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holding that “Ohio has the most significant relationship to the claims against JPMorgan and the Beacon Entities”
Summary of this case from In re Nat'l Century Fin. Enters., Inc. Inv. Litig.Opinion
Civil Action 2:03-md-1565, Case No. 04-cv-1090, Case No. 04-cv-1097.
May 7, 2008
Order
On April 25, 2008, counsel for the parties participated in a telephone discovery dispute conference with the Magistrate Judge regarding Credit Suisse's service of a Rule 30(b)(6) deposition subpoena on GMAC.
Facts underlying the dispute . In 2000, GMAC considered purchasing NCFE. It conducted due diligence. GMAC employees also had a number of contacts with Credit Suisse while considering the purchase.
In early November 2007, plaintiffs deposed Lorna Gleason and Greg Shultz, the two GMAC employees most knowledgeable about the due diligence conducted. Credit Suisse requested and was granted additional time for the defendants to examine these witnesses. Plaintiffs had 5 hours of deposition time with each of them and defendants' three. Neither plaintiffs nor defendants used the entire time allotted for either witness. Over two hours of deposition time went unused during the Gleason deposition and over four hours during the Shultz deposition.
Credit Suisse's Rule 30(b)(6) deposition notice sets out only subject matter areas already covered during the Gleason and Shultz depositions. Were the Court to permit the Rule 30(b)(6) deposition to go forward, Gleason and/or Shultz would be the depon-ent(s).
It appears that what GMAC learned during the course of due diligence for the contemplated purchase of NCFE and what it communicated to Credit Suisse is potentially important to the resolution of material disputed factual issues. Specifically, Gleason testified that Credit Suisse knew that fraud was occurring at NCFE. Gleason and Shultz testified that they communicated information regarding NCFE's questionable business practices to Credit Suisse.
Rule 30(b)(6) . The Rule provides:
(6) Notice or Subpoena Directed to an Organization.
In its notice or subpoena, a party may name as the deponent a public or private corporation, a partnership, an association, 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 persons who consent to testify on its behalf; and it may set out the matters on which each person designated will testify. A subpoena must advise a nonparty organization of its duty to make this designation. The persons designated must testify about information known or reasonably available to the organization. This paragraph (6) does not pre-clude a deposition by any other procedure allowed by these rules.Ruling . Credit Suisse's Rule 30(b)(6) subpoena to GMAC is QUASHED. Although defendants' listed a GMAC Rule 30(b)(6) deposition as one of some 500 potential depositions they might take, had Credit Suisse wanted to pursue that deposition it should have notified GMAC before the depositions of Gleason and Shultz were taken or, at the very latest, at the conclusion of Gleason's deposition. Going into those depositions, Credit Suisse knew that Gleason and Shultz were important witnesses. It also should have known that Gleason and Shultz were likely the most knowledgeable GMAC employees about the due diligence for the proposed purchase of NCFE. If Credit Suisse believed that GMAC's Rule 30(b)(6) deposition should come first, that it had inadequate time to prepare for the Gleason and Shultz depositions, or that the three hours allotted to defendants to examine them was inadequate, it should have put plaintiffs on notice of those objections then.
It makes no sense to take a Rule 30(b)(6) deposition after the two people most knowledgeable about GMAC's due diligence for the contemplated purchase of NCFE have been taken. Credit Suisse does not credit the testimony of Gleason and Shultz about the information they gained during the due diligence and about what facts they communicated to Credit Suisse's employees. It would like to impeach them.
Having failed to impeach them at their first depositions, Credit Suisse cannot seek a second crack by noticing a Rule 30(b)(6) deposition of GMAC. See, Rule 26(b)(2)(C)(i), Fed.R.Civ.P. It does have the right to depose other GMAC employees who participated in the due diligence and/or the communications with NCFE. Of course, GMAC's employees have the same right as every third party witness under Rule 45, Fed.R.Civ.P.
The depositions were take very early in the discovery period. If Credit Suisse can demonstrate that unknown to it at the time some critical documents or testimony was not available then or that specific facts subsequently developed demonstrate that it did not have an adequate opportunity to prepare for the depositions, it may be able to establish good cause for a limited reopening of the depositions.
It would be unreasonably duplicative to ask Gleason and Shultz questions as Rule 30(b)(6) witnesses that had previously been asked and answered during their individual depositions. See, ICE Corp. v. Hamilton Sundstrand Corp., 2007 WL 1732369 (D. Kan. June 11, 2007), at *4 ( citing Williams v. Sprint/United Mgmt, Co., 2006 U.S. Dist. LEXIS 4937, at *1-3 (D. Kan. February 8, 2006)).
The purpose of Rule 30(b)(6) is to streamline the discovery process by placing the burden on a corporation to identify the witness(es) most knowledgeable about relevant facts. Resolution Trust Corp. v. Southern Union Co., Inc., 985 F.2d 196, 197 (5th Cir. 1993); Great American Insurance Company of New York v. Vegas Construction Company, Inc., 2008 WL 813947 (D. Nev. March 24, 2008), at *3. Here Credit Suisse has already identified and deposed the witnesses most knowledgeable about GMAC's due diligence for the contemplated purchase of NCFE and about the communications made by GMAC employees to Credit Suisse about NCFE.
Credit Suisse argues that the fact that it has deposed Gleason and Shultz is not a bar to their taking those same employees' depositions as Rule 30(b)(6) witnesses. It cites LaSalle National Association v. Nomura Asset Capital Corp., 2003 WL 21688225 (N.D. Ill. July 16, 2003) as an example of cases holding that a party may take the Rule 30(b)(6) deposition of a corporation after it has taken the deposition of a witness whom the corporation would designate to respond to Rule 30(b)(6) subject matter areas. But LaSalle is distinguishable because the majority shareholder who had been deposed there had not answered questions about relevant subject matter areas identified in the notice of the Rule 30(b)(6) deposition. Here Gleason and Shultz have answered all questions asked about their knowledge of each of the subject matter areas noticed by Credit Suisse.
Credit Suisse points out that neither Gleason or Shultz consulted with other employees before their depositions so that they could answer questions about the knowledge of every GMAC employee gained during the course of the due diligence and/or about their communications with NCFE. While that is true, the reason they did not testify as Rule 30(b)(6) witnesses was that Credit Suisse did not speak up before their depositions and ask that they prepare as Rule 30(b)(6) witnesses.
More fundamentally, a Rule 30(b)(6) deponent testifies about the knowledge of the corporation, and her answers bind the corporation. Great American, 2008 WL 818947 above, at *4. Here the knowledge of GMAC is not at issue. Credit Suisse is not attempting to bind GMAC through the testimony of a Rule 30(b)(6) witness. Rather, it is attempting to find out what GMAC's employees learned during the course of due diligence, what communications they made to Credit Suisse employees, and what communications Credit Suisse employees made to them. Since Credit Suisse has already discovered through the testimony of Gleason and Shultz, the two GMAC employees most knowledgeable about the relevant subject matter areas, the facts gathered during the course of the due diligence and the facts communicated to and by Credit Suisse employees, there is no purpose in a Rule 30(b)(6) deposition. What Credit Suisse seeks is not GMAC's knowledge about the subject matter areas so that it can bind GMAC, but the recollections of other GMAC employees to test the accuracy and credibility of the Gleason's and Shultz's testimony.