Elasticsearch, Inc. v. Floragunn GmBH

Background

Elasticsearch, Inc. and Elasticsearch B.V., together called “Elastic,” disputed whether two foreign witnesses associated with floragunn GmbH—Mikael Gustavsson and Sergii Bondarenko—could be required to testify based on a deposition notice under Federal Rule of Civil Procedure 30(b)(1). Floragunn described the witnesses as freelance programmers and argued that it did not control them. Elastic asked the court to order floragunn to make them available for depositions and to impose sanctions if they did not appear.

Both witnesses wrote two of the 19 source-code segments that Elastic accused of infringing its copyrights. Gustavsson had worked continuously for floragunn for three years at 24 hours per week, and Bondarenko had worked for more than two years at 40 hours per week. Both had renewed their freelance contracts with floragunn the previous year.

Managing-agent analysis

Under Rule 30(b)(1), a deposition notice directed at a corporation can require the corporation to produce an officer, director, or managing agent. A nonparty witness generally must instead be subpoenaed or obtained through procedures applicable to witnesses in another country. Courts assess managing-agent status using factors that include the person’s authority and discretion in corporate matters, whether the person can be relied on to testify at the employer’s request, the person’s relative position within the organization, and the person’s responsibilities concerning the litigation. When the question is whether the deposition should occur, doubts are resolved in favor of allowing discovery.

The court found that the evidence supported treating Gustavsson and Bondarenko as managing agents for this deposition. Jochen Kressin, floragunn’s managing director and chief executive officer, testified that the witnesses created portions of the accused code and committed it to a public repository without review by anyone at floragunn. He also testified that floragunn gave them no specific instructions about how to write the code and that they used their own judgment to implement it. The court concluded that they had practical authority to publish the four code segments at issue.

The court rejected floragunn’s argument that the witnesses’ apparent unwillingness to agree to depositions showed that they did not identify with floragunn’s interests. Floragunn’s declarations did not show that the witnesses had been told their refusal could lead to sanctions against floragunn, and it was unclear whether they would still refuse to appear if floragunn were required to produce them. The court also noted that their contracts required cooperation in investigations into violations of floragunn’s Code of Conduct, which prohibited prejudicing others’ intellectual-property rights.

The court further found that the witnesses’ responsibilities were highly relevant to the litigation because each had created two of the accused code segments. It explained that a person may be a managing agent for testimony about a particular subject even if that person is not a managing agent of the corporation generally. The court stated that whether the witnesses’ testimony could ultimately bind floragunn on a particular issue would be decided at trial.

Disposition

The court granted Elastic’s request to compel the depositions and found Gustavsson and Bondarenko to be floragunn’s managing agents for purposes of deposition under Rule 30(b)(1). Floragunn was ordered to produce them for depositions by remote video conference by May 14, 2021.

The court denied Elastic’s request for non-appearance sanctions without prejudice as premature. If either witness failed to appear, Elastic could renew its sanctions request after meeting and conferring with floragunn.