BWP Gas, LLC

UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
In re 	: 	Chapter 11
BWP GAS, LLC 	:
Bankruptcy No. 05-18754bif
Debtors 	:
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ORDER
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AND NOW, this 13th day of June 2006, GHK Company, LLC (“GHK”)
has filed a motion for sanctions pursuant to Fed. R. Bankr. P. 7030, for conduct that
occurred during a deposition of Mr. Howard M. Appel on February 17, 2006,
And during that deposition, BWP Gas, LLC was represented by attorney
Michael V. Blumenthal, Esquire from the law firm of Brown Raysman Millstein Felder &
Steiner LLP,
And both BWP and Brown Raysman Millstein Felder & Steiner LLP jointly
oppose this sanctions motion,
And this deposition was taken in connection with GHK’s request to dismiss
this chapter 11 case under 11 U.S.C. § 1112(b). Fed. R. Bankr. P. 1017(f) provides that a
dismissal request under section 1112(b) shall be made by motion under Fed. R. Bankr. P.
9014. Rule 9014(c) further incorporates the discovery rules, including Bankruptcy Rule
7030, into contested matters,
And Fed. R. Bankr. P. 7030 incorporates Fed. R. Civ. P. 30. Rule 30(d)(3)
states:
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If the court finds that any impediment, delay, or other conduct
