Civil litigation in cannabis, like any other industry, usually proceeds in a predicable order. First, a complaint is filed and served. This kicks off the lawsuit and compels a defendant to file an Answer to avoid a default judgment. Second, the parties conduct written discovery: i.e. gathering relevant documents, identifying potential witnesses, and serving interrogatories and perhaps requests for admission. Third, the parties take depositions of their opponents and non-parties who have relevant information. And fourth, motions for summary judgment and trial ensue.
In limited circumstances, however, a party may take a deposition when no lawsuit is pending. These depositions are known as “perpetuation depositions.” This blog posts covers the basics of that unusual procedure.
Under Federal Rule of Civil Procedure 27, depositions to perpetuate testimony may be used to take a deposition when no lawsuit is pending. (Most states also have a rule allowing perpetuation depositions, this post discusses the federal rule.) The rule is meant to apply to situations where, for some reason, testimony might be “lost” to a potential litigant unless the testimony is taken immediately without waiting for a lawsuit to commence.
The application of the rule, however, does not permit a litigant to conduct early discovery to “fish” for some ground to bring a lawsuit. Courts uniformly agree that such a purpose is improper and an abuse of the rule.
The federal rule requires a person seeking to take a deposition when no lawsuit is pending to file a “verified” petition. Such a petition is more like a sworn affidavit, made under penalty of perjury, than an ordinary complaint, which need not be “verified.”
The petitioner must establish several criteria that convince the court that a deposition is justified absent a pending lawsuit. These criteria include establishing that a lawsuit is expected to be filed but cannot presently be filed, the subject matter of the expected action, the facts the petitioner desires to establish, the names of adverse parties, and the substance of the testimony the petitioner expects to elicit.
A critical issue for the petitioner is demonstrating a danger of losing evidence by delay. It is not enough that some time may pass before a lawsuit is filed and the potential witnesses memory may not be as clear. Although a witnesses illness may be a factor, that alone is not enough, according to the Wright & Miller treatise on federal practice. The petitioner must also show why a lawsuit could not be filed now, and thereby proceed along the ordinary course described above.
If the court is satisfied with the petition, it will grant an order that requires the witness to testify at the perpetuation deposition – even though no lawsuit has yet been filed.
Depositions to perpetuate testimony ought to be considered at the outset of every cannabis business dispute. In most circumstances they are unnecessary, but in a few instances, a deposition before a lawsuit is pending may be required to collect critical evidence for trial.