By: Dylan R. Mathewson, DJCL staff member at Widener University Delaware Law School.
The state of Delaware has been and continues to be the jurisdiction of choice for many publicly traded companies when it comes to corporate litigation. In the course of litigation leading up to trial, either party may conduct discovery requests and subpoena witnesses. When suits against companies arise, the parties can request depositions of the companies’ most knowledgeable employee, who is designated as the representative. In turn, the company receiving the request gets to choose who will be the representative to appear on its behalf under Federal Rules of Civil Procedure Rule 30 (“Rule 30”).[1] To ensure corporate efficiency, any employee may be designated as the company’s representative. Once chosen, this employee must attend depositions requested by adverse parties under Rule 30(b)(6). This allows directors, officers, and managing agents to avoid the timely hassle of attending depositions.
In order to qualify as a 30(b)(6) witness, the employee must satisfy certain criteria required by the rule. An employee designated to testify on the company’s behalf shall “testify as to matters known or reasonably available to the organization.”[2] In order to testify as to matters “known or reasonably available,” a 30(b)(6) witness must have, or acquire, knowledge and information of the matters that will be the focus of the deposition. To attain such knowledge, the designated 30(b)(6) witness is educated by the company through the review of documents and materials regarding the matter at hand. In addition to knowledge about the corporation, a 30(b)(6) witness may also be questioned about corporate beliefs, opinions, and even legal positions despite attorney-client privilege and the work product doctrine.[3]
While much is known about 30(b)(6) witnesses in the deposition sense, very little has been published about compelling a 30(b)(6) to testify at trial. Adverse parties may subpoena corporate directors, officers, and managing agents to trial, but does this power extend to employees of the company acting as 30(b)(6) witnesses? In Delaware, one case regarding the matter is ambiguous in its language stating that “[t]hrough its jurisdiction over a corporation, a court can compel … directors, officers, and managing agents to appear as witnesses at trial or for depositions …. A court also can compel the corporation to produce the biological person or persons who are knowledgeable about given subjects.”[4] Based on the language, it is unclear if the Court of Chancery can compel 30(b)(6) witnesses to testify at trial or if the power to compel is limited to just directors, officers, and managing agents.
The main conflict arising out of the opposition of a 30(b)(6) witness being compelled to testify is that they lack personal knowledge of the matter.[5] In addition, an opposing party can object to what a 30(b)(6) witness claims on the grounds of hearsay.[6]
While these objections appear to be legitimate concerns, they can most likely be overruled. The corporate representative would be acting as a party-opponent. Therefore, what a 30(b)(6) witness says as a “party’s agent or employee on a matter within the scope of that relationship” would fall under the 801(d) section of the hearsay rule, which would deem such statements made by the 30(b)(6) witness not hearsay.[7] As for the personal knowledge requirement, adverse parties seeking to call a 30(b)(6) witness may overcome this obstacle by using Federal Rules of Civil Procedure Rule 32 (“Rule 32”).[8]
Rule 32 addresses the use of depositions in court proceedings, and 32(a)(3) indicates that “[a]n adverse party may use for any purpose the deposition of a party or anyone who, when deposed, was the … designee under Rule 30(b)(6) ….”[9] In Bravos River Authority v. GE Ionics, Inc., the fifth circuit discussed a reluctancy to simply read the deposition of a 30(b)(6) witness into evidence “if the witness is available to testify at trial, and such exclusion is usually deemed harmless error.”[10]
Although the Bravos decision occurred in a sister jurisdiction, it remains the leading case discussing 30(b)(6) witnesses testifying at trial.[11] The 30(b)(6) representative does not per se need personal knowledge, nor is there a rule requiring the corporate designee to testify “vicariously” at trial.[12] Thus, if a company makes a witness available at trial, the witness should not be able to refuse to testify to matters the same witness testified about at the deposition on the grounds that he had only corporate knowledge of the issues, and not personal knowledge.[13]
In conclusion, when a company designates an employee who lacks personal knowledge over a particular issue to attend depositions on the company’s behalf, the company also takes a risk that this 30(b)(6) witness can then be called to trial by an adverse party. Other jurisdictions have compelled live testimony at trial of 30(b)(6) witnesses due to the preference of live testimony over simply reading deposition testimony into evidence.[14] Therefore, these 30(b)(6) witnesses can fall within the court’s jurisdiction and be compelled to testify at trial under direct examination on matters that the individual lacks personal knowledge over. When faced with this issue, the Court of Chancery will most likely compel the testimony of the 30(b)(6) witness. Therefore, corporations facing litigation must be wise in selecting a corporate representative for depositions as a way to save time because such choice could prove to be a great expense for the company come trial.
About the Author: Dylan is a second-year Regular Division student and expected to graduate in May of 2021. Dylan obtained a Law Clerk position at Musi, Malone & Daubenberger, LLP in Media, Pennsylvania during the summer of 2019 and will continue to work there during his second year. Dylan received the Delaware Select Merit Scholarship and was awarded the Certificate of Achievement in Legal Methods II – Spring 2019. Dylan is an active staff member of the Delaware Journal of Corporate Law.
Footnotes:
[1] A corporate employee designated as the company’s representative is often referred to as a 30(b)(6) witness.
[2] Fed. R. Civ. P. 30(b)(6) (emphasis added).
[3] Steven O’Neil, 60-SEP Fed. Law 70, 1 (Sept. 2013).
[4] In re Dole Food Co., 110 A.3d 1257, 1262-63 (Del. Ch. 2015).
[5] Fed. R. Evid. 602.
[6] Fed. R. Evid. 801.
[7] Fed. R. Evid. 801(d) (emphasis added).
[8] Bravos River Auth. v. GE Ionics, Inc., 469 F.3d 416, 434 (5th Cir.2016).
[9] Fed. R. Civ. P. 32(a)(3).
[10] Bravos, 469 F.3d at 434; see also Jackson v. Chevron Chem. Co., 679 F.2d 463, 466 (5th Cir. 1982).
[11] Lauren Bragin, A Primer on 30(b)(6) Witnesses, Young Lawyers (Apr. 2015), https://www.glaserweil.com/uploads/documents/Lauren_Bragin_A_Primer_on_Rule_30(b)(6)_Witnesses_Bragin_2015.pdf.
[12] Bravos, 469 F.3d at 434.
[13] Id.
[14] Univ. Healthsystem Consortium v. UnitedHealth Grp., Inc., 68 F. Supp. 3d 917, 921 (N.D. Ill. 2014) (finding that a 30(b)(6) witness who testifies at a deposition and then again at trial without having personal knowledge is of “little principled distinction”).