Commercial Litigation and Arbitration

30(b)(6) Testimony Binding Only in Sense It Can Be Used Against Organization — Testimony Can be Corrected, Explained or Supplemented — Entity Isn’t Bound to Whatever a Fairly-Prepared and Candid Deponent Happens to Recall

Keepers, Inc. v. Sidepockets, Inc., 2015 U.S. App. LEXIS 20223 (2d Cir. Nov. 20, 2015):

Plaintiff Keepers, Inc. ("Keepers") and defendant City of Milford, Connecticut ("Milford" or "the City") appeal and cross-appeal, respectively, from partial summary judgment awards to each party by the United States District Court for the District of Connecticut (Alvin W. Thompson, Judge). This case presents two questions related to Chapter 2.3 Milford's municipal code, which regulates "adult-oriented establishments." The first is whether the District Court improperly considered the affidavit of Milford Chief of Police Keith Mello in granting partial summary judgment for the City. Keepers argues that the District Court should have struck the affidavit because it contradicted testimony given by Milford's former city attorney in a deposition taken pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure. We conclude that the District Court did not "abuse its discretion" in considering the affidavit, and we accordingly AFFIRM the District Court's partial summary judgment award to the City.


On December 5, 2008, Keepers served a notice of deposition on the City pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure.29 Rule 30(b)(6) permits a party to depose an organization, including a governmental entity, by sending it a notice of deposition "describ[ing] with reasonable particularity the matters for examination." After receiving such notice, the organization must designate someone familiar with the matters described in the notice to testify on its behalf. If the organizational deponent fails to comply by "mak[ing] available such number of persons as will be able to give complete, knowledgeable and binding answers on its behalf," a court may impose sanctions under Rule 37 of the Federal Rules of Civil Procedure, "including the preclusion of evidence."30

29   Fed. R. Civ. P. 30(b)(6) provides in relevant part

   In its notice or subpoena, a party may name as the deponent a public or private corporation, . . . a governmental agency, or other entity and must describe with reasonable particularity the matters for examination. The named organization must then designate one or more officers, directors, or managing agents, or designate other [*15]  persons who consent to testify on its behalf; and it may set out the matters on which each person designated will testify. . . . The persons designated must testify about information known or reasonably available to the organization.

30   Reilly v. Natwest Mkts. Grp. Inc., 181 F.3d 253, 268 (2d Cir. 1999) (internal quotation marks omitted). Fed. R. Civ. P. 37(a)(3)(B)(ii) permits a party seeking discovery to move for an order compelling designation if "a corporation or other entity fails to make a designation under Rule 30(b)(6)." If a corporation fails to comply with such an order, the court may impose the sanctions specified in Rule 37(b)(2)(A), which include

   (i) directing that the matters embraced in the order or other designated facts be taken as established for purposes of the action, as the prevailing party claims;

(ii) prohibiting the disobedient party from supporting or opposing designated claims or defenses, or from introducing designated matters in evidence;

(iii) striking pleadings in whole or in part;

(iv) staying further proceedings until the order is obeyed;

(v) dismissing the action or proceeding in whole or in part;

(vi) rendering a default judgment against the disobedient party; or

(vii) treating as contempt of court the failure to obey any order except an order to submit to a physical or mental examination. [*16]

Rule 37(d)(1)(A)(i) provides for similar sanctions if "a person designated under Rule 30(b)(6) . . . fails, after being served with proper notice, to appear for that person's deposition." "Instead of or in addition to these sanctions, the court must require the party failing to act, the attorney advising that party, or both to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust." Fed. R. Civ. P. 37(d)(3).

Keepers' Rule 30(b)(6) notice of deposition listed thirty-one matters related to the drafting, passage, and enforcement of Chapter 2.3.31 Most relevant here, the notice identified as a matter for deposition "[t]he definition and interpretation of any provisions of Chapter 2.3 which are not specifically defined in that ordinance."32 Neither Keepers' complaint nor its notice of deposition identified which provisions of Chapter 2.3 Keepers believed to be vague, and its notice did not specifically identify which terms and provisions it planned to address during the deposition.

31   App. 161-66.

32   App. 162.

The City responded to Keepers' notice of deposition by designating its former municipal attorney, Marilyn Lipton, who gave deposition testimony [*17]  for Milford on January 8, 2009. At the start of the deposition, Milford's attorney stated that, while Lipton had authority pursuant to Rule 30(b)(6) to testify on Milford's behalf, she was "not authorized to contradict the ordinance text."33

33   App. 172.

During her deposition, Lipton was unable to answer various questions regarding the potential application and interpretation of Chapter 2.3.34 She was unable, for instance, to explain whether an "assistant manager" would fall within the 2007 ordinance's definition of someone having an "influential interest" in an SOB;35 whether the City could revoke an SOB employee's license for failing to stop another employee from "doing something wrong";36 and whether mandated "buffer zones" between dancers and patrons would be measured from "front of body [to] front of body" or based on the distance between other body parts.37

34   See Keepers, 944 F. Supp. 2d at 158 (noting that Keepers identified 33 instances in which Lipton said she was uncertain or unable to answer various questions).

