Summary
holding that, under F.R.C.P. 34, defendant corporate parent had control over and thus had to produce requested documents in the possession of non-party wholly owned subsidiary
Summary of this case from Bank of America Corp. v. LemgruberOpinion
01 Civ. 3016 (AGS) (HBP)
August 6, 2002
MEMORANDUM OPINION AND ORDER
I. Introduction
Plaintiff seeks an Order either permitting it to take an additional deposition beyond the limit of thirty depositions per side that has been imposed in this case or directing Tribune Broadcasting Company ("Tribune Broadcasting") to produce a 30(b)(6) witness properly prepared to testify concerning certain documents.
II. Facts
The facts in this case are fully set forth in Judge Schwartz's decision addressing plaintiff's motion for a preliminary injunction and defendants' motion to dismiss, Twentieth Century Fox Film Corp. v. Marvel Enters., Inc., 155 F. Supp.2d 1 (S.D.N.Y. 2001), aff'd, Twentieth Century Fox Film Corp. v. Marvel Enters., Inc., 277 F.3d 253 (2d Cir. 2002). Familiarity with both of these decisions is assumed. For present purposes it is sufficient to note that plaintiff is the licensee of copyrighted characters created by defendant Marvel Enterprises, Inc., and known as the X-MEN. In July, 2000, pursuant to its license, plaintiff released a full length, live action motion picture based on these characters, entitled "X-MEN." Plaintiff alleges, among other things, that defendant Tribune Entertainment's television program, MUTANT-X, infringes on plaintiff's rights in the X-MEN and that defendants have attempted to pass off their MUTANT-X television program as being related to plaintiff's motion picture.
The present dispute has its genesis in a subpoena served on Tribune Broadcasting, the parent of defendant Tribune Entertainment Company. In response to a subpoena duces tecum, Tribune Broadcasting produced a document on "WGN" letterhead. WGN-TV and WGN Superstation are a local Chicago television station and a cable television station, respectively, that are both owned and operated by Tribune Broadcasting; the letterhead on the document in issue merely states "WGN Entertaining America," with no further description. The document appears to be a script for a sales presentation and suggests that there is a close association between plaintiff's X-MEN motion picture and defendants' MUTANT-X television program.
Tribune Broadcasting's 30(b)(6) witness denied knowledge of the document and stated that it was a WGN document; he did not specify whether he was referring to WGN-TV or WGN Superstation. As a result of that testimony, plaintiff served a further subpoena and deposition notice. The subpoena was addressed to "WGN-TV, 2501 W. Bradley Place, Chicago, IL 60618" (Torres 7-16-02 Ltr., Ex. B). The accompanying notice of deposition was addressed to "WGN-TV/Superstation (Chicago),", and the schedule attached to the subpoena defined "WGN" as
The topics listed in the Rule 30(b)(6) notice served on Tribune Broadcasting included "The advertising, marketing, sale and/or promotion of [defendants' television series]" (Letter of Diana M. Torres, Esq., dated July 16, 2002 ("Torres 7-16-02 Ltr."), at 1, n. 1).
WGN-TV/Superstation and any of its predecessor and successor entities, affiliates, subsidiaries, agents, servants, representatives, and/or attorneys, and all other persons acting or purporting to act on WGN's behalf
(Torres 7-16-02 Ltr., Ex. B). The schedule attached to the subpoena annexed a copy of the document described above and designated it as a subject of examination.
In response to this subpoena, a witness from WGN-TV was produced. Like the witness produced on behalf of Tribune Broadcasting, he also disclaimed knowledge of the document in dispute and claimed that it appeared to be a script from WGN Superstation.
According to statements made in the course of oral argument concerning the current dispute held on July 30, 2002, neither WGN-TV nor WGN Superstation is a legally cognizable entity; both are owned by several corporations which are ultimately owned by Tribune Broadcasting.
