JONATHAN GOODMAN, Magistrate Judge.
The issue before the Court appears straightforwad on its face: whether Defendant can take a Rule 30(b)(6) deposition of the SEC in this case. Phrased differently, the issue is whether the SEC can foreclose a 30(b)(6) deposition in a case it initiated by arguing that the deposition would necessarily and always require the disclosure of privileged or otherwise protected information. And, to use a third variation on the phrasing of the issue, the question is whether a civil defendant may obtain factual information in a deposition taken of a government agency pursuant to Rule 30(b)(6) in a manner which does not cause the agency to disclose the work product of its counsel, and, if so, what safeguards can be implemented to prevent an abusive deposition?
For the reasons (and with the limitations and safeguards) discussed below, the Court concludes that the answer is yes, Defendant may take the 30(b)(6) deposition of the SEC in this case.
The SEC filed this civil lawsuit against Defendant Merkin, an attorney, for allegedly making false public statements in connection with the purchase and sale of penny stock. Specifically, the SEC accuses Merkin of stating falsely in four letters, which he knew would be posted on the internet, that his client was not being investigated about possible violations of the securities laws. The SEC alleges that these statements were false because Merkin knew full well about an SEC investigation because Merkin was actually representing his client in the investigation. The SEC seeks injunctive relief, an order requiring Merkin to disgorge all ill-gotten gains, civil money penalties and an order barring Merkin from participating in any penny stock offering.
Over the course of several months, Merkin's counsel attempted to convince the SEC to permit him to take a 30(b)(6) deposition. He ultimately issued a 15-topic 30(b)(6) deposition Notice. The SEC objected to the Notice and asked Merkin to withdraw it. The SEC took the position that no 30(b)(6) deposition should go forward because such a deposition would lead to questions implicating work product protected information, the attorney-client privilege, the deliberative process privilege and the investigative privilege. The SEC argued that a 30(b)(6) deposition would require the SEC to produce its own enforcement division attorneys as deposition designees or would require those government lawyers to prepare a non-lawyer by divulging the attorney's opinions, strategies and thoughts. It also contended that the noticed topics were irrelevant and/or overbroad and that, to the extent the topics were not, the SEC already produced documents that Merkin could use to determine the facts and information upon which the SEC based its claims.
Instead of filing discovery motions, the parties complied with Judge Graham's discovery procedures order by conferring over the dispute, calling Chambers to schedule a discovery hearing and then submitting relevant materials. [See ECF No. 15, p. 2]. The submitted materials included letters discussing the discovery dispute that were created during the conferral process and effectively serve as mini-briefs. The parties also submitted post-hearing Notices of Supplemental Authority. [ECF Nos. 26; 30].
At the hearing, the SEC argued that it was not taking the broad position the SEC was exempt from Rule 30(b)(6) and need not ever produce a 30(b)(6) witness. Instead, it contended that whether the SEC must produce a 30(b)(6) witness should be decided on a case-by-case, topic-by-topic basis and that, applying this approach, the Court should conclude that none of the noticed topics warrant a 30(b)(6) deposition.
Notwithstanding this seemingly flexible and nuanced position, SEC counsel advised that he — the Assistant Chief Litigation Counsel of the Enforcement Division [see ECF No. 30] — had never personally produced a 30(b)(6) designee in his eight years with the agency, was unaware of any instance where another SEC attorney had done so and could not imagine even one issue in this case which could justify a 30(b)(6) deposition. SEC counsel also cited cases, from this District and other districts, where courts have ruled that a 30(b)(6) deposition of the SEC was inappropriate and would not permit it.
Merkin's counsel argued that, despite its rhetoric, the SEC was actually seeking special treatment under a rule that by its own terms applies equally to all parties. To that end, Merkin's counsel argued that he is entitled to obtain admissions from the SEC during a 30(b)(6) deposition and, for illustrative purposes, explained that he wants an SEC designee to agree or concede that the SEC instructs parties under investigation to keep the existence of the investigation confidential. In response to a question from the Court, Merkin's counsel also opined that a 30(b)(6) deposition would be less expensive than, for example, propounding equivalent requests for admission.
