Written by Brian A. Cafritz, Esq.
Whenever a corporation is a party to litigation, the 30(b)(6) Deposition is one of the major events during discovery. Rule 30(b)(6) is the Federal Rule that establishes the means by which one party can take the binding deposition of a corporation. The basic framework is that the party seeking the deposition provides a list of Matters of Inquiry, notifying the organization as to what subject matters the inquiry will be focused. The corporation, then, decides the representative(s) it wants to answer the specific matters of inquiry. It is incumbent upon the corporation to make sure that the representative testifies, not based on his own knowledge, but based on the knowledge of the entire company. This, by necessity, requires preparation, focus, and dedication. So what happens when adequate preparation does not occur?
Recently, the Western District of Virginia sanctioned a corporate defendant for acting in bad faith for not properly preparing its corporate representatives. In Latson v. Clarke, WDVA (Abingdon Division) Case 1:16cv39 (May 14, 2018), an autistic man sued the Virginia Department of Corrections (“DOC”) over improper treatment at a state prison. A Notice of Deposition was served on the DOC containing eighteen Matters of Inquiry. The DOC produced six corporate designees to answer the matters of inquiry. After the depositions were completed, the Plaintiff believed that the designees did not sufficiently prepare for their testimony and had insufficient information to answer the various matters of inquiry on which each was designated. As a result, Plaintiff moved for sanctions.
It is worth noting that the matters of inquiry were agreed upon in advance, and the counsel conducted several meet and confer negotiations to clarify the numerous topics and subtopics. However, in some cases, within twenty-four hours of the deposition, the DOC’s counsel withdrew some of the designees— one within an hour of the deposition.
The details of the designees’ failures at deposition were fairly consistent. One designee testified that his only preparation had been a brief meeting with the DOC’s counsel the morning of the deposition.
A second designee was a mental health professional for the DOC. She testified that, like the other deponents, her only preparation had also been a short meeting with counsel the morning of the deposition. However, this designee went on to testify that she was not comfortable answering questions on behalf of the DOC, but would only testify in an individual capacity. Thus, although the DOC had designated her to discuss the plaintiff’s medications and communications of his treatment at the prison, she was only able to testify as to her own personal involvement with the Plaintiff. She was completely unaware of what other treatments Plaintiff had undergone at the DOC.
A third designee was a supervising psychologist, designated to testify as to the treatments administered and communications exchanged amongst the Plaintiff’s various treatment providers. She, however, failed to review the Plaintiff’s treatment plan and could not answer any questions about it.
A fourth designee, designated to testify on training for guards and security, testified that he only spent ten minutes preparing for his deposition and had not reviewed any documents. He could not identify any training documents produced in discovery and could not answer any questions about the training given to correctional officers.
A fifth designee was a prison social worker designated to testify about the plaintiff’s access to TV, phone, books, etc. This witness did not review the library logs, did not know what types of stimuli was in Plaintiff’s cell, and did not know if the Plaintiff had used the prison commissary.
The final designee was the warden of the prison, who was designated to testify as to the majority of the matters of inquiry. Her only preparation was a one-hour meeting with counsel a month before the deposition. She also admitted that she had not reviewed any documents in preparation for her deposition. She was unable to testify about policies related to intake and segregation.
Rule 30(b)(6) requires the deponent organization to provide testimony about “information known or reasonably available” to it. Further, the organization, “must make a good faith effort to designate people with knowledge of the matter sought…and to adequately prepare the representatives so that they may give complete, knowledgeable, and non-evasive answers in deposition.” Latson, at p 8, (quoting Spicer v. Universal Forest Prods., (WDVA 7:07cv462 2008))
The judge ruled that the DOC had acted in bad faith in handling the Rule 30(b)(6) depositions. The matters of inquiry were narrow. The questions which the DOC had been unable to answer clearly fell within these matters of inquiry. Moreover, the judge emphasized that designees could not rely upon their own personal knowledge to answer questions, but were instead required to take “some investigation to obtain information reasonably available to the organization.” Latson, at p 9. The minimal time and lack of document review was sufficient evidence to conclude that the DOC had acted in bad faith, and therefore, sanctions were appropriate.
In determining the sanctions, however, the news got better for the DOC. Mut. Fed. S&L v. Richard & Assoc., 872 F2d 88 (4th Cir 1989) established a four-part test to determine the appropriate sanction[1]:
1. Whether the court found bad faith;
2. The amount of prejudice the non-compliance caused – which necessarily includes inquiry into the materiality of the evidence not produced;
3. The need to deter non-compliance; and
4. The effectiveness of less drastic sanctions.
The Judge considered what prejudice the Plaintiff suffered. He noted that Plaintiff had conducted twenty-six depositions in the case and had obtained thousands of pages of documents through discovery. Latson, at p 9. (“It appears as though most if not all of the questions at issue were answered, at least in part, through other witnesses or documentary evidence.”). As a result, the Court found no real prejudice to Plaintiff other than wasted time in depositions. The Judge did feel compelled to deter such conduct, but he did not feel it was necessary to reconvene the depositions, given the wealth of material Plaintiff already had. However, he did allow the Plaintiff leave to serve additional interrogatories and admissions on the DOC, and he required answers within fourteen days. He also required the DOC to pay for Plaintiff’s time in filing the motion and preparing the additional discovery requests.
Given the bad faith the court found, the sanctions against the DOC could have been much more severe. Fortunately for the DOC, the lack of prejudice to the Plaintiff clearly outweighed the other factors the court considered when contemplating sanctions, and the DOC avoided the potential sanctions of default, stricken defenses, or severe monetary fines. So how can we predict where a judge will go with sanctions in future cases? Using Latson as a case study, it appears the primary question will be the prejudice caused by the delay, balanced against the egregious nature of the violation. By any reading of the case, the violations in Latson were unacceptable. However, their full participation in other aspects of discovery saved them from much more extensive sanctions. The bottom line, however, is that businesses must be diligent, focused, and thorough when preparing for a 30(b)(6) deposition. Moreover, counsel for the organization must be pro-active in focusing the matters of inquiry and must be in regular contact with opposing counsel to manage their expectations on what can and cannot be offered in advance of the deposition.
[1] The Four-Part Test in Richards is actually for a sanction of default judgment, but Judge Jones found the test instructive for determining sanctions even when default it not sought.