Rekor Systems, Inc. v. Loughlin
- Lewis Liman
- 1:19-cv-07767
- U.S. District Court · Southern District of New York
- 5
In Rekor Systems v. Loughlin, Judge Liman granted Rekor’s motion to compel Lynn Satterfield’s deposition, limiting it to two hours per day.
Rekor may take Lynn Satterfield’s deposition. The defendants’ request to prevent the deposition was rejected, and the deposition must be limited to no more than two hours per day until complete.
What happened
In Rekor Systems, Inc. v. Loughlin, Rekor asked the court to require Lynn Satterfield to appear for a deposition. Satterfield, who worked as Firestorm’s bookkeeper from 2012 to March 2019, is the wife of defendant James Satterfield. Rekor said her testimony could be relevant to its claims involving alleged financial fraud and defendants’ defenses.
The defendants opposed the deposition, arguing that Satterfield has dementia and would have difficulty preparing, remembering facts, and answering questions reliably. They asked for a remote deposition limited to one hour. The court treated that opposition as a request for a protective order, which can limit discovery to prevent serious harm. The court found that the neurologist’s declaration showed possible embarrassment, agitation, and emotional distress, but did not show the specific and serious harm required to block the deposition. The court also found that Satterfield likely had relevant information.
Judge Lewis J. Liman granted Rekor’s motion to compel. He ordered Satterfield to appear for a deposition limited to no more than two hours per day until it is complete, and directed the parties to choose dates that meet the case-management deadline.
The detailed version
- Rekor Systems, Inc. v. Loughlin · No. 1:19-cv-07767
- Lewis Liman
- Feb. 17, 2022
Background
Rekor Systems, Inc. moved to compel Lynn Satterfield to appear for a deposition. Satterfield is the wife of defendant James Satterfield and worked for Firestorm Solutions LLC and Firestorm Franchising LLC from 2012 through March 2019. She stated in a sworn declaration that she was Firestorm’s bookkeeper and was responsible for the books of both companies.
The operative complaint alleges that James Satterfield, Suzanne Loughlin, and Harry Rhulen fraudulently induced Rekor to purchase the two Firestorm companies in January 2017. It also alleges that the three individual defendants destroyed Rekor’s emails after resigning from Rekor and Firestorm in December 2018, after the company suffered financial losses. The defendants have asserted, among other defenses, that some defendants did not know about the alleged fraud and that information disclosed to Rekor defeated its claim of reasonable reliance.
Arguments and legal standard
The defendants opposed the deposition and argued that Satterfield is suffering from dementia resulting from Alzheimer’s disease. They contended that she would have difficulty preparing for the deposition and remembering enough facts to testify, and that any testimony would be unreliable. They requested that the deposition occur remotely and last no more than one hour.
The court treated the defendants’ opposition as a motion for a protective order under Federal Rule of Civil Procedure 26(c). A protective order may protect a person from annoyance, embarrassment, oppression, or undue burden or expense. The party seeking the order must show good cause, including a clearly defined, specific, and serious injury that would occur without the order. The court explained that completely prohibiting an oral deposition is unusual, but courts may impose accommodations when potential harm does not justify blocking the deposition entirely.
Court’s analysis
The court held that the defendants had not shown the required good cause. Their neurologist’s declaration stated that Satterfield would likely feel embarrassed, become agitated, and suffer emotional distress because of her perceived inability to understand and answer questions. But the declaration did not describe the progress of the disease, the extent of Satterfield’s impairment, or any harm beyond embarrassment and emotional distress. The court found those allegations insufficient to completely prohibit the deposition.
The court also found that Rekor made a specific showing that Satterfield’s testimony was relevant. Because she handled the books of two companies involved in allegations of concealed financial fraud, she was likely to have evidence directly relevant to Rekor’s claims and the defendants’ defenses. The court rejected the argument that other witnesses had duplicative knowledge, concluding that Rekor’s ability to prosecute its case and test the defendants’ defenses outweighed the defendants’ generalized assertions of harm.
Disposition
The court granted Rekor’s motion to compel. It ordered Lynn Satterfield to appear for a deposition, with the accommodation that the deposition be limited to no more than two hours per day until completed. The parties were directed to meet and confer about dates so the deposition would be completed by the deadline in the operative case-management plan. The Clerk of Court was directed to close Docket Nos. 189, 190, and 193.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.