One of the big “if only” moments in corporate litigation concerns testimony: if only a corporation as a corporation could face deposition. Despite the legal fiction that corporations have an identity, it remains impossible, absent some serious and frightening advances in future technology, for a corporation to testify on its own behalf. To get around this dilemma, the Federal Rules of Civil Procedure include Rule 30(b)(6) (“30(b)(6)”). This rule allows a party to name an entity such as a corporation, an association or a governmental agency as a deponent, and that entity will then designate a representative to be deposed on behalf of the company. (Kentucky’s Civil Rule of Procedure 30.02(6) substantially tracks the federal rule, so this information applies to both Kentucky and federal courts.) The rub is that 30(b)(6) deponents face a different set of standards for testimony than regular deponents, and that difference could create havoc for a client, up to and including sanctions.
Rule 30(b)(6) in Practice
Rule 30(b)(6) was put in place to simplify the process of determining the best representative for an entity, which works in a few ways. First, it narrows the field of all potential responsible managers down to one, and prevents the practice of parading several officers of a corporation through depositions with all of them claiming to have no pertinent information. It additionally prevents entities from having to endure multiple and unnecessary depositions. It’s largely a win for everyone, but it comes with a new set of standards for deponents.
In a traditional deposition, a deponent must speak only to those matters of which he or she has personal information, and there should be no speculation. A 30(b)(6) deponent, however, must be able to speak on behalf of the entire corporation to the matter that has been identified, which includes all the information that the corporation may have on the topic. Not only that, but the 30(b)(6) deponent must also be ready to testify on opinions, beliefs and interpretations that the corporation may have, which certainly includes speculation and plenty of matters outside the scope of the deponent’s personal knowledge. What is usually off-limits – legal positions and advice given by corporate counsel – may also come into play, subject to attorney-client privilege.
But wait, there’s more – although there isn’t any case law in Kentucky on the issue, the trendline of federal cases allows that the scope of the deposition is not limited to the matters in the deposition notice, so there is an affirmative duty on the entity to produce a 30(b)(6) deponent who can answer questions on ALL matters that are known or reasonably available to the entity. Also, the 30(b)(6) deponent’s answers may be binding on the entity depending on the court, but they can be contradicted by other evidence produced by the corporation.
If a 30(b)(6) deponent is not adequately prepared to testify, there is some support for levying sanctions against the party, as a poorly-prepared deponent is akin to having no deponent at all. The takeaway is that entities should choose a 30(b)(6) representative wisely and adequately prepare him or her to testify in a thorough manner.
Rule 30(b)(6) at Trial?
A relatively recent wrinkle in the use of Rule 30(b)(6) is thanks to the Fifth Circuit case of Brazos River Authority v. GE Ionics, Inc. It holds that 30(b)(6) deponents may be able to be called as witnesses at trial as a representative of the entity if they are already called to testify in their personal capacity. The key point of this holding by the Brazos court is that, if an individual is called to testify on behalf of the entity in his or her personal capacity, he or she should not be able to refuse to testify on other matters to which he or she had already testified at the deposition, and accordingly should be subject to cross-examination as representative of the entity as well. This relatively new development adds a tool to the arsenal of opposing counsel, but it should also give notice to corporations and their counsel that the choice of a 30(b)(6) representative should potentially be limited to individuals who will not be voluntarily appearing as witnesses otherwise.