General Electric Company v. APR Energy PLC

Background

APR Energy PLC moved under Federal Rule of Civil Procedure 37 to compel General Electric Company to give APR permission to search the personal-property security registries of Australia, Canada, and New Zealand for registrations of security interests by or on behalf of GE’s energy-rental business before October 28, 2013. APR also sought the information necessary to conduct those searches.

APR said the discovery was relevant to its claim that GE breached Section 5.01 of the parties’ business-transfer agreement by failing to conduct the rental business in the ordinary course through closing. APR asserted that registering security interests was part of GE’s ordinary business practice and that GE failed to register a security interest in the Forge Turbines on Australia’s personal-property security registry.

The Parties’ Positions

APR relied in part on testimony from GE’s designated witness under Rule 30(b)(6), which permits an organization to designate a witness to testify about information known or reasonably available to the organization. APR argued that the witness’s testimony about GE having no practice or policy for registering security interests was based on limited knowledge and did not address whether local counsel or business representatives had made registrations in Australia, Canada, or New Zealand.

GE argued that APR’s request was outside the scope of the Rule 30(b)(6) deposition topic, which concerned GE’s practices and policies regarding the perfection of security interests over business assets leased to third parties. GE also argued that the request was irrelevant and burdensome. GE stated that its witness had consulted the relevant attorneys and that GE had no practice or policy on the subject. GE further argued that the search would be futile because no entity named “GE Energy Rental Business” existed and, according to GE’s Australian registry expert, the Australian registry could not be searched by secured-party name.

Court’s Analysis

The court applied Federal Rule of Civil Procedure 26(b)(1), which permits discovery of nonprivileged information relevant to a claim or defense and proportional to the needs of the case. It also noted that motions to compel under Rule 37 are entrusted to the court’s discretion.

The court reviewed the deposition notice and transcripts. It found that GE’s witness repeatedly testified that GE had no practice or policy regarding perfection of security interests over assets owned by the business and leased to third parties. The court also found that questions about whether local counsel could have perfected security interests in unidentified countries, and whether registry searches could determine that fact, were outside the deposition topic.

Because the deposition topic did not seek information about GE’s compliance with foreign laws, the court concluded that APR’s questions and the witness’s speculation about foreign registrations were irrelevant and beyond the topic’s scope. The court further concluded that APR’s requested searches were entirely irrelevant, specifically including searches of the Canadian and New Zealand registries because they had no bearing on the claims or defenses in the action.

Disposition

The court denied APR’s letter-motion, Docket Entry No. 113, to compel GE to provide the requested permission and search information.