35   App. 223

36   App. 252-53.

37   App. 264. Chapter 2.3 requires six-foot "buffer zones" between patrons and dancers. See § 2.3-17(b) (2007).

In its motion for summary judgment in August 2009, Keepers identified several provisions of Chapter 2.3 that [*18]  it argued were unconstitutionally vague, relying on Lipton's deposition for support.38 In its November 2009 response to Keepers' motion, Milford filed an affidavit by Chief of Police Keith Mello (the "Mello Affidavit"), who was primarily responsible for administering the ordinance. The Mello Affidavit offered "additional guidelines regarding the interpretation and enforcement of Chapter 2.3,"39 with particular focus on those provisions that Keepers' motion had identified as vague.40

38   Keepers, 944 F. Supp. 2d at 158 (noting Keepers' argument that Lipton "had little to no understanding as to how the words, phrases, and provisions contained within the ordinance are to be applied and/or enforced" (quoting Keepers Br. Summ. J., Doc. 51, at 11)).

39   App. 313.

40   Keepers had deposed Mello in January 2009 as an individual witness, but not pursuant to Rule 30(b)(6). Dep. of Keith Mello, Doc. 55-3, at 3.

In December 2009, Keepers moved to strike the Mello Affidavit, arguing that it impermissibly contradicted Lipton's deposition testimony. Keepers also moved for discovery sanctions. The District Court denied Keepers' motions and relied on the Mello Affidavit in awarding summary judgment to the City on Keepers' vagueness challenge.41 The District Court concluded [*19]  that "[i]t would be unfair to ignore" the Mello Affidavit and to rely solely on the Lipton Deposition, "in which the plaintiffs succeeded in surprising a deponent not charged with enforcement of the ordinance with hypotheticals that served to 'stump' her."42

41   App. 46-47 (Order of Sept. 28, 2010).

42   Keepers, 944 F. Supp. 2d at 159.


1. The "Binding" Nature of Rule 30(b)(6) Testimony

Keepers misunderstands how testimony pursuant to Rule 30(b)(6) binds a party. Keepers rightly notes that an organization's deposition testimony is "binding" in the sense that whatever its deponent says can be used against the organization.47 But Rule 30(b)(6) testimony is not "binding" in the sense that it precludes the deponent from correcting, explaining, or supplementing its statements.48 Nothing in the text of the Rule or in the Advisory Committee notes indicates that the Rule is meant to bind a corporate party irrevocably to whatever its designee happens to recollect during her testimony.49 Of course, a party whose testimony "evolves" risks its credibility, but that does not mean it has violated the Federal Rules of Civil Procedure.50

47   See Reilly, 181 F.3d at 268.

48   See 8A Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 2103 (3d ed. 2015); 7-30 James Wm. Moore et al., Moore's Federal Practice § 30.25 (3d ed. 2015).

49   See A.I. Credit Corp. v. Legion Ins. Co., 265 F.3d 630, 637 (7th Cir. 2001).

50   See R & B Appliance Parts, Inc. v. Amana Co., 258 F.3d 783, 786-87 (8th Cir. 2001).

Indeed, Keepers itself came to a similar conclusion earlier in this litigation. During the Lipton Deposition, Milford objected to questions requiring Lipton [*23]  to give precise answers based on 2,000 pages of evidence. Its counsel emphasized that if Lipton answered a question with "I don't know," she should be taken to mean, "I don't know without reviewing all 2,000 pages right now," and that such an answer should "not preclude the city's reliance on anything in the record at summary judgment."51 The attorney for Keepers agreed: "I am sure that if there's something that is in [the record] that is responsive to any arguments that we're going to be making, you will pull it out in response to our motion for summary judgment."52 Accordingly, the parties proceeded under the assumption that Lipton's recollection did not limit what evidence Milford could present.

51   App. 230.

52   Id.

Although the parties' exchange focused on Milford's right to supply additional facts, a Rule 30(b)(6) deponent may also amend and expand its legal conclusions. Courts have held repeatedly that a party is "entitled to produce contrary evidence" that contradicts legal interpretations offered during a deposition.53 The statements to which Keepers seeks to bind Milford are primarily interpretations of law--whether or how Chapter 2.3 applies to various situations--rather than facts concerning the drafting [*24]  or history of the ordinance. The rule that organizational deponents may supplement their Rule 30(b)(6) testimony thus applies with special force in the present case.

53   AstenJohnson, Inc. v. Columbia Cas. Co., 562 F.3d 213, 229 n.9 (3d Cir. 2009); see R & B Appliance, 258 F.3d at 786-87.

