To What Extent Can You Use Errata Sheets To Correct Testimony Under Rule 30(e)?

How many times have litigators said "the witness will read and sign the transcript" at the end of a deposition? But to what extent can a witness actually correct their testimony on an errata sheet?

In a recent decision, Judge Urbanski addressed the scope of the provision in the Federal Rule of Civil Procedure allowing for the reading, correction and signing of a deposition transcript.

This contract dispute involved ant-infested wooden pallets manufactured by plaintiff and sold to defendant.  The case was before the court on plaintiff's summary judgment motion and objection to defendant's errata sheets purporting to change the testimony of defendant's witnesses (including its 30(b)(6) witness) which were provided to plaintiff only days before the deadline to file dispositive motions.

Rule 30(e) provides that after a deposition transcript is prepared, the deponent is allowed 30 days "to review the transcript ... [and] if there are changes in form or substance, to sign a statement listing the changes and the reasons for making them."  This statement containing those changes is referred to as an "errata sheet."

As noted by Judge Urbanski, courts uniformly allow deponents to make minor form changes and corrections to transcription errors, but the Fourth Circuit has not addressed the outer scope of Rule 30(e) and thus there is a difference of opinion among lower courts regarding the ability to make more substantive changes to deposition testimony.

While the Court noted that there were two general lines of cases--the "traditional" and "modern" approach to Rule 30(e)--, the Court decided instead to adopt the "case-by-case approach" developed by the Third Circuit.

Under the traditional approach, deponents can made substantive--even contradictory--changes to prior testimony.  This permissive approach allows almost any change in an errata sheet, although both versions remain available for purposes of cross-examination.

In contrast, the modern approach interprets Rule 30(e) more narrowly and only allows for corrections for errors made by the court reporter.  One case, cited by the Court, explained that "[t]he Rule cannot be interpreted to allow one to alter what was said under oath.  If that were the case, one could merely answer the question with no thought at all, then return home and plan artful responses.... A deposition is not a take home examination." (quoting Trout v. First Energy Generation Corp., 339 F. App/x 560, 565 (6th Cir. 2009)).

After explaining these two approaches, Judge Urbanksi determined that the Court need not adopt either the permissive traditional approach or the narrow modern approach, because there was a third approach that best addresses the situation before the Court.

As explained by the Court, the Third Circuit's more flexible case-by-case approach "allows deponents to make necessary changes via Rule 30(e) without also 'generat[ing] from whole cloth a genuine issue of material fact (or eliminate[ing] the same) simply by re-tailoring sworn deposition testimony to his or her satisfaction.'" (quoting EBC Inc. v. Clark Bldg. Sys. Inc., 618 F.3d 258, 268 (3d Cir. 2010)).

The case-by-case approach is similar to the "sham affidavit" doctrine, which prevents a party from avoiding summary judgment by submitting an affidavit that contradicts prior testimony.  Similarly, under the Third Circuit's flexible approach to Rule 30(e), "the court has discretion to ignore errata sheets that propose 'substantive changes that materially contradict prior deposition testimony, if the party proffering the changes fails to provide sufficient justification.'"  Given that the Fourth Circuit has recognized the "sham affidavit" doctrine, Judge Urbanski reasoned that "the Third Circuit's case-by-case approach to Rule 30(e) best accounts for the facts presented here."

Applying this case-by-case approach, the Court determined that defendant's errata sheets should be ignored because they directly contradicted prior testimony, were submitted only days before the deadline for summary judgment motions, were supported by only perfunctory justifications and were focused on the very issues at stake in the summary judgment motion.  Thus, the Court held that "[a]bsent a more compelling justification for the abrupt change in testimony, the court will not allow [defendant] to use Rule 30(e) to inject new factual disputes into the summary judgment record that did not exist previously."

The Court went on to grant in part and deny in part the summary judgment motion, and reserved judgment on whether the errata sheet should be stricken for purposes of trial.  The Court concluded:

Further, as noted above, the court need not resolve the larger dispute about the proper scope of Rule 30(e) that has thus far divided courts in this circuit. In the situation presented here-where a party changes sworn testimony directly relevant to its potential liability mere days before the deadline for dispositive motions-the court is persuaded that Rule 30(e) does not allow parties to make substantive changes to deposition testimony in an effort to avoid an imminent motion for summary judgment.

