Anyone who has watched a courtroom television drama is aware of their Fifth Amendment privilege against self-incrimination. But “pleading the Fifth” is not something a witness can invoke blanketly to avoid answering questions, especially where a witness is testifying on behalf of a corporation as a corporate designee under Federal Rule of Civil Procedure 30(b)(6). In those circumstances, knowing your available options when preparing a corporate designee witness is key to managing any risks of potential self-incrimination.

Rule 30(b)(6) allows a party in litigation to take the deposition of an “organization,” such as a corporation, limited liability company, or other business entity.  The organization must then “designate one or more officers, directors, or managing agents, or . . . other persons who consent” to testify on behalf of the organization who must testify “about information known or reasonably available to the organization.”  The individual selected to testify is referred to as a “corporate designee,” and his or her testimony will bind and be admissible against the organization itself.

Generally, “[a] corporation is not protected by the constitutional privilege against self-incrimination.”[1] Accordingly, it is incumbent upon an organization in a corporate designee deposition to produce a witness who will not invoke the Fifth Amendment.  However, should the need arise at the deposition, the corporate designee as an individual remains constitutionally protected, so long as the disclosure could implicate them personally in criminal conduct.

When determining whether a witness can legitimately assert the privilege, the critical question is whether they may furnish a link in the chain of evidence necessary to prosecute the person claiming the privilege for any crime.[2] Pertinently, the incrimination must be one of criminal culpability, not civil liability.[3] This issue can often arise in instances of potential violations of the False Claims Act, which can expose the party to both criminal and civil liabilities.

Whether a witness is in danger of incriminating themselves is an objective test. The Supreme Court in Hoffman v. United States established the standard for courts to apply in this instance: “To sustain the privilege, it need only be evident from the implications of the question, in the setting in which it is asked, that a responsive answer to the question or an explanation of why it cannot be answered might be dangerous because injurious disclosure could result.”[4] The privilege is also available when an answer may “furnis[h] a link in the chain of evidence needed to prosecute a crime.”[5] “Even if the information, seen in a vacuum, appears innocent, the privilege is justified if, in light of other facts already developed, it appears to present a danger of prosecution. In such a case, the witness need only assert the privilege and identify the nature of the criminal charge or supply sufficient facts so that a particular criminal charge can be reasonably identified by the court.”[6]

The question must require the witness to confront a “substantial and ‘real,’ and not merely trifling or imaginary, hazar[d] of incrimination.”[7] There is a low bar to assert the privilege. The witness is not required to give specifics as to why they are invoking the Fifth Amendment, as “[t]he court must be mindful of not requiring the witness to prove what hazards he foresees as a result of disclosure, for to do so would be to require the surrender of the protection which the privilege is designed to guarantee.”[8]

The privilege “can be asserted in any proceeding, civil or criminal, administrative or judicial, investigatory or adjudicatory.”[9]  But the privilege may not be used to avoid a deposition entirely. The deponent must still attend the deposition, be sworn under oath, and answer those questions he or she can answer without running a risk of incrimination.[10]

As explained above, the corporate designee’s personal invocation of the privilege does not extinguish the corporation’s responsibility to provide a designee to testify on these topics. If a designee does invoke the privilege, then the corporation will need to provide a new designee, since a corporate defendant served with a Rule 30(b)(6) deposition notice must produce a representative who will not invoke the Fifth Amendment, even if that necessitates retaining an agent expressly for the purpose of testifying in that deposition.[11] “If the retained corporate representative has limited or no knowledge, [the corporate defendant] must provide [them] with sufficient knowledge so that [they] can determine from the corporate documents the information required by the subpoena, as well as other information that a knowledgeable person ordinarily could glean from corporate records.”[12]  If the corporation fails to proffer another witness, the adverse party may seek sanctions, including an adverse inference.

The members of PilieroMazza’s Litigation & Dispute Resolution, False Claims Act, and Audits & Investigations teams are well versed in preparing corporate designee witnesses for testimony at a deposition or other judicial proceeding.

If you have questions about preparing a corporate designee witness, please contact Megan Benevento, the author of this blog, or a member of the Firm’s Litigation & Dispute Resolution, False Claims Act, or Audits & Investigations teams.

[1] Curcio v. United States, 354 U.S. 118, 122 (1957). 

[2] Hoffman v. United States, 341 U.S. 479, 486-87 (1951).

[3] Id.

[4] Id. at 487.

[5] Id.

[6] Moses v. Allard, 779 F. Supp. 857, 864 (E.D. Mich. 1991) (describing Morganroth, supra). See also United States v. O’Shea, 662 F. Supp. 2d 535, 543 (S.D. W. Va. 2009) (“Where it is obvious that those questions or requests for documents may be incriminatory, the Court will not compel the party to comply.”).

[7] Marchetti v. United States, 390 U.S. 39, 453 (1968).

[8] Lowe’s, 219 F. Supp. at 189-190 (sustaining objections to interrogatories phrased as “on the grounds that the witness’ Fifth Amendment privilege against self-incrimination ‘might’ be violated by responsive answers.”).

[9] Kastigar v. United States, 406 U.S. 441, 445 (1972); Maness v. Meyers, 419 U.S. 449 (1975); see also Prentice v. Hsu, 280 F. Supp. 384, 386 (S.D.N.Y. 1968) (citing criminal cases in support of authority to invoke Fifth Amendment in civil case); Lowe’s of Roanoke, Inc. v. Jefferson Standard Life Ins. Co., 219 F. Supp. 181, 189 (S.D.N.Y. 1963) (same).

[10] Wright, Miller, King & Marcus, 8 Fed. Prac. & Proc. § 2018.

[11] See United States v. Barth, 745 F.2d 184, 189 (2d Cir. 1984) (“If all current employees successfully assert a fifth amendment privilege, the corporations must appoint an agent who will testify without asserting the privilege[,]” even if that requires the appointment of “someone who has no previous connection with the corporations . . . .”).

[12] S.E.C. v. Mut. Benefits Corp., No. 04 60573 CIV, 2008 WL 239167, at *3 (S.D. Fla. Jan. 28, 2008).