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Organizational Depositions: Do They Allow a Second Bite at the Apple?

Authors: David Markowitz and Joseph Franco

BACKGROUND

The general practice in Oregon is that each witness may be deposed only once.  This rule, that a party may have only “one bite at the apple,” is not codified within Oregon’s procedural rules – but it is well accepted among practitioners and courts alike.  The limited Oregon case law discussing the re-opening or continuation of depositions is consistent with the rule that one deposition per person is allowed.  Burson v. Cupp, 70 Or App 246, 248, 688 P2d 1382 (1984) (holding that trial court’s refusal to allow a second deposition of a witness was not an abuse of discretion).  Under federal law, the one-bite rule is expressly recognized by Fed. R. Civ. P. 30(a)(2)(ii), which provides that a witness may not be deposed more than once absent a stipulation or leave of court. 

The concept that a witness may be deposed only once is at times in tension with the rules providing for organizational depositions, because they leave open the possibility that a witness may be deposed both as the designated representative of an organization, and also in that witness’s individual capacity.  ORCP 39 C(6) provides that a party may notice the deposition of an organization and describe with particularity the matters on which examination is requested.  Both the Oregon rule and its federal counterpart place on the organization the affirmative duty to prepare the designated witness or witnesses on all matters “known or reasonably available to the organization.”  ORCP 39 C(6); Fed. R. Civ. P. 30(b)(6).  Under both rules, taking an organizational deposition does not preclude “a deposition by any other procedure.”  Id. 

Some practitioners employ these rules to get what appear to be two bites at the same apple.  A common example is when a corporate officer, such as a CEO or CFO, is deposed and then later, in the same litigation, the organization’s deposition is noticed on topics that were already exhaustively covered in the officer’s deposition.  Often the overlapping subject matter would have made it obvious to the noticing attorney that the previously deposed officer would be the corporate designee at the organizational deposition.  Under these circumstances, the same witness could be deposed twice on the same subject matter – even asked substantially the same questions. 

It is not surprising that many practitioners object to this tactic.  One side seeks a protective order, and both sides brief and argue the issue – often at substantial expense.  While reported Oregon cases have yet to address the issue, it has increasingly been raised in federal litigation under Rule 30(b)(6).  Although upon first glance the federal courts seem split on the issue, closer inspection reveals they share common themes.  

A number of courts have been highly reluctant to proscribe a party’s ability to take an organizational deposition, even when it necessitated a second deposition of the same witness.  Other courts have limited or even eliminated a party’s ability to take an organizational deposition when the individual who will be the organization’s designee has already been deposed, if the second deposition will be duplicative, harassing or burdensome.  These courts have permitted a responding party to designate a fact witness’s previous deposition testimony as the testimony of the organization and thereby satisfy the need to designate a Rule 30(b)(6) witness.  This approach limits duplication and encourages the questioner to ask all important questions during the first deposition. 

Using the federal court treatment of this subject as a guide, this article proposes a standard for Oregon.  In particular, this article discusses when it may be inappropriate to allow a party a second bite at the apple under ORCP 39 C(6), when it may be appropriate, and then recommends that these issues be addressed between counsel at an early stage of every case to streamline discovery and avoid costly disputes. 

FEDERAL DECISIONS UNDER ANALOGOUS RULE 30(b)(6)

The federal courts that have allowed multiple depositions of the same individual, in different capacities, have done so because of a concern that the purpose behind the rules permitting organizational depositions would have otherwise been thwarted.  In articulating the unique purpose of organizational depositions, these courts often focus on two distinctions between the deposition of a fact witness and an organizational deposition:  the affirmative obligation to prepare the witness to testify as to matters known or reasonably known to the corporation; and the binding nature of the deposition. 

In the case of In re Motor Fuel Temperature Sales Practices Litigation, No. 07-MD-1840-KHV, 2009 WL 5064441, *2-3 (D. Kan. Dec. 16, 2009) the court rejected the entry of a protective order, even though the witnesses within the organization who would be designated had already been deposed on the same subject, and even though the organization offered to designate the previous testimony as 30(b)(6) testimony.  The court based its decision on two distinctions between ordinary depositions and organizational depositions.  First, in the context of an organizational deposition, there is the need to provide a witness who is prepared to testify regarding the institutional knowledge of the organization.  Id. at *2.  Second, the organizational deposition binds the company as its official position, where the deposition of an individual employee will often not bind the company to a particular position in the same way.  Id. at *2.  “Based upon this reasoning, courts have consistently held that the fact that a company’s employee was deposed under Rule 30(b)(1) does not insulate the company from producing the same – or another – individual as a corporate representative to give a Rule 30(b)(6) deposition.”  Id.    