I had previously limited each side in this case to a total of thirty depositions. Since the deposition resulting from plaintiff's subpoena to WGN-TV was plaintiff's thirtieth deposition, it cannot now seek a deposition of WGN Superstation without relief from the Court.
In connection with the current dispute, both sides have each submitted three letter briefs. In addition, as noted above, I heard oral argument by telephone on July 30, 2002.
III. Analysis
The current dispute raises the issue of whether an entity receiving a notice of deposition pursuant to Rule 30(b)(6) is obligated to produce a witness prepared with the knowledge of both the entity that received the subpoena and its subsidiaries or affiliates. I conclude that the scope of the entity's obligation in responding to a 30(b)(6) notice is identical to its scope in responding to interrogatories served pursuant to Rule 33 or a document request served pursuant to Rule 34, namely, it must produce a witness prepared to testify with the knowledge of the subsidiaries and affiliates if the subsidiaries and affiliates are within its control.
It is well settled that a witness appearing pursuant to a Rule 30(b) (6) notice has a unique status and testifies as the entity, not as an individual. "A deposition pursuant to Rule 30(b)(6) is substantially different from a witness's deposition as an individual. A 30(b)(6) witness testifies as a representative of the entity, his answers bind the entity and he is responsible for providing all the relevant information known or reasonably available to the entity." Sabre v. First Dominion Capital, LLC, 01 Civ. 2145 (BSJ) (HBP), 2001 WL 1590544 at *1 (S.D.N.Y. Dec. 12, 2001), citing 8A Charles A. Wright, Arthur R. Miller, Richard L. Marcus, Federal Practice Procedure § 2103 (2d ed. 1994). As comprehensively explained by Magistrate Judge Eliason of the Middle District of North Carolina:
The testimony elicited at the Rule 30(b)(6) deposition represents the knowledge of the corporation, not of the individual deponents. The designated witness is "speaking for the corporation," and this testimony must be distinguished from that of a "mere corporate employee" whose deposition is not considered that of the corporation and whose presence must be obtained by subpoena. 8A Wright, Miller Marcus § 2103, at 36-37. . . . If the persons designated by the corporation do not possess personal knowledge of the matters set out in the deposition notice, the corporation is obligated to prepare the designees so that they may give knowledgeable and binding answers for the corporation. Dravo Corp. v. Liberty Mut. Ins. Co., 164 F.R.D. 70, 75 (D. Neb. 1995) (citing Marker, 125 F.R.D. at 126). Thus, the duty to present and prepare a Rule 30(b)(6) designee goes beyond matters personally known to that designee or to matters in which that designee was personally involved. Buycks-Roberson v. Citibank Federal Sav. Bank, 162 F.R.D. 338, 343 (N.D. Ill. 1995); S.E.C. v. Morelli, 143 F.R.D. 42, 45 (S.D.N.Y. 1992).
The Rule 30(b)(6) designee does not give his personal opinions. Rather, he presents the corporation's "position" on the topic. U.S. v. Massachusetts Indus. Finance Agency, 162 F.R.D. 410, 412 (D. Mass. 1995); Lapenna v. Upjohn Co., 110 F.R.D. 15, 21 (E.D. Pa. 1986); Toys "R" Us, Inc. v. N.B.D. Trust Company, No. 88C10349, 1993 WL 543027, at *2 (N.D. Ill. Sept. 29, 1993). Moreover, the designee must not only testify about facts within the corporation's knowledge, but also its subjective beliefs and opinions. Lapenna, 110 F.R.D. at 20. The corporation must provide its interpretation of documents and events. Ierardi v. Lorillard, Inc., Civ. A. No. 90-7049, 1991 WL 158911 (E.D. Pa. Aug. 13, 1991). The designee, in essence, represents the corporation just as an individual represents him or herself at a deposition. Were it otherwise, a corporation would be able to deceitfully select at trial the most convenient answer presented by a number of finger-pointing witnesses at the depositions. See Lapenna, 110 F.R.D. at 25. Truth would suffer.