Until the Fourth Circuit addresses the issue, Judge Urbanski's opinion will likely be cited in subsequent civil litigation to delineate the scope of errata sheets under Rule 30(e).  The Court's full opinion in Grottoes Pallet Company, Inc. v. Graham Packaging Plastic Products, Inc., 2016 WL 93869 (Jan. 7, 2016) is available here.

Court Declines To Dissolve Prayer Injunction After Supreme Court's Town of Greece Decision

In March 2013, Judge Urbanski issued an injunction prohibiting Pittsylvania County from opening its board of supervisors meetings with sectarian prayers associated with any one religion as a violation of the Establishment Clause.  That case is currently on appeal before the Fourth Circuit.

In May 2014, the US Supreme Court issued a 5-4 decision upholding the constitutionality of non-coercive sectarian invocations by invited clergy and laypeople at city council meetings.  See Town of Greece v. Galloway, 572 U.S. ___ (2014).    Given this new Supreme Court decision on public prayer, many localities that had been subject to injunctions have petitioned courts to modify those injunctions to conform with Town of Greece. 

Pittsylvania County filed a Rule 60(b)(5) motion in Western District of Virginia seeking to modify the Court's prior order.  The Court, however, held that it was without jurisdiction to modify its permanent injunction because the matter was on appeal to the Fourth Circuit.  There is a limited exception allowing the Court to rule on matters "in aid of the appeal."  Under this exception, the Court is permitted to entertain the motion and issue a short order if the Court is inclined to grant the motion, thus allowing the movant to request a limited remand from the Fourth Circuit for that purpose. 

After considering the merits of Pittsylvania County's request, Judge Urbanski determined that the Court was inclined to modify the injunction "to a very limited extent, i.e., to make it clear, consistent with Town of Greece, that opening prayers offered at the start of the Pittsylvania County Board of Supervisors meetings need not be generic or nonsectarian."  The Court, however, would deny the request to dissolve the injunction altogether because of factual differences between this case and Town of Greece. 

First, Pittsylvania County did not invite clergy or laypersons to offer invocations, as was the case in Town of Greece.  Instead, the prayers were led by the board members themselves.  "Thus, in contrast to Town of Greece, where the town government had no role in determining the content of the opening invocations at its board meetings, the government of Pittsylvania County itself, embodied in its elected Board members, dictated the content of the prayers opening official Board meetings."

Second, the Pittsylvania board of supervisors often directed the public to participate in the prayers by asking them to stand.  For example one board of supervisor began his prayer by stating: "If you don't want to hear this prayer, you can leave.  Please stand up."

In summary, the Court held that the active role of the board of supervisors in leading the prayers, dictating their content and directing public participation distinguished this case from Town of Greece.

It will be interesting to see how the Fourth Circuit rules in the appeal.

While it must have been irresistible for Pittsylvania County to try to dissolve the permanent injunction order after Town of Greece, given the decision by Judge Urbanski, it would have been better for the County not to have filed the Rule 60(b)(5) motion.  The Fourth Circuit can now see that the District Court would have granted the injunction anyway, even after considering the new Supreme Court precedent.  Thus, not only does this case involve an interesting constitutional question, but it is also instructive on matters of litigation and appeal strategy.

Trade Dress and the Functionality Doctrine: At the Intersection of Trademark and Patent Law

Earlier this week, the Fourth Circuit reversed the dismissal of a Lanham Act claim for trade dress infringement involving a pixel pattern embossed on an absorbent textile-like product used in medical supplies, hygiene products and food packages.  Judge Wilson (Roanoke Division of the Western District of Virginia) had dismissed the trade dress claim because he found the dot pattern to be functional and thus not protectable as trade dress.

Trade dress -- the visual appearance of a product or its packaging that signifies the source of the product to consumers -- is protected under trademark law.  However, if a product feature is determined to be functional, then that feature is not protected by trademark law.  The only way to protect a functional feature of a product's design is under patent law.  A product feature is functional if it is essential to the use or purpose of the product or affects the cost or quality of the product.  To put it simply, a feature is functional if it is the reason the device works as opposed to being merely ornamental.  Sometimes the distinction is difficult to determine.

