Circling the Wagons: Preparing for the Showdown
By: Michael Freeman, Vice President Litigation and Employment Law, WALGREEN CO, Deerfield, Illinois; Dianna Baker Shew, Assistant General Counsel, CORRECTIONS CORPORATION OF AMERICA, Nashville, Tennessee; Marygrace Schaeffer, Vice President, DECISIONQUEST, Minneapolis, Minnesota; Joseph R Swift, BROWN & JAMES P.C., St. Louis, Missouri, firstname.lastname@example.org; John R Tarpley, LEWIS THOMASON, Nashville, Tennessee, email@example.com
Deposing Corporate Witnesses: A Primer in the Era of “The Reptile.”1
Depositions of employees of corporate defendants can be the “make or break” moment in the course of litigation. There are two distinct ways plaintiffs can depose corporate witnesses; each have pitfalls and strategies. In response to the advent of Rules of the Road2 and the Reptile method3, significant strategies must be incorporated to protect the corporate defendant and allow juries to hear the truth.
This article, because its anticipated audience is national, is based on the Federal Rules of Civil Procedure. Specific application of many of these pointers may not be applicable if state court rules of discovery control.
I. The Corporate Representative Deposition.
Rule 30(b)(6)4 is the rule that sets forth the requirements and obligations of the party pursuing the testimony of an entity. In turn, the entity is to produce a person to give testimony. The rule has its origin in the 1970 amendments to the Federal Rules of Civil Procedure5.
The 1970 amendments to the Rules of Civil Procedure aimed to provide a discovery device, Rule 30(b)(6), for a party seeking information from a corporation or other organizational entity. There was a perception that organizational entities were playing “hide and seek” when it came to producing a person with knowledge concerning a lawsuit. (More likely the primary duties of the folks being deposed were running the business and they did not have time to devote to litigation support.)
The committee notes commented that the rule was designed to “curb the bandying” that occurred when officers or managing agents of a corporation were deposed in turn, but each disclaimed knowledge of the facts that were clearly known to persons in the organization.6 With the burdens the rule imposes, that is, requiring a corporation to produce witnesses knowledgeable about the topics, the advisory committee assumed that the burden was not essentially different from that of answering interrogatories under Federal Rule of Civil Procedure 33.7 Also, it allows the entity to produce persons or people who can speak to the particular subject.
The Rule, in part, reads:
“In its notice or subpoena, a party may name as the deponent a public or private corporation, a partnership, an association, a governmental agency, or other entity and must describe with reasonable particularity the matters for examination. The named organization must then designate one or more officers, directors, or managing agents, or designate other persons who consent to testify on its behalf; and it may set out the matters on which each person designated will testify.…The persons designated must testify about information known or reasonably available to the organization. This paragraph (6) does not preclude a deposition by any other procedure allowed by these rules.”8
As stated in the rule, the notice must have “reasonable particularity” with respect to the matters for examination. However, if the notice does not comport with the rule of reasonable particularity, a party may not wait until the time of the deposition to do something about it.
“A party may not defend against sanctions under Rule 37(d) by contending that the request for discovery was improper and objectionable. Rule 37(d)(2) says that the failure to respond “is not excused on the ground that the discovery sought was objectionable, unless the party failing to act has a pending motion for protective order under Rule 26(c).”9
Therefore, once the notice is received the parties need to be diligent with respect to evaluating its specificity and whether or not, in good faith, a deponent can address the topics. If the topic as requested by the opponent remains deficient, the obligation is placed upon the deponent to object and more particularly ask for a protective order pursuant to FRCP 26(c). That will suspend the obligation and the timing of the notice and will bring the problem with respect to the notice to the attention of the Court.
If the notice is, in the opinion of the entity, sufficiently specific, the corporation then has an obligation to produce a spokesperson to address the topics. It is not sufficient to complain that no one within the corporation has personal knowledge of the items that testimony is requested for. “A…corporation has a duty to make a conscientious, good-faith effort to designate a knowledgeable person for Rule 30(d)(6) depositions and to prepare them to fully and unevasively answer questions about the designated subject matter”.10
The fact that an organization no longer has a person with knowledge on the designated topic does not release the organization of the duty to prepare a Rule 30(b)(6) designee. In fact, the Great American opinion11 commented that a party producing a Rule 30(b)(6) witness must prepare the deponent by having them review prior fact witness deposition testimony as well documents and deposition exhibits.