. . . The attorney for the corporation is not at liberty to manufacture the corporation's contentions. Rather, the corporation may designate a person to speak on its behalf and it is this position which the attorney must advocate.
. . . Rule 30(b)(6) explicitly requires [a corporation] to have persons testify on its behalf as to all matters known or reasonably available to it and, therefore, implicitly requires such persons to review all matters known or reasonably available to it in preparation for the Rule 30(b)(6) deposition. This interpretation is necessary in order to make the deposition a meaningful one and to prevent the "sandbagging" of an opponent by conducting a half-hearted inquiry before the deposition but a thorough and vigorous one before the trial. This would totally defeat the purpose of the discovery process. The Court understands that preparing for a Rule 30(b) (6) deposition can be burdensome. However, this is merely the result of the concomitant obligation from the privilege of being able to use the corporate form in order to conduct business.
United States v. Taylor, 166 F.R.D. 356, 361-62 (M.D.N.C. 1996), accord Paul Revere Life Ins. Co. v. Jafari, 206 F.R.D. 126, 127-28 (D. Md. 2002).
Neither the parties' research nor my own has found any authority directly addressing the specific question of whether a corporation receiving a Rule 30(b)(6) notice is obligated to prepare its witness with both the entity's own knowledge and the knowledge of its subsidiaries and affiliates. However, decisions dealing with the scope of a producing party's duty to respond to interrogatories or document requests provide guidance.
A corporation responding to interrogatories must provide not only the information contained in its own files and possessed by its own employees, American Rockwool, Inc. v. Owens-Corning Fiberglas Corp., 109 F.R.D. 263, 266 (E.D.N.C. 1985), it must also provide all information under its control. "A party served with interrogatories is obliged to respond by `furnish[ing] such information as is available to the party.' [Defendant] therefore is obliged to respond to the interrogatories not only by providing the information it has, but also the information within its control or otherwise obtainable by it." In re Auction Houses Antitrust Litig., 196 F.R.D. 444, 445 (S.D.N.Y. 2000), quoting and citing Fed.R.Civ.P. 33(a) (emphasis in original); Cullins v. Heckler, 108 F.R.D. 172, 176-77 (S.D.N.Y. 1985); 8A Charles Alan Wright, Arthur R. Miller Richard L. Marcus, Federal Practice Procedure: Civil §§ 2174, 2177 (2d ed. 1994). See also Shamis v. Ambassador Factors Corp., 34 F. Supp.2d 879, 894 (S.D.N.Y. 1999). Accordingly, "when the parent is served with an interrogatory, it is no defense to claim that the information is within the possession of a wholly owned subsidiary, because such a corporation is owned and controlled by such interrogee." Westinghouse Credit Corp. v. Mountain States Mining Milling Co., 37 F.R.D. 348, 349 (D. Col. 1965). See also Sol S. Turnoff Drug Distrib. Inc. v. N.V. Nederlandsche Combinatie Voor Chemische Industrie, 55 F.R.D. 347, 349 (E.D. Pa. 1972); Erone Corp. v. Skouras Theaters Corp., 22 F.R.D. 494, 498 (S.D.N.Y. 1958); Greenbie v. Noble, 18 F.R.D. 414, 415 (S.D.N.Y. 1955); Banana Serv. Co. v. United Fruit Co., 15 F.R.D. 106, 108 (D. Mass. 1953).
