Originally appeared in the OSB Corporate Counsel Section's Corporate Counselor November 2011 issue.
Most attorneys are familiar with ORCP 39 C(6), which allows parties to take the deposition of an organization rather than an individual. But fail to be familiar with how to prepare a deponent for an ORCP 39 C(6) deposition and you could find yourself on the wrong side of a motion for sanctions.
Overview of ORCP 39 C(6)
ORCP 39 C(6) can be an efficient way for parties to depose an organization (defined as a public or private corporation, partnership, association, or governmental agency). Instead of taking multiple individual depositions of an organization's current and former employees, a party can simply notice the deposition of the organization under ORCP 39 C(6)—this places the burden on the organization to identify and produce a deponent (or deponents) who can testify on behalf of the organization.1
But ORCP 39 C(6) also requires the party seeking to depose the organization to identify "with reasonable particularity the matters on which examination is requested" in the deposition notice.2 Contrast this with a traditional deposition, for which a party need only include the date, time, and place for questioning the deponent.
The requirement to identify deposition topics beforehand is a double-edged sword. On one hand, it requires the noticing party to "tip its hand": identifying the topics of examination before the deposition takes place eliminates the element of surprise that is often present in a traditional deposition.3 But on the other hand, the requirement places the burden on the organization to identify and produce a deponent (or deponents) who can testify fully on behalf of the organization.
Consider also that choosing to notice a deposition under ORCP 39 C(6) might help to avoid the expense of deposing multiple individuals from an organization, some of whom might know some things but not others.5 As mentioned in the advisory committee notes to Fed R Civ P 30(b)(6)—the federal counterpart to ORCP 39 C(6)—the rule was designed to "curb the 'bandying' by which officers or managing agents of a corporation are deposed in turn but each disclaims knowledge" of relevant facts.6
Preparation: traditional depositions vs. ORCP 39 C(6) depositions
At a traditional deposition, deponents must answer questions that fall within their personal knowledge. Accordingly, preparing a fact witness for a traditional deposition often involves giving advice like this:
"If you don't know the answer to a question, don't guess—just say 'I don't know.' And if you can't remember something, don't be afraid to answer 'I don't remember.' 'I don't know' and 'I don't remember' are perfectly valid answers."
But that isn't the case for an ORCP 39 C(6) deposition. As previously mentioned, the rule requires an ORCP 39 C(6) deponent to testify only on the topics described in the deposition notice. But instead of an ORCP 39 C(6) deponent's "personal knowledge" of the noticed topics, he or she must be able to testify fully and completely on all "matters known or reasonably available to the organization."7
This presents preparation issues that are unique to organizational depositions. Corporations, partnerships, associations, and government agencies are not "people," so what do they "know"? How broadly do courts construe the requirement that an ORCP 39 C(6) deponent must testify on all matters "known or reasonably available to the organization"? And most importantly, how do you prepare a deponent to "know" everything that an organization knows?
Matters that are "known or reasonably available to the organization"
Oregon courts have not taken a close look at what types of information are "known or reasonably available to the organization." But courts interpreting Fed R Civ P 30(b)(6) have found that the following types of information qualify:
- Personal knowledge of current employees;8
- Personal knowledge of former employees;9
- Corporate documents that relate to the noticed deposition topics;10
- Previously entered deposition exhibits;11 and
- Deposition testimony of prior fact witnesses.12
Consequences for failing to prepare your ORCP 39 C(6) deponent
Some courts consider producing an uneducated deponent who cannot testify fully on behalf of the organization—i.e., someone who answers "I don't know" to questions for which the company should have answers—as tantamount to failure to appear at the deposition.13 And under ORCP 46, if a party fails to appear at an ORCP 39 C(6) deposition, the court can impose sanctions that include:
- An order precluding the disobedient party from supporting or opposing certain claims or defenses;
- An order precluding the disobedient party from introducing designated matters into evidence;
- An order dismissing all or part of the action; and
- An order requiring the organization to pay the reasonable expenses, including attorney fees, caused by the failure to produce a knowledgeable deponent.14
Some commentators discuss ORCP 39 C(6) depositions in terms of whether the organization's answers (as given by its designated deponent) are "binding" on the organization as judicial admissions.15 In other words, if an organization's designee answers "I don't know" to a question, does that preclude the organization from later introducing evidence on that topic? Some courts say "yes, the deponent's answers are binding on the organization," while others treat an organizational deponent's responses the same as any other deposition testimony—as something that can be refuted later.16
But whether or not an organizational deponent's testimony is binding on the organization as a judicial admission is a totally different issue from whether producing an unprepared, uneducated deponent at an ORCP 39 C(6) deposition can lead to sanctions precluding the organization from later introducing evidence on the "I don't know" topics. The rules suggest that preclusion is a potential sanction for failing to produce an unprepared organizational deponent, but courts consider this an extreme sanction, and are more likely to require the disobedient party to produce an educated deponent at a later date (and pay the expenses for rescheduling the deposition that the requesting party incurs).17
It doesn't have to be the "most knowledgeable" person
Finally, it is important to note that ORCP 39 C(6) does not require the organization to produce the most knowledgeable deponent on the noticed topics. Rather, the rule imposes an affirmative obligation to prepare a deponent to give full and complete answers on behalf of the organization. Although the most knowledgeable person may need less preparation than someone who has little personal knowledge of the noticed topics, the scope of the deposition is not limited to the knowledge of the "most knowledgeable person" at the organization—it encompasses everything "known or reasonably available to the organization."18 And in some cases, it might make more sense to educate a deponent who will "present well" at a deposition, rather than simply producing the most knowledgeable witness (if he or she is a "bad" witness).19
An ounce of preparation . . . might not be enough
It is perfectly acceptable for a fact witness to answer "I don't know" and "I don't remember" at a traditional deposition. But an unprepared organizational designee deponent who gives the same answers at an ORCP 39 C(6) deposition might be inviting the opposing party—and the court—to ask, "Why not?" Taking time to review corporate documents, deposition exhibits, and previous deposition testimony with the organization's deponent, and interviewing current and former employees, will help your client avoid being on the wrong end of a motion to compel or motion for sanctions.20
[1] United States v. Taylor, 166 FRD 356, 360-61 (MDNC 1996); Marker v. Union Fid. Life Ins. Co., 125 FRD 121, 126 (MDNC 1989) (citing Fed. Deposit Ins. Corp. v. Butcher, 116 FRD 196 (ED Tenn 1986); Mitsui & Co. (U.S.A.), Inc. v. Puerto Rico Water Res. Auth., 93 FRD 62 (DPR 1981)).
