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Resolution Tr. Corp. v. S. Union Co.

United States Court of Appeals, Fifth Circuit
Mar 23, 1993
985 F.2d 196 (5th Cir. 1993)

Summary

holding that the presence of an unprepared 30(b) designee constitutes "no appearance at all"

Summary of this case from Brown v. City of Atlanta

Opinion

No. 92-8407. Summary Calendar.

March 5, 1993. Rehearing Denied March 23, 1993.

Jeanne Crandall, Ronald D. Hinds, Reyna, Hinds Crandall, Dallas, TX, for plaintiff-appellant.

Sidney Powell, Dallas, TX, for defendant-appellee.

Appeal from the United States District Court for the Western District of Texas.

Before POLITZ, Chief Judge, DUHE and DeMOSS, Circuit Judges.


The Resolution Trust Corporation appeals an order imposing sanctions and expenses under Fed.R.Civ.P. 37(d). We affirm.

Background

RTC sued Southern Union Company, Inc. for specific performance of a repurchase agreement. During the course of this litigation Southern Union served notice on RTC that it intended to depose RTC pursuant to Fed.R.Civ.P. 30(b)(6). The notice set forth, in a page and a half, 10 discrete topics with which the deponent was to be familiar. Three weeks later, and after several telephone conversations between counsel, RTC provided two witnesses. Lead counsel for Southern Union flew to Dallas from Washington, D.C. to conduct these depositions.

Southern Union called the deposition to inquire into the circumstances surrounding the preparation of a demand letter by RTC's recently deceased managing agent.

During the questioning of the first witness, Charles Perry, it became immediately apparent that he possessed no knowledge relevant to the subject matters identified in the Rule 30(b)(6) notice. Indeed, on cross-examination RTC's counsel actually impeached Perry with his lack of knowledge. On redirect Southern Union's counsel recited each item of inquiry designated in the notice and asked if Perry had any knowledge thereof. In every instance the answer was "no." The second designated witness, Robert Wieting, was equally unknowledgeable.

Southern Union moved for sanctions; RTC responded with relevant documents, one of which was signed by a Howard Jones who, although he had not been offered in response to the Rule 30(b)(6) notice, had been deposed earlier without avail. During the course of his second deposition, however, Southern Union's counsel refreshed Jones' memory with the relevant documents, including the one he had signed. Jones then regained his memory. RTC obviously made no effort to review documents which would have informed it of Jones' relevant knowledge. Jones was not designated under Rule 30(b)(6), nor were the documents identifying his knowledge produced, until after Southern Union sought sanctions.

In granting the motion for sanctions the court awarded costs and fees incurred in deposing Perry and Wieting and in identifying Jones as a person with knowledge.

Analysis

Rule 37 authorizes the district court to impose sanctions against a party for failing to appear "before the officer who is to take the deposition, after being served with proper notice." Southern Union argues persuasively that RTC's designation of the first two witnesses was tantamount to a complete failure of the corporation to appear. RTC maintains that it was only obliged to produce persons who might have pertinent knowledge. Implicit in this argument is the suggestion that RTC was under no obligation to make any investigation, including the review of readily available records, to identify an appropriate witness for Rule 30(b)(6) purposes.

RTC seeks succor in the Second Circuit's decision in Salahuddin v. Harris, in which the court determined that deponent's failure to answer questions at a deposition was not equivalent to a failure to appear. As viewed by the Salahuddin court, in a case where the deponent physically appears, "`the proper procedure is first to obtain an order from the court as authorized by Rule 37(a), directing him to be sworn and testify.'"

782 F.2d 1127 (2d Cir. 1986); but cf. Greenwood v. Dittmer, 776 F.2d 785 (8th Cir. 1985) (interpreting identical language in Rule 30(g)(2)); Cronin v. Midwestern Okla. Dev. Auth., 619 F.2d 856 (10th Cir. 1980); Turner v. Hudson Transit Lines, Inc., 142 F.R.D. 68 (S.D.N.Y. 1991).

Salahuddin, 782 F.2d at 1131 (quoting SEC v. Research Automation Corp., 521 F.2d 585, 588-89 (2d Cir. 1975)).

Were we here faced with a case involving the deposition of a natural person we might be inclined to agree with the reading of Rule 37(d) by our Second Circuit colleagues. The deposition of a corporation, however, poses a different problem, as reflected by Rule 30(b)(6). Rule 30(b)(6) streamlines the discovery process. It places the burden of identifying responsive witnesses for a corporation on the corporation. Obviously, this presents a potential for abuse which is not extant where the party noticing the deposition specifies the deponent. When a corporation or association designates a person to testify on its behalf, the corporation appears vicariously through that agent. If that agent is not knowledgeable about relevant facts, and the principal has failed to designate an available, knowledgeable, and readily identifiable witness, then the appearance is, for all practical purposes, no appearance at all.

In the instant case, RTC possessed documents that clearly identified Jones as having personal knowledge of the subject of the deposition. RTC did not furnish those documents or designate Jones until after it had designated Perry and Wieting, obliged Southern Union's counsel to travel from Washington, D.C. to Dallas for a useless deposition, and been served with Southern Union's motion for sanctions. The finding that RTC did not make a meaningful effort to acquit its duty to designate an appropriate witness is manifest. The district court did not abuse its discretion in awarding fees and costs under Rule 37(d).

