This portion of the materials will focus on the use and effect of 30(b)(6) deposition testimony.
1. The 30(b)(6) Deposition in General
In U.S. v. Taylor, 166 F.R.D. 356 (M.D.N.C. 1996), the court gives a terrific summary and overview of 30(b)(6) deposition and its purpose in litigation.
The testimony elicited at the Rule 30(b)(6) deposition represents the knowledge of the corporation, not of the individual deponents. The designated witness is “speaking for the corporation,” and this testimony must be distinguished from that of a “mere corporate employee” whose deposition is not considered that of the corporation and whose presence must be obtained by subpoena. . . . The corporation appears vicariously through its designee. Resolution Trust Corp. v. Southern Union Co., 985 F.2d 196, 197 (5th Cir.1993). If the persons designated by the corporation do not possess personal knowledge of the matters set out in the deposition notice, the corporation is obligated to prepare the designees so that they may give knowledgeable and binding answers for the corporation. Dravo Corp. v. Liberty Mut. Ins. Co., 164 F.R.D. 70, 75 (D.Neb.1995) (citing Marker, 125 F.R.D. at 126). Thus, the duty to present and prepare a Rule 30(b)(6) designee goes beyond matters personally known to that designee or to matters in which that designee was personally involved. Buycks–Roberson v. Citibank Federal Sav. Bank, 162 F.R.D. 338, 343 (N.D.Ill.1995); S.E.C. v. Morelli, 143 F.R.D. 42, 45 (S.D.N.Y.1992).
The Rule 30(b)(6) designee does not give his personal opinions. Rather, he presents the corporation’s “position” on the topic. U.S. v. Massachusetts Indus. Finance Agency, 162 F.R.D. 410, 412 (D.Mass.1995); Lapenna v. Upjohn Co., 110 F.R.D. 15, 21 (E.D.Pa.1986); Toys “R” Us, Inc. v. N.B.D. Trust Company, No. 88C10349, 1993 WL 543027, at *2 (N.D.Ill. Sept. 29, 1993). Moreover, the designee must not only testify about facts within the corporation’s knowledge, but also its subjective beliefs and opinions. Lapenna, 110 F.R.D. at 20. The corporation must provide its interpretation of documents and events. Ierardi v. Lorillard, Inc., Civ. A. No. 90–7049, 1991 WL 158911 (E.D.Pa. Aug. 13, 1991). . . . Were it otherwise, a corporation would be able to deceitfully select at trial the most convenient answer presented by a number of finger-pointing witnesses at the depositions. See Lapenna, 110 F.R.D. at 25. Truth would suffer.
It is not uncommon to have a situation, as in the instant case, where a corporation indicates that it no longer employs individuals who have memory of a distant event or that such individuals are deceased. See Dravo Corp., 164 F.R.D. at 75; U.S. v. Massachusetts Indus. Finance Agency, 162 F.R.D. at 412. These problems do not relieve a corporation from preparing its Rule 30(b)(6) designee to the extent matters are reasonably available, whether from documents, past employees, or other sources. Ierardi v. Lorillard, Inc., supra. Of course, just like in the instance of an individual deponent, the corporation may plead lack of memory. However, if it wishes to assert a position based on testimony from third parties, or their documents, the designee still must present an opinion as to why the corporation believes the facts should be so construed. The attorney for the corporation is not at liberty to manufacture the corporation’s contentions. Rather, the corporation may designate a person to speak on its behalf and it is this position which the attorney must advocate.
U.S. v. Taylor, 166 F.R.D. at 361.
2. Effect of Testimony and Admissions During the 30(b)(6) deposition.
Testimony given by a 30(b)(6) deposition witness is “binding” on the corporation, and therefore counsel may have to deal with damaging statements at the dispositive motion stage or at trial. A 30(b)(6) deposition being "binding" on the corporation should not be interpreted as being tantamount to a judicial admission (i.e., admissions that cannot be controverted by the party at trial or on appeal). 8A Charles Alan Wright, et al., Federal Practice and Procedure §2103 (Supp. 2007); U.S. v. Taylor, 166 F.R.D. 356, 362 (M.D.N.C. 1996). Rather, the 30(b)(6) statements are evidentiary admissions; i.e., admissions which, if altered, may be explained and explored through cross-examination as to the reason why the statement was altered. Ierardi v. Lorillard, Inc., 1991 WL 158911, at *3 (E.D.Pa. 1991). However, the designee can make admissions against interest under Fed. R. Evid. 804(b)(3) which are binding on the corporation. Id.
3. Testimony Outside the Scope of the Rule 30(b)(6) Deposition Notice
Rule 30(b)(6) is silent on whether the examining party can question the deponent on matters beyond the scope of the 30(b)(6) notice and what the evidentiary consequences are for this situation occurring. North Carolina courts have not addressed this issue, but the majority of other jurisdictions allow such questions. In these jurisdictions, the reasoning is that "the Rule simply defines a corporation's obligations regarding whom they are obligated to produce for such a deposition and what that witness is obligated to be able to answer." King v. Pratt & Witney, 161 F.R.D. 475, 476 (S.D. Ha. 1995); see also American General Life Ins. Co. v. Billard, 2010 WL 4367052, at *4 (N.D. Iowa 2010); Todd v. Precision Boilers, Inc., 2008 WL 4722338, *2- 4 (W.D. La. 2008). "If the deponent does not know the answer to a question that is beyond the scope of the notice, that is the examining party's problem." King, 161 F.R.D. at 476.
