By Brendan Faulkner and Mike A. D’Amico
The deposition of a corporate defendant is often a turning point in a product liability lawsuit. In large part this is because the rules that allow for and govern depositions of knowledgeable corporate representatives impose substantial obligations. Corporate parties must designate one or more representatives and prepare them with all of the information known or reasonably available to the corporation on the designated subjects. Likewise, corporate counsel has a duty to present the corporate designee with the required information. The procedure is designed to avoid the bandying by corporations where individual officers or employees disclaim knowledge of facts clearly known to the corporation.
Practice Book 13-27(h) and Federal Rule 30(b)(6) in Product Liability Cases
Pursuant to Practice Book 13-27(h) a party may notice the deposition of a corporation and designate with reasonable particularity the matters on which examination is requested. The organization must then designate representatives to testify as to all matters known or reasonably available to the organization.
The federal counterpart to Practice Book 13-27(h) is Rule 30(b)(6) of the Federal Rules of Civil Procedure. Rule 30(b) (6) also provides that a corporation must designate representatives for each subject in a deposition notice to testify about information known or reasonably available to it on those subjects.
The rule has three purposes: (1) to reduce the difficulty a deposing lawyer encounters in determining, before the deposition, whether a particular employee or agent is a “managing agent”; (2) to curb the practice of “bandying,” where an entity’s officers or managing agents are deposed in turn, but each denies knowledge of facts that are clearly known to people in the organization; and (3) to assist entities that find an unnecessarily large number of their officers and agents being deposed by a party uncertain of who in the organization has relevant knowledge. See Fed. R. Civ. P. 30(b)(6) advisory comm. n. to 1970 amendments.
Many subjects in a product liability action, such as product design, product testing, regulatory compliance, and product-complaint handling, are ideally suited for corporate representative depositions. Testimony that binds a corporation on such topics frequently determines a product liability case’s outcome. Corporate representative depositions can also be valuable in advancing discovery (i.e. learning about document retention policies or the legal relationships between related corporate entities), and are a good way to authenticate documents for use at trial without the need for a sponsoring trial witness.
A Corporation Must Speak with “One Voice” on the Subjects of a Corporate Designee Deposition
An organization must speak with “one voice” in a corporate representative deposition. The testimony of a corporate representative is binding on the corporation; it is a sworn corporate admission. A party may read or publish any portion of a transcript of a corporate designee deposition at essentially any point during the trial.
Additionally, following such a deposition, a corporation cannot later offer new or different evidence stemming from an investigation that could have been made prior to the corporate representative deposition, unless the corporation can prove that the information was not known, or was inaccessible at that time.
Obligations of a Corporate Deponent to Prepare Its Designees
A party should give the corporation notice of the areas of inquiry that will be pursued at the deposition so the corporation can identify appropriate deponents and ensure that they are prepared for the deposition. The notice should accurately and concisely identify the areas of questioning giving due regard to the nature, business, size and complexity of the entity being asked to testify.
In response, a corporation must make a conscientious good faith effort to designate the people having knowledge of the matters sought. It must designate one or more people to testify to the matters listed in the notice, and is required to prepare its representatives to testify on all the listed matters.
It is the responsibility of the corporation to undertake a thorough investigation in response to the corporate deposition notice. The corporation must designate a deponent who can testify to the knowledge of the entire company on every area designated on the deposition notice. By designating someone, an organization indicates that the person has the authority to speak on behalf of the corporation with respect to the area within the notice of deposition not only to facts, but also to subjective beliefs and opinions.
The designee must be prepared to provide complete, knowledgeable, and binding answers on behalf of the corporation. If the deponent’s designees are not personally knowledgeable about the matters specified in the deposition notice and for which they have been designated to testify, the organization must prepare them to give knowledgeable, binding answers on those topics. This prevents “sandbagging.”
A corporation’s designation of a witness who does not know about matters in the notice and within the designation of the witness amounts to a failure to appear to testify. A variety of sanctions may be imposed for a party’s failure to comply with a proper corporate designee deposition notice (i.e. costs, preclusion, an order that certain matters be taken to be established for purposes of the action, or default). (A recent federal district court decision which resulted in a sanction for failing to properly prepare a corporate representative for deposition contains a useful overview of the current state of the law concerning “30(b)(6)” depositions. See QBE Insurance Corp. v. Jorda Enterprise, 277 F.R.D. 676 (S.D. Fla. Jan. 30, 2012).)
Though preparing a corporate designee is often onerous, this price is merely incidental to the privilege of using the corporate form to do business.
The Scope of a Corporate Representative Deposition
Is Not Limited by the Deposition Notice
It is also important to note that the rule providing for depositions of corporate representatives cannot be used to limit what is asked of a designated witness at such a deposition. The witness is required to truthfully answer all questions he or she has knowledge of if they are reasonably calculated to lead to the discovery of admissible evidence. No special protection is conferred upon a deponent by virtue of the fact that the deposition was noticed as a corporate representative deposition. King v. Pratt & Whitney, 161 F.R.D. 475 (S.D. Fla. 1995), aff’d 213 F.3d 646 (11th Cir. 2000). Many other courts have followed this rule.
For questions at corporate representative depositions that are outside the topics described in the notice, the general deposition rules govern. Counsel may not object and instruct the witness not to answer questions that are reasonably calculated to lead to the discovery of admissible evidence even though they are beyond the subjects listed in the deposition notice. See Practice Book 13-30(b), and Rules 3.4 and 8.4 of the Rules of Professional Conduct.
The rules and principles providing for, and governing corporate representative depositions make these depositions formidable tools in a product liability case. A thorough understanding of these special rules is essential to making these depositions effective, and in properly preparing a corporate deponent. The importance of these depositions is difficult to overstate.