Arabi Gin Co. v. Plexus Cotton, Ltd. (In re Joseph Walker & Co.)

472 B.R. 696, 2012 WL 2512910, 2012 Bankr. LEXIS 1645, 56 Bankr. Ct. Dec. (CRR) 182
CourtUnited States Bankruptcy Court, D. South Carolina
DecidedApril 13, 2012
DocketBankruptcy No. 10-01948-JW; Adversary No. 11-80023-JW
StatusPublished

This text of 472 B.R. 696 (Arabi Gin Co. v. Plexus Cotton, Ltd. (In re Joseph Walker & Co.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arabi Gin Co. v. Plexus Cotton, Ltd. (In re Joseph Walker & Co.), 472 B.R. 696, 2012 WL 2512910, 2012 Bankr. LEXIS 1645, 56 Bankr. Ct. Dec. (CRR) 182 (S.C. 2012).

Opinion

ORDER

JOHN E. WAITES, Chief Judge.

Defendant Nicholas Peter Francis Ear-lam brings this matter before the Court upon a Motion for a Protective Order (the “Motion”) pursuant to Fed.R.Civ.P. 26(c)1 as to the time and location of a deposition noticed by Plaintiffs pursuant to Rule 30(b).2 Plaintiffs sought to depose Ear-lam — a resident of the United Kingdom— in Columbia, South Carolina. Earlam contends that requiring him to be deposed in South Carolina would significantly disrupt his business and personal affairs. Earlam requests that he be deposed in Liverpool, United Kingdom, which is where he resides and serves as the chairman of the [699]*699board and as a high-level executive for-Defendant Plexus Cotton, Ltd. (“Plexus”).3

The events giving rise to this adversary-proceeding are extensive and complicated. The Complaint summarizes these events as follows: Debtor entered into a number of contracts in late 2007 and early 2008 to purchase a large amount of cotton from Plaintiffs, with delivery to take place at a later time. Due to extreme volatility in the commodities market during 2008, Debtor was ultimately rendered insolvent because of various market positions it held at that time. Subsequently, Debtor failed to honor its contractual obligations to Plaintiffs, and Plaintiffs contend that they suffered significant losses as a result.

The Complaint alleges that Defendant Plexus, as the majority owner of Debtor, controlled Debtor’s affairs, which included taking actions that caused Debtor to become insolvent. In seeking compensatory damages of $10,687,356.72 and punitive damages of $100,000,000.00, Plaintiffs contend that Debtor was essentially the alter ego of Plexus and that Debtor’s financial condition and Defendants’ wrongful conduct warrant a piercing of Debtor’s corporate veil in order to hold Plexus and its agents and subsidiaries liable for damages. As additional causes of action, the Complaint asserts a breach of fiduciary duties owed by Debtor’s board to Debtor’s creditors, breach of contract, fraud, negligent misrepresentation, civil conspiracy, tor-tious interference with contractual obligations, and promissory estoppel. The Complaint further requests that a constructive trust be placed on Defendants’ assets based on the alleged unlawful conduct. Earlam, in his role as an executive and chairman of the board at Plexus and former board member of Debtor, is painted as the primary force behind the actions that gave rise to this adversary proceeding.

Earlam filed the Motion seeking a protective order that requires Plaintiffs to depose him in Liverpool, where he lives and where Plexus and its employees are located. He submits that Plaintiffs have not overcome the presumption that a defendant who is not a resident of the forum is to be deposed where the defendant resides. In support of his contention, Ear-lam filed an affidavit stating that he has no business interests or business reasons to travel to South Carolina and that requiring him to do so would impose a hardship on his personal affairs as well as disrupt Plexus’ operations. Conversely, Plaintiffs allege that the factors of cost, convenience, and litigation efficiency favor holding the deposition in South Carolina. Plaintiffs additionally argue that holding the deposition in South Carolina would better preserve the Court’s ability to preside over any discovery disputes, and that because Earlam played a central role in the alleged wrongdoing, the equities favor Plaintiffs’ choice of forum for the deposition.

I. Applicable Standards

Neither the Federal Rules of Civil Procedure nor the Local Bankruptcy or District Court Rules specify where a deposition is to take place. Rule 30 governs oral depositions and specifies that reasonable written notice must be given to every other party and “must state the time and place of the deposition.” Rule 30(b)(1). Rule 26(c), which governs motions for protective orders, states that a “court may, for good cause, issue an order [700]*700to protect a party or person from ... undue burden and or expense,” including “specifying terms, including time and place, for the disclosure or discovery.” Rule 26(c)(1)(B). Rules 30(b) and 26(c) act in concert, as “the examining party may set the place for the deposition of another party wherever he or she wishes subject to the power of the court to grant a protective order under Rule 26(c)(1)(B) designating a different place.” 8A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2112 (3d ed. 2012). Courts are accordingly given broad discretion to manage discovery and make discovery rulings. See United States v. Westinghouse Savannah River Co., 305 F.3d 284, 290 (4th Cir.2002) (“We afford substantial discretion to a district court in managing discovery....”); Botkin v. Donegal Mut. Ins. Co., Civil Action No. 5:10cv00077, 2011 WL 2447939, at *8 (W.D.Va. June 15, 2011) (“Courts have broad discretion to determine the appropriate location for a deposition.”) (citing Armsey v. Medshares Mgmt. Servs., Inc., 184 F.R.D. 569, 571 (W.D.Va.1998)).

Generally, a plaintiff, by choosing the forum in which an action is brought, will be required to make himself or herself available to be deposed in the forum district. See In re Outsidewall Tire Litig., 267 F.R.D. 466, 471 (E.D.Va.2010); Wright & Miller, supra, § 2112 (“Ordinarily, plaintiff will be required to make himself or herself available for examination in the district in which suit was brought.”). On the other hand, “a non-resident defendant ordinarily has no say in selecting a forum,” and thus “an individual defendant’s preference for a situs for his or her deposition near his or her place of residence — as opposed to the judicial district in which the action is being litigated — is typically respected.” In re Outsidewall Tire Litig., 267 F.R.D. at 471; see also Wright & Miller, supra, § 2112 (“[C]ourts are more willing to protect defendant from having to come to the forum for the taking of his or her deposition than they are in the case of plaintiffs.”) The same general rule that applies to depositions of individual defendants also applies to corporations, in that a deposition of a defendant corporation through its officers is to take place at the corporation’s principal place of business or where the officers reside. Connell v. Biltmore Sec. Life Ins. Co., 41 F.R.D. 136, 137 (D.S.C.1966); Wright & Miller, supra, § 2112 (citing cases). These general rules create “an initial presumption that a defendant should be deposed in the district of his residence or principal place of business.” Armsey, 184 F.R.D. at 571 (citing Turner v. Prudential Ins. Co. of Am., 119 F.R.D. 381, 383 (M.D.N.C.1988)); see also Farquhar v. Shelden, 116 F.R.D. 70, 72 (E.D.Mich.1987) (“[C]ourts have held that plaintiffs normally cannot complain if they are required to take discovery at great distances from the forum.”) (citing Work v. Bier, 107 F.R.D. 789, 792 (D.D.C.1985)).

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Bluebook (online)
472 B.R. 696, 2012 WL 2512910, 2012 Bankr. LEXIS 1645, 56 Bankr. Ct. Dec. (CRR) 182, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arabi-gin-co-v-plexus-cotton-ltd-in-re-joseph-walker-co-scb-2012.