The real problem arises when the witness has independent knowledge concerning the off-topic area and answers the question. In this circumstance, the question is should this knowledge concerning the area beyond the scope of the noticed topics bind the corporate party? While there is no North Carolina case on point, courts in other jurisdictions have held that such answers will not bind the corporation. See e.g., Detoy v. City and County of San Francisco, 169 F.R.D. 362 (N.D. Cal. 2000). The court in Detoy reasoned that "defending counsel may fear ambush, and the designating entity could be bound by the witness's answers or that the answers could be construed as admissions by the designating entity, or that the questions may enter into territory where the witness is unprepared." Id. at 367.
Therefore, the examining party may ask questions that go beyond the topics delineated in the notice, but cannot expect the answers to be binding on the corporation. Given the courts' guidance on the issue, when the deposing party asks a question that goes beyond the scope of the Rule 30(b)(6) designation, the better practice is for counsel to object to the question, noting on the record that any answer by the deponent are not made on behalf of the corporation and do not bind the corporation and then allow the witness to answer. Furthermore, counsel should be careful to instruct the witness not to answer only if the question invades a privilege or the terms of the court order. A number of courts have ordered the attorney to pay the opposition's, attorney’s fees stating that it is improper to instruct a witness not to answer questions exceeding the scope of the designated topics. See, e.g., Ant Gen. Life Ins., 2010 WL 4367052, at *10 (N.D. Iowa 2010). However, if the deposition is being conducted in bad faith or in a manner that unreasonably annoys, embarrasses, or oppresses the deponent or party," counsel may be able to terminate the deposition and seek a protective order. If the examining party seeks to introduce these answers at trial, the designating party "may request from the trial judge jury instructions that such answers were merely the answers or opinions of individual fact witnesses, not admissions of the party." Detoy, 169 F.R.D. at 367.
4. Lack of Knowledge
What happens when the designated 30(b)(6) witness claims lack of knowledge of a properly noticed topic at the deposition, but then at trial, the organization attempts to offer testimony from a witness who now claims knowledge? With individuals, the adverse party has limited options for dealing with an "I don't know" deponent who miraculously transforms into a fountain of knowledge at trial. However, in the 30(b)(6) context the deposing party has several potentially more effective alternatives at its disposal, ranging from compelling the organization to produce additional designees, imposing sanctions or barring the corporate party from introducing evidence at trial on that particular subject. In order to take advantage of these alternatives at trial, deposing counsel needs to make certain tactical decisions including filing discovery motions and/or pretrial motions.
Because of the affirmative duty on the part of the organization to prepare its corporate designee, an organization's designation of a witness who lacks knowledge of the matters specifically delineated in the notice is "tantamount to failure to appear", warranting imposition of sanctions. The Board of Drainage Commissioners of Pitt County v. Dixon, et al., 158 .S.E.2d 469 (N.C. App. 2003). Therefore, if it becomes apparent during the deposition that a witness is not prepared or knowledgeable about the noticed topics, the corporation is obligated to provide a substitute. Marker v. Union Fid. Life Ins. Co., 125 F.R.D. 121, 126 (M.D.N.C. 1989) (even where defendant in good faith thought deponent would satisfy the deposition notice, it had a duty to substitute another person once the deficiency of its designation became apparent during the deposition). If the corporation fails to do so, the court can impose various sanctions that may include the preclusion of evidence at trial. Taylor, at 362-363 ('inadequate preparation of a Rule 30(b)(6) designee can be sanctioned based on the lack of good faith, prejudice to the opposing side, and disruption of the proceedings"). Other sanctions include awarding attorneys' fees and costs.
Pretrial motions may provide another opportunity to limit corporate testimony. As mentioned above, if the designee claims lack of knowledge, the examining party can also consider this an admission that the corporation has no corporate knowledge or position on that matter. As such, the examining party may later move in limine to prohibit the corporation from introducing documentary or testimonial evidence as to that area of inquiry. Taylor, at 362-363. The court may preclude the corporation from asserting a position at trial where none were taken during the deposition, unless it can prove that that the information was not reasonably available at the time of the deposition. Id. at 363 ("answers given at a Rule 30(b)(6) depositions are not judicial admissions"). Alternatively, courts in other jurisdictions have ruled that a Rule 30(b)(6) deposition is no different from any other deposition and the deponent's testimony may be used for impeachment if differs from the trial testimony of the witness. See e.g., Al Credit Corporation v. Legion Ins. Co., 265 F.3d 630, 637 (7th Cir. 2001).
5. Questions to Deponent about Law and Legal Standard Issues
The North Carolina Court of Appeals recently held that a corporate party is not bound by testimony that constitutes an answer to questions of law given by its 30(b)(6) witness. In Bullard v. Wake County, 729 S.E.2d 686 (N.C. App. 2012), plaintiff argued that the rule 30(b)(6) designee of the county admitted a waiver of the county's sovereign immunity as to plaintiff's claims during his deposition. The court reasoned that the question of whether the terms of the county's insurance policy waived its sovereign immunity was a question of law, and, as such, the designee's testimony was not binding on the county. Id. at 693.
