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I’ve Been Designated to Testify on Behalf of My Corporation…Now What?

Published by
Stephen Bazarian
Partner, Dalton & Finegold LLP

 

 

We all know that corporations can be named as parties in a lawsuit.  They can sue and be sued.  However, a corporation is not person.  It is a legal fiction, a paper entity.  If that is the case, how can a party in a lawsuit learn through a deposition information that a corporation may possess?  One cannot depose a “legal entity.”  One can depose only human beings.  As a result of this conundrum, both the Massachusetts and Federal Rules of Civil Procedure have created a method by which the “corporation” is deposed but the people actually speaking on its behalf are designated by the company to do so.  Massachusetts and Federal Rules of Civil Procedure 30(b)(6) are the rules of procedure which permit such depositions.  As such, depositions of corporate designees are frequently referred to as “Rule 30(b)(6) depositions.”

For good or bad, Rule 30(b)(6) depositions place a great deal of responsibility upon the persons who are designated to testify on behalf of the corporation.  Individuals testifying at a Rule 30(b)(6) deposition are testifying not on behalf of themselves but on behalf of the corporation. They are testifying to specific topics about which the opposition seeks information.  The designee’s testimony binds the corporation.  It is as if the corporation itself is testifying and that testimony is as admissible in court for or against the corporation.

To illustrate how a Rule 30(b)(6) works, let’s use a case where Wile E. Coyote has sued Acme Dynamite Corporation because vibrations from Acme’s demolition work in a rock quarry caved in the basement of Mr. Coyote’s nearby house.  Acme’s lawyer is Attorney Foghorn Leghorn.

In a Rule 30(b)(6) deposition, a party seeking to depose the corporation must first notify the corporation in writing of the topics about which it wants testimony.  This is done via a document called a “Rule 30(b)(6) notice of deposition.”  The topics set forth in the Rule 30(b)(6) notice of deposition must be in some way related to the subject of the dispute between the parties.  In our example, Wile E. Coyote would send a Rule 30(b)(6) notice of deposition to Acme Dynamite Corporation and list a number of topics about which he wants the corporation to designate someone to testify.  Some examples of the topics Wile E. Coyote might want Acme’s corporate witnesses to testify about could be: “Topic No. 1 – The type of training that Acme Dynamite Corporation provides its employees to protect nearby houses when using dynamite;” “Topic No. 2 – The amount of dynamite Acme Dynamite Corporation used at the rock quarry on the day of the demolition work;” or “Topic No. 3 – A description of all other lawsuits in which Acme Dynamite Corporation was involved where its work damaged houses in a nearby area.”

After receiving the Rule 30(b)(6) notice of deposition, a corporation is obligated to name one or more of its employees to testify on each topic at the deposition.  In our example, Acme Dynamite Corporation is obligated to designate someone to testify about the topics Wile E. Coyote has identified.  Acme can designate one or more witnesses to testify about the topics.  In our case, let’s assume that Acme designates employee Yosemite Sam testify to Topic No. 1, Board of Director Elmer Fudd to testify to Topic No. 2 and CEO Bugs Bunny to testify to Topic No. 3.

The primary reason that Rule 30(b)(6) depositions are difficult is because witnesses who agree to be designated as corporate representatives must be adequately prepared to respond to questions concerning the topics set forth in the notice of deposition.  Their testimony is not limited strictly to the knowledge they possess.  They are obligated to testify to the knowledge of the entire corporation.  If Yosemite Sam is asked in his deposition if Acme Dynamite Corporation has a training program for its employee’s use of dynamite and he answers, “Not to my personal knowledge,” he has failed to fulfill his duty as a corporate deponent.  His personal knowledge is irrelevant.  He is obligated to testify to the knowledge possessed by the corporation.  In our example, Yosemite Sam must educate himself thoroughly on the training Acme Dynamite Corporation provides its employees. Naturally, a corporation will frequently designate a witness who already possesses a great deal of information about a specific topic to testify on that topic.  For our example, Yosemite Sam would be the perfect designee to testify to Topic No. 1 if he is the head of the New Employee Dynamite Use Training Program at Acme.

The work that corporate designees must do to educate themselves on a specific topic must be undertaken primarily by them and not the corporation’s counsel.  They cannot rely on the corporation’s lawyer to gather that information and then teach them about it.  There are several reasons for this.  First, the lawyer deposing the corporate designee is sure to ask the deponent where or how he or she learned the information about which he or she is testifying.  Mr. Fudd cannot testify that Attorney Leghorn told him about the amount of dynamite Acme Dynamite Corporation used on the day of the demolition because such a disclosure breaches the attorney-client privilege and allows the lawyer taking the deposition to inquire about other, and likely more sensitive, attorney-client communications, such as Acme’s future plans for defending the lawsuit.  Second, the simple fact is that the corporate designee, as an employee of the corporation, typically not only knows more about a topic relevant to the corporation but also has much better knowledge than the corporation’s lawyer about the proper people to contact to learn about the topic about which he or she has been designated to testify. Elmer Fudd knows more about the amount of dynamite used in the quarry than Attorney Leghorn and, if he does not, he certainly has better and easier access to the people who worked for Acme at the quarry from whom he can gather this information than Leghorn.

