Sacerdote v. Cammack LaRhette Advisors, LLC

Background

Dr. Alan Sacerdote brought an underlying action alleging that the defendants breached fiduciary duties under the Employee Retirement Income Security Act of 1974, a federal employee-benefits law. Cammack was added as a defendant in that action. The present motion concerned a subpoenaed deposition of Jeffrey Levy, a former Cammack employee.

During the deposition, Sacerdote’s lawyer asked Levy who was in charge of Cammack. Levy’s lawyer objected, said the question concerned topics involved in a pending protective-order motion, and ended the deposition after about 55 minutes. Levy and Cammack then sought a protective order terminating or limiting the deposition.

While this motion was pending, the court entered an order in the underlying action barring questions about eight topics concerning Cammack’s finances and assets because Cammack’s ability to pay a judgment was not relevant to a claim. The court stated that any part of the present motion concerning those eight topics was moot. The remaining issue was whether Levy’s deposition should be terminated on other grounds.

Legal standard

Federal Rule of Civil Procedure 30 allows a court to terminate or limit a deposition when it is conducted in bad faith or in a way that unreasonably annoys, embarrasses, or oppresses the deponent or a party. Federal Rule of Civil Procedure 45 permits protection of a non-party from an undue burden, and Rule 26 allows protective orders for good cause to prevent annoyance, embarrassment, oppression, undue burden, or undue expense. The party seeking protection bears the burden of showing that the order is justified.

The court also relied on Rule 30(c)(2), which generally requires objections to be stated on the record while the examination continues. The testimony is taken subject to the objection. The rule recognizes limited circumstances for instructing a witness not to answer, including preserving a privilege, enforcing a court-ordered limitation, or seeking to end a deposition because it is being conducted in bad faith or in an oppressive manner.

Court’s analysis

The court found that the deposition had been improperly cut short. Levy’s lawyer could have objected to the question and allowed the examination to proceed rather than ending the deposition after the question about who was in charge of Cammack. The question did not concern a personal matter and was not asked in bad faith or to annoy, embarrass, or oppress Levy.

The court explained that irrelevance alone does not justify stopping a deposition. Even if the question was irrelevant, the objection should have been noted and the deposition should have continued. The court further found that Levy had not shown an undue burden from reconvening the deposition. The court considered it significant that the need to reconvene resulted from the improper early termination and that Levy’s lawyer had repeatedly offered to continue the deposition later.

The court also rejected the argument that Levy’s testimony would be cumulative of testimony from another Cammack employee. Sacerdote asserted that Levy had unique knowledge of his interactions with and advice given to the defendants, including involvement in negotiating Cammack’s agreements with New York University. The court noted that Levy and Cammack could have sought to quash the deposition earlier if they believed his testimony was duplicative.

Finally, the court found that Levy’s episodic back pain from surgery did not prevent the deposition from proceeding. The court stated that periodic breaks or other accommodations could address his concern.

Disposition

Judge Valerie Figueredo denied Levy’s and Cammack’s motion for a protective order terminating Levy’s deposition. The order did not add a with-prejudice or without-prejudice qualifier. The Clerk was directed to terminate the motion from the docket.