The courts rationalize this burden by saying it is the price of the privilege of being able to use the corporate form to conduct business.12
II. Compare to a Deposition Notice of a Specific Person
The Rule 30(b)(6) deposition differs in significant respects from a non-representative depositions. As mentioned, the notice is required to state, with reasonable particularity, the matters for examination. In contrast, in a non-representative deposition the examiner is basically free, without advance warning, to inquire about anything within the scope of discovery.13 At least with a 30(b)(6) deposition, an argument can be made that questions beyond the topics may not constitute admissions.
III. Effect of Statements made in Corporate Representative Depositions
An intriguing question is whether or not the statements of the corporate representative are “binding” on the corporate entity. That is, once the representative has spoken, may the corporation may not offer contrary evidence. The answer is not clear.
Wright and Miller’s Federal Practice and Procedure suggests that corporate answers, in a Rule 30(b)(6) deposition are binding on it.14 Of course, the testimony of the representative who speaks for the corporation is certainly admissible, however the question of whether or not it forecloses other and potentially contrary testimony is not determined. Courts have ruled otherwise, the statements are “not binding” in the sense the corporate party is forbidden to call the same or another witness to offer different testimony at trial.
For example, the 8th Circuit stated in R & B Alliance v. Amana Co. L.P., a case involving 30(b)(6) testimony by a designee of Amana: “Although Amana is certainly bound by Mr. Schnack’s testimony it is no more bound than any witness is by his or her prior deposition testimony. A witness is free to testify differently from the way he/she testified in deposition, albeit at the risk of having his/her credibility impeached by the introduction of a deposition”.15
One must look to the use of deposition rules to determine the answer of the admissibility. Rule 32(a)(3)16 reads, in part: “An adverse party may use for any purpose the deposition of the party or anyone who, when deposed, was the party’s officer, director, managing agent or designee under Rule 30(b)(6) or 31(a)(4).”17 Therefore, the deposition can be used by the opponent. It is not safe to assume that the deponent can then read or play favorable portions of the deposition in their case. The rule of completeness would allow follow up questions from the deposition; however, that rule implies that the topic matter be the same as what was offered by the adverse party.
If a non adverse party wishes to use the deposition, it must show unavailability of the witness.18 This may be impossible if the representative deposed is the corporate representative attending the trial. While this person can be called as a witness at the trial, taking the stand to “undo” admissions played to the jury in the plaintiff’s case, is awkward and ineffective.
IV. Potential Sanctions for Non Compliance
The organization has an obligation to produce a witness who must provide information that is known or reasonably available to the organization. This imposes an obligation to research information. The failure to do so, could subject the party to sanctions.19
Rule 37(d)20 allows the imposition of sanctions against a party for a disregard of the obligations imposed by the discovery rules even though there was no violation of a court’s order. Specifically, Rule 37(d)(3)21 incorporates by reference the sanctions available. They are found in 37(b)(2)(A)(i)-(vi).22 Those sanctions include: (1) costs and attorney fees incurred in filing a motion to compel; (2) monetary sanctions against the non-compliant party and its counsel; (3) an order compelling compliance with Rule 30(b)(6) and requiring an educated deponent to be produced; (4) requiring a corporation to re-designate and adequately prepare a witness to testify in any deposition at the corporation’s expense”.23
V. The Location of the Deposition
The place of the deposition is controlled by Rules 45(c)(1) and Rule 26(c)(1)(B).24 Technically, the examining or noticing party may set the place for deposition wherever he or she wishes, subject to the power of the court to grant a protective order. “The deposition of a corporation by its agents and officers should ordinarily be taken at its principal place of business. This customary treatment is subject to modification, however when justice requires”.25
VI. The Deposition of an Officer, Director or Managing Agent
A close relative of a 30(b)(6) deposition, is the deposition of an officer, director, or managing agent of a corporation. While there is no obligation for this person to “research” any specific topics, concomitantly, the party seeking the deposition is not required to forecast the topic areas and is basically only bound by the general rule that discovery is broad and only needs to be reasonably calculated to lead to the discovery of “non-privileged” matter that is relevant to any party’s claim or defense. This includes the existence, description, nature, custody, condition and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. “Relevant information need not be admissible at the trial if the discovery appears to be reasonably calculated to lead to the discovery of admissible evidence”.26
Remember that Rule 32(a)(3)27 provides that the testimony of an officer, director, or managing agent like that of a designated representative under Rule 30(b)(6) is admissible against the corporation for any purpose just as if the witness were a party himself. For example, the deposition of a corporate officer, director, or managing agent under Federal Rule 30(b)(1) or someone designated under Rule 30(b)(6) to testify on behalf of the company can be used even if the witness is present in the courtroom.28
VII. Strategies in Light of Current Practice
Within memory, corporate representative depositions were truly a fact finding and fact gathering endeavor. However, corporate representative depositions now seem to be about preserving sound bites. Given the impact of video depositions and “snippets” of testimony without the ability to play “the rest of the story” is especially daunting for defendants. This has been encouraged by a “trilogy” of trial guides: the Rules of the Road,29 Reptile30 and Damages.31
Mr. Friedman, the Rules of the Road author, is a bit arrogant, by writing; “a final word: some have asked why I write a book and possibly reveal these secrets to the defense bar. We believe there is no effective defense to this technique.”32
The trilogy of books presents a method of proving liability in all types of cases, not exclusively auto cases. The title “Rules of the Road” is meant to illustrate the need for the method.