[2] See Taylor, 166 FRD at 360.
[3] Ierardi v. Lorillard, Inc., No. 90-7049, 1991 WL 158911, at *3 (ED Pa Aug. 13, 1991) ("The very purpose of discovery is to avoid trial by ambush.") (internal quotation marks and citations omitted); Butcher, 116 FRD at 201.
[4] Taylor, 166 FRD at 361; Marker, 125 FRD at 126.
[5] See Fed R Civ P 30(b)(6) advisory committee's note (1970).
[6] Id.
[7] SEC v. Morelli, 143 FRD 42, 45 (SDNY 1992) (duty to prepare designee goes beyond matters personally known to deponent); Dravo Corp. v. Liberty Mut. Ins. Co., 164 FRD 70, 75 (D Neb 1995) (citing Marker, 125 FRD at 126).
[8] Wilson v. Lakner, 228 FRD 524, 528 (D Md 2005).
[9] Taylor, 166 FRD at 361.
[10] Calzaturficio S.C.A.R.P.A. s.p.a. v. Fabiano Shoe Co., 201 FRD 33, 37 (D Mass 2001).
[11] Sprint Commc'ns Co. v. Theglobe.com, Inc., 236 FRD 524, 528 (D Kan 2006).
[12] Id.
[13] Resolution Trust Corp. v. S. Union Co., 985 F2d 196, 197 (5th Cir 1993); Taylor, 166 FRD at 363; Black Horse Lane Assoc., L.P. v. Dow Chem. Corp., 228 F3d 275, 304 (3d Cir 2000).
[14] ORCP 46.
[15] Sidney I. Schenkier, Deposing Corporations and Other Fictive Persons: Some Thoughts on Rule 30(b)(6), Litigation, Winter 2003, at 20, 62; Paul N. Gold, Deposing the Ventriloquist's Dummy: A Discussion of When and How to Take Depositions of Organizational Representatives, Retreat Materials (La Ass'n of Justice 2007 Post-Legislative Retreat); James S. Goddard et al, Taking and Defending Depositions, 798 PLI/Lit 83, 91 (2009); Steven P. Means, The Corporation as a Witness, Wis Law, July 1996, at 14, 16.
[16] Rainey v. Am. Forest & Paper Ass'n, Inc., 26 F Supp 2d 82, 94-95 (DDC 1998) (treating Rule 30(b)(6) testimony as binding, and admitted matters as being conclusively established); A.I. Credit Corp. v. Legion Ins. Co., 265 F3d 630, 637 (7th Cir 2001) (deposition does not bind corporation as judicial admission and can be contradicted at trial); see also R & B Appliance Parts, Inc. v. Amana Co., 258 F3d 783, 786 (8th Cir 2001) (designee no more bound than any witness is by prior deposition testimony and may testify differently at trial); W.R. Grace & Co. v. Viskase Corp., No. 90 C 5383, 1991 WL 211647, at *2 (ND Ill Oct. 15, 1991) (statement may be altered and explained and explored through cross-examination); Boland Marine & Mfg. Co. v. M/V BRIGHT FIELD, No. Civ.A. 97-3097, 1999 WL 280451, at *3 (ED La May 3, 1999) (inadequacies in deponent's testimony must be egregious and not merely lacking in desired specificity in discrete areas).
[17] W. Reserve Oil & Gas Co. v. Key Oil, Inc., 626 F Supp 948, 949 (SD W Va 1986) (characterizing preclusion as harsh sanction); United States v. Sumitomo Marine & Fire Ins. Co., 617 F2d 1365, 1369 (9th Cir 1980); Reilly v. NatWest Mkts. Grp. Inc., 181 F3d 253, 269 (2d Cir 1999) (outlining four factors for enforcing preclusive order); Cedar Hill Hardware & Constr. Supply, Inc. v. Ins. Corp. of Hannover, 563 F3d 329, 345 (8th Cir 2009) (exclusion an appropriate sanction, but not necessarily required); Calzaturficio, 201 FRD at 39 (designees inadequately prepared as Rule 30(b)(6) witnesses, and ordered witnesses redeposed).
[18] See Taylor, 166 FRD at 361 (corporation with knowledge must designate officer, employee, agent, "or other" individual to present the company's position); Dravo Corp., 164 FRD at 75 (if no current employee has knowledge of requested information, corporation must prepare other witnesses to give "complete, knowledgeable and binding answers on behalf of the corporation") (internal quotation marks and citation omitted).
[19] Schenkier, supra, Litigation, Winter 2003, at 23.
[20] Marker, 125 FRD at 126-27 (sanctions imposed for failure to provide and prepare Rule 30(b)(6) witness to give "complete, knowledgeable and binding answers on behalf of the corporation").