Some deponents will, of course, try to abuse Rule 30(b)(6) by intentionally offering misleading or incomplete responses, then seeking to "correct" them by offering new evidence after discovery. Appropriate remedies are available for such situations. For instance, as Keepers points out, the "sham-affidavit rule" prevents a party from manufacturing an issue of fact "by submitting an affidavit in opposition to a summary judgment motion that, by omission or addition, contradicts the affiant's previous deposition testimony."54 But that rule has no relevance here. A subsequent witness does not "contradict" a Rule 30(b)(6) deponent when that witness offers information about which the deponent had disclaimed knowledge or expressed uncertainty.55 With one minor exception,56 the Mello Affidavit did not "contradict" Lipton's earlier testimony but instead filled in its gaps.

54   Crawford v. Franklin Credit Mgmt. Corp., 758 F.3d 473, 482 (2d Cir. 2014) (internal quotation marks omitted).

55   See id.

56   This exception involved inconsistent legal conclusions about the meaning of the term "regularly" as it is used in the 2007 ordinance, rather than contradictory [*25]  statements of fact. Keepers Br. 8, ¶ 1; App. 197, 313.

Rule 37 also empowers district courts to correct abuses in the deposition process. If a deponent fails to satisfy Rule 30(b)(6) by refusing to designate a witness or producing an unprepared witness, the court may order sanctions, including the preclusion of evidence.57 But we cannot conclude that such sanctions would be appropriate here, much less that the District Court "abused its discretion" by failing to employ them against Milford.58


57   Reilly, 181 F.3d at 268; see also Black Horse Lane Assocs. v. Dow Chem. Corp., 228 F.3d 275, 304 (3d Cir. 2000) ("[W]e hold that when a witness is designated by a corporate party to speak on its behalf pursuant to Rule 30(b)(6), producing an unprepared witness is tantamount to a failure to appear that is sanctionable under Rule 37(d)." (alteration and internal quotation marks omitted)); Kyoei Fire & Marine Ins. v. M/V Mar. Antalya, 248 F.R.D. 126, 152 (S.D.N.Y. 2007) (same).

58   Keepers moved for sanctions before the District Court, but on appeal, the only "sanction" it seeks is the striking of the affidavit. See Keepers Br. 12.

Keepers identifies no authority that cuts against these settled principles. Indeed, the contrast between the instant case and Reilly v. Natwest Markets Group Inc., the principal case on which Keepers relies, is illuminating.59 In Reilly, a corporate defendant was served with a Rule 30(b)(6) notice asking it to produce [*26]  representatives familiar with the work performed by the plaintiff, its former employee. In response, the defendant produced a single witness, "despite [the plaintiff's] complaints that [the witness] was not sufficiently knowledgeable,"60 in what was apparently an effort to frustrate the plaintiff's discovery.61 As a result, the district court refused to allow two other witnesses for the defendant--whom the defendant had declined to produce for its Rule 30(b)(6) deposition--to testify on the same subject at trial.

59   181 F.3d 253 (2d Cir. 1999).

60   Id. at 268.

61   See id. at 268-69.

This case differs from Reilly in two important respects. First, unlike the corporate defendant in Reilly, Milford produced as its witness the person it considered to be most familiar with the subject matter at issue.62 Although Lipton's testimony may have been inadequate, the District Court found that that inadequacy flowed not from the kind of willful obstruction apparent in Reilly but rather from Keepers' decision to "surpris[e]" Lipton63 with "various hypothetical scenarios" not identified in the notice of deposition.64 Second, the defendant in Reilly wanted to frustrate discovery, but Milford had every incentive to be as forthcoming as possible in order to defeat Keepers' claim of vagueness. Indeed, [*27]  forcing Lipton to answer "I don't know" was precisely what Keepers hoped to achieve.65

62   See Milford Br. 4.

63   Keepers, 944 F. Supp. 2d at 159.

64   App. 46 (Order of Sept. 28, 2010).

65   See Keepers Br. 8-11.

As the District Court recognized, the process by which Milford ultimately answered Keepers' questions was not "a route that is to be preferred."66 Ideally--perhaps after receiving more particularized notice of what Keepers wanted to know--Lipton herself would have been prepared to offer more precise answers during her deposition. If Milford believed that Keepers' Rule 30(b)(6) notice failed to describe the matters for deposition with adequate particularity, Milford could have objected prior to the deposition. Alternatively, Keepers might have requested an additional Rule 30(b)(6) deposition, perhaps of Mello. But the "management of discovery and trial" belongs "to the sound discretion of the district court."67 We have no trouble concluding that the District Court did not "abuse" that discretion in admitting the Mello Affidavit.

66   App. 47 (Order of Sept. 28, 2010).

67   Willey v. Kirkpatrick, 801 F.3d 51, 72 (2d Cir. 2015).

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