Most jurors know traffic rules, i.e. the “rules of the road.” The trilogy of books use that example to point out, that unlike driving a car, most jurors have no sense of the “rules” for common carriers, insurance companies, physicians, product manufacturers and the like.
In a nut shell, the method attempts to put “meat on the bones” of what the authors deem esoteric legal terminology. In fact, the authors argue that the defense wields three weapons to defeat Plaintiffs’ cases: complexity, confusion and ambiguity. The reasoning is that if a jury is left wondering or undecided, they will tend to find against a Plaintiff. In fact, the authors even go so far to as to say that sometimes complexity, confusion, and ambiguity are part of a conscious defense strategy.33 The avowed purpose of the “trilogy” is summed up as: “ultimately, this book is about how to breath life into ambiguous legal standards and create an indisputable standard for everyone – judges, juries and Defendant’s – to see. The standard must be clear as a double yellow line on a highway”.34
VIII. How the “Rules” Apply?
As mentioned, the rationale for the use of the rule method is to put “meat on the bones” of what are sometimes abstract legal concepts that find their way into jury instructions. The argument is that when jurors are asked to apply an ambiguous standard, they are either confused or invent their own definition for the standard. If that happens, the authors feel that the defense wins. The thought is that psychologically, when faced with the decision about something you do not feel comfortable that you understand, you will hesitate to make a decision.
The authors assert that this is a huge advantage for the defense. This may be true, especially in light of standard defense arguments that have an emphasis on burden of proof.
With respect to a corporate representative deposition, Plaintiff lawyers will use the “Rules method” to develop rules for case. For instance, if the corporate representative has to explain the safety rules of a defendant company, the Plaintiff’s lawyers will quote the rules and get the corporate representative to admit that the rules are designed to keep the community safe and that in this instance the actions that are the focus of the lawsuit were violated and therefore the company action, or “rule violation” caused the damage to the plaintiff and, more importantly created a danger to the community.
IX. Strategies for Combating the Reptile.
The Reptile method is becoming more and more prevalent in litigation. Like most things, being forewarned is forearmed. Developing an understanding, early on, of the applicable rules and how they should be addressed will allow you to effectively combat the rules.
Probably the best method is to treat every deposition preparation session as one in which the deposition will be taken using the Reptile method. While the opposing lawyer may have no history of incorporating the Reptile method, it would be best to prepare for it anyway.
Another way to gain insight is to learn about Plaintiff’s counsel’s reputation and try to secure other depositions that lawyer has taken. Also, you should carefully examine the nature of the discovery served. Typically, interrogatories and requests for production will specifically ask about protocols, guidelines, rules, regulations, standards, policies, and/or practices of the defendant. They will also ask specifically about authoritative sources, textbooks, training manuals, and procedures used at the company.
Any company information that is publicly available should be reviewed. Review the company’s website. This invariability will come up in questioning of corporate representatives. What does the website promise and what representations are made?
After identifying the rules that are going to be presented to the deponent, write them out and review them with the witness. For any authoritative sources that are disclosed in discovery, the witness needs to prepare to discuss the “rule” found in the document. Also, a very clear explanation needs to be developed as to whether or not the rules are applicable. If a rule is not applicable, the reasoning for the non- applicability must be clearly explained by the deponent.
Beware manipulation. A witness can be manipulated by asking about familiarity with rules. Remember familiarity does not mean the rule governs. Often Plaintiff’s counsel makes the leap that familiarity equals authoritativeness. This may not be the case. The witness has to be patient and consistently explain that “rule” was not followed because it was not applicable.
Another potential response is that the “rule” was, in fact, followed. Of course, Plaintiff’s counsel will want to see substantiation of the compliance.
Finally, if you are faced with a situation where it appears the “rule” was broken; you may be able to explain why breaking the rule does not make a difference in the case. Causation is always an important element.
