Deposition
The entity’s adversary has few obligations in noticing the deposition of a corporate designee. All
Rule 30(b)(6) requires is a notice directed to the entity that “describe[s] with reasonable particularity the matters for examination.”
Notwithstanding this minimal obligation, some limits do exist on the adversary’s description of the matters for examination. The qualifier “including, but not limited to,” or other language indicating that the topics listed in the notice are not exclusive renders the notice overbroad and subject to a motion to quash. (See, e.g., Reed v. Bennett, 193 F.R.D. 689, 692 (D. Kan. 2000).)
Instead, the adversary has an obligation to define the “outer limits” of the subject matter of the deposition of the corporate designee. This limit exists to ensure that the entity is capable of designating a witness (or witnesses) who can testify about each of the topics listed, rather than facing the “impossible task” of designating a witness who can testify about all possible questions the adversary might ask.
Responsibilities Upon Receiving Rule 30(b)(6) Notice
Upon receiving a Rule 30(b)(6) notice, a corporation must produce a witness (or witnesses) for deposition questioning by the adversary. The witness(es) must be capable of giving “complete, knowledgeable and binding answers on behalf of the corporation” about each of the topics listed in the deposition notice, according to Marker v. Union Fidelity Life Insurance, 125 F.R.D. 121, 126 (M.D.N.C. 1989).
Accordingly, the corporation also incurs a duty to educate and prepare its designees to testify about any matter outside the designee’s personal knowledge, which the Rule 30(b)(6) notice specifies. Failure to do so “is tantamount to a failure to appear, and warrants the imposition of sanctions,” as in United Technologies Motor Systems v. Borg-Warner Automotive, Civil Action No. 97-71706, 1998 U.S. Dist. LEXIS 21837, at *4 (E.D. Mich. Sept. 4, 1998).
Who Can The Corporation Designate?
An entity is not limited to its own present employees as its corporate designees. Instead, Rule 30(b)(6) permits an entity to designate “officers, directors, or managing agents, or … other persons who consent to testify on its behalf.”
In particular, where the relevant events have long since passed, a former employee may be the most appropriate corporate designee. In Beauperthuy v. 24 Hour Fitness USA, Case No. 06-715 SC, 2009 U.S. Dist. LEXIS 104906, at *17 n.5 (N.D. Cal. Nov. 9, 2009), for example, the court held that “the text of Rule 30(b)(6) leaves no doubt that a former employee can and should be designated as a Rule 30(b)(6) deponent, if the former employee is the most knowledgeable individual and as long as the former employee consents.”
Nor does Rule 30(b)(6) limit proper designees to people employed by or otherwise affiliated
with the entity. Any “other person who consent[s]” to testify on behalf of the entity and has the requisite knowledge and preparation may do so.
What Questions Must The Corporate Designee Answer?
As with any other deposition witness, the corporate designee must testify about facts within his or her (or, in this case, the entity’s) knowledge. But a corporate designee’s responsibilities go further; he or she must also answer questions about the entity’s “subjective beliefs,” “interpretation of documents and events,” and “position” on any of the topics in the deposition notice, as in United States v. Taylor, 166 F.R.D. at 361.
Some courts also permit the adversary to ask questions beyond the scope of the topics in the deposition notice. Even where the court so permits, the answers of the designee are treated like those of any other fact witness and do not bind the entity, according to Detoy v. City & County of San Francisco, 196 F.R.D. 362, 367 (N.D. Cal. 2000).
Other courts, such as in Paparelli v. Prudential Insurance Co. of America, 108 F.R.D. 727, 728-31 (D. Mass. 1985), have held that the adversary may not ask questions beyond the topics listed in the Rule 30(b)(6) notice. But counsel for the entity cannot enforce that limitation by instructing the designee not to answer the questions. Instead, the designee must answer the questions to the extent possible, and the adversary has no recourse if the witness disclaims knowledge of matters outside the scope of the deposition notice.
What Is Effect Of Corporate Designee’s Testimony?
Within the scope of the deposition notice, the designee’s answers are the corporation’s answers. That is not to say that the corporation may not later alter its answers or positions, but doing so will subject its representatives to cross-examination at trial. And the deposition testimony itself of the designee may be admissible at trial as a prior inconsistent statement, a statement against interest, or on another basis.
The same rule applies “if 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.” In that circumstance, “it cannot argue for a contrary position at trial without introducing evidence explaining the reasons for the change.”
The deposition of a corporate designee presents both risks and opportunities for a corporation or other entity involved in litigation. By understanding the rules that govern such depositions, both in-house and outside counsel for entities can use them to great effect while minimizing the risks to their client’s litigation positions.
Originally published in The Legal Intelligencer on July 16, 2014.
