Interstate and international companies that litigate in California should know about a recent California court decision. Suppose one party to a lawsuit wants to take the deposition of the other party’s employee, who lives outside the state. May the court force the company to bring the witness to California? No, held the court in Toyota Motor Corporation v. Superior Court (Stewart), ___ Cal.App.4th ___, 2011 WL 3131194 (2011). Stewart holds that a court cannot compel a party to bring a non-resident employee to California for deposition. Instead, the lawyer seeking the deposition may take the deposition in the employee’s state or country of residence. By requiring the lawyers — not the employee — to do the traveling, Stewart reduces disruption and minimizes the employee’s time lost from work. Bingham McCutchen LLP represented the successful petitioner.
Facts
In Stewart, plaintiffs sought the depositions of five Toyota employees who lived and worked in Japan. The company offered to produce all five employees in Japan. It also voluntarily produced other, person-most-knowledgeable witnesses for deposition in California. The trial court, however, ordered the company to produce the Japanese employees in California.
The company petitioned the Court of Appeal to overturn the order, relying on California Code of Civil Procedure section 1989. That section states that “A witness…is not obliged to attend as a witness…unless the witness is a resident within the state at the time of service.” The Code defines “witness” to include a witness at deposition. Plaintiffs argued that section 1989 applied only to trial and that a different statute (Code of Civil Procedure section 2025.260) let the court set deposition far from the employees’ place of residence. Amici curiae filed briefs on both sides.
Holding
The Court of Appeal held that section 1989’s “residency limitation applies not only to trials, but also to discovery. As a result, the trial court has no authority to compel Japanese residents to come to Los Angeles to attend depositions.”
In so holding, the Court extensively reviewed the statutes’ legislative history. It concluded that the legislature that enacted section 1989 deliberately defined “witness” to cover depositions. And while a predecessor of section 2025.260 had included the words “[n]otwithstanding Section 1989,” the legislature deliberately deleted those words from the current statute. Hence, section 1989 governed and was no longer trumped by section 2025.260. The Court held that when the trial court ordered the company to produce Japanese nationals for deposition in California, it impermissibly “obliged” non-residents to appear in California in violation of section 1989. Consequently, the Court held, the order was invalid.
Disagreement With Precedent
The Court of Appeal in Stewart expressly disagreed with Glass v. Superior Court, 204 Cal.App.3d 1048 (1988). Glass had ruled that what is now section 2025.260 trumped section 1989. As a result, Glass held, non-resident employees can be required to come to California for deposition. Rejecting this conclusion, Stewart held that Glass unjustifiably denied effect to the legislature’s decision to remove the key words “[n]otwithstanding Section 1989.”
Effect
Under Stewart, a company can insist that a non-resident employee be deposed in the state or country where the employee lives. The ruling applies to any out-of-state employee, whether in another U.S. state or a foreign country. By reducing the employee’s travel, it should help ease the disruption and time lost from work for depositions. Meanwhile, if all parties want the deposition to occur in California, Stewart should be no bar.
But there are limits to the Stewart rule. Stewart does not decide whether its rule applies to person-most-knowledgeable depositions of the company itself. And because Court of Appeal decisions conflict, trial courts in California may elect to follow either Stewart or Glass (we believe Stewart to be better reasoned).
Plaintiffs have stated that they may seek California Supreme Court review. If they do, there is no way to know whether the Court will take the case. For now, companies faced with depositions of out-of-state or out-of-country employees may want to argue that the deposition must occur in the state or country where the employee lives, not California.
For more information about the subject matter of this alert, please contact the lawyers listed below:
Geoffrey Holtz, Partner
g.holtz@bingham.com, 415.393.2390
David Salmons, Chair, Appellate Group
david.salmons@bingham.com, 202.373.6283
Debra Fischer, Co-chair, Litigation Area
debra.fischer@bingham.com, 213.680.6418
Donn Pickett, Co-chair, Litigation Area
donn.pickett@bingham.com, 415.393.2082
This article was originally published by Bingham McCutchen LLP.