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Article: June 2019: Where the Federal Rules Don’t Tread: Depositions in Distant Locations

June 27, 2019
Business Litigation Reports

Since the 2015 amendments to the Federal Rules, much has been written about costs related to electronic document discovery as courts have focused on finding the appropriate balance between relevance and proportionality.  How does this play out when it comes to the location of depositions?  What should a witness or party do when the proposed location of a deposition poses an undue burden or expense, and can some or all of the cost be shifted to the party seeking the deposition?

The Location of Party Depositions Is Not Set by the Federal Rules of Civil Procedure.  The Federal Rules expressly provide for depositions by in-person, oral examination.  Fed. R. Civ. P. 30.  Under Rule 45, which authorizes the service of a subpoena, non-parties can be compelled to appear at a deposition, but only if it takes place within 100 miles of that person’s residence, place of employment, or place where the person regularly conducts business in person.  Fed. R. Civ. P. 45(c).  Rule 30, which governs depositions generally, addresses such matters as the timing and number of depositions (i.e., when leave from the court is and is not required) and the manner in which depositions should be conducted (e.g., length, objections, recording methods).  See Fed. R. Civ. P. 30(a)–(f).  In contrast to Rule 45, Rule 30 does not contain a geographic limitation on the location of a party deposition.  Instead, Rule 30 permits the noticing party to unilaterally select the location and requires only that the notice “state the time and place of the deposition and, if known, the deponent’s name and address.”  Fed. R. Civ. P. 30(b)(1).  The unilateral ability for the opposing party to select the time and place of a deposition does not typically result in a dispute, however, because courts expect the parties to be reasonable and accommodating when scheduling depositions.  Nevertheless, in some cases, travel-related expenses for depositions may be so significant and so one-sided that a party will seek either a different location or to have the opposing party pay all or some of the expenses associated with conducting the deposition at the noticed location.

Courts May Order Deposition Locations Changed or Costs Shifted to the Requesting Party.  Assuming a party has not exceeded its permitted number of depositions, only the most unusual circumstances will persuade a court to order the total prohibition of a deposition.  See Salter v. Upjohn Co., 593 F.2d 649, 651 (5th Cir. 1979) (“It is very unusual for a court to prohibit the taking of a deposition altogether and absent extraordinary circumstances, such an order would likely be in error.”); Zimmerman v. Al Jazeera Am., LLC, 329 F.R.D. 1, 5 (D.D.C. 2018) (“complete prohibition of a deposition is an extraordinary measure which should be resorted to only in rare occasions”).  Accordingly, if the parties are unable to agree on the location of a deposition, the Federal Rules permit a party to seek a protective order under Rule 26(c), which provides that a “court may, for good cause, issue an order to protect a party or person from ... undue burden or expense.”  See Philadelphia Indem. Ins. Co. v. Fed. Ins. Co., 215 F.R.D. 492, 495 (E.D. Pa. 2003) (“Usually, a party seeking discovery may set the place where the deposition will take place, subject to the power of the courts to grant a protective order designating a different location.”).  The burden of showing good cause is on the party seeking the protective order.  Courts have broad discretion in determining the place of a deposition and related relief.  In the exercise of that discretion, a court generally focuses on cost, convenience, and efficiency.  To determine whether good cause exists, courts typically begin with the presumptive location developed through case law.

Depositions of a Plaintiff Corporation and Its Agents Should Presumptively Take Place in the District in Which the Suit Was Brought.  The rationale behind this presumption is straightforward—since plaintiff selected the forum, it may not be heard to complain about having to appear there for a deposition, even if its witnesses reside in a foreign country.  See Hyde & Drath v. Baker, 24 F.3d 1162, 1166 (9th Cir. 1994) (even though it would require travel from Hong Kong, the district court did not abuse its discretion by ordering plaintiff’s witnesses to travel from Hong Kong for depositions in San Francisco because plaintiff filed suit in the district and “should therefore expect to have to appear there”); Nippondenso Co., Ltd. v. Denso Distributors, 1987 WL 14111, at *2 (E.D. Pa. Sept. 21, 1987) (ordering plaintiff either to produce its former executive for deposition in Philadelphia, and incur his costs of travel from Japan, or to pay defendant’s expenses to send one of its attorneys to depose the witness at his residence or place of business in Japan, “including the cost of travel and appropriate meals and lodging”).

