Overseas Deponents & the Federal Rules of Civil Procedure

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David A. Szwak
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Overseas Deponents & the Federal Rules of Civil Procedure

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Overseas Deponents & the Federal Rules of Civil Procedure

*3 Federal Rule of Civil Procedure 30 governs depositions. Rule 30(b)(1) provides, “[a] party who wants to depose a person by oral questions ... must state the time and place of the deposition.” Fed.R.Civ.P. 30(b)(1). Generally, this means that the examining party may unilaterally choose a deposition's location. Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice & Procedure: Civil § 2112 at 523 (3d ed.2010); Cadent Ltd. v. 3M Unitek Corp., 232 F.R.D. 625, 628 (C.D.Cal.2005).

However, the examining party's discretion to choose a location is limited. First, Rule 26(c) empowers courts to shield deponents “from annoyance, embarrassment, oppression, or undue burden or expense.” Fed.R.Civ.P. 26(c). This rule grants district courts “wide discretion” to establish a deposition's location. Hyde & Drath v. Baker, 24 F.3d 1162, 1166 (9th Cir.1994) (citing In re Standard Metals Corp., 817 F.2d 625, 628 (10th Cir .1987)).

Second, there is a rebuttable presumption that a corporation's deposition should be taken at the corporation's principal place of business.FN7 Wright & Miller, supra, at § 2112 at 533; Thomas v. Int'l Bus. Machines, 48 F.3d 478, 483 (10th Cir.1995); Salter v. Upjohn Co., 593 F.2d 649, 651 (5th Cir.1979); Cadent, 232 F.R.D. at 628. When a foreign defendant is involved, this presumption may be even stronger. Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Court for S. Dist. of Iowa, 482 U.S. 522, 546 (1987); In re Outsidewall Tire Litig., 267 F.R.D. 466, 471 (E.D.Va.2010). But, this rule is not-and never was)—“invariable.” Hirsch v. Glidden Co., 79 F.Supp. 729, 730 (S.D.N.Y.1948) (permitting a deposition near the defendant's satellite office if the examining party pays the deponent's traveling expenses and hotel bill); Gitto v. “Italia”, Societa Anonima Di Navigazione, Genova, 28 F.Supp. 309, 310 (E.D.N.Y.1939) (modifying the general rule to avoid undue expense).

FN7. There is also a general presumption that natural-person defendants should be deposed in the district of his or her residence. Fausto v. Credigy Serv. Corp., 251 F.R.D. 427, 429 (N.D.Cal.2008) (citation omitted).

The Federal Rules of Civil Procedure are otherwise silent with regard to choosing a deposition's location. Outsidewall, 267 F.R.D. at 471. Where, as here, there is no place that appears convenient for the parties, the task of deciding the proper location falls on the court. Id.; Societe Nationale, 482 U.S. at 546 (“We do not articulate specific rules to guide this delicate task of adjudication.”). In developing this standard, courts consider whether “circumstances exist distinguishing the case from the ordinary run of civil cases.” Outsidewall, 267 F.R.D. at 471 (citing Salter, 593 F.2d at 651–52); Hyde & Drath, 24 F.3d at 1166.

When making this determination courts in the Ninth Circuit FN8 apply a five-factor test (the Cadent factors): (1) the location of counsel for the parties in the forum district; (2) the number of corporate representatives a party is seeking to depose; (3) the likelihood of significant discovery disputes arising which would necessitate-resolution by the forum court; (4) whether the persons sought to be deposed often engage in travel for business purposes; and (5) the equities with regard to the nature of the claim and the parties' relationship. Cadent, 232 F.R.D. at 629.

FN8. These factors are applied in several circuits. See, e.g., Armsey v. Medshares Mgmt. Servs., 184 F.R.D. 569, 571 (W.D.Va.1998); Resolution Trust Corp. v. Worldwide Ins. Mgmt. Corp ., 147 F.R.D. 125, 127 (N.D.Tex.1992)); Smith v. Shoe Show of Rocky Mount, Inc., No. 00–30141–MAP, 2001 WL 1757184, at *3 (D.Mass. Apr. 26, 2001). Additionally, courts in the Ninth Circuit have applied these factors in cases involving defendants who reside in foreign domestic jurisdictions, see, e.g., Botell v. United States, No. 2:11–cv–1545–GEB, 2013 WL 360410, at *3 (E.D.Cal. Jan. 29, 2013) (American Samoa), and international jurisdictions, see, e.g., In re Transpacific Passenger Air Transp. Antitrust Litig., No. C–07–05634 CRB (DMR), 2013 WL 6730165, at *2 (N.D.Cal. Dec. 20, 2013) (China).

*4 This, however, is not the only test. When considering where to locate the deposition of a defendant residing overseas, courts have also considered its ability to supervise depositions and resolve discovery disputes. Afram Exp. Corp. v. Metallurgiki Halyps, S.A., 772 F.2d 1358, 1365 (7th Cir.1985); Mill–Run Tours v. Khashoggi, 124 F.R.D. 547, 551 (S.D.N.Y.1989). Other considerations include whether the deposition would be impeded by the foreign nation's laws or would affront the nation's judicial sovereignty. Custom Form Mfg., Inc. v. Omron Corp., 196 F.R.D. 333, 336 (N.D.Ind.2000). (“If a federal court compels discovery on foreign soil, foreign judicial sovereignty may be infringed, but when depositions of foreign nationals are taken on American or neutral soil, courts have concluded that comity concerns are not implicated.”); Fin. Gen. Bankshares, Inc. v. Lance, 80 F.R.D. 22, 23 (D.D.C.1978); McKesson Corp. v. Islamic Rep. of Iran, 185 F.R.D. 70, 80 (D.D.C.1999).

Rule 28(b) must also be considered. Rule 28(b) governs depositions in foreign countries and prescribes four methods for taking depositions abroad. See Fed.R.Civ.P. 28(b) (permitting depositions in a foreign country (a) under a treaty or convention, (b) under letters rogatory, (c) on notice, or (d) before a person commissioned by the court). Where, as here, a party moves for a protective order, which locates a deposition abroad, the moving party must show that the protection requested complies with Rule 28(b). Societe Nationale, 482 U.S. at 533; see also Fausto, 251 F.R.D. at 430–31 (ordering four Brazilian defendants to be deposed in the United States because “it apparently is illegal for American lawyers to take depositions in Brazil.”).

Finally, the court must consider Rule 1, which instructs the court to construe and administer the rules “to secure the just, speedy, and inexpensive determination of every action and proceeding .” Fed.R.Civ.P. 1. Courts routinely apply Rule 1 when determining where to locate a deposition. See, e.g., Cadent, 232 F.R.D. at 630 (applying Rule 1); see also Societe Nationale, 482 U.S. at 546 (“American courts, in supervising pretrial proceedings, should exercise special vigilance to protect foreign litigants from the danger that unnecessary, or unduly burdensome, discovery may place them in a disadvantageous position.”).

In sum, the governing law requires the court to make three distinct inquiries: (1) whether the parties claims and contacts with the forum warrant locating the deposition at home or abroad; (2) whether a foreign deposition will offend or infringe that nation's judicial sovereignty; and (3) whether less expensive and more reasonable alternatives exist.

S.E.C. v. Banc de Binary
Slip Copy, 2014 WL 1030862
March 14, 2014
David A. Szwak
Bodenheimer, Jones & Szwak, LLC
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Chairman, Consumer Protection Section, Louisiana State Bar Association
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