A corporate entity is regarded by the law as a “person” for purposes of standing to sue and be sued, but an organization, whether corporation, partnership, governmental organization, or other entity, can act only through its officers, directors or other agents. Accordingly, when a corporate entity becomes a party to a lawsuit, whether as a plaintiff or as a defendant, it will undoubtedly be required, at some point, to provide testimony at deposition in the course of the discovery phase of the case. Inasmuch as the statements of the representative at deposition become the admissions of the company and will be binding upon it at trial, the decision as to whom to speak for the company is not to be taken lightly. This blog is aimed at providing information and guidance to the corporate litigant in the selection and preparation for testimony of what is commonly known as the “corporate designee.”
When a commercial case is brought in federal court, the obtaining of the testimony of the corporate entity is governed by Federal Rule of Civil Procedure 30(b)(6). Indeed, the corporate deposition has come to be commonly known as the “30(b)(6) deposition.” Most state courts have adopted rules governing corporate designee depositions that are either modeled on, or otherwise similar to, Rule 30(b)(6), so, for purposes of this blog, I will simply refer to all corporate designee depositions, whether in state or federal court, as 30(b)(6) depositions. Of course, if your company finds itself in a state court, your counsel should be completely familiar with that jurisdiction’s variations, if any, on Rule 30(b)(6), which provides, with regard to the right of a party to depose a corporate entity, as follows:
In its notice or subpoena, a party may name as the deponent a public or private corporation, a partnership, an association, a governmental agency, or other entity and must describe with reasonable particularity the matters for examination. The named organization must then designate one or more officers, directors, or managing agents, or designate other persons who consent to testify on its behalf; and it may set out the matters on which each person designated will testify. A subpoena must advise a nonparty organization of its duty to make this designation. The persons designated must testify about information known or reasonably available to the organization. This paragraph (6) does not preclude a deposition by any other procedure allowed by these rules.
Unlike the deposition of an individual, wherein no “head’s up” of the subject areas of testimony is given, the 30(b)(6) notice of deposition must state the subject areas of the deposition with “reasonable particularity.” This enables the company to select the individual(s) it believes is best qualified to testify on its behalf on those subjects. Note that the Rule requires that the person(s) designated to testify are required to do so as to information “known or reasonably available to the organization.” Thus, the corporate designee(s) need not have personal knowledge of the facts and events about which they are to testify, but he or she must be prepared to testify about the designated subject areas, irrespective of how the knowledge was obtained. The deponent can be an officer, director, employee or even a former employee, as long as the witness possesses knowledge responsive to the deposition notice. Failure to produce an individual that is prepared to provide testimony in the subject areas listed in the notice of deposition can lead to serious adverse consequences for the company in the litigation, so careful selection and thorough preparation of the deponent is critical.
So, knowing that so much is riding on the corporate designee deposition, whom to select and how to prepare? The deponent, aside from having knowledge of the subject areas, should be the type of person that presents well and will be effective in conveying the company’s position. Since there is no requirement that the company put forth the individual with the most personal knowledge of an area, it may be best to put forth a credible-appearing, effective and personable witness who is able to gather the knowledge from sources within the company, rather than a witness who might be more familiar with the facts, but about whom the company has reservations as to how he or she will hold up in questioning from counsel. It may take longer to prepare the witness in that scenario, but the benefit would likely outweigh the burden of the extra time spent.
Since the corporate designee is speaking for the company, he or she should not only be familiar with the facts and circumstances listed in the designated areas of testimony, but should also be familiar with, and ready to address, the company’s position on the issues. Your company counsel should ensure that your designee take whatever preparation time is necessary which, depending on the subject areas of the deposition, may involve review of the relevant documents in the case, interviews with other individuals familiar with the facts and review of other deposition transcripts.
While it is impossible in a piece of this length to address all aspects of the corporate designee deposition, we hope that this overview has at least conveyed the significance of the decisions that a company must make it choosing its representative to speak for it in litigation, and provided some guidance in doing so.
About the Author: Paul Mengel is counsel with PilieroMazza and leads the Litigation Group. He can be reached at firstname.lastname@example.org.