Rekor Systems, Inc. v. Loughlin

Background

Defendants Suzanne Loughlin, James Satterfield, and Harry Rhulen, together with counterclaim-plaintiff CrisisRisk, moved to compel Morris De Feo to appear for a deposition. De Feo had represented Rekor Systems, Inc. in connection with the transaction at the center of the case while employed by Crowell & Moring, LLP, which was Rekor’s counsel.

Defendants said De Feo had relevant information about the due-diligence process, including information exchanged during that investigation, and about any waiver of requirements in the purchase agreement. They also identified his involvement in negotiating the transaction and his knowledge of certain post-acquisition events at Rekor as relevant subjects for questioning.

Rekor opposed the motion. It argued that depositions of lawyers are disfavored, that defendants could obtain the information from other sources, that the deposition could implicate attorney-client privilege, and that defendants had already taken depositions on the relevant subjects. De Feo separately argued that the deposition would burden him because of his active legal practice and management responsibilities.

Court’s analysis

The court explained that federal discovery rules generally allow broad discovery. Under the Second Circuit’s flexible approach to depositions of lawyers, the court considers all relevant circumstances, including the need for the deposition, the lawyer’s role in the matter and litigation, the risk of attorney-client privilege or work-product issues, and the extent of discovery already completed.

The court distinguished cases involving a party’s current trial counsel or a lawyer affiliated with that party’s litigation counsel. Those cases reflected concerns that questioning litigation counsel could reveal trial strategy, disrupt the attorney-client relationship, and interfere with the litigation. The court found those concerns did not apply to De Feo because he was not affiliated with a lawyer representing a party in the current litigation and was being asked about historical events at the center of the case.

The court found De Feo’s testimony highly relevant and not unnecessarily cumulative. It noted that he was one of the few potential witnesses not then affiliated with a party and could provide presumably disinterested testimony. The court also found no particular privilege risk for most of the proposed questioning because the focus would be on what De Feo observed and said to the opposing party, and what that party said to him, rather than on what he said to his client. Defendants represented that any privilege concerning one conversation with Rekor’s board chair had been waived. The court also concluded that work-product concerns should not arise because De Feo was not a litigator and litigation was not anticipated when the transaction occurred.

Disposition

The court granted the motion to compel. It directed De Feo to appear for his deposition before March 21, 2022. The court also approved the parties’ request to permit Michael Monahan’s deposition to proceed on March 10, 2022, after the deposition deadline. The Clerk was directed to close Docket Nos. 197 and 206.