Depositions of a Defendant Corporation and Its Agents Should Presumptively Take Place in the Corporation’s Principal Place of Business or Where the Witness Works or Resides.  See Salter v. Upjohn Co., 593 F.2d 649, 651 (5th Cir. 1979) (“It is well settled that the deposition of a corporation by its agents and officers should ordinarily be taken at its principal place of business, especially when, as in this case, the corporation is the defendant.”); Farquhar v. Shelden, 116 F.R.D. 70, 72 (E.D. Mich. 1987) (noting that “case law indicates that it will be presumed that the defendant will be examined at his residence or place of business or employment”).  This presumption is recognized even when the principal place of business is a foreign country.  See U.S. ex rel. Barko v. Halliburton Co., 270 F.R.D. 26, 29 (D.D.C. 2010) (ordering that corporate deposition of defendant take place in Amman, Jordan, its principal place of business, and denying plaintiff’s request that its expenses to attend be shifted to defendant).

Courts May Order a Deposition Held in a Different Location “When Justice Requires.”  8A Wright & Miller, Fed. Prac. & Proc. § 2112 (3d ed.).  It is quite common for a defendant corporation, its agents, and managers to be deposed in places other than the principal place of business.  See Sugarhill Records Ltd. v. Motown Rec. Corp., 105 F.R.D. 166, 171 (S.D.N.Y. 1985) (“Corporate defendants are frequently deposed in places other than the location of the principal place of business . . . for the convenience of all parties and in the general interests of judicial economy.”).  To determine whether justice requires setting the deposition for a different location or attaching conditions, courts typically focus on cost, convenience, and efficiency.  See, e.g., SEC v. Aly, 320 F.R.D. 116, 118 (S.D.N.Y. 2017) (“Factors guiding the [c]ourt’s discretion include the cost, convenience, and litigation efficiency of the designated location.”).  Many courts evaluate those general principles through more specific factors, including:  (1) whether all counsel are located in the forum district; (2) the number of corporate representatives the opposing party seeks to depose; (3) the likelihood of significant discovery disputes arising during the deposition, requiring the court’s intervention; (4) whether the persons sought to be deposed often travel to the forum district for business; and (5) the equities with regard to the nature of the claim and the parties’ relationship.  See, e.g., Cadent Ltd. v. 3M Unitek Corp., 232 F.R.D. 625, 629 (C.D. Cal. 2005).  When foreign defendants are involved, courts may also consider other specific factors, including whether the foreign nation’s laws or procedures would impede the deposition and whether the deposition may be a potential affront to the country’s sovereignty.  See In re Vitamin Antitrust Litig., 2001 WL 35814436, at *4 (D.D.C. Sept. 11, 2001) (ordering depositions of defendant foreign corporations and agents to take place in U.S. on condition that “plaintiffs shall reimburse defendants for the reasonable costs of deponents’ travel . . . including lodging and food, to attend the depositions”).

The 2015 Federal Rules Amendments Meant to Ensure the Availability of Cost-Shifting, Not Make It More Frequent.  In 2015, the U.S. Supreme Court approved an amendment to Rule 26 that codified the courts’ inherent authority to shift discovery costs.  Specifically, the amendment states that when entering a protective order to protect a party or person from, among other things, “undue burden or expense,” the court may specify the “time and place or the allocation of expenses, for the disclosure or discovery[.]”  Fed. R. Civ. P. 26(c)(1)(B) (emphasis added).  The advisory committee explained, however, that the amendment “does not mean that cost-shifting should become a common practice[]” and “[t]he assumption remains that the responding party ordinarily bears the costs of responding.”  Fed. R. Civ. P. 26 advisory committee’s notes.  Accordingly, as in the document discovery context, the particular facts of the case have and continue to determine whether the court will exercise its discretion to shift costs to the requesting party in the deposition context.  See Oxbow Carbon & Minerals LLC v. Union P. R.R. Co., 322 F.R.D. 1, 10-11 (D.D.C. 2017) (determining whether document discovery warrants cost-shifting turns on the specific needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake, and the importance of the proposed discovery in resolving those issues); 8A Wright & Miller, Fed. Prac. & Proc. § 2112 (3d ed.) (“the court has a wide discretion in selecting the place of examination and in attaching conditions concerning the payment of expenses,” which depend on the particular facts of the case).

