cotchett, pitre & mccarthy, llp joseph w. … to compel... · deposition, production of an...

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COTCHETT, PITRE & McCARTHY, LLPJOSEPH W. COTCHETT (SBN 36324)[email protected] C. MOLUMPHY (SBN 168009)[email protected] G. THIGPEN (SBN 232642)[email protected] K. EDLING (SBN 250940)[email protected] Francisco Airport Office Center840 Malcolm RoadBurlingame, CA 94010Telephone: (650) 697-6000Fax:(650) 697-0577

MILBERG LLPJEFF S. WESTERMAN (SBN 94559)[email protected] E. AZAR (SBN 218319)[email protected] M. FURUKAWA (SBN 234121)[email protected] California Plaza300 S. Grand Avenue, Suite 3900Los Angeles, CA 90071Tel: (213) 617-1200Fax: (213) 617-1975

Co-Lead Counsel for Plaintiffs and the Class

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

SOUTHERN DIVISION- SANTA ANA

IN RE: MEDICAL CAPITALSECURITIES LITIGATION

This document relates to:

Case No.: SA CV 09-1048 DOC(RNBx)

))))))))))))))))

LEAD CASE NO. SA ML 10-2145 DOC(RNBx)

MOTION TO COMPELCONTINUATION OF 30(b)(6)DEPOSITION, PRODUCTION OFAN ADEQUATE WITNESS, ANDREQUEST FOR SANCTIONS

DATE: April 25, 2012TIME: 10:00 AMJUDGE: Special Master William

McDonald

MT. TO COMPEL & REQUEST FOR SANCTIONS, LEAD CASE NO. SA ML 10-2145 DOC (RNBx)

Case 8:10-ml-02145-DOC -RNB Document 310 Filed 03/28/12 of 22 Page ID #:8275

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TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

PLEASE TAKE NOTICE that, on April 25, 2012, telephonically at 10:00

a.m., or as soon thereafter as may be heard before the Honorable William F.

McDonald (Ret.), Special Master for this Action, at the Judicial Arbitration and

Mediation Services (JAMS) office at 500 N. State College Blvd., 14th Floor,

Orange, CA 92868, or at such other location as the Special Master or the Court

shall specify, Plaintiffs Steven Masonek, et al. (“Plaintiffs”) will move for an

order compelling Defendant Wells Fargo Bank N.A. (“Wells Fargo” or

“Defendant”) to offer Ms. Mary Sohlberg for the continuation of her deposition

and to produce an adequate witness for subsequent Rule 30(b)(6) depositions.

Further, Plaintiffs will move for an order to require Defendant to bear appropriate

costs associated with such Rule 30(b)(6) depositions.

Plaintiffs make this Motion pursuant to the Court’s September 2, 2010

Order Setting Procedure for Consideration of Discovery Disputes, which requires

the parties to follow L. Civ. Rules 6-1, 7-9, and 7-10. This motion is also made

following the conference of counsel, which took place on February 22, 2012.

The Motion is based on this Notice of Motion, the Memorandum of Points

and Authorities, the Declaration of Jordanna G. Thigpen and its accompanying

exhibits, the documents on file in this action, and documents subject to judicial

notice and such written or oral argument as may be presented.

DATED: March 28, 2012 COTCHETT, PITRE & McCARTHY, LLP

/s/

JORDANNA G. THIGPEN

MT. TO COMPEL & REQUEST FOR SANCTIONS, LEAD CASE NO. SA ML 10-2145 DOC (RNBx) 1


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TABLE OF CONTENTS

Page

I. INTRODUCTION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

II. STATEMENT OF FACTS AND PROCEDURAL HISTORY. . . . . . . . . . . 3

A. Summary of Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

B. The 30(b)(6) Deposition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

C. The Parties’ Meet And Confer Efforts. . . . . . . . . . . . . . . . . . . . . . . . . 4

III. LEGAL ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

A. Wells Fargo Improperly And Prematurely Terminated The Rule30(b)(6) Deposition of Sohlberg. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

B. Wells Fargo Did Not Produce An Adequate 30(b)(6) Witness. . . . . . 7

i. Sohlberg Conceded She Had No KnowledgeRegarding Several Deposition Topics. . . . . . . . . . . . . . . . . . 7

ii. Defendant Should Produce The Wells FargoEmployees Sohlberg Identified As Having TheRequisite Knowledge For The Rule 30(b)(6)Deposition.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

C. Counsel For Wells Fargo Lodged An Extraordinary Amount OfImproper Objections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

i. Counsel for Wells Fargo Improperly InstructedDeponent Not To Answer.. . . . . . . . . . . . . . . . . . . . . . . . . . 10

ii. Counsel For Wells Fargo Repeatedly Made ImproperSpeaking Objections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

