Case In Brief
Clarifications to Depositions in Nevada
By J. Malcolm DeVoy, Esq.
Depositions are a crucial aspect of case development: they provide the first, and sometimes the only opportunity to gather information using sworn, first-person testimony. Unlike in a trial, where objections can be used more liberally to exclude evidence from the jury’s consideration, depositions provide a largely unrestrained environment to gather useful information from a witness without objections or exclusions.
In 2015, the Nevada Supreme Court clarified its position on several aspects of deposition practice…namely, procedural and substantive issues that affect how depositions occur. First, the Nevada Supreme Court closed the loophole where attorneys may have been able to rehabilitate their clients’ sworn deposition testimony by going off the record after a damaging admission. This decision was shocking for some attorneys, but it is consistent with practice in federal courts, and merely reinforced the importance of deposition preparation. Second, the Nevada Supreme Court took the opportunity to clarify the requirements of Nevada Rule of Civil Procedure 30 in scheduling the dates and locations of depositions. While not every case is as complex as the facts presented to the Nevada Supreme Court, its decision provides guidance in how the court—and, the discovery commissioners in Clark County—will resolve such disputes in the future.
- Check Your Privilege–Coyote Springs Investment LLC v. Eighth Judicial District Court, 131 Nev. Adv. Op. 18 (2015).
In Coyote Springs, a witness in a real estate dispute testified, during his sworn deposition, that he believed the term sheets for a lease were final and binding. Almost immediately after that answer, the witness and his attorneys took a break from the deposition and went off the record. During that break, the deponent and his counsel had a private meeting in a separate conference room. Once the deposition resumed and the witness was back on the record, he “clarified” the testimony he gave right before taking a break, and all but contradicted everything he previously said.
The witness maintained that everything he and his attorneys discussed during the break was protected by the attorney-client privilege. The other side disagreed—especially based on the 180-degree change in testimony following the break—and it sought to have the testimony given in the deposition after his off-the-record conference with counsel excluded at trial. This became a sticking issue during trial, and the Nevada Supreme Court considered[1] whether the off-the-record conference between the deponent and his counsel during a break in the deposition was protected by the attorney-client privilege.
The Nevada Supreme Court determined that the off-the-record meeting between the deposed witness and counsel was not protected by the attorney-client privilege. Relying on federal precedent, the court agreed that the purpose of a deposition is to adduce testimony “as may be permitted at trial”[2] allowing a testifying witness essentially to cry out, “line!” and be fed the correct answer by his attorney, was inconsistent with that purpose.
This is not to say that a deposition witness has no access to counsel. Following the United States District Court for the District of Nevada’s decision in In re Stratosphere Corporation Securities Litigation, 182 F.R.D. 614, 621 (D. Nev. 1998), the Nevada Supreme Court set forth a standard under which witnesses and their attorneys can confer during a deposition. Reasoning that it would be overly harsh to deprive a witness of his or her right to an attorney, it adopted the Stratosphere decision’s three requirements for properly taking a break from a deposition to determine whether to assert a privilege.
First, when going back on the record, the attorney must state that a conference between counsel and the deponent took place. Second, the subject of that conference must be disclosed. Third, and finally, the attorney must state the outcome of that conference—namely, whether the attorney or witness will be asserting a privilege against answering the question. The Nevada Supreme Court made it clear that these requirements must be satisfied, and stated on the deposition record “in order to preserve the attorney-client privilege.” Otherwise, everything a witness says to the attorney once the deposition clock has begun, and until it is continued or concluded, is considered fair game.
Coyote Springs confirms that preparing a witness for deposition must be done before the deposition, not during it. For federal practitioners familiar with Stratosphere, the Coyote Springs decision confirms what they already knew and affirms that it applies in state court proceedings, as well. Otherwise, the decision represents the Nevada Supreme Court’s ongoing delineation of when Nevada courts defer to its federal counterparts. Because of the similarity of the Nevada and Federal civil procedure rules, similar outcomes are common in cases such as this one; but Nevada’s deference to federal courts is far from guaranteed, as seen in FDIC v. Rhodes, 130 Nev. Adv. Op. 88 (2014).
- Rule 30 Is Dead; Long Live Rule 30–Okada v. Eighth Judicial District Court, 131 Nev. Adv. Op. 83 (2015).
Yet another case presenting a deposition dispute that came to the Nevada Supreme Court by a party seeking writ relief, Okada arises from the fight between Wynn Resorts, Limited, and Kazuo Okada, a former member of Wynn Resorts’ board of directors. Wynn Resorts filed its suit against Okada, a Japanese citizen who lives in Hong Kong, in Clark County, Nev., where Wynn Resorts is headquartered.[3]
During the course of the case, Wynn Resorts noticed Okada’s deposition for 10 days in Las Vegas, Nev. Okada disputed this notice and moved the trial court for a protective order. In his motion, Okada raised issues with the duration of the deposition, as the rule allows for depositions to be only one, seven-hour day, and contested the deposition’s location, arguing instead that it should be in Hong Kong, where he resides, or Tokyo, where he conducts business. The lower court denied Okada’s motion for a protective order, and Okada sought special relief from the Nevada Supreme Court.
Okada is an unusual decision because the Nevada Supreme Court denied Okada’s petition, as it did not “fall within [the categories] for considering a discovery-related writ petition.” Finding that “it raises important issues of law that need clarification,” the Supreme Court expended 16 pages denying the petition.
Because Nevada Rule of Civil Procedure 30, which governs depositions, is silent as to location, it is a question left for the parties to resolve among themselves. The Nevada Supreme Court recognized that the “general rule” was for a defendant to be deposed where he or she resides or does business—but also notes that is just a general rule, and not inflexible. Because Okada sought refuge from Wynn Resorts’ deposition notice through a protective order, he had the obligation to show good cause for why the deposition should not be held in Las Vegas.
The Nevada Supreme Court agreed with the district court that Okada did not meet this burden, and that the court correctly held his deposition should occur in Las Vegas. While Nevada Rule of Civil Procedure 30 is silent on location, it defines the duration of a deposition to one, seven-hour day. The rule does provide an escape valve, though, in that the court must allow additional time if needed to complete the examination, or extenuating circumstances require it. Based on the facts of the case, the Nevada Supreme Court agreed that the 10 days requested for the deposition was reasonable, and the court did not err in declining to shorten it, particularly when Okada could move to shorten it if it became clear it was improper.
The result is a series of flexible presumptions and general rules that apply until the court decides otherwise. The factors the Nevada Supreme Court endorsed in determining both the location and timing issues are designed to come to a logical conclusion, and likely will not be an issue in most cases. For high-stakes litigation, or cases involving international parties, these issues become more important and therefore contentious. Under those circumstances, it is important to remember that Nevada Rule of Civil Procedure 30 begins to operate less like a “rule” and more like a suggestion that the court can—and will—alter with even mild pressure.
Malcolm (“Jay”) DeVoy is the owner of DeVoy Law P.C., and serves as counsel to The Firm P.C. DeVoy focuses on representing individuals and businesses in their commercial disputes, and advising them about the changing rules of federal agencies such as the FDA and FTC.
[1]1. As has been the case throughout 2015, the Nevada Supreme Court considered and resolved a number of important discovery issues that were brought to it by parties seeking writ relief: Writs of mandamus, asking that the Supreme Court order the trial court to take a specific affirmative action, or writs of prohibition, in which the Supreme Court issues a writ disallowing the lower court from acting.
[2] Federal Rule of Civil Procedure 30(c).
[3] Shortly before this lawsuit, Okada filed a separate action against Wynn Resorts in Clark County, seeking Wynn Resorts’ production of business records.
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