The corporate designee must also take the time to meet with the corporation’s lawyer before the deposition to prepare for the proceeding.  In our case, Yosemite Sam, Elmer Fudd and Bugs Bunny should be prepared to spend a fair amount of time with Attorney Leghorn so that he can explain to each of them the nature of the lawsuit and all of Acme’s defenses.  Attorney Leghorn should also carefully review with Messrs. Sam, Fudd and Bunny the Rule 30(b)(6) notice of deposition and all of the topics about which each has been designated to testify.  Finally, Attorney Leghorn should familiarize Messrs. Sam, Fudd and Bunny with any questions that opposing counsel may ask them at the deposition and also show them any documents which may be used as exhibits at the deposition.  If Attorney Leghorn fails to take any of these actions to prepare Messrs. Sam, Fudd and Bunny, he is not properly representing the Acme and is sending the witnesses to be ambushed at the deposition.

Finally, once the deposition is under way, corporate designees have several important jobs.  First, and most importantly, they should always tell the truth in the deposition.  Second, they should be prepared to be independent thinkers throughout the proceeding. The corporate designee must be more than a robot, testifying to only the things he or she has memorized from his or her preparation for the deposition with counsel. Attorney Leghorn, if he is doing his job properly, will do his best to prepare Messrs. Sam, Fudd and Bunny for all of the questions or documents that they may face in the deposition.  However, it is simply a fact that a corporation’s lawyer cannot anticipate every question that the opposition may ask the corporate designee.  When, for example, Mr. Fudd gets asked a question in the deposition that he has not previously discussed with Attorney Leghorn, he must, first and foremost, answer the question honestly.  However, he must also be prepared to answer the question with the intent to provide testimony that will ultimately help, or at the very least not damage, Acme Dynamite Corporation’s position in the case. This requires Mr. Fudd to engage in some independent thinking based upon not only his knowledge of the topic about which he has been designated to testify but also about the ultimate aims of Acme Dynamite Corporation in defending Wile E. Coyote’s claims in the case.

Testifying as witness in a Rule 30(b)(6) deposition is not something that should be taken lightly.  Corporate designees must be prepared to work both independently and with the corporation’s lawyer to fully understand the topics about which they are testifying, their corporation’s positions in the lawsuit, and the testimony they may be required to give.

 

 

 

 

 

 

Max Butterbrodt Wins a Seat in Local Housing Authority!

Congratulations to Dalton & Finegold LLP employee Max Butterbrodt who was recently elected to the North Andover Housing Authority (5 year term). The Board is made up of five members and oversees the affordable housing programs and manages 300 units in town.  The Housing Authority meets once a month to create local policies and advises the Housing Authority’s executive director. The  motivation driving Max to run for this position was to meet and work with housing professionals and residents passionate about improving affordable housing options. Max’s overarching goal is to responsibly grow the number of units managed by the authority to provide more housing to residents.  “We can do more!” was Max’s campaign theme. To pay for these improvements Max plans to pitch the idea of starting a non-profit arm of the authority to work better with private developers on projects as well as lobbying the state and federal government for more funds. North Andover’s funding has remained the same despite town population exploding with more residents qualifying for elderly housing.

It has been Max’s dream to serve in town government since attending his first US history course in High School.  Max has been active in town politics since then, serving as a citizen advocate at town meeting, working on local campaigns, and NEVER missing a town meeting or election since he has been able to vote.

Max chose to run for the office of Housing Authority because of his work with the housing discrimination clinic at Suffolk University and working at Dalton & Finegold in the Real Estate Department.  At Dalton & Finegold Max is learning every aspect of the home buying, selling and refinancing process and working intimately with all the parties involved in the process to better understand client needs and wants.

Max is a 3rd year law student at Suffolk Law planning to take the Massachusetts Bar Exam and will return to Dalton & Finegold as an associate in the Residential Real Estate Department.

Congratulations Julissa Cruz!!

Congratulations to Julissa Cruz for being appointed as a Massachusetts Notary and New Hampshire Commissioner of Deeds!! Great things ahead Julissa!!! We are so proud of you! Thank you for being a long time, loyal Dalton & Finegold, LLP team member!  Julissa started her career with Dalton & Finegold as a post closing paralegal who worked full time while attending Law School.

Congratulations to Partner P. Michael Margolis

Congratulations to Partner P. Michael Margolis for his recent admission to the Massachusetts Bar.  Now able to provide legal services in both Connecticut and Massachusetts, Attorney Margolis focuses on commercial real estate leasing, sales/leaseback transactions, development, sales, acquisitions and financing, commercial lending and general business transactions.  To learn more about Attorney Margolis, click here to visit his profile on our firm website.

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