D. Wells Fargo Should Be Required To Bear Appropriate CostsAssociated With All Subsequent 30(b)(6) Depositions. . . . . . . . . . . 14

IV. CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

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TABLE OF AUTHORITIES

Case Page(s)

Adams v. Allianceone2011 U.S. Dist. LEXIS 56357 (S.D. Cal. May 25, 2011).. . . . . . . . . . . . . . 14

Alexander v. FBI186 F.R.D. 137(D.D.C. 1998).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 8

Amezaga v. Amezaga195 B.R. 221 (D.P.R. 1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Apple Inc. v. Samsung Elecs. Co.2012 U.S. Dist. LEXIS 9921 (N.D. Cal. Jan. 27, 2012). . . . . . . . . . . . . . 7, 15

Baykeeper v. Int’l Metals Ekco2009 U.S. Dist. LEXIS 69183 (C.D. Cal. Feb. 27, 2009). . . . . . . . . . . . . . . 5

Bd. of Trs. of the Leland Stanford Junior Univ. v. Tyco Int’l Ltd.253 F.R.D. 524 (C.D. Cal. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 7, 10

Biovail Labs., Inc. v. Anchen Pharm., Inc.233 F.R.D. 648 (C.D. Cal. 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Buycks-Roberson v. Citibank Fed. Sav. Bank162 F.R.D. 338 (N.D. Ill. 1995). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Detoy v. City and County of San Francisco196 F.R.D. 362 (N.D. Cal. 2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 12

EEOC v. Boeing Co.2007 U.S. Dist LEXIS 29107 (D. Ariz. Apr. 17, 2007). . . . . . . . . . . . . . . . . 9

FCC v. Mizuho Medy Co.257 F.R.D. 679 (S.D. Cal. 2009).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Great Am. Ins. Co. of N.Y. v. Vegas Constr. Co.251 F.R.D. 534 (D. Nev. 2008).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

In re Toys “R” Us-Delaware2010 U.S. Dist. LEXIS 130884 (C.D. Cal. July 29, 2010).. . . . . . . . . . . 5, 12

Jadwin v. Abraham2008 U.S. Dist. LEXIS 116780 (E.D. Cal. Aug. 22, 2008). . . . . . . . . . . . . 12

JSR Micro, Inc. v. QBE Ins. Corp.` 2010 U.S. Dist. LEXIS 40185 (N.D. Cal. Apr. 5, 2010). . . . . . . . . . . . . . . 12

Paige v. Consumer Programs248 F.R.D. 272 (C.D. Cal. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Paparelli v. Prudential Ins. Co. of Am.108 F.R.D. 727 (D.C. Mass. 1985). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

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Pioneer Drive, LLC v. Nissan Diesel Am., Inc.262 F.R.D. 552 (D. Mont. 2009).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Resolution Trust Corp. v. S. Union Co.985 F.2d 196 (5th Cir. Tex. 1993). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Roberson v. Bair242 F.R.D. 130 (D.D.C. 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Saunders v. Knight2007 U.S. Dist. LEXIS 3387 (E.D. Cal. Jan. 4, 2007). . . . . . . . . . . . . . . . . . 5

Shapiro v. Paul Revere Life Ins. Co.1997 U.S. Dist. LEXIS 16286 (N.D. Cal. 1997). . . . . . . . . . . . . . . . . . . . . 10

Tacori Enters. v. Beverly Jewellery Co.253 F.R.D. 577 (C.D. Cal. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Statutes & Rules

Fed. R. Civ. P. 30(b)(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 3, 6-9, 14, 15

Fed. R. Civ. P. 30(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Fed. R. Civ. P. 30(d)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 15

Fed. R. Civ. P. 30(d)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Fed. R. Civ. P. 37(a)(4)(A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Fed. R. Civ. P. 37(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

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I. INTRODUCTION

After exhausting all attempts to obtain a suitable outcome with Defendant

Wells Fargo (“Defendant” or “Wells Fargo”), Plaintiffs, on behalf of the Certified

Class, move to compel Wells Fargo to (1) offer Ms. Mary Sohlberg (herein

“Sohlberg”) for the continuation of her Fed. R. Civ. P. 30(b)(6) deposition

following Defendant’s unilateral early termination; (2) to compel Wells Fargo to

produce sufficient Rule 30(b)(6) witnesses, due to Sohlberg’s admitted lack of

knowledge on numerous noticed topics (many of the appropriate witnesses were

identified by Sohlberg); and (3) to require Defendant to bear appropriate costs

associated with the additional depositions.

Following the Court’s order to compel Wells Fargo to produce one or more

30(b)(6) witnesses, Plaintiffs issued a new Rule 30(b)(6) Deposition Notice in

November 2011, identifying 25 topics. See Declaration of Jordanna G. Thigpen

(“Thigpen Decl.”), Exh. 1. The parties subsequently met and conferred regarding

certain topics and Plaintiffs agreed not to question the deponent(s) regarding

Topics 24 and 25. Defendant’s deposition was set for February 8, 2012.