Costs Associated with the Deposition of a Foreign Witness May be Shifted to the Other Party.  For example, in Haviland & Co. v. Montgomery Ward & Co., the court departed from the general rule that plaintiff’s officers are subject to deposition in the district where it filed suit based on the poor health of the witness, a resident of France.  31 F.R.D. 578 (S.D.N.Y. 1962).  However, as a condition for overriding that presumption, the court ordered that plaintiff had the option to produce the deponent in New York or pay the deposing party’s (defendant) expenses to travel to France for the deposition, including “first class air travel for its counsel, a per diem allowance for necessary attendance upon such deposition, and a reasonable counsel fee for attendance thereat.”  Id. at 580.  In Republic of Turkey v. Christie’s, Inc., the Southern District of New York again held it was appropriate to depart from the general rule requiring plaintiff to appear for deposition in the forum where it brought suit.  326 F.R.D. 402 (S.D.N.Y. 2018).  The court’s decision to override the presumption was based on balancing the parties’ relative burdens—the distance plaintiff’s witnesses would have to travel (over 14 hours) and defendant’s need for in-person depositions due to the complexities of interpreters and foreign language documents.  Id. at 406.  Instead of New York or Turkey, the court ordered that plaintiff could either agree to hold the depositions in London, a location neither party sought, and reimburse defendant approximately 25% of the extra costs compared to New York depositions, or plaintiff could pay nothing and produce the deponents in New York.  Id. at 406-07 (noting defendant was not required to cover the full amount of extra costs because both parties bore responsibility for the necessity of the depositions). 

In Cadent Ltd. v. 3M Unitek Corp., an oft-cited case from the Central District of California, an Israeli company filed suit in Los Angeles, but refused to produce its witnesses there after defendant noticed several depositions of plaintiff and its officers (and an employee) who resided in Israel and New Jersey.  232 F.R.D. 625, 628 (C.D. Cal. 2005).  Defendant moved to compel the depositions to be taken in Los Angeles and plaintiff sought a protective order requiring that the depositions be held in Israel, plaintiff’s principal place of business or, alternatively, in New York or Los Angeles, provided defendant paid, respectively, some or all plaintiff’s related expenses.  Id.  Rather than starting with the presumption that a plaintiff should be deposed in the district in which suit was brought, the court seemed to accept plaintiff’s argument that the presumption it should make was the one ordinarily afforded corporate defendants, i.e., that the deposition should occur at the principal place of business.  Id.  The court noted, however, that a “number of factors serve to dissipate the presumption” and “may persuade the court to require the deposition to be conducted in the forum district or some other place.”  Id. at 628-29.  Noting that even corporate defendants are “frequently deposed in places other than the location of the principal place of business, especially in the forum,” the court found that “several common sense factors militate[d] toward holding the depositions in Los Angeles.”  Id. at 630.  In the court’s view, it appeared “more convenient, less time consuming, and less expensive” to conduct the depositions in Los Angeles rather than Israel (which might be “dangerous”) or New York or New Jersey because counsel for all parties resided in and had offices in Los Angeles, at least one deponent periodically traveled to Los Angeles, and plaintiff conducted business in the district.  Id.  Again appearing to work from the presumption that corporate depositions should be conducted at the principal place of business, the court partially shifted plaintiff’s travel costs to defendants, ordering defendants to pay half the costs of airfare and lodging for the deponents’ trip from Israel to Los Angeles because depositions in Los Angeles “may save defendants considerable expense.”  Id.  The court noted that the prevailing party could ultimately recover those costs.  Id. (while the court did not specify, a prevailing party may be entitled to recover certain costs pursuant to Rule 45(d)(1)).

