Compelling the Deposition of a Foreign Managing Agent

4 Feb 2013

In Peerless Industries, Inc. v. Crimson AV, LLC, (2013 WL 85378 (N.D.Ill.), an Illinois District court heard, and rejected, common defense excuses to evade a deposition and electronic data discovery obligations. Plaintiff brought a patent infringement lawsuit against defendant Crimson, which company is closely aligned with a non-defendant Chinese corporation, Sycamore. In a prior ruling in the case, the court determined that Crimson was in control of Sycamore’s relevant documents.

In response to plaintiff’s motion to compel the deposition of Sycamore president Tony Jin, who lives and works in China, the defendant employed a common tactic. Crimson attempted to downplay the involvement of Jin in the defendant corporation and claimed he was not a “managing agent.” The court disagreed, looking to several factors to determine whether a person was a managing agent to compel his deposition under Federal Rule 30(b)(1):

  • Whether the individual has the power to exercise judgment and discretion in corporate matters;
  • Whether the individual is able to testify in response to the requested discovery;
  • Whether there are other employees with more authority or control over the issues;
  • What the individual’s general responsibilities are with respect to the litigation; and
  • Whether the individual can be expected to identify with the interests of the corporation.

The court found that Jin satisfied nearly every one of the factors, and noted the defendant’s own witness testified  that Crimson and Sycamore were essentially one in the same. The court then considered where Jin’s deposition would take place. Typically, depositions should take place at the witness’s place of business.  Sycamore is located in China while Crimson is located in Illinois.  However, the court noted that since Crimson and Sycamore were so entwined, that Jin should be compelled to travel to the U.S., as that would be considerably less expensive than for both parties’ counsel to travel to China.

This was only the first part in the court’s ruling. Plaintiff alleged defendant’s electronic discovery was inadequate and filed a Motion for Sanctions. The defendant tried to place the blame for the poor defense production on Sycamore and an outside vendor. Will the court believe this defense tactic to hide behind its sister corporation and a third party vendor to evade its discovery obligations? Don’t bet on it, and our discussion of Peerless continues on Wednesday.

ILS – Plaintiff eDiscovery Experts