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From Scripts to Sanctions: Defendants Dismissed With Help From Plaintiff’s Aggressive Parroting

7/5/23

By: Brian Goldberg and Jack Ma

Federal Rule of Civil Procedure 30(b)(6) requires a corporation, government agency, or other organization to designate one or more individuals to testify. Unlike regular employees, their testimony has far more weight and may significantly influence how a lawsuit is resolved. They will be expected to present themselves and be prepared to speak on specific subjects, which are often decided upon in advance. However, can a party fully escape liability if the other party abuses the opportunity provided in Rule 30(b)(6)? The answer is a concrete ‘yes.’

Recently, in Consumer Fin. Prot. Bureau v. Brown, 69 F.4th 1321 (11th Cir. 2023), the 11th Circuit weighed in and upheld the district court’s dismissal of five service-provider defendants sued by the Consumer Financial Protection Bureau (“CFPB”) in an action for allegedly engaging in or substantially assisting a fraudulent debt collection scheme.

The CFPB’s discovery misconduct began when it attempted to avoid being deposed by lodging frivolous objections. Initially, the CFPB objected to deposition notices, contending it already provided information through written interrogatories and asserting inapplicable privileges. In the 300 hours it took to prepare for the deposition, CFPB was unable to find a single exculpatory fact, demonstrating their continued deliberate disregard for the District Court’s ruling. The District Court overruled these objections emphasizing federal government agencies are subject to the same discovery rules as everyone else.

Second, CFPB’s witness attempted to pass off its duty to respond by parroting verbatim fully from its “memory aids.” Not just once, but for multiple depositions, “CFPB equipped its witness with so-called ‘memory aids’ from which the witness read verbatim for extended periods of time. In response to one question, for example, the witness read from his memory aid for more than 40 minutes and then, after a break, continued reading for 18 minutes before the parties stipulated that he would have read another 93 pages. This filibuster-style reading occurred repeatedly. When Global Payments’ attorneys objected, the CFPB’s counsel would insist the witness needed to finish his answer: ‘Let him finish the answer, maybe it will be [responsive].’”

The defendants, aggrieved by the CFPB’s behavior, sought sanctions under Federal Rule of Civil Procedure 37. The district court granted the defendants’ motions and imposed sanctions on the CFPB. “The district court found CFPB’s witness ‘failed to appear’ pursuant to Rule 37(d) because, even though he was physically present, he was effectively unavailable due to his inability to answer questions without memory aids and refusal to address exculpatory evidence.”

A district court may, in accordance with Rule 37, “strike [CFPB’s] pleadings in whole or in part.” It did just that after determining that CFPB’s acts were so egregious, striking all claims against the service-providing defendants and dismissing them from the lawsuit.

Like the District Court, the 11th Circuit was unimpressed with CFPB’s arguments and upheld the District Court’s sanctions as more than appropriate and free of any abuse of discretion, given CFPB’s discovery abuses were sufficiently egregious to merit dismissal. Ultimately, the 11th Circuit affirmed the District Court’s sanctions order, emphasizing the CFPB’s violation of clear directives and obstruction of multiple depositions. The 11th Circuit found, “the CFPB clearly violated Rule 37(b) and severe sanctions were warranted…[and held] that the district court’s sanctions order dismissing the CFPB’s claims against the five appellees was not an abuse of discretion.”

Attorneys should prepare all their witnesses for depositions, as an unprepared witness can make mistakes that hurt the case by revealing unnecessary or damaging admissions. This is especially so with a Rule 30(b)(6) deposition.

An attorney should prepare a Rule 30(b)(6) witness by scheduling at least one, if not more in person preparation sessions with the witness. The witness should be educated on the deposition process and review documents and other materials. The session will help the witness ease into the deposition, build their confidence, and let them develop their rapport.

Additionally, attorney-prepared memory aids are acceptable, especially in depositions covering an extensive range of topics, nonetheless, the District Court made it clear that “memory aids were acceptable due to the voluminous record but regurgitating pre-written information would be insufficient in many cases.” The District Court further explained that although CFPB made a good faith effort to provide documents to comply with the district court’s order, CFPB’s witness lacked a “more generalized response or a response that’s more of a human touch.” A prepared witness can expect and answer carefully, possibly protecting the integrity of their position. However, as seen, CFPB detoured greatly from simply preparing their witness for deposition.

Ultimately, depending on how either side attempts to comply with the Rule, Federal Rule of Civil Procedure 30(b)(6) lends itself as a potent discovery tool for either side. A party can use it to its advantage if used properly, but improperly, it may feed in the opposing side’s favor.

For more information, please contact Brian Goldberg at brian.goldberg@fmglaw.com, Jack Ma at Jack.Ma@fmglaw.com, or your local FMG attorney.