The same principle applies to requests for documents pursuant to Rule 34 and requires a party to produce documents in its "possession, custody or control . . . ." Fed.R.Civ.P. 34(a). As observed by the Honorable Robert W. Sweet, United States District Judge, in Dietrich v. Bauer, 95 Civ. 7051 (RWS), 2000 WL 1171132 at *3 (S.D.N.Y. Aug. 16, 2000):
Numerous courts have concluded that a parent corporation has a sufficient degree of ownership and control over a wholly-owned subsidiary that it must be deemed to have control over documents located with that subsidiary. See United States v. International Union of Petroleum and Indus. Workers, AFL-CIO, 870 F.2d 1450, 1452 (9th Cir. 1989) ("A corporation must produce documents possessed by a subsidiary that the parent corporation owns or wholly controls."); Alden v. Time Warner, Inc., No. 94 Civ. 6109, 1995 WL 679238, at *2 (S.D.N.Y. Nov. 14, 1995) (corporate parent required to produce documents held by its subsidiary); Camden Iron [ Metal v. Marubeni Am. Corp.], 138 F.R.D. [438,] 441 [(D.N.J. 1991)] (parent corporation has control over documents in physical control of wholly-owned or controlled subsidiary); In re Uranium Trust Litigation, 480 F. Supp. 1138, 1152 (N.D. Ill. 1979) (corporate parent must produce documents of wholly-owned subsidiary but not documents of 43.8%-owned subsidiary which conducted its corporate affairs separately); Hubbard v. Rubbermaid, Inc., 78 F.R.D. 631, 637 (D. Md. 1978) (parent corporation must produce documents held by wholly-owned subsidiaries and fact that subsidiaries were separate corporate entities was irrelevant). This principle applies where the subsidiary is not owned directly but, rather, is owned by an intermediate corporation that is itself a wholly-owned corporation of the parent corporation. See Lethbridge v. British Aerospace PLC, No. 89 Civ. 1407, 1990 WL 194915, at *1 (S.D.N.Y. Nov. 28, 1990).
See also George Hantscho Co. v. Miehle-Goss-Dexter, Inc., 33 F.R.D. 332, 334-35 (S.D.N.Y. 1963).
I conclude that the same principle that is applied to interrogatories and document requests should also be applied to determine the scope of a party's obligation in responding to a Rule 30(b)(6) notice of deposition. There is no logical reason why the sources researched by a party in responding to a discovery request should be dependent on the particular discovery vehicle used; in all cases, the responding party should be obligated to produce the information under its control. Application of this principle to Rule 30(b)(6) discovery is not only consistent with the judicial interpretations of the other discovery provisions of the Federal Rules of Civil Procedure, it is also consistent with the purpose of discovery — "[to] make a trial less a game of blind man's buff and, more a fair contest with the basic issues and facts disclosed to the fullest practicable extent." United States v. Procter Gamble Co., 356 U.S. 677, 682 (1958); accord EEOC v. Metropolitan Museum of Art, 80 F.R.D. 317, 318 (S.D.N.Y. 1978).
Application of this principle to the present case leads to the conclusion that Tribune Broadcasting must provide a witness prepared with the knowledge of WGN Superstation to testify concerning the documents in issue. Tribune Broadcasting's public statements establish that it controls WGN Superstation. Specifically, Tribune Broadcasting's web page states "Tribune Broadcasting owns and operates 23 major-market television stations, including national superstation WGN-TV, and reaches more than 80 percent of U.S. television households." Tribune Company Overview, available at http://www.tribune.com/about/index.htm (last visited Aug. 4, 2002) (emphasis added). Since Tribune Broadcasting "owns and operates" WGN Superstation, it has sufficient control to be charged with WGN Superstation's knowledge for discovery purposes.
Although Tribune Broadcasting has, in response to the current motion, attempted to distance itself both from the statements on its web site and from WGN Superstation, its arguments in this regard are entitled to no weight. There cannot be one "truth" for the world at large, and a different "truth" for the Court.
IV. Conclusion
Accordingly, for all the foregoing reasons, I conclude that Tribune Broadcasting violated its obligations under Rule 30(b)(6) by failing to provide a witness properly prepared to testify concerning the subject matters designated in plaintiff's notice of deposition. Accordingly, no later than August 19, 2002, Tribune Broadcasting is directed to produce a witness properly prepared with the knowledge of WGN Superstation concerning all documents produced by Tribune Broadcasting.
SO ORDERED