Taking an entity to trial entails special considerations over and above litigation involving individuals alone. Among the matters to consider are the process of preparing 30(b)(6) witnesses, employee representation, insurance considerations, document retention, and funding litigation. Each of these matters might require a litigator to modify their approach to trial. In this Protecting an Entity in Litigation Series, I will explore several critical issues an attorney should consider when protecting an entity in litigation.
When attorney preparations of a 30(b)(6) witness are inadequate, varying sanctions such as a default judgment or directed verdict-type situation can be imposed. Witnesses must be prepared to discuss the extensive preparation they went through for the deposition.
The most daunting of measures attorneys face in protecting an entity in litigation is preparing witnesses for a Federal Rules of Civil Procedure 30(b)(6) deposition. Whether taking or defending, the first dance is the scope of the topic list – how many topics are appropriate, what time frame is appropriate, do the topics include privileged or work product information, etc. And the end cap on the preparation – from negotiation over topics through preparing witnesses and finally presenting a witness for deposition – is the heavy threat of sanctions for failing to do a complete job.
Of course, through the middle the attorney is faced with gathering information, investigating facts, finding competent and available witnesses, preparing them on a number of occasions, ensuring compliance with the Rules and the entity’s other evidence and discovery responses, and properly defending the entity’s position through the deposition.
What’s the point?
The point of the 30(b)(6) deposition is to prevent sandbagging at trial by “halfhearted” inquiry into matters before depositions “but a thorough and vigorous one before the trial” Bd. of Trustees of Leland Stanford Ju. College v. Tyco, Inc., 253 F.R.D. 524, 526 (C.D. Cal. 2008). Sandbagging can happen when the president, their administration and a board member are each called separately and their testimonies compared. Under 30(b)(6) rules, the information collected during deposition should be everything the “entity” knows in one area.
Rule 30(b)(6) depositions begin with a Notice of Topics that lists a number of potential topics a company representative must be prepared to testify about. The notice must describe “with reasonable particularity the matters for examination” because even proper topics that appear narrowly tailored can present an onerous burden on the entity to properly prepare its witnesses. Watch out for hearsay and relevance issues contained in the topics, as well as any other issues that might not typically raise an objection, and be sure to object to the topics prior to the deposition to preserve those objections for trial where the circumstances are different.
Depositions can be expensive and time-consuming, especially when a 30(b)(6) Notice of Topics results in the company having to put forth 30 different witnesses to explain the company’s knowledge. Defending counsel is required to complete extensive internal investigation and review of documents using one or more representatives to determine what comprises “known” or “reasonably available” information. When the president of an entity comes to testify in his individual capacity at trial, he could be cross examined by Rule 30(b)(6) evidence even if the president himself did not give that testimony.
“What is known” and “what is reasonably available” are the standards for what the defending attorney and entity must be able to learn and testify to. Both on the part of the attorney and the entity, discovery of what information fits into these definitions require significant investigation including reviewing documents, files, old computer drives, and interviewing various people in different offices or across different time to put together a package of witness information.
Upon receipt of a Rule 30(b)(6) Notice, attorneys defending entities must try to limit and narrow the scope, timing and parameters set by which individuals may be deposed. For example, has the entity been acquired, sold, or modified? If so, do the persons with knowledge of the topics still work for the entity or are they now at a different entity? Does the notice limit the time frame to one reasonable under the facts of the case? It is incredibly difficult to prepare for each year the company has conducted business and an open-ended notice on the time is likely overly broad. Other definitions can also be important – does the notice discuss “financial information” or does the deposing attorney only want tax information, profits and losses, or bank account ledgers? Knowing this information ahead of time assists the defending attorney in collecting information and finding the best witnesses.
The burden of the Rule 30(b)(6) deposition requires a huge time commitment both for the client and attorney so it is imperative that you start the process early. There is no way to prep for 35 separate, distinct topics in the 35 days leading up to the deposition. It is also unreasonable and extremely expensive to expect one or two executives of a company to take four days to investigate and prepare.
Start by negotiating the details with opposing counsel. Attorneys should try to agree on narrowing of topics, proper definitions when they are lacking, and extensions of time when the burden to adequately prepare for a deposition requires it (or when a critical witness will be unavailable during the scheduled time).
If, however, no agreements can be reached with opposing counsel, a motion should be filed with the court as soon as practicable. A motion for a protective order can act as a “stay” of the deposition while the court considers the request.
Case law is sparse in this area, but courts are hesitant to grant much relief. A request contingent upon a review of “voluminous” documents and the like will not excuse an entity from testifying. Your motion to protect must be more detailed on why the scope of the topics is overly broad or why the witnesses cannot be properly prepared in time.