For similar reasons, other courts have rejected the concept that an organization’s offer to designate a fact witness’s prior testimony as the testimony of the organization satisfied the obligation to designate a witness pursuant to Rule 30(b)(6).  See DHL Express (USA), Inc. v. Express Save Indus. Inc., No. 09-60276-CIV, 2009 WL 3418148 (S.D. Fla. Oct. 19, 2009) (declining to allow designation of prior deposition testimony of the president of a closely held corporation as Rule 30(b)(6) testimony, and compelling an organizational deposition); Alloc, Inc. v. Unilin Décor N.V., Nos. 02-C-1266, 03-C-342, 04-C-121, 2006 WL 2527656 (E.D. Wis. Aug. 29, 2006) (requiring an organizational deposition of a previously deposed witness on the same subject matter notwithstanding the defendant’s willingness to designate the former testimony as organizational testimony pursuant to Rule 30(b)(6)). 

Other courts have seemingly been less reflexive and more pragmatic about whether a party can have two bites at the apple under the organizational deposition rules.  These courts will allow a corporate party to designate the prior testimony of a witness as the testimony of the organization, if doing so will avoid the undue burden and expense of a duplicative deposition, while still honoring the basic objectives of an organizational deposition.  

In one early case, the court held that when an organization’s most knowledgeable employee on the subject in question had already been deposed extensively on that subject, the organization had satisfied its obligations pursuant to Rule 30(b)(6) by offering to be bound by the previous testimony.  Novartis Pharm. Corp. v. Abbott Labs., 203 F.R.D. 159, 162-63 (D. Del. 2001).  Novartis was followed shortly by Sabre v. First Dominion Capital, LLC, No. 01CIV2145BSJHBP, 2001 WL 1590544, at *2 (S.D.N.Y. Dec. 12, 2001) in which the court reasoned in dicta that:  “In the case of many closely held corporations, the knowledge of an individual concerning a particular subject also constitutes the total knowledge of the entity.  In such a situation, the witness could simply adopt the testimony that he or she provided in a former capacity, thereby obviating the need for a second deposition.”  See also, Nicholas v. Wyndham Int’l, Inc., 373 F3d 537, 543 (4th Cir. 2004) (upholding trial court’s order denying an organizational deposition when two principals of a closely held corporation had already been deposed, would have been the 30(b)(6) designees, and possessed all of the corporation’s knowledge of the subject matter at issue). 

Several courts have cited Novartis for the proposition that, under the right circumstances, an organization can satisfy its burden to designate a representative pursuant to Rule 30(b)(6) by offering to be bound by prior testimony.  See e.g., Requa v. C.B. Fleet Holding Co., Inc., No. 06-cv-01981-PSF-MEH, 2007 WL 2221146, at *2 (D. Colo. July 31, 2007) (“While prior testimony can be designated by the corporation to satisfy a Rule 30(b)(6) deposition, this is most appropriate when the prior witness is the most knowledgeable on the subject and has been previously deposed by opposing counsel with regard to that topic.”); EEOC v. Boeing Co., No. CV 05-03034-PHX-FJM, 2007 WL 1146446, at *2 (D. Ariz. Apr. 18, 2007) (“A corporation may also satisfy its Rule 30(b)(6) obligation by offering to be bound by prior deposition testimony regarding a noticed Rule 30(b)(6) topic.”). 

Similarly, in State Farm Mut. Auto. Ins. Co. v. New Horizont, Inc., 254 F.R.D. 227, 232-33 (E.D. Penn. 2008) the court rejected the defendants’ attempt to depose a witness in his individual capacity after that witness had already been deposed as his organization’s Rule 30(b)(6) designee because defendants already had sufficient opportunity to discover the information sought. 

APPLICATION TO OREGON

The two seemingly disparate lines of federal case law on this subject are easily reconciled.  Taken as a whole, the federal authorities suggest that two conditions must be present for a party to be able to avoid an organizational deposition when the designated witness has already testified in an individual capacity.  First, a party will need to demonstrate that the overall objectives of the rule allowing organizational depositions will not be thwarted by the denial of a second deposition.  Generally speaking, these objectives will have been met if the previously deposed witness possessed and testified to all information reasonably available to the company, and if the company agrees that it will be bound by the previous testimony.  Second, a party will also need to show that the proposed subject matter of the organizational deposition is the same or highly similar to the subject matter upon which the witness was previously deposed such that a second deposition would be duplicative, harassing or burdensome.  Accordingly, if an organization’s most knowledgeable witness on a particular subject has already been fully deposed, and the organization is willing to be bound by that testimony, there is no reason that same witness should have to endure another deposition on the same subject matter.  Under those circumstances, the organization should be allowed to discharge its obligation to produce an organizational designee by adopting the previous testimony. 

