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Schindler Elevator Corp. v. Otis Elevator Co.

June 18, 2007


The opinion of the court was delivered by: Theodore H. Katz, United States Magistrate Judge.


In this action, Schindler Elevator Corporation and Inventio AG (collectively, "Plaintiffs") accuse Otis Elevator Company ("Defendant") of willfully infringing U.S. Patent No. 5,689,094 ("the 094 patent"). The patent is for an elevator control system that, through the use of electronic transmitters and a recognition device in the processing unit of the elevator control, automatically (and without passenger initiation or contact) guides elevator passengers to specific elevators for transport to their destination floor, simultaneously incorporating security and access control, personalization of travel, and traffic flow optimization. (See Complaint, dated July 17, 2006, at Exhibit A.) Plaintiffs specifically cite Defendant's elevator installation at 7 World Trade Center, in New York City, as an example of an infringement of Plaintiffs' patent. (See Complaint ¶ 5.) Defendant has counterclaimed, arguing, among other things, that the 094 patent is invalid and, in any case, Defendant is not infringing. (See Defendant's Answer, Affirmative Defenses and Counterclaims, dated Aug. 7, 2006, at 4.)

Presently before the Court are several discovery matters relating to Defendant's efforts to obtain the deposition testimony and documents of Dr. Paul Friedli, a citizen and resident of Switzerland who is also the inventor of the patent at issue in this litigation.*fn1 Specifically, Defendant requests that the Court deem Dr. Friedli a "managing agent" of Plaintiffs, and therefore compel Plaintiffs to produce Dr. Friedli for a deposition and require that Plaintiffs produce "Dr. Friedli's documents that are within the possession, custody, and control of Inventio." (See Letter from Alan Littmann, Esq., dated May 1, 2007 ("Def. 5/1 Letter"), at 4.) In the event that the Court does not grant its request for Dr. Friedli's documents, Defendant requests that the Court issue a Letter of Request for International Judicial Assistance Pursuant to the Hague Convention, seeking the production of documents from Dr. Friedli through the appropriate Swiss authority. (See Defendant's Motion to Issue a Letter of Request, dated Apr. 17, 2007.)*fn2

Plaintiffs argue that Defendant's requests for Dr. Friedli's deposition testimony and documents should be denied because he is not a "managing agent" of Plaintiffs, and they do not have the legal ability to produce him or his documents. (See Letter from Charles Bruton, Esq., to the Court, dated Apr. 25, 2007 ("Pls. 4/25 Letter").)

The issues involving Dr. Friedli have been the subject of several conferences and numerous submissions to this Court.


The need to authorize document discovery under the Hague Convention is dependent upon whether the Court finds that Dr. Friedli's documents must be produced by Plaintiffs, which, in turn, is dependent upon the Court's determination as to whether Dr. Friedli is a "managing agent" of Plaintiffs, and therefore subject to deposition under Rule 30 of the Federal Rules of Civil Procedure ("Rule 30"). Thus, the Court begins by assessing whether Plaintiffs should be compelled to produce Dr. Friedli as a party-witness.

I. Deposition of Dr. Friedli A. Governing Legal Standards

Under Rule 30(b)(1) of the Federal Rules of Civil Procedure, a specific officer, director, or managing agent of a corporate party may be compelled to give testimony pursuant to a notice of deposition. A corporate employee or agent who does not qualify as an officer, director, or managing agent is not subject to deposition by notice. See, e.g., United States v. Afram Lines (USA), Ltd., 159 F.R.D. 408, 413 (S.D.N.Y. 1994); Sugarhill Records Ltd. v. Motown Record Corp., 105 F.R.D. 166, 169 (S.D.N.Y. 1985); DeNoto v. Pennsylvania R.R. Co., 16 F.R.D. 567, 567 (S.D.N.Y. 1954). Such an employee is treated as any other non-party witness, and must be subpoenaed pursuant to Rule 45 of the Federal Rules of Civil Procedure; or, if the witness is overseas, the procedures of the Hague Convention or other applicable treaty must be utilized. See Afram Lines, 159 F.R.D. at 413; see also In re Honda Am. Motor Co., 168 F.R.D. 535, 540 (D. Md. 1996) (citing Afram Lines).

"The test for a managing agent is not formulaic." Boss Mfg. Co. v. Hugo Boss AG, No. 97 Civ. 8495 (SHS)(MHD), 1999 WL 20828, at *3 (S.D.N.Y. Jan. 13, 1999). Rather, the question of whether a person is a managing agent, and therefore subject to a notice of deposition, is answered pragmatically and on a fact-specific basis. See 8A Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure § 2103, at 39 (2d ed. 2007); see also Afram Lines, 159 F.R.D. at 413 ("Because of the vast variety of factual circumstances to which the concept must be applied, the standard . . . remains a functional one to be determined largely on a case-by-case basis.") (quoting Founding Church of Scientology of Washington, D.C., Inc. v. Webster, 802 F.2d 1448, 1452 (D.C. Cir. 1986) (citation omitted)). "The term 'managing agent' should not be given too literal an interpretation," Tomingas v. Douglas Aircraft Co., 45 F.R.D. 94, 96 (S.D.N.Y. 1968), and "[a]s in all matters appertaining to discovery, it is the ends of justice that are to be served." Church of Scientology, 802 F.2d at 1453.