Defendant produced Sohlberg as the sole witness for the remaining 23 topics.

However, Sohlberg’s testimony demonstrated that she lacks the requisite

knowledge to be an adequate corporate representative for all 23 deposition topics,

as required by Rule 30(b)(6). Further, Defendant’s counsel obstructed the

deposition by instructing the deponent not to answer on improper grounds, and

unilaterally terminated the deposition with time under the federal rules remaining.

Plaintiffs met and conferred with Defendant, attempting to resolve this

discovery dispute without the Court’s intervention. However, Plaintiffs simply

cannot accept Defendant’s conditions in offering Sohlberg again, as they are

unreasonable, unjustified, and a violation of Federal Rules. Plaintiffs respectfully

request the Court to order Wells Fargo to produce Sohlberg for the remaining time

permitted under Rule 30(d)(1) and to produce suitable 30(b)(6) witnesses for



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subsequent deposition on the noticed topics for which she conceded lack of

knowledge.

II. STATEMENT OF FACTS AND PROCEDURAL HISTORY

A. Summary of Action

Plaintiffs bring this action for breach of contract against Defendant Wells

Fargo and Bank of New York Mellon (collectively, “Defendants”) on behalf of a

class of investors who purchased notes offered by five special purpose

corporations (“SPCs”) – MP II, MP III, MP IV, MP V, and MP VI – owned by

Medical Capital Holdings, Inc. (collectively “Medical Capital”). Plaintiffs allege

that Defendants improperly disbursed millions of dollars to Medical Capital in

breach of their contractual duties to investors.

Medical Capital solicited approximately $2 billion from over 20,000

investors. While Medical Capital stated that such funds would be used to

purchase discounted medical receivables and health care related non-receivable

assets, in reality, Medical Capital did no such thing.

As trustees, Defendants were required to oversee the funding of the SPCs

and to ensure investor funds were being properly used by Medical Capital.

Instead, Defendants ignored the contract terms in the Note Issuance and Security

Agreements (“NISAs”), and freely distributed hundreds of millions of dollars to

Medical Capital for “administrative” duties in a manner not permitted. As a result

of Defendants’ breach, approximately $1 billion in Notes held by thousands of

investors are now in default. See generally In re Medical Capital Sec. Litig., Case

No. SA-10-ML-20145 DOC (RNBx), Dkt. 147, Plaintiffs’ Third Amended

Consolidated Complaint (“TAC”).

B. The 30(b)(6) Deposition

Plaintiffs originally served Wells Fargo with a Rule 30(b)(6) Deposition

Notice on November 29, 2010, setting the deposition for December 20, 2010. See

Thigpen Decl., Exh. 2. Defendant objected to the Deposition Notice and refused



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to produce any witness. See Thigpen Decl., Exh. 3. Plaintiffs moved to compel

on July 22, 2011. See In re Medical Capital Sec. Litig., Case No. SA-10-ML-

02145 DOC (RNBx), Dkt. 235. On September 29, 2011, the Court granted

Plaintiffs’ Motion to Compel after consideration of the Special Master’s Report

and Recommendations. See Id., Dkt. 276.

Pursuant to the Order, a new Rule 30(b)(6) Deposition Notice was issued on

November 28, 2011. See Thigpen Decl., Exh. 1. On December 13, 2011,

Plaintiffs met and conferred with Defendant regarding certain topics and

scheduled the deposition for February 8, 2012.

On February 8, 2012, Defendant produced Sohlberg, representing her to be

knowledgeable as to 23 deposition topics. The deposition started at 10:11 a.m. It

became readily apparent that Sohlberg lacked the requisite knowledge on a

number of topics. See e.g., Thigpen Decl., Exh. 4, Sohlberg Tr. 29:2-30:1.

Further, during the course of the deposition, counsel for Wells Fargo lodged a

number of improper objections impeding Plaintiffs’ questioning of Sohlberg. See

Id., Sohlberg Tr. 260:14-261:20. At 6:18 p.m., counsel for Wells Fargo expressed

concern as to the length of the deposition. See Id., Sohlberg Tr. 300:6-16. The

videographer informed the parties that approximately one hour remained, but

Plaintiffs’ counsel offered to finish the Rule 30(b)(6) in 30 minutes. See Id.

Instead, at 6:27 p.m., counsel informed Plaintiffs of Defendant’s unilateral

decision to remove Sohlberg and terminate the deposition. See Id., Sohlberg Tr.

300:25-301:6.

