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Corporate Representative Depositions in Texas: The Basics Explained

If your company becomes involved in litigation, chances are it will be asked to present a corporate representative for deposition.  A corporate representative deposition is one in which the company names a person to testify on behalf of the company on a list of topics that opposing counsel has provided.  The answers given by the representative are binding on the company at trial.  Therefore, how your company responds to the request can have a meaningful impact on the outcome of the litigation.

A good corporate representative deposition can establish what a company knows, what it does not know, and often, what it should have known about important aspects of the litigation.  It is also a prime opportunity for the opposing counsel to obtain damaging corporate omissions.  In order to avoid the pitfalls of a corporate deposition, it is important to understand their purpose and what obligations stem from the request.   By doing so, your company can complete the preparation necessary to meet its obligations and to solidify its position leading up to trial.  The following is a brief summary of the rules governing corporate representative depositions and suggestions for preparing your corporate witness to be deposed.

In previous versions of the rules governing corporate depositions, the onus of identifying corporate witnesses and procuring corporate testimony was on the opposing counsel.  The process was often abused by companies and permitted them to evade corporate discovery by presenting witnesses who claimed to have little to no relevant knowledge.  The changes implemented under both Texas Rule of Civil Procedure 199.5(b)(1) and Federal Rule of Civil Procedure 30(b)(6) seeks to streamline the process and, importantly, now require the noticed entity to identify and prepare a knowledgeable witness to testify on its behalf.  Unlike other depositions where the witness's personal knowledge is at issue, the corporate representative deposition tests the knowledge of the company itself, through its designated witness.   The designee's testimony is binding on the company.  Attempts to evade the process by failing to properly identify and prepare the witness carry consequences and may subject the company to damaging testimony and harmful evidentiary rulings.  However, the rule allows the company to gain an advantage by selecting a strong witness to testify on its behalf, and essentially is provided a cheat sheet before the deposition as to the list of question areas, so there is little excuse for presenting an unprepared corporate representative to testify.

Whether the case is filed in a Texas court or federal court, the noticing party must identify a list of topics with "reasonable particularity."  In practice, this requires the noticing party to give sufficient information in the notice so that the company can ascertain who the appropriate person(s) is to designate and prepare the designee on the identified topics.  The notice is important because the list of topics determines the scope of the deposition.  The company's attorney should take steps to clarify any vague or confusing topics and object when necessary so that scope issues can be avoided during the deposition and at trial.  In response, the noticed company is required to designate one or more representatives whom it authorizes to testify on its behalf.   The company must make a good faith, conscientious effort to designate the appropriate person(s) and prepare its witness to testify on information "known or reasonably available."  This obligation has been interpreted to require the company to make a complete investigation of all available information, without the excuse of the passage of time.  A responding company must review all available documents and complete employee interviews (past and present), to allow its witness to testify fully and non-evasively.

The failure to comply with the obligation to prepare the company's witness can result in sanctions, preclusion of testimony, and even entry of default rulings against the company.  A common issue in corporate depositions, past and present, is the witness's response that he/she does not know the information requested.  "I don't know" responses, while common, should be avoided where possible, because of the potential it will cost the company an opportunity to present evidence on the issue at trial.  Courts considering this issue have held the company to its "I don't know" responses by disallowing contradictory testimony or preventing supplementation at trial.  In responding to the notice, the company should take all necessary steps to learn available information, otherwise it risks that a court will prevent it from correcting or supplementing erroneous testimony.  Additionally, a lack of preparation and knowledge will subject the witness to difficult questioning by an experienced opposing counsel.  If allowed, a skilled attorney can use the witness' lack of preparation to bind the company to damaging testimony and seek favorable admissions that the company may not be allowed to correct.

Preparation starts with the company identifying the best witness or witnesses.  The person selected by the company will be both the face and spokesperson for the company in the litigation.  The ideal candidate will be able and willing to learn the necessary information, but will also be comfortable in the deposition setting.  It may be helpful to identify someone who has been deposed before or someone who can be counted on to express the company's position with confidence.  Another good attribute is someone who can control their responses and follow the instructions given by their counsel during preparation.  The company is not limited to current employees and can designate former employees, or other third parties, if the person is better equipped to testify about past occurrences or relevant issues.  The designee, like the company, should understand the consequences for the failure to adequately prepare and be given the time and latitude to properly prepare.

Once the designee(s) is identified, the company should identify all relevant sources of information, including documents, email, correspondence, employee interviews (past and present), and even past pleadings and/or deposition testimony.   In some litigation, the amount of information could be substantial, which may overwhelm the designee.  In these cases more than one deponent may be necessary or efforts should be made to split up the topics into multiple depositions so that preparation is more manageable.   In addition to obtaining corporate knowledge, the designee should also be prepared to talk generally about the company's history and background.  Knowledge of applicable policies and procedures, the relevant law, and how they apply to the litigation will be a hedge against potentially damaging testimony.

Following the identification of the sources of information, the witness needs to take sufficient time to complete preparation.   The company's attorney should provide guidance on what to expect and should streamline the preparation by identifying the most important aspects of the litigation and the deposition topics.   The task of preparation can be substantial, but must be balanced with what is at stake in the litigation.   Any tendency to procrastinate or "wing-it" should be avoided because of the potential consequences discussed above.