The Importance of Preparing for the Corporate Deposition by Andrew Vicknair

D’Arcy Vicknair founding partner, Andrew Vicknair, recently authored a blog for the American Bar Association and posted on The Dispute Resolver: The Importance of Preparing for the Corporate Deposition.

The importance of a corporate deposition is often discounted. It can streamline litigation and avoid the need to take multiple depositions of corporate representatives but it can also be damaging if the corporate representative is not properly prepared. As spokesperson for the corporation, their testimony can be binding on the company.

Federal Civil Procedure Rule 30(b)(6) and similar state rules provide the procedure for a corporate deposition. While this may seem like business as usual for litigators during the discovery process, its importance is often under appreciated.

In general, the notice of corporate deposition must “describe with reasonable particularity the matters for examination.” Fed R. Civ P. 30. The notice must contain the required specificity and set forth the areas of inquiry so that the other party can reasonably designate the proper representative to testify.  If the notice lacks the required specificity, courts may grant a protective order preventing the deposition or requiring the noticing party to narrow or clarify the matters of examination. Edelen v. Campbell Soup Co., 265 F.R.D. 676, 698 (N.D. Ga. 2010). Courts may also prevent the noticing party from asking questions outside of the areas of inquiry. Philbrick v. eNom, Inc., 593 F. Supp. 2d 352, 363 (D.N.H. 2009).

If the 30(b)(6) corporate notice is proper, then the corporate entity must make a “conscientious good-faith endeavor to designate the persons having knowledge of the matters sought by [the party noticing the deposition] and to prepare those persons in order that they can answer fully, completely, unevasively, the questions posed . . . as to the relevant subject matters.” Brazos River Auth. v. GE Ionics, Inc., 469 F.3d 416, 433 (5th Cir. 2006). The designated representative is not required to have personal knowledge of the areas of inquiry.  PPM Fin., Inc. v. Norandal USA, Inc., 392 F.3d 889, 894 (7th Cir. 2004). The key is preparation of the witness because producing an unprepared witness is tantamount to a failure to appear and is sanctionable.  Black Horse Lane Assocs., L.P. v. Dow Chem. Corp., 228 F.3d 275, 304 (3d Cir. 2000). Thus, the designated representative(s) must be prepared to the extent matters are reasonably available, whether from documents, past employees, or other sources. Id.

While courts have made it clear that a designated representative must be prepared to answer questions concerning the areas of inquiry set forth in the corporate notice, it is vital that a witness is properly prepared to testify truthfully and in the best interests of the corporation.  Selection and preparation of the representative is crucial because the corporate representative’s testimony is binding on the corporate party i.e. whatever the representative/deponent says can be used against the corporate entity. Keepers, Inc. v. City of Milford, 807 F.3d 24, 34, (2d Cir. 2015). Corporate representative’s unfavorable testimony will be difficult to correct or controvert through other testimony.

The personality of a corporate representative should be considered in the selection process. An ideal corporate representative is calm, not rattled by tough questions, and preferably one who has been deposed before. Counsel should meet with company representatives in selecting the representative(s) that can perform under pressure. Another consideration is whether multiple corporate representatives are needed to answer the varying areas of inquiry.

After the representative/witness is selected, it is crucial to meet face to face with the witness and explain the corporate deposition and the potential outcomes. Explain the ongoing litigation and make sure that the witness understands the company’s position, claims, or defenses.  It is also a good idea to explain the key witnesses. Advise the witness that he/she is answering on behalf of the company and any personal observations may be irrelevant when answering on behalf of the company.

Be sure to stress the importance of preparation and advise the witness that if he/she is unable to answer questions related to the areas of inquiry, the corporation could be subject to sanctions or a second deposition. Tell the witness that he/she should plan on multiple prep sessions to properly prepare. Planning to meet with a corporate representative once on the day before the deposition is a bad idea and may result in failure.  It is also helpful to work with in-house counsel in scheduling several prep sessions/meetings with the witness to discuss the topics, key documents, and pleadings. With the use of various communication platforms, such as Zoom, Microsoft Teams, GoTo Meeting and the like, this process can be less burdensome and provide the opportunity for several sessions.

At a minimum, counsel should go over the areas of inquiry with the witness and have the witness review all available documents related to the areas of inquiry, all relevant pleadings, discovery (responses to interrogatories, requests for admissions, and requests for production), and any key documents.  Unfortunately, this is not a “quick” process and depending on the nature of the case, can require several sessions/meetings with the witness.

Preparing a deposition notebook/binder (or electronic equivalent) is a useful preparation tool for counsel and the corporate representative. The binder should include the areas of inquiry and the documents that the representative/witness should review. If possible, arrange the deposition binder and any relevant documents by the areas of inquiry.  Advise the witness that he/she does not have to memorize any documents, but the witness should be familiar with key documents and pleadings. In addition to asking the representative to review the documents, counsel should walk the representative through each area of inquiry and the documents corresponding to each area.

Another useful preparation tool is conducting a mock deposition or reviewing sample questions that you anticipate will be asked by opposing counsel. Spend time questioning the representative about the areas of inquiry. Test the representative’s knowledge so that the witness has an idea of what will be asked. As counsel, you should also be prepared to object to any questioning outside of the areas of inquiry or related to privileged matters and explain this process to the representative. Counsel should also explain the importance of fixing prior errors or misstatements in testimony while the deposition is ongoing. If a witness is properly prepared, the witness should not be surprised and can remain calm and perform in the best interests of the company.

However, it is important to remember that there is no substitute for preparation. “By failing to prepare you are preparing to fail.” – Benjamin Franklin.