C. The Parties’ Meet And Confer Efforts

On February 15, 2012, Plaintiffs initiated meet and confer efforts. See

Thigpen Decl., Exh. 5. Defendant responded on February 21, 2012, setting forth

several conditions should Defendant offer Sohlberg again: (1) the deposition be

taken by telephone or video-conference; (2) the questioning be limited to topics

not previously covered; (3) advance notice of the topics to be discussed be given;



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and (4) Plaintiffs bear all costs for such further examination. See Thigpen Decl.,

Exh. 6. Plaintiffs found these conditions unreasonable and unjust, as none of

them allay Plaintiffs’ concerns and further, in particular Sohlberg’s unsuitability in

serving as Wells Fargo’s witness on the designated topics. As a result, Plaintiffs

informed Defendant on March 14, 2012 that Plaintiffs intend to file this motion to

compel. See Thigpen Decl., Exh. 7.

III. LEGAL ARGUMENT

A. Wells Fargo Improperly And Prematurely Terminated The Rule30(b)(6) Deposition of Sohlberg

At a minimum, Plaintiffs are entitled to a full seven hours of deposition

testimony from Sohlberg. Wells Fargo attempted to justify their early termination

by claiming “nothing in the text of the Rule itself requires that normal breaks be

excluded from the calculation of seven hours.” See Thigpen Decl., Exh. 6.

Defendant is clearly mistaken.

Federal Rules of Civil Procedure Rule 30(d)(1) states that “[u]nless

otherwise stipulated or ordered by the Court, a deposition is limited to 1 day of 7

hours.” Fed. R. Civ. P. 30(d)(1); see also Paige v. Consumer Programs, 248

F.R.D. 272, 274 (C.D. Cal. 2008). Contemplating reasonable breaks, the only time

to be counted against the seven-hour limitation is the time occupied by actual

deposition. Saunders v. Knight, 2007 U.S. Dist. LEXIS 3387, at *8 (E.D. Cal. Jan.

4, 2007); see also Baykeeper v. Int’l Metals Ekco, 2009 U.S. Dist. LEXIS 69183,

at *4 (C.D. Cal. Feb. 27, 2009) (“seven hours of deposition time, [is] exclusive of

breaks and meals periods); In re Toys “R” Us-Delaware, 2010 U.S. Dist. LEXIS

130884, at *34 (C.D. Cal. July 29, 2010) (same); Roberson v. Bair, 242 F.R.D.

130, 138 (D.D.C. 2007) (same).

Plaintiffs had 55 minutes remaining on the record before Defendant

terminated the deposition. Defendant attempts to convolute the situation by also

claiming the concern was due to Sohlberg being an “older woman who had flown



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in from Minnesota and was on Central Time” and that she was “exhausted.” See

Thigpen Decl., Exh. 6. While Plaintiffs can sympathize with Sohlberg’s fatigue, it

provides no excuse for both improperly terminating a deposition and refusing to

reconvene. Defendant had more than sufficient notice of the deposition date and

time and could have easily remedied any concerns prior to the commencement of

the deposition, for example by requesting an earlier start time. Defendant chose

not to.

Further, when pressed by Defendant to conclude the deposition, Plaintiffs

offered to compromise by limiting further questioning to 30 minutes. See Thigpen

Decl., Exh. 4, Sohlberg Tr. 300:6-14. Defendant, rejected Plaintiffs’ proposal.

Unequivocally, “[a]t any time during a deposition, the deponent or a party

may move to terminate or limit it on the ground that it is being conducted in bad

faith or in a manner that unreasonably annoys, embarrasses, or oppresses the

deponent or party.” Bd. of Trs. of the Leland Stanford Junior Univ. v. Tyco Int’l

Ltd., 253 F.R.D. 524, 526 fn. 2 (C.D. Cal. 2008); FCC v. Mizuho Medy Co., 257

F.R.D. 679, 681 (S.D. Cal. 2009) (“the only grounds to terminate or limit a

deposition is if it is being conducted in bad faith or in a manner that unreasonably

annoys, embarrasses, or oppresses the deponent or party.”) (emphasis added)

(internal citations omitted).

Unlike the situations set forth above, Defense Counsel did not remove

Sohlberg due to Plaintiffs Counsel’s conduct. The termination of Sohlberg’s

deposition was just that, “she [was] very, very tired.” See Thigpen Decl., Exh. 4,

Sohlberg Tr. 301:1-4. Plainly, this situation is insufficient to warrant Defendant’s

unilateral termination of Sohlberg’s 30(b)(6) deposition.