One of the issues on appeal was the effect of the utility patents that plaintiff had obtained on the same product.  The Supreme Court has held that a utility patent is strong evidence that the features claimed therein are functional, and thus not protectable trade dress.  The plaintiff argued, however, that its utility patents covered the manufacturing process and materials, but did not pertain to a particular embossing pattern, which was the aspect of the product that plaintiff argued was protected as trade dress.  The Fourth Circuit noted that the diagrams on the utility patents show hexagonal shapes, rather than the circular dots or pixels depicted in the trademark. 

Patent

Trademark

The Fourth Circuit found that while the utility patents were evidence of the dots' functionality, they were not dispositive.  The court should look at other factors, such as the availability of functionally equivalent designs.  In light of these factual questions, the Fourth Circuit determined that there was a genuine issue of material fact regarding "whether a specific embossing pattern is the reason the device works or merely an ornamental, incidental, or arbitrary aspect of the device."  Therefore the dismissal was reversed and the case remanded for further proceedings.

The case demonstrates an interesting area of intellectual property law that is at the crossroads of trademarks and patents.

The case is McAirlaids, Inc. v. Kimberly-Clark Corporation, --- F.3d --- (4th Cir. June 25, 2014).

Fourth Circuit Certifies Business Conspiracy Question To Virginia Supreme Court

Virginia Lawyers Weekly reports that the Fourth Circuit is asking the Virginia Supreme Court to answer two questions about the interpretation of Virginia's Business Conspiracy Statute.

The first question is whether an allegation of tortious interference with contract or business expectancy can serve as the basis for a statutory conspiracy claim.  The second question is whether a two-year or five-year limitations period applies to a tortious interference claim.

The case, Dunlap v. Cottman Transmissions Systems, LLC, was brought by the owner of a transmission shop who alleged that local competitors and others conspired to get a franchisor to force him out of business.  The Eastern District of Virginia dismissed the lawsuit, and the shop owner appealed.  Instead of addressing the issues on appeal, the Fourth Circuit decided that it would be best to ask the Virginia Supreme Court to answer the unresolved questions of state law pursuant to Rule 5:40 of the Rules of the Supreme Court of Virginia.

Interestingly, the Fourth Circuit panel that issued the ruling included former Supreme Court Justice Sandra Day O'Connor, who was sitting on the panel by designation.  In this day and age, Supreme Court Judges are frequently accused of judicial activism by those who disagree with their rulings.  Justice O'Connor's decision to certify a question to a state court instead of resolving it herself is perhaps the epitome of judicial restraint and moderation.

The issues raised in this case are interesting and noteworthy for attorneys practicing business litigation.  There is generally a lack of case law regarding statutory business conspiracy claims.  I recently had a case in state court that involved similar issues, but the claims against my clients were dismissed without the court having to resolve these questions.

The Fourth Circuit's opinion explained why it was certifying these two issues thusly:

The reason to certify the first issue is straightforward: The Virginia Supreme Court’s recent decision in Station #2 signals obvious skepticism about business conspiracy claims predicated on contract disputes, but we are unable to ascertain with certainty how far that skepticism extends.

On the one hand, Station #2 clearly represents an important change in Virginia’s business conspiracy law, and we agree with the district court that this case raises concerns of the kind addressed there.

...

On the other hand, there are plausible reasons to limit Station #2’s holding to actual breach of contract claims, and to distinguish tortious interferences with contract or business expectancy.

...

The reason to certify the second question is even more straightforward: The question which statute of limitations to apply to tortious interference claims is a pure legal issue that has not been settled by the Virginia Supreme Court. Virginia applies a two-year statute of limitations to claims regarding personal injuries and a five-year statute of limitations to claims regarding injuries to property. See, e.g., Willard, 262 Va. at 478. But that distinction can be hard to draw, and the Virginia Supreme Court has previously disagreed with how this Circuit has attempted to articulate it. See id. at 479 (rejecting the test applied in Brown v. Am. Broad. Co., 704 F.2d 1296, 1303-04 (4th Cir. 1983)). As with the previous issue, we believe that this question at bottom concerns an ambiguity in the Virginia Supreme Court’s recent precedent that is best resolved by that Court.