While attorneys will likely serve certain objections to the notice prior to the deposition (for example, on standing issues such as evidentiary objections), objections alone do not excuse the organization from attending the deposition or producing a properly prepared witness to testify as to each topic. For this, an attorney needs a specific agreement with the opposing counsel or a court order.
Designated Rule 30(b)(6) deponents speak for the organization on the matters specified in the notice. The entity is bound by the deponent’s testimony at trial. The Rule 30(b)(6) deponent is not necessarily the person most knowledgeable — this is a common misconception. An organization must designate “officers, directors, or managing agents, or . . . other persons who consent to testify” on the organization’s behalf.
Picking witnesses can be difficult, especially when some of the questions may be well tailored to the upper echelons of the entity. These are people that are highly paid, very busy, and they are not going to want to take multiple days off to prepare and testify.
Because these individuals are typically sophisticated, they sometimes make difficult and reluctant witnesses. They may not take an attorney’s call, provide documents timely, and want “the lawyer” to make it go away. Because the testimony can bind the company and be used for any purpose at trial, it is worth imposing the time burden on higher up employees if they are the best witness.
While the entity is bound to provide deponents, an attorney is looking for willing individuals who would make good witnesses. Lower-level employees may work well as witnesses, especially when coached during preparation sessions before the hearing. This does not need to be the most knowledgeable person. Instead, it could be a group of people comprised of, for example, an officer, director, managing agent, warehouse personnel, outside accountant, or other persons who can testify consistently and speak to the distinct categories of information. Although hard on the attorney to manage, having more than one person, or as many as possible, testify shifts the burden off any single person.
In preparing, an attorney must consider the time allotted and request an extension from opposing counsel or from the court if time is too short to gather materials and prepare witnesses.
Rule 34(b)(2)(A) requires that the corporate representative must receive at least 30 days notice. The attorney should work to gather and deliver materials the deponent will need to prepare as early as possible. Don’t overlook providing the witnesses with the relevant pleadings in the case, disclosures, and discovery responses that may have already bound the company to a specific line of thought.
Each witness should have at least two preparation sessions to meet the obligation to identify details and learn the facts, as necessary. The first session should be at least two weeks prior to the deposition so the witness has the opportunity to do further follow-up investigation—talking to other people, pulling documents, and looking through files to shore up testimony.
At this first prep-session, ask the witness potential questions, think about their answers and use of documents, note the holes in responses, and put all in writing. Then, send a letter to the corporation and the client, not just the witness, sharing the answers with all. This must be done in addition to notifying them of the possibility of sanctions.
During the prep-session, the attorney should treat the witness like any other deposition. Set them up, identify points of concern, let witnesses vent and get it out of their system so the attorney can hear it all. Then, go through the themes of the case, what the witness should know, using the language the witness should use. If the opposing party is talking about a civil theft claim, every time a witness says something is “missing,” that implies to a jury that it was stolen, and is language to avoid.
The second prep-session mirrors the first but is days before the deposition and does more realistic training. Not only will the preparation involve discussions between counsel and the witness on how to answer questions, but the attorney (or hopefully the attorney’s colleague) will ask questions of different styles to prepare the witness on how to answer – for example, leading questions or open-ended questions, with various tones ranging from friendly to aggressive – so the witness becomes comfortable with any style of questioning from opposing counsel. Your witness should also become comfortable letting you object and knowing what those objections stand for. Finally, this is the last chance for a 30(b)(6) witness to ensure he or she knows the facts and is able to respond credibly to the topics posed.
Of course, it goes without saying, always instruct witnesses to tell the truth. Entity depositions are more difficult than personal depositions due to the range of potential questions and details required in responses. Attorneys can create talking points for witnesses as long as the bullets do not include privileged material as it will be discoverable and end up going to opposing counsel.
Remember the Risks
This deposition and others can be used for any purpose at trial. Even if the Rule 30(b)(6) deponent is testifying live at trial, a court may allow opposing counsel to play video or read transcript from the Rule 30(b)(6) deposition not just for impeachment. So, it is a good idea to ask the trial judge at the case management conference how depositions may be used at trial – for example, can it be used in opening statement or can it be used whether or not the deponent testifies live at trial. Then, if an attorney takes that deposition, opposing counsel will know how hard to defend it.
Inadequate preparation can easily lead to sanctions – both of the entity and of the attorney. These sanctions can range from a default judgment or directed verdict-type situation to financial penalties or having to re-do the deposition once again.
Witnesses should be prepared to discuss the extensive preparation they went through for the deposition. Upon receipt of a notice, an attorney should begin working to negotiate with opposing counsel, file a motion as required, provide potential witnesses with the notice and relevant information, gather information, schedule early prep sessions, schedule additional prep sessions, and show up to the deposition prepared and caffeinated.
This information is not intended as legal advice. Readers should seek specific legal advice before acting with regard to the matters addressed above.