A. When should a second bite at the apple be denied?

Using the federal authorities as a guide, the circumstances under which an Oregon court may deny a second bite at the apple pursuant to the organizational rules comes into focus.  Like federal courts, Oregon courts have discretion to limit discovery “to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.”  ORCP 36 C.  It seems likely that an Oregon court would not hesitate to prohibit a party from taking two depositions of the same individual if the overarching objectives of ORCP 39 C(6) had been met, and if the second deposition would merely be duplicative of the first.  A court would likely find that such a deposition would be oppressive, and constitute an undue burden and expense.    

This situation may arise under two common factual scenarios.  The first scenario exists when the most knowledgeable person in an organization on a particular subject has already been thoroughly deposed on that subject.  Often the opposing party will think of additional questions later, or will simply be unsatisfied with the answers it received.  The opposing party will then notice an “organizational” deposition pursuant to ORCP 39 C(6) in order to obtain a second shot at the same witness.  Under these circumstances, if the organization resists the second deposition and offers to be bound by the previous testimony on the particular subject, a court may well enter a protective order or, alternatively, deny a motion to compel ORCP 39 C(6) testimony. 

Another common scenario exists when a previously deposed officer of a closely held company essentially possesses all of the knowledge of the organization.  If that officer has already been deposed, it may be difficult to justify allowing the opposing party another bite at the apple simply because the second deposition is of the “organization,” which on the facts and circumstances of the case is essentially indistinguishable from the individual. 

B. Under what circumstances might a second bite at the apple be appropriate under ORCP 39 C(6)? 

Given the obligation of an organization to designate a witness who must “testify as to matters known or reasonably available to the organization,” the easiest way to obtain a second deposition is to show that the witness was not properly prepared.  If it is apparent that a fact witness did not have knowledge of all of the information reasonably available to the organization on a particular topic at the time of the witness’s deposition, then it will be unlikely that the organization could avoid a second deposition by offering to be bound by that testimony.  In that circumstance, an Oregon court may hold that the opposing party is entitled to the organization’s full knowledge on a particular topic and compel an organizational deposition – whether it be of the previously deposed witness or another witness.  This holds true even if a witness’s first deposition is in a representative capacity under ORCP 39 C(6).  If the witness does not have all of the information reasonably available to the organization during that deposition, then a court would be likely to order a continuation of the deposition so that the witness can provide full testimony after adequate preparation. 

Another related circumstance occurs when the previously deposed witness was not asked about the subject matter articulated in the subsequent ORCP 39 C(6) notice of deposition.  For instance, if through the course of discovery a party discovers a new subject that must be explored, and upon which a previously deposed witness was not and reasonably could not have been questioned, then an ORCP 39 C(6) deposition may be appropriate even if the organization’s choice of designee means that a witness will be deposed twice.    

C. Using these principles as a guide, counsel should proactively address potential disputes. 

Although the principles discussed above may provide some guidance for Oregon practitioners, their application will depend on the unique facts and circumstances of every case and are therefore fertile ground for disputes.  That said, most of these disputes can be avoided by proactive discussions between counsel at the early stages of a case. 

When an organization has been sued, counsel should discuss openly and early which topics may be the subject of an organizational deposition.  Before any officer of the organization is deposed, or any company employee with specialized knowledge which is the subject of the lawsuit is deposed, counsel should determine whether the testimony should properly be considered the testimony of the organization.  Counsel also may know, for instance, that a particular witness, such as a CEO or President is very busy and will not take kindly to a second deposition.  In that circumstance, counsel for the organization should make clear that the organization will resist a second deposition of the same witness even if it is noticed as an “organizational” deposition. 

Under some circumstances, counsel may wish to stipulate in advance to two or more deposition sessions with the same witness if that will facilitate an orderly transition through the discovery process.  There are innumerable ways these issues can be handled in advance, and without court intervention, if the parties spot these issues early and proactively address them.

This article appeared in the Spring 2012 issue of the Oregon State Bar's Litigation Journal.