Merkin's counsel, who has been in private practice since 1985 and who advised that he routinely litigates against the SEC in civil enforcement actions, also stated that he has previously issued 30(b)(6) notices in SEC cases. While counsel could not recall a specific case in which he succeeded in taking such a deposition, he cited a number of cases from other districts where the SEC or another government agency provided a 30(b)(6) witness.
Based on these arguments, the parties sought opposing relief during the hearing: (1) The SEC requested an order quashing the Notice or, in the alternative, a protective order preventing Merkin from taking a 30(b)(6) deposition; and (2) Merkin asked for an order compelling the SEC to comply with his request for a 30(b)(6) deposition.
By its very terms, Rule 30(b)(6) applies to the Government. The Rule provides, in pertinent part, that "a party may name as the deponent a public or private corporation, a partnership, an association,
Despite the SEC's insistence that it is not advancing a per se rule excluding it from complying with Rule 30(b)(6), its counsel's statements suggest otherwise. It is therefore appropriate, as a threshold matter, to reject the notion that the Government (in general) and the SEC (in particular) enjoy some type of automatic, special exemption from Rule 30(b)(6).
As succinctly noted by nationally recognized civil discovery expert United States District Judge Shira Scheindlin in SEC v. Collins & Aikman Corp., 256 F.R.D. 403, 414 (S.D.N.Y. 2009), "[l]ike any ordinary litigant, the Government must abide by the Federal Rules of Civil Procedure. It is not entitled to special consideration concerning the scope of discovery,
Therefore, just like any party litigating in federal court, Merkin has the right to take a 30(b)(6) deposition from the SEC, subject to privilege and work product claims available to all litigants as well as special privileges enjoyed by the Government. SEC v. Kramer, 778 F.Supp.2d 1320, 1327 (M.D. Fla. 2011) (noting that the Rule "provides [the SEC] neither an exemption from Rule 30(b)(6) nor `special consideration concerning the scope of discovery'") (quoting Collins & Aikman, 256 F.R.D. at 414).
In Kramer, the SEC asserted the same arguments as in this case. Namely, that: (1) the information sought from the SEC qualified as protected attorney work product; (2) the request was tantamount to an effort to take the deposition of SEC counsel; (3) the defendant could learn the facts underlying the SEC's allegations by other means; (4) the SEC already produced all the documents it has; (5) the SEC has no independent knowledge of the facts and documents; and (6) either SEC counsel or an investigator prepared by SEC counsel would need to appear as the 30(b)(6) witness for the Government.
Noting that it is highly unusual for a court to prohibit the taking of a deposition altogether absent extraordinary circumstances, the Kramer court explained that the need for protection usually cannot be determined before the examination begins. That court also underscored the practical point that a party could move for a protective order if the need actually arises during a deposition. The court determined that the magistrate judge's ruling — precluding a 30(b)(6) deposition of the SEC because he concluded the questions would necessarily intrude upon the work product and deliberative process privileges — was clearly erroneous and therefore overruled the order denying the defendant's motion to compel a 30(b)(6) deposition from the SEC.
The Kramer court considered the work product and deliberative process arguments advanced (preemptively) by the SEC, but it explained that the defendant "sought to discover only the
The SEC categorizes Kramer as an outlier case that is contrary to the weight of judicial authority. Nevertheless, one of the leading treatises on civil procedure cites Kramer with approval and cites other cases in which courts deemed the FBI and Navy Department government agencies within 30(b)(6) that could be compelled to provide designees for a 30(b)(6) deposition. 8A CHARLES ALAN WRIGHT, ARTHUR R. MILLER & RICHARD L. MARCUS, FEDERAL PRACTICE & PROCEDURE § 2103 n. 37.