With respect to company representative depositions, you can anticipate the plaintiff’s attorney emphasizing that the representative is the company and is making admissions on behalf of the company. The company representative has to be vigilant about knowing the limits of his/her authority to testify and stick specifically to the topics that they were designated for.
Also, the witness must avoid speaking generally. Since the focus of the “Reptile” is to protect the community, the defendant will equally be generalized into all companies of like nature and in the industry. Those need to be corrected at the time the questions are asked. A good corporate representative needs to be articulate, smart, savvy, even-tempered and knowledgeable.
The best way to be successful in corporate representative depositions is prepare extensively. This preparation includes almost what amounts to a “safe word” or “running to the light”.35 While speaking objections are not allowed, a subtle reminder by counsel that objecting to the form of the question should remind the witness to come back to what was discussed in the practice sessions.
Often videoing a mock deposition will be very helpful for the witness. A playback of the video during the coaching session is a must. In fact, giving the video to the witness as “homework” is often effective.
A solid understanding of the merger of “rules” governing depositions and the Reptile rules of the road may turn the “make or break” moment of the representative’s deposition a “make” moment instead of a “break” moment.
1 Materials prepared by Elaine Moss and Teresa Young of Brown & James, P.C., St. Louis, MO, and Robert Paschal and Chris Page of Young, Moore and Henderson, Raleigh, NC
2 Rick Friedman & Patrick Malone, RULES OF THE ROAD - A PLAINTIFF’S LAWYER’S GUIDE TO PROVING LIABILITY (2d ed. 2010).
3 David Ball & Don C. Keenan, REPTILE, THE 2009 MANUAL OF THE PLAINTIFF’S REVOLUTION (2009).
4 Fed. R. Civ. P. 30(b)(6).
5 8A Charles Alan Wright, Arthur R. Miller, Mary Kay Kane, Richard L. Marcus & Adam Steinman, FEDERAL PRACTICE AND PROCEDURE § 2103 (3D ED. 2015).
8 Fed. R. Civ. P. 30(b)(6).
9 8A Charles Alan Wright, Arthur R. Miller, Mary Kay Kane, Richard L. Marcus & Adam Steinman, FEDERAL PRACTICE AND PROCEDURE § 2291 (3D ED. 2015).
10Great American Insurance Company of New York v. Vegas Construction Company, 251 F.R.D. 534, 539 (D. Nev. 2008)
11 Id. at 539.
12 Id at 539.
13 8A Charles Alan Wright, Arthur R. Miller, Mary Kay Kane, Richard L. Marcus & Adam Steinman, FEDERAL PRACTICE AND PROCEDURE § 2103 (3D ED. 2015).
14 Id §2103.
15 258 F.3d 783, 786 (8th Cir 2001).
16 Fed. R. Civ. P. 32 (a)(3).
17 Fed. R. Civ. P. 32 (A)(3).
18 Fed. R. Civ. P. 32 (4)(A-E).
19 8A Charles Alan Wright, Arthur R. Miller, Mary Kay Kane, Richard L. Marcus & Adam Steinman, FEDERAL PRACTICE AND PROCEDURE § 2291 (3D ED. 2015).
20 Fed. R. Civ. P. 37(d).
21 Fed. R. Civ. P. 37(d)(3).
22 Fed. R. Civ. P. 37(b)(2)(A)(i)-(vi).
23 Great American Insurance Company of New York v. Vegas Construction 251 FRD 534, 542-543 (D. Nev. 2008).
24 Fed. R. Civ. P. 45 (c)(1) and 26 (c)(1)(B).
25 8A Charles Alan Wright, Arthur R. Miller, Mary Kay Kane, Richard L. Marcus & Adam Steinman, FEDERAL PRACTICE AND PROCEDURE § 2112 (3D ED. 2015).
26 Fed. R. Civ. P. 26(b)(1).
27 Fed. R. Civ. P. 32 (a)(3).
28 James C. WinstoN, CORPORATE REPRESENTATIVE DEPOSITIONS REVISTED, 65:3 Baylor L. R. 930 (2003).
29 Rick Friedman & Patrick Malone, RULES OF THE ROAD - A PLAINTIFF’S LAWYER’S GUIDE TO PROVING LIABILITY (2d ed. 2010).
30 David Ball & Don C. Keenan, Reptile, THE 2009 MANUAL OF THE PLAINTIFF’S REVOLUTION (2009).
31 David Ball, DAVID BALL ON DAMAGES 3, (3rd ed. 2012).
32 The Rules of the Road at 5.
33 The Rules of the Road at 2.
34 The Rules of the Road at 3.
35 Poltergist, (Metro-Goldwyn-Mayer 1982).