/ / /

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B. Wells Fargo Did Not Produce An Adequate 30(b)(6) Witness

i. Sohlberg Conceded She Had No Knowledge RegardingSeveral Deposition Topics

A corporation must “designate one or more officers, directors, or managing

agents . . . [who] must testify about information known or reasonable available to

the organization.” Fed. R. Civ. P. 30(b)(6). While Rule 30(b)(6) is not meant to

be a memory contest, the corporation must “make a conscientious, good-faith

effort to designate knowledgeable persons for Rule 30(b)(6) depositions and to

prepare them to fully and unevasively answer questions about the designated

subject matter.” Apple Inc. v. Samsung Elecs. Co., 2012 U.S. Dist. LEXIS 9921,

at *13 (N.D. Cal. Jan. 27, 2012); see also Bd. of Trs. of the Leland Stanford Junior

Univ., 253 F.R.D. at 526 (good faith effort must be made in designating

knowledgeable persons for Rule 30(b)(6) depositions); Alexander v. FBI, 186

F.R.D. 137, 141 (D.D.C. 1998) (same).

Sohlberg admitted without equivocation that she had no knowledge

regarding several specifically identified deposition topics, including but not

limited to, Deposition Topic Nos. 5, 6, 7, and 9. See, e.g., Thigpen Decl., Exh. 4,

Sohlberg Tr. 29:2-30:1; 30:4-22; 31:20-23; 32:15-23; 36:5-11; 37:7-38:15, 42:8-

43:1. For many others, including Topic Nos. 12, 13, 15, 16, 17, 18, 19, 20, 22, and

23, she was unsure if she was knowledgeable, and identified other employees that

were more knowledgeable and better able to answer questions. See, e.g., Thigpen

Decl., Exh. 4, Sohlberg Tr. 45:23-47:3; 47:6-48:18; 49:4-15; 49:18-50:19; 50:20-

51:15; 51:16-53:3; 53:6-25; 54:3-17; 55:16-56:1; 56:3-19.1

Sohlberg’s inadequacy as a witness was confirmed when she was

questioned about basic facts in the case, such as the documents Medical Capital

Attached to the Thigpen Decl. is a chart listing demonstrating the specific1

topics for which Sohlberg lacked the requisite knowledge and, if made, heridentification of the appropriate witnesses. The transcript pages are provided assupport for the chart. See Thigpen Decl. Exh. 4 .



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submitted to the Trustees to obtain Administrative Fees and other disbursements

of trust assets. Sohlberg was not familiar with a single document used to obtain

disbursements, and could not provide any substantive responses to Plaintiffs’

questions regarding the reports and the documents Wells Fargo was required to

receive and make pursuant to the provisions set forth in the NISAs. Sohlberg

frequently “d[id]n’t know,” “didn’t prepare to this level of detail” or simply stated

that she simply “had not seen this form before.” See Thigpen Decl., Exh. 4, see

also, e.g., Sohlberg Tr. 193:17-22; 211:23-212:3; 215:4-11; 223:2-9; 234:15-

235:11; 238:2-21; 246:16-247:1. She had no knowledge whatsoever about the

basic administration of the Medical Capital accounts, including fees that Wells

Fargo charged to Medical Capital or made in connection with its investments of

Medical Capital funds. See Id., Sohlberg Tr. 119:12-120:6; 137:11-21; 141:1-11;

143:9-147:18.

As the transcript demonstrates, Sohlberg repeatedly admitted to lacking the

knowledge necessary to answer Plaintiffs’ questions. Defendant strategically

chose an individual who could not testify to anything beyond what she minimally

learned from others and what she observed from reading one NISA, essentially

wasting Plaintiffs’ resources, obtaining a free preview of Plaintiffs’ work product,

and denying Plaintiffs of any meaningful opportunity to obtain testimony on

critical topics. Accordingly, the Court should require Defendant to produce

adequate 30(b)(6) witnesses, who can sufficiently answer questions on deposition

topics that Sohlberg could not, including Topic Nos. 1, 2, 5, 6, 7, 13, 14, 15, 16,

17, 18, 19, and 23.

ii. Defendant Should Produce The Wells Fargo EmployeesSohlberg Identified As Having The Requisite KnowledgeFor The Rule 30(b)(6) Deposition

Should a witness designated by the corporation be unable to answer

questions regarding matters specified in the deposition notice, the corporation

must immediately designate a new witness. Alexander, 186 F.D.R. at 141; see



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also Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 338, 343 (N.D. Ill.

1995) (“Citibank seems to believe that it can satisfy Rule 30(b)(6) by producing a

witness with only selected information to offer . . . The Federal Rules and this

Court do not countenance self-selecting discovery by either party”); EEOC v.

Boeing Co., 2007 U.S. Dist LEXIS 29107, at *3-4 (D. Ariz. Apr. 17, 2007) (same).

As the transcript evidences, Sohlberg lacked sufficient knowledge on

several deposition topics. When pressed, Sohlberg readily conceded that other

Wells Fargo employees would have more knowledge than she.

Question: Okay. Do you know – is there anyone you can think ofthat might know about any specific report that wasrequired by MPIII.2 that wasn’t required by MPIII.1?

[. . . ]

Answer: Cheryl.