Moreover, several district courts have applied 30(b)(6) to government agencies and have rejected sweeping arguments that a deposition could not go forward because of the possibility that some questions might seek protected information. United States v. Health Alliance of Greater Cincinnati, No. 1:03-cv-167, 2009 WL 5227661 (S.D. Ohio Nov. 20, 2009) (granting defendant's motion to compel and noting that the Government is not exempt from the 30(b)(6) discovery tool which expressly applies to agencies);
The parties here have not submitted any binding Supreme Court or Eleventh Circuit opinions involving civil litigants' efforts to obtain 30(b)(6) depositions from the SEC or any other federal agencies. Indeed, virtually all of the case law authority appears to be from federal magistrate or district court judges. Although the SEC has submitted non-binding authorities to support its position, including cases from this District,
A government agency's concerns over privilege in a 30(b)(6) deposition would not be analytically different if the agency involved was connected to a state or city instead of the federal government. Thus, cases analyzing privilege arguments from different government agencies are persuasive and instructive.
As a general proposition, government agencies embroiled in litigation are subject to the same discovery rules as private litigants, regardless of the level of government to which the agency belongs. This fundamental rule was recognized in Francis v. City of New York, 262 F.R.D. 280 (S.D.N.Y. 2009) (Scheindlin, J.), which held that "the City does not have special procedural rights in federal court" and emphasized that government agencies are "like any ordinary litigant" and "must abide by the Federal Rules of Civil Procedure." Despite her noted understanding of, and "sympathetic" attitude toward, New York City's tremendous litigation caseload, Judge Scheindlin nevertheless concluded that "the City does not have special procedural rights in federal court." 262 F.R.D. at 282. Similarly, another district court granted a motion to compel the District of Columbia government to produce a 30(b)(6) witness for deposition and in doing so remarked that the District "cannot claim privilege pre-emptively, before any deposition question has been propounded." Elkins v. District of Columbia, 250 F.R.D. 20, 27 (D.D.C. 2008).
The concern that a 30(b)(6) deposition would risk disclosure of privileged information is not unique to cases involving the Government. To the contrary, private litigants routinely confront identical hazards and raise similar objections (in motions for protective orders, motions to quash or objections to motions to compel). To be sure, under certain circumstances the Government may be able to assert privileges unavailable to private litigants, but the fundamental concern that a 30(b)(6) witness might reveal privileged information is present in private litigation as well as cases involving a government agency.
Similar to the SEC's stated concerns in this case, private litigants often object to 30(b)(6) depositions because they say the depositions would require an attorney to testify or would necessarily cause an attorney to prepare the designee(s). But courts routinely reject those very arguments from private litigants. In addition, the argument that a lawyer would be involved in the preparation process is simply a truism which, if sufficient to preclude 30(b)(6) depositions, would eliminate that discovery tool. This is because lawyers usually prepare their clients' 30(b)(6) designees. Radian Asset Assurance, Inc. v. College of the Christian Bros. of N.M., 273 F.R.D. 689, 692 (D.N.M. 2011) ("while counsel will have to carefully prepare the 30(b)(6) representative, counsel must
The mere fact that it might be an SEC attorney preparing a government investigator as the designee instead of a private attorney preparing the client's current or former employees is not a meaningful distinction. The privilege argument is identical — and if the argument is rejected in cases where private litigants seek to avoid a 30(b)(6) deposition (and it is), then there seems to be no reason to adopt a different result simply because the litigant happens to be a government agency.
For example, in EEOC v. Caesars Entertainment, Inc., 237 F.R.D. 428 (D. Nev. 2006), the defendant corporation sought a protective order precluding the 30(b)(6) deposition of a corporate representative concerning the facts and information supporting the defendant's position statement in response to discrimination charges as well as defendant's affirmative defenses. The defendant corporation argued that the 30(b)(6) deposition would invade attorney work product, compel attorney opinions and conclusions and intrude upon the attorney-client privilege. Plaintiff, however, asserted that it merely wanted to know the facts that its opponent relied upon for its position statement and affirmative defenses.
The Caesars Entertainment court denied the corporation's motion for a protective order. That court based its conclusion on points equally applicable to the instant case, including that: (1) using 30(b)(6) depositions to obtain the factual grounds for an opponent's positions and defenses is "not novel;" (2) deposition questions may pose a slightly greater risk than contention interrogatories of inadvertent disclosure of privileged or protected information but the risk is "adequately addressed" by the presence of counsel who may give appropriate instructions not to answer improper questions or questions which would result in answers revealing work product or privileged information; (3) the 30(b)(6) witness can be counseled before the deposition on the scope of privileges and protections; and (4) it would be inappropriate under the circumstances to deny plaintiff its choice of discovery methods by requiring it to use contention interrogatories in lieu of a 30(b)(6) deposition.
