Eleventh Circuit Court of Appeals
Consumer Financial Protection Bureau v. Brown
Eleventh Circuit Court of Appeals
6/12/23, Judge Branch
Topics: Corporate Representative Deposition; Sanctions
This is not a personal injury case, but it deals with an issue that comes up in most personal injury cases: the deposition of a defendant’s corporate representative.
Judge Branch began her opinion with the admonishment that the Consumer Financial Protection Bureau is not exempt from the rules of discovery. The judge stated that the CFPB “tried to bring a wide-ranging civil lawsuit against 19 defendants without ever being deposed. When the district court ordered the CFPB to sit for Rule 30(b)(6) depositions, the CFPB doubled down by engaging in dramatic abuse of the discovery process” that incurred sanctions, and the Eleventh Circuit affirmed the sanctions.
During discovery, the defendants tried to use a 30(b)(6) depo (which does apply to government agencies) to “uncover the factual bases for the CFPB’s claims against them.” The CFPB fought against the depo by arguing that 1) it had already provided the information in interrogatory responses; 2) some of the topics involved law enforcement and deliberative process privilege; and 3) the deposition was an improper attempt to uncover the mental impressions and analyses of counsel.
The district judge overruled the objections, holding that factual matters are subject to inquiry even if those matters have been disclosed in interrogatory responses.
CFPB then moved for a protective order relying on the already-rejected arguments. The district court granted the motion in part, clarifying that facts including exculpatory facts could be asked about, but that CFPB’s trial strategy was off limits.
During the first 30(b)(6) depo, CFPB’s representative lodged 70 work product objections to questions about facts. It even maintained that the identity of witnesses were protected by work product. Most of the objections were accompanied by instructions from the attorney to the corporate rep to refrain from answering the questions.
Also, CFPB equipped its corporate rep with lawyer-prepared scripts that were hundreds of pages in length. The lawyer called them “memory aids.” In response to a single question, the corporate rep read from his “memory aid” for 40 minutes, took a break, read for 18 minutes more, and then the parties stipulated that he had planned to read for 93 more pages. The court called this a “filibuster- style” tactic, and it occurred several times during the deposition. And when the deposing attorney objected, CFPB’s lawyer insisted that the witnesses needed to finish the answer and that “maybe it will be [responsive.]”
Third, CFPB took the position that though it had to divulge exculpatory facts, it had not identified any exculpatory facts.
Despite a hearing with the judge, CFPB continued the same sort of obstructionist conduct during the next four depositions. (The multiple depos were due to the number of defendants).
Defendants filed a motion for sanctions under Rule 37 for contumacious conduct. Rule 37(b) pertains to failure to obey a discovery order. Rule 37(d) pertains to failure of a corporate rep to appear for deposition. Potential sanctions under the rules permitted striking pleadings in whole or in part. The district court found the defiance of the discovery order to be “willful,” and the judge also found that despite physically appearing, the rep’s refusal to answer questions beyond reading memory aids and refusal to address exculpatory evidence was essentially a constructive failure to appear.
Because CFPB’s conduct was egregious, and the Court was not optimistic that further depos would be fruitful, the judge struck all claims against the complaining defendants and dismissed them from the case.
CFPB appealed. The Eleventh Circuit noted that the standard was abuse of discretion, and that discretion is “wide.” If the district court applies an incorrect legal standard, fails to follow the appropriate procedures when making the relevant determination, or makes findings of fact that are clearly erroneous, it abuses its discretion. A factual finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.
The court did not reach the question about whether sanctions for non-appearance can be imposed under the constructive non-appearance approach of the district court. The case was resolved solely on the 37(b) failure to obey a discovery order. There was a discovery order, a clarifying order in response to the motion for protective order, and a phone hearing after the first deposition but before the other four depositions. The district judge’s order was clear. Sanctions were appropriate.
In regard to whether the most severe sanction—dismissal of the case with respect to the five affected defendants—dismissal is okay if the party’s conduct amounts to a flagrant disregard and willful disobedience of the discovery order. A district court must always assess whether lesser sanctions would suffice, but the court held that the finding need not be express when the rest of its analysis makes that finding obvious. Here, the court found that in light of the pattern of misconduct, the court was not optimistic that reopening the depositions would be fruitful. That satisfies the requirement that the possibility of lesser sanctions be addressed.