Deposition Costs Will Not Be Shifted When Doing So Would Result in Unfairness.  For example, in Paleteria La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A. de C.V., a court in the District of Columbia ordered that the corporate designee(s) of the party that initiated the dispute must come to the U.S. from Mexico for depositions and denied its request that the associated expenses be shifted to the deposing party.  292 F.R.D. 19, 22 (D.D.C. 2013).  Focusing on the fact that the foreign party had initiated the suit in the U.S., the court rejected the argument the deposing party was more able to bear the associated travel expenses and noted that the plaintiff company had expanded its presence within the U.S., including occasionally sending officers to the U.S., and that it had some control over travel costs through its selection of Rule 30(b)(6) designees.  Id. at 24-25.  In U.S. ex rel. Barko v. Halliburton Co., the court ruled there was no basis to deviate from the general rule that a corporate deposition of defendant occur in the defendant’s principal place of business, even though that was in Amman, Jordan.  270 F.R.D. 26, 29 (D.D.C. 2010).  After defendant moved to dismiss the complaint based on a lack of personal jurisdiction, the court granted plaintiff limited jurisdictional discovery and plaintiff noticed a deposition for Washington, DC.  Id. at 27.  A key factor in this case was defendant’s agreement that the deposition would be conducted “pursuant to the Federal Rules.”  Id. at 29 (this “case does not involve a foreign jurisdiction in which the taking of a deposition pursuant to the Federal Rules was barred by the law of the foreign country”).  In ruling, the court rejected plaintiff’s unsupported assertion that the deposition may require judicial intervention and plaintiff’s equitable argument that conducting a deposition in Jordan “puts a greater burden on the plaintiff than would be on the defendant if the deposition were conducted in the United States.”  Id.  The court further found “no basis” to grant plaintiff’s request to shift plaintiff’s extra costs associated with conducting the deposition in Jordan to defendant.  Id.

Where Costs May Not Fairly Be Imposed on Either Party, Courts Have Discretion to Order a Deposition by Other Means.  For example, in Hernandez v. Hendrix Produce, Inc., a court in the Southern District of Georgia ordered plaintiffs, migrant workers residing in rural Mexico, to pay $1,000 to defendant produce company to cover the expense of web-based video depositions of workers where internet depositions would save workers $15,000 in expenses traveling from Mexico for in-person depositions in Georgia.  297 F.R.D. 538, 540-41 (S.D. Ga. 2014).  In SEC v. Aly, a court in the Southern District of New York departed from the general rule that a defendant should be deposed where he resides after concluding a deposition in either New York,  Pakistan, or another country would not eliminate an undue burden for one of the parties.  320 F.R.D. 116, 118-19 (S.D.N.Y. 2017).  Instead, the court ordered that the deposition be conducted by videoconference, which is “frequently a preferred solution to mitigate the burden of a deposition location inconvenient to one or both sides.”  Id. at 119; see also Robinson v. Tracy, 16 F.R.D. 113, 115 (D. Mo. 1954) (declining plaintiff’s request to shift travel costs to defendant and ordering that deposition be conducted via written questions pursuant to Rule 31).

Conclusion.  In sum, when it appears practical or efficient to do so, courts will follow general presumptions regarding the location of party depositions.  If, however, conducting the deposition at a particular location will result in “undue burden or expense,” all bets are off.  The court may order the deposition to take place in a different location, require one party to pay all or some of the other party’s associated costs, or order the deposition to be conducted by some alternative means.  Indeed, as one court succinctly stated, a court “may be as inventive as the necessities of a particular case require.”  DePetro v. Exxon Inc., 118 F.R.D. 523, 525 (M.D. Ala. 1988).