With these principles in mind, courts in this district have generally considered five factors in determining whether an individual is a managing agent:

1) whether the individual is invested with general powers allowing him to exercise judgment and discretion in corporate matters; 2) whether the individual can be relied upon to give testimony, at his employer's request, in response to the demands of the examining party; 3) whether any person or persons are employed by the corporate employer in positions of higher authority than the individual designated in the area regarding which the information is sought by the examination; 4) the general responsibilities of the individual respecting the matters involved in the litigation; and 5) whether the individual can be expected to identify with the interests of the corporation.

Sugarhill Records, 105 F.R.D. at 170 (internal quotations and citations omitted); accord Afram Lines, 159 F.R.D. at 413; Zurich Ins. Co. v. Essex Crane Rental Corp., No. 90 Civ. 2263 (SWK) (JCF), 1991 WL 12133, at *1 (S.D.N.Y. Jan. 29, 1991); see also Boss Mfg., 1999 WL 20828, at *3 (recognizing that although the number of factors generally considered by courts ranges from three to five, courts in this district have considered the five factors listed above).

Just as it is clear that a deponent need not have a formal association with the corporation, and need not be associated with the corporation at the time of his deposition, to be deemed its managing agent, see Dubai Islamic Bank v. Citibank, N.A., No. 99 Civ. 1930 (RMB)(THK), 2002 WL 1159699, at *3 (S.D.N.Y. May 31, 2002) (internal citations omitted), those characterized as independent contractors can also be managing agents for purposes of Rule 30. See Afram Lines, 159 F.R.D. at 413 (stating that the five-step analysis is "fully applicable to cases like this where the agent is a corporate entity rather than an individual and an independent contractor rather than an employee"); see also Calgene, Inc. v. Enzo Biochem, Inc., No. Civ. S93-0195, 1993 WL 645999, at *8 (E. D. Cal. Aug. 23, 1993)(holding that consultant and advisory board member who identified with interests of company and who had "power regarding the subject matter of the litigation" was managing agent). Indeed, in the independent contractor scenario, "the existence of an agency relationship . . . is clear," and "the focus of the [managing agent] analysis is accordingly on the scope of the agent's authority, and the nature of his role in the matters at stake in the litigation." United States v. Fid. & Guar. Co. v. Braspetro Oil Services Co., No. 97 Civ. 6124 (JGK)(THK), 2001 WL 43607, at *3 (S.D.N.Y. Jan. 17, 2001).

Finally, although the examining party bears the burden of establishing the status of the witness, see Sugarhill Records, 105 F.R.D. at 170, the exact nature of this burden is not perfectly clear, see Boss Mfg., 1999 WL 20828, at *4 ("[I]t is not entirely clear whether the burden [of establishing the deponent's status] is one of production or persuasion or both."); Afram Lines, 159 F.R.D. at 414 (suggesting that the burden may vary depending on whether the examining party has had complete discovery on the issue or whether the deponent is an employee of the opposing party); accord Malletier v. Dooney & Bourke, Inc., No. 04 Civ. 5316, 2006 WL 3476735, at *14 (S.D.N.Y. Nov. 30, 2006). In any event, the burden is "modest," Boss Mfg., 1999 WL 20828, at *4, and all doubts are to be resolved in favor of the examining party, see Malletier, 2006 WL 3476735, at *14; Afram Lines, 159 F.R.D. at 414; Sugarhill Records, 105 F.R.D. at 171. Thus, the examining party satisfies its burden when it produces "enough evidence to show that there is at least a close question whether the proposed deponent is the managing agent." Afram Lines, 159 F.R.D. at 413; accord Boss Mfg., 1999 WL 20828, at *4. This approach permits discovery to proceed, while deferring until trial the ultimate question of whether the witness's testimony is binding on the corporation. See Malletier, 2006 WL 3476735, at *14; Afram Lines, 159 F.R.D. at 413-14; Zurich Ins. Co., 1991 WL 12133, at *2; Sugarhill Records, 105 F.R.D. at 171; see also Federal Practice and Procedure ยง 2103 ("The determination of whether a particular person is a 'managing agent' will be made by the trial court when the deposition is sought to be introduced. . . ."). The witness's deposition testimony itself may well provide the best evidence of his or her status. See Afram Lines, 159 F.R.D. at 413-14 (stating that it is proper to defer final determination of managing agent status until trial since at that time the examining party will have had full discovery regarding that status); Boss ...

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