Coane v. Ferrara Pan Candy Co., 898 F.2d 1030 (5th Cir. 1990).

RTC finally contends that it was denied the opportunity to develop an adequate record because the trial court declined to hold an evidentiary hearing or provide detailed findings of fact. The district court has broad discretion to grant or deny such a hearing, limited only by the due process clause of the fifth amendment. In the instant case both parties submitted substantial memoranda detailing their factual and legal positions. They were given an opportunity to be heard. We cannot say that this procedure was infirm, considering the sanction imposed.

Emerick v. Fenick Indus., Inc., 539 F.2d 1379 (5th Cir. 1976).

See American Airlines, Inc. v. Allied Pilots Ass'n, 968 F.2d 523 (5th Cir. 1992) (this court weighs the formality required of such hearings on sliding scale considering the severity of the proposed sanction).

AFFIRMED.


Summaries of

Resolution Tr. Corp. v. S. Union Co.

United States Court of Appeals, Fifth Circuit
Mar 23, 1993
985 F.2d 196 (5th Cir. 1993)

holding that the presence of an unprepared 30(b) designee constitutes "no appearance at all"

Summary of this case from Brown v. City of Atlanta

finding expense-shifting sanctions appropriate when a corporation failed to designate a deponent with personal knowledge

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finding that when a corporation fails to designate the proper person, "the appearance is, for all practical purposes, no appearance at all"

Summary of this case from Mun. Subdistrict v. OXY USA, Inc.

ruling that district court properly granted motion for sanctions where two witnesses "possessed no knowledge relevant to the subject matters identified in the Rule 30(b) notice"

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upholding award of fees and costs against corporate party who produced corporate representatives lacking knowledge of the matters on which they were to testify

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affirming award of costs and fees incurred in the deposition of a witness who "possessed no knowledge relevant to the subject matters identified in the Rule 30(b) notice" such that his "appearance [was], for all practical purposes, no appearance at all."

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affirming award of costs and fees incurred in the deposition of a witness who "possessed no knowledge relevant to the subject matters identified in the Rule 30(b) notice" such that his "appearance [was], for all practical purposes, no appearance at all."

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affirming sanction of costs and fees where 30(b) witnesses "possessed no knowledge relevant to the subject matters identified" in the notice

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rejecting the argument that a corporate designee who has no personal knowledge need not be educated on relevant subject matter to testify for the corporation

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noting that Rule 30(b) places the burden of identifying responsive witness for corporate deposition on corporation

Summary of this case from Ecclesiastes 9:10-11-12, Inc. v. LMC Holding Co.

In Resolution Trust we affirmed sanctions against a party that possessed documents that plainly identified a witness as having personal knowledge of the subject of the deposition but did not furnish those documents or designate the witness until after it had designated two other witnesses with no personal knowledge.

Summary of this case from Brazos River Auth. v. GE Ionics, Inc.

noting that the failure to properly designate a Rule 30(b) witness can be considered a nonappearance justifying the imposition of sanctions

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stating that "[w]hen a corporation or association designates a person to testify on its behalf, the corporation appears vicariously through the agent. If that agent is not knowledgeable about relevant facts, and the principal has failed to designate an available, knowledgeable, and readily identifiable witness, then the appearance is, for all practical purposes, no appearance at all."

Summary of this case from Nutrition Distribution LLC v. PEP Research, LLC

noting Rule 30(b) obliges the corporation to designate an agent through which the corporation vicariously appears, such that "[i]f the agent is not knowledgeable about relevant facts, and the principal has failed to designate knowledgeable ... witness, then the appearance is, for all practical purposes, no appearance at all"

Summary of this case from Apple Inc. v. Samsung Elecs. Co.

noting that Rule 30(b) places the burden of identifying responsive witness for corporate deposition on corporation

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noting that Rule 30(b) places the burden on identifying and designating responsive witnesses for corporate deposition upon corporation itself

Summary of this case from Mintel International Group, LTD v. Neerghen

explaining that the corporation appears vicariously through the 30(b) designee

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In Resolution Trust Corporation v. Southern Union Co., Inc., 985 F.2d 196 (5th Cir.1993), RTC received a deposition notice from Southern Union and designated two witnesses to testify at depositions.

Summary of this case from Ferko v. Nat'l Ass'n for Stock Car Auto Racing, Inc.

In Resolution Trust, the Fifth Circuit affirmed a district court's award of fees and costs pursuant to Rule 37, where the offending party had withheld documents that would have indicated a knowledgeable witness, instead put up two incompetent witnesses for an expensive and "useless deposition," and only thereafter indicated the witness who would be competent to testify.

Summary of this case from Lopez v. Portfolio Recovery Assocs., Llc. (In re Lopez)
Case details for

Resolution Tr. Corp. v. S. Union Co.

Case Details

Full title:RESOLUTION TRUST CORPORATION, IN ITS CAPACITY AS RECEIVER OF FIRST BANKERS…

Court:United States Court of Appeals, Fifth Circuit

Date published: Mar 23, 1993

Citations

985 F.2d 196 (5th Cir. 1993)

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