Other district courts have permitted 30(b)(6) depositions in the face of arguments that the information sought could and should be obtained by other, more-efficient means. See, e.g., New Jersey v. Sprint Corp., No. 03-2071-JWL, 2010 WL 610671, at *2-3 (D. Kan. Feb. 19, 2010) (also rejecting the argument that the 30(b)(6) deposition would duplicate discovery already obtained and explaining that the rule is designed to
The same result obtains when the objection is more directly premised on the work product privilege. As one court noted, if construed too broadly the work product privilege "may interfere with the essential function of the discovery process of narrowing issues for trial." United States v. Pepper's Steel & Alloys, Inc., 132 F.R.D. 695, 698 (S.D. Fla. 1990). In Pepper's Steel, counsel repeatedly asserted the work product privilege as justification for instructing a 30(b)(6) witness not to answer questions if the information was received during the process of working with counsel. The court classified this instruction as "completely erroneous" and held that the third party defendant "cannot shield itself from discovery by objecting to all questions which would require the deponent to testify regarding facts learned while reviewing documents selected by . . . counsel." Id. at 699. The Pepper's Steel court provided a compelling and logical reason for its holding:
Id. at 699 (emphasis added).
Permitting a litigant to use a 30(b)(6) deposition to learn
By way of summary:
a. Litigants usually cannot prohibit a 30(b)(6) deposition by arguing in advance that each and every question would trigger the disclosure of attorney-client and work product information;
b. Litigants (and their counsel) served with a 30(b)(6) notice decide which witnesses to designate and those witnesses need not be (and generally are not) attorneys;
c. The mere fact that attorneys were involved in the preparation of the 30(b)(6) witness does not foreclose all questions of the 30(b)(6) witness;
d. Litigants can ordinarily select which available discovery tools they want to use, along with the order in which they want to use them, and courts usually will not force litigants to select another form of discovery (e.g., interrogatories) before permitting a 30(b)(6) deposition;
e. Litigants are permitted to learn the facts underlying their opponent's claims and defenses;
f. Counsel may protect against the disclosure of work product or privileged information in 30(b)(6) depositions by interposing appropriate objections and giving instructions on a question-by-question basis;
g. The Government and its agencies are subject to the same discovery rules as private litigants; and
h. Although the Government sometimes enjoys privileges not available to private parties, these unique privileges do not usually generate an automatic, across-the-board immunity from 30(b)(6) depositions.
To the extent that the SEC is urging a de facto immunity from 30(b)(6) depositions in this case, the Court rejects the argument. To the extent that the SEC objects that none of the 15 topics designated by Merkin are appropriate for a 30(b)(6) deposition, the Court finds that the position is unpersuasive and overrules the objection.
The SEC, of course, may interpose objections and give privilege-based and Court order-based instructions not to answer specific questions at 30(b)(6) depositions taken in this case. The Court understands and appreciates the SEC's concern that some of the topics are irrelevant and that it would not be permitted to instruct its 30(b)(6) witness not to answer irrelevant questions unless those questions also implicated a privilege or a restriction imposed by the Court. Therefore, in an effort to streamline the 30(b)(6) depositions and to prevent the SEC from becoming trapped in the awkward scenario of having its counsel silently sit by while irrelevant and/or overly broad questions are asked, the Court considers it appropriate to pinpoint which topics may not, at least for now, be covered in a 30(b)(6) deposition of the SEC:
Topics 6 through 12 and 15 are irrelevant and/or unduly broad and the SEC need not now produce 30(b)(6) witnesses to respond to these eight topics. This ruling is without prejudice to Merkin's ability later to urge a 30(b)(6) deposition on these topics, on modified topics, or on other entirely new topics.
Phrased from Merkin's perspective, he will be permitted to take Rule 30(b)(6) depositions on Topics 1 through 5 and 13 through 14,
Merkin, of course, may choose to pursue any objections and do-not-answer instructions by scheduling the disagreement for a discovery hearing after complying with the mandatory pre-hearing conferral requirement.