Sohlberg Tr. 181:5-9 (emphasis added) (objection omitted).

Question: Do you know if Medical Capital turned in the netcollateral coverage ratio reports for MPII.1 every monthas required?

Answer: I don’t know.Question: Who would know that?Answer: Cheryl Zimmerman.Question: Anyone else?Answer: Beth Walker.

Sohlberg Tr. 202:4-11 (emphasis added).

Question: Okay. Do you know if Wells Fargo ever issued a noticeof default to Medical Capital for failure to turn in a netcollateral coverage ratio report?

Answer: I don’t know.Question: Who would know that?Answer: Beth Walker.

Sohlberg Tr. 214:23-215:3 (emphasis added).

Question: Do you know if Wells Fargo ever rejected any of theUCC schedules that were turned in?

Answer: I don’t know.Question: Who would know that?Answer: Cheryl Zimmerman.



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Sohlberg Tr. 216:6-10 (emphasis added).2

Sohlberg’s concessions regarding the inadequacy of her knowledge strongly

suggests other Wells Fargo employees would have been better suited to appear as

30(b)(6) witnesses. Given the number of times Sohlberg identified Cheryl

Zimmerman and Elizabeth “Beth” Walker during her deposition, those witnesses

should have been produced for Plaintiffs’ noticed topics. Plaintiffs respectfully

request that the Court order Defendant to produce those witnesses.

C. Counsel For Wells Fargo Lodged An Extraordinary Amount OfImproper Objections

i. Counsel for Wells Fargo Improperly Instructed DeponentNot To Answer

“An objection at the time of the examination – whether to evidence, to a

party’s conduct, . . ., to the manner of taking the deposition, or to any other aspect

of the deposition – must be noted on the record, but the examination still proceeds

. . .” Bd. of Trs. of the Leland Stanford Junior Univ., 253 F.R.D. at 526. Counsel

may only instruct a deponent not to answer when “necessary to preserve a

privilege, to enforce a limitation ordered by the court, or to present a motion under

Rule 30(d)(3).” Fed. R. Civ. P. 30(c)(2); see also Shapiro v. Paul Revere Life Ins.

Co., 1997 U.S. Dist. LEXIS 16286, at *2 (N.D. Cal. 1997) (Rule 30(c)(2)

“provides exclusive grounds for instructing a deponent to not answer”); Detoy v.

City and County of San Francisco, 196 F.R.D. 362, 367 (N.D. Cal. 2000) (counsel

“shall refrain from instructing a witness not to answer, except as provided in Rule

30[(c)(2)]”).

Despite clear rules to the contrary, Defense Counsel continuously advised

Sohlberg not to answer, further preventing Plaintiffs from obtaining what little

information Sohlberg could offer. Despite the fact that this case is a breach of

Plaintiffs have detailed some of the numerous times that Sohlberg2

identified other Wells Fargo employees with knowledge of particular topics in thechart attached to Exhibit 4.



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contract action concerning Defendant’s performance of duties pursuant to the

particular terms of three contracts (the NISAs,) Defense Counsel repeatedly

instructed his client not to answer questions regarding the terms of those contracts,

and continually lodged the related objection that the “document speaks for itself.”

For example:

MS. THIGPEN: Okay. Do you know – is there anyone you can think ofthat might know about any specific report that wasrequired by MP III.2 that wasn’t required by MP III.1?

MR. SOMMER: Objection. The NISAs speak for themselves and sameprior objections.

THE WITNESS: Cheryl.

Sohlberg Tr. 181:5-10.

MS. THIGPEN: Did you have an understanding as to how often MedicalCapital had to make [the net collateral coverage ratio]calculation and provide the calculation to Wells Fargo?

MR. SOMMER: Objection; the document speaks for itself as to what’srequired.

Sohlberg Tr.187:5-9.

MS. THIGPEN: Do you think “shall” is providing an optional form ofaction for the debtor?

MR. SOMMER: Let me object.THE WITNESS: Okay.

MR. SOMMER: The meaning of particular provisions of the NISA isoutside of the scope of this – the topics for thisdeposition.

THE WITNESS: Okay.MR. SOMMER: You’re not authorized to testify on behalf of the bank on

that.MS. THIGPEN: Counsel, it’s absolutely not outside the scope. Let’s go

back to Exhibit No. 1 so we can be crystal clear here.MR. SOMMER: We can have an argument about it ...MS. THIGPEN: Turn back to Exhibit No. 1, please.MR. SOMMER: ... my instruction’s going to stand.MS. THIGPEN: Are you instructing her not to answer the question?MR. SOMMER: She’s instructed not to answer about the particular

meaning of particular provisions because it’s notwithin the scope of the topics noticed for thisdeposition.




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MS. THIGPEN: . . . Were there any reports that Medical – that thetrustee, Wells Fargo, was to provide to Medical Capitalpursuant to the MP III.1 NISA?

MR. SOMMER: It’s outside the scope.THE WITNESS: I can’t answer that question because I’m not

understanding the question and I’m not so sure it’ssomething I – I reviewed. I reviewed the – the governingdocument to determine what specific reports wererequired of Medical Capital.

Sohlberg Tr. 178:24-179:7.

First, such topics were assuredly not outside the scope noticed. See e.g.,

Thigpen Decl., Exh. 1, Topic Nos. 1, 2, 16, 18, 19, and 23. Further, whether or

not a question is outside the scope of the Rule 30(b)(6) Deposition Notice is not a

valid justification to instruct the deponent not to answer. In re Toys “R” Us-

Delaware, 2010 U.S. Dist. LEXIS 130884, at *35 (C.D. Cal. July 29, 2010); see

also Detoy, 196 F.R.D. 362, 367 (N.D. Cal. 2000) (holding that instructing a

witness not answer a question as it is outside the scope of a 30(b)(6) is improper);

Paparelli v. Prudential Ins. Co. of Am., 108 F.R.D. 727, 731 (D.C. Mass.

1985)(same).

ii. Counsel For Wells Fargo Repeatedly Made ImproperSpeaking Objections

“Speaking objections are prohibited by Fed. R. Civ. P. 30(c)(2)” as “[a]n

objection must be stated concisely in a nonargumentative and nonsuggestive

manner.” Jadwin v. Abraham, 2008 U.S. Dist. LEXIS 116780, at *16 (E.D. Cal.

Aug. 22, 2008); Tacori Enters. v. Beverly Jewellery Co., 253 F.R.D. 577, 580

(C.D. Cal. 2008) (holding Defense Counsel’s use of speaking objections to be

improper); JSR Micro, Inc. v. QBE Ins. Corp., 2010 U.S. Dist. LEXIS 40185, at

*20 (N.D. Cal. Apr. 5, 2010) (holding Defendant’s consistent speaking objections

to be improper). Counsel is therefore “prohibited from acting as a intermediary,

interpreting questions, assisting deponent with formulation of the answers or

deciding which questions should be answered. . . .” Amezaga v. Amezaga, 195

B.R. 221, 228 (D.P.R. 1996).



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Despite Plaintiffs’ effort to remind Defense Counsel of the inappropriate

nature of speaking objections, Defense Counsel ignored Plaintiffs’ warnings and

continued to make lengthy speaking objections throughout the course of the

deposition.

MS. THIGPEN: Okay. And why would they need Wells Fargo services?MR. SOMMER: It calls for speculation. It assumes – sorry, the – lacks

foundation. If you – if you know.MS. THIGPEN: Counsel, your objections are noted. No speaking

objections. I’ve asked you before.

Sohlberg Tr. 75:19-25 (emphasis added).

MS. THIGPEN: Was Wells Fargo required to give a notice of default foran overdue net collateral coverage ratio report?

MR. SOMMER: Objection. It calls for legal conclusion and calls fortestimony beyond the scope of the deposition topics.

THE WITNESS: I can’t answer that.MS. THIGPEN: Why? You don’t know or ....THE WITNESS: Because it calls for a legal conclusion. MS. THIGPEN: Yes. Unfortunately, that’s counsel’s objection, but that’s

not a – that isn’t a proper response. I mean, if you don’tunderstand the question, then you can say. I can try torephrase, but...

MR. SOMMER: Well, it calls for speculation if – and also it’s beyond thescope if you –

MS. THIGPEN: No speaking objections.MR. SOMMER: in the course of your investigationMS. THIGPEN: No speaking objections, counsel.MR. SOMMER: If in the course of your investigation you are able to

answer that question on – MS. THIGPEN: Counsel – MR. SOMMER: – behalf of the bank – MS. THIGPEN: – you’ve lodged your objection.


These instances by no means provide an exhaustive list of Defense

Counsel’s disregard for the discovery rules during Sohlberg’s Rule 30(b)(6)

deposition.

Defense Counsel’s persistent assertions of speaking objections and

improper instructions not to answer prevented Plaintiffs from obtaining testimony

and unduly prolonged the deposition examination. Such indifference to the

Federal Rules should not be ignored or tolerated.



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D. Wells Fargo Should Be Required To Bear Appropriate CostsAssociated With All Subsequent 30(b)(6) Depositions

Rule 37(b) permits the Court to impose sanctions, including the payment of

reasonable expenses, upon a party who “fails, after being served with proper

notice, to appear for that person’s deposition.” Fed. R. Civ. P. 37(d). By

producing an unprepared witness, it is “tantamount to failure to appear.” Great

Am. Ins. Co. of N.Y. v. Vegas Constr. Co., 251 F.R.D. 534, 542 (D. Nev. 2008);

Adams v. Allianceone, 2011 U.S. Dist. LEXIS 56357, at *26 (S.D. Cal. May 25,

2011). Further, Fed. R. Civ. P. 37(a)(4)(A) provide that if a motion to compel is

granted, the court shall award reasonable costs associated with the motion, such as

costs attendant to subsequent depositions. Biovail Labs., Inc. v. Anchen Pharm.,

Inc., 233 F.R.D. 648, 653-654 (C.D. Cal. 2006) (requiring payment of costs

associated with second deposition following counsel’s improper early termination

and obstreperous conduct).

As described, Wells Fargo terminated the deposition early, produced an

unprepared and inadequate witness, and limited the deponent’s testimony through

improper objections and instructions not to answer.

In demanding Plaintiffs cover the costs of further examination, Defendant

seemingly overlooked the fact that Plaintiffs would not have been required to bear

costs of a subsequent 30(b)(6) deposition of Sohlberg had Defendant not

prematurely terminated her deposition. Nor would Plaintiffs have had to incur

costs of additional 30(b)(6) depositions had Defendant originally proffered

knowledgeable witnesses. Defendant’s unreasonable request is further affirmation

that Wells Fargo assumes no fault in their behavior.

Rule 30(b)(6) depositions are meant to ensure efficient discovery by placing

the onus on the corporation to identify witnesses. Pioneer Drive, LLC v. Nissan

Diesel Am., Inc., 262 F.R.D. 552, 558 (D. Mont. 2009). Some parties, however,

choose to abuse the process, rather than make a proper designation from the



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outset. Resolution Trust Corp. v. S. Union Co., 985 F.2d 196, 197 (5th Cir. Tex.

1993).

Defendant’s designation of Sohlberg was nothing more than a tactic to

burden Plaintiffs with the preparation for and costs of deposing an inadequate

witness. In conjunction with Defense Counsel’s overly obstructive conduct during

the deposition, Plaintiffs were not given a fair opportunity to obtain any

meaningful testimony on critical matters for this action. If the deponent is “not

knowledgeable about relevant facts, and the principal has failed to designate [a]

knowledgeable ... witness, then the appearance is, for all practical purposes, no

appearance at all.” Apple Inc. v. Samsung Elecs. Co., 2012 U.S. Dist. LEXIS

9921, at *15 fn. 5 (N.D. Cal. Jan. 27, 2012) (citing Resolution Trust Corp., 985

F.2d at 197).

Given Defendant’s uncooperative and inappropriate behavior, Plaintiffs

respectfully request that the Special Master recommend that Defendant bear the

costs associated with (1) the continuation of Sohlberg’s deposition and (2) the

taking of subsequent Rule 30(b)(6) depositions on the topics set forth in the

November 28, 2011 Deposition Notice. See Thigpen Decl., Exh. 1. Such costs

should include, for each deposition, the costs of (1) a court reporter and

videographer; (3) one copy of the transcript for Plaintiffs; (4) travel, including

hotel and airfare, for Plaintiffs’ counsel to attend the depositions.

IV. CONCLUSION

For the reasons set forth herein, Plaintiffs respectfully request that the

Special Master recommend that: (1) Sohlberg be produced for the remaining time

of her deposition, as permitted under Rule 30(d)(1); (2) Defendant produce the

appropriate Wells Fargo employees Cheryl Zimmerman and Elizabeth Walker, as

identified by Sohlberg, for each of the deposition topics Sohlberg lacked

knowledge of; and (3) Defendant bear the costs of all subsequent Rule 30(b)(6)

depositions.



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Dated: March 28, 2012 COTCHETT, PITRE & McCARTHY, LLP

By: /s/ Jordanna G. Thigpen Jordanna G. Thigpen

MILBERG LLPJEFF S. WESTERMANDAVID E. AZAR (218319)MICHIYO M. FURUKAWA (234121)One California Plaza300 S. Grand Avenue, Suite 3900Los Angeles, CA 90071

Co-Lead Counsel for Plaintiffs and the Class

MINAMI TAMAKIDerek G. Howard (118082)Bethany Caracuzzo (190687)360 Post Street, 8th FloorSan Francisco, CA 94108Telephone: (415) 788-9000Facsimile: (415) 398-3887

LAW OFFICE OF MICHAEL D. LIBERTYMichael D. Liberty (136088)1290 Howard Avenue, Suite 303Burlingame, CA 94010Telephone: (650) 685-8085Facsimile: (650) 685-8086

AITKEN*AITKEN*COHNDarren O. AitkenCasey R. Johnson3 MacArthur Place, Suite 800Santa Ana, Ca 92707Telephone: (714) 434-1424Facsimile: (714) 434-3600

Attorneys for Plaintiffs and Members of Plaintiffs’Executive Committee



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