Can a party be precluded from offering evidence that contradicts or seeks to expand the testimony of its designated Rule 30(b)(6) witness? When a party notices the deposition of an organization under Rule 30(b)(6), the organization has an obligation to ensure, through the testimony of one or more witnesses, that the party taking the deposition receives complete responses, based on the organization's full knowledge and any relevant material available to it.

But what if the organization wants to offer testimony later that is different than that to which the 30(b)(6) witness testified?

A very unscientific poll among acquaintances reveals a sharp split of opinion. Some said of course, the witness's answers are binding on the organization since the organization had a duty in the first instance to produce a knowledgeable witness or educate the witness so that the witness would be able to respond to questions on the noticed subject matter. The examining party is relying on the answers that are given by the witness, and the organization should not be able to change those answers at a later date. Others said of course not, witnesses forget, misspeak or make mistakes; organizations may later discover different or additional information than they had when the 30(b)(6) witness testified, and they should not be precluded from offering it at trial even if it contradicts the testimony of the 30(b)(6) witness.

In ADT Holdings v. Harris, C.A. No. 2017-0328-JTL (Del. Ch. Sept. 7), Vice Chancellor J. Travis Laster considered the plaintiffs' motion in limine to preclude the corporate defendant from offering any evidence that contradicted or sought to expand the testimony of its designated Rule 30(b)(6) witness. He denied the motion.

Laster looked to case law under the Federal Rules and found that there were two lines of authority. A minority of federal courts treat Rule 30(b)(6) testimony as akin to a judicial admission—a statement that conclusively establishes a fact and estops an opponent from controverting the statement with any other evidence. Laster cited Rainey v. American Forest & Paper Association, 26 F. Supp. 2d 82 (D.D.C. 1998), which he characterized as the foundational case for the minority position, for the proposition that a corporation cannot later proffer new or different allegations that could have been made at the time of the 30(b)(6) deposition unless it can prove that the information was not known or was inaccessible. The Rainey court concluded that preventing the corporation from contradicting its own 30(b)(6) testimony serves to prevent the corporate defendant from playing games in discovery and ambushing its adversary in a later phase of the case.

Laster suggested that the Rainey decision could be read narrowly as applying a version of the “sham affidavit” rule to a corporation. The “sham affidavit” rule prevents a party, under certain circumstances, from submitting an affidavit (or a deposition errata form) that contradicts the party's deposition testimony in order to create an issue of material fact to defeat a summary judgment rule. The rule, as it has developed under Delaware case law, requires the following elements: prior sworn testimony; given in response to unambiguous questions; yielding clear answers; later contradicted by sworn affidavit statements or sworn errata corrections; without adequate explanation; and submitted to the court in order to defeat an otherwise properly supported motion for summary judgment.

The majority view among the federal courts is that a Rule 30(b)(6) witness is like any other witness; testimony from a 30(b)(6) witness is not “binding” in the sense that it precludes the deponent from correcting, explaining, or supplementing its statements. The organization that designated the 30(b)(6) witness may offer contradictory testimony or evidence, even if it has the effect of impeaching the testimony of the 30(b)(6) witness. However, the earlier testimony is still admissible and can be used to impeach the later testimony.

Laster held that the majority view is consistent with the policy underlying Rule 30(b)(6). The purpose of that rule, Laster wrote, is to afford comparable treatment to biological and “nonbiological” persons, i.e., to treat organizations like a human person. He concluded that permitting a corporation to offer evidence at trial that may contradict its prior testimony places the “non-biological person” on the same footing as a biological person. While he acknowledged that there may be situations where they should be treated differently, citing, for example, a case holding that a corporation cannot serve as an expert witness, it seemed to him that the better approach was to treat biological and “nonbiological” persons similarly for purposes of a party's ability to introduce evidence at trial that contradicts its earlier testimony.

Accordingly, Laster refused to preclude the defendant corporation from offering evidence at trial that contradicted or was otherwise inconsistent with the deposition testimony of its Rule 30(b)(6) witness. The plaintiffs would be able to rely on the earlier 30(b)(6) testimony and use it for impeachment.

One wonders whether this is an outcome that is particularly well suited to the Court of Chancery, since the chancellor and the vice chancellors are the sole fact finders who already understand the requirements of Rule 30(b)(6) and are highly experienced in weighing conflicting testimony. It is less clear that this outcome is well suited for cases that will be heard by lay juries. Although not intended, it does open the door to potential abuse by an organizational defendant by not limiting the introduction of the later testimony by criteria akin to that used in applying the “sham affidavit” rule. Of course, the opposing party can always use the earlier testimony to impeach the later evidence, but that argument requires educating the lay jury on the requirements of Rule 30(b)(6) and introduces a potentially distracting collateral issue.

Barry M. Klayman is a member in the commercial litigation group and the bankruptcy, insolvency and restructuring practice group at Cozen O'Connor. He regularly appears in Chancery Court.

Mark E. Felger is co-chair of the bankruptcy, insolvency and restructuring practice group at the firm.

Can a party be precluded from offering evidence that contradicts or seeks to expand the testimony of its designated Rule 30(b)(6) witness? When a party notices the deposition of an organization under Rule 30(b)(6), the organization has an obligation to ensure, through the testimony of one or more witnesses, that the party taking the deposition receives complete responses, based on the organization's full knowledge and any relevant material available to it.

But what if the organization wants to offer testimony later that is different than that to which the 30(b)(6) witness testified?

A very unscientific poll among acquaintances reveals a sharp split of opinion. Some said of course, the witness's answers are binding on the organization since the organization had a duty in the first instance to produce a knowledgeable witness or educate the witness so that the witness would be able to respond to questions on the noticed subject matter. The examining party is relying on the answers that are given by the witness, and the organization should not be able to change those answers at a later date. Others said of course not, witnesses forget, misspeak or make mistakes; organizations may later discover different or additional information than they had when the 30(b)(6) witness testified, and they should not be precluded from offering it at trial even if it contradicts the testimony of the 30(b)(6) witness.

In ADT Holdings v. Harris, C.A. No. 2017-0328-JTL (Del. Ch. Sept. 7), Vice Chancellor J. Travis Laster considered the plaintiffs' motion in limine to preclude the corporate defendant from offering any evidence that contradicted or sought to expand the testimony of its designated Rule 30(b)(6) witness. He denied the motion.

Laster looked to case law under the Federal Rules and found that there were two lines of authority. A minority of federal courts treat Rule 30(b)(6) testimony as akin to a judicial admission—a statement that conclusively establishes a fact and estops an opponent from controverting the statement with any other evidence. Laster cited Rainey v. American Forest & Paper Association, 26 F. Supp. 2d 82 (D.D.C. 1998), which he characterized as the foundational case for the minority position, for the proposition that a corporation cannot later proffer new or different allegations that could have been made at the time of the 30(b)(6) deposition unless it can prove that the information was not known or was inaccessible. The Rainey court concluded that preventing the corporation from contradicting its own 30(b)(6) testimony serves to prevent the corporate defendant from playing games in discovery and ambushing its adversary in a later phase of the case.

Laster suggested that the Rainey decision could be read narrowly as applying a version of the “sham affidavit” rule to a corporation. The “sham affidavit” rule prevents a party, under certain circumstances, from submitting an affidavit (or a deposition errata form) that contradicts the party's deposition testimony in order to create an issue of material fact to defeat a summary judgment rule. The rule, as it has developed under Delaware case law, requires the following elements: prior sworn testimony; given in response to unambiguous questions; yielding clear answers; later contradicted by sworn affidavit statements or sworn errata corrections; without adequate explanation; and submitted to the court in order to defeat an otherwise properly supported motion for summary judgment.

The majority view among the federal courts is that a Rule 30(b)(6) witness is like any other witness; testimony from a 30(b)(6) witness is not “binding” in the sense that it precludes the deponent from correcting, explaining, or supplementing its statements. The organization that designated the 30(b)(6) witness may offer contradictory testimony or evidence, even if it has the effect of impeaching the testimony of the 30(b)(6) witness. However, the earlier testimony is still admissible and can be used to impeach the later testimony.

Laster held that the majority view is consistent with the policy underlying Rule 30(b)(6). The purpose of that rule, Laster wrote, is to afford comparable treatment to biological and “nonbiological” persons, i.e., to treat organizations like a human person. He concluded that permitting a corporation to offer evidence at trial that may contradict its prior testimony places the “non-biological person” on the same footing as a biological person. While he acknowledged that there may be situations where they should be treated differently, citing, for example, a case holding that a corporation cannot serve as an expert witness, it seemed to him that the better approach was to treat biological and “nonbiological” persons similarly for purposes of a party's ability to introduce evidence at trial that contradicts its earlier testimony.

Accordingly, Laster refused to preclude the defendant corporation from offering evidence at trial that contradicted or was otherwise inconsistent with the deposition testimony of its Rule 30(b)(6) witness. The plaintiffs would be able to rely on the earlier 30(b)(6) testimony and use it for impeachment.

One wonders whether this is an outcome that is particularly well suited to the Court of Chancery, since the chancellor and the vice chancellors are the sole fact finders who already understand the requirements of Rule 30(b)(6) and are highly experienced in weighing conflicting testimony. It is less clear that this outcome is well suited for cases that will be heard by lay juries. Although not intended, it does open the door to potential abuse by an organizational defendant by not limiting the introduction of the later testimony by criteria akin to that used in applying the “sham affidavit” rule. Of course, the opposing party can always use the earlier testimony to impeach the later evidence, but that argument requires educating the lay jury on the requirements of Rule 30(b)(6) and introduces a potentially distracting collateral issue.

Barry M. Klayman is a member in the commercial litigation group and the bankruptcy, insolvency and restructuring practice group at Cozen O'Connor. He regularly appears in Chancery Court.

Mark E. Felger is co-chair of the bankruptcy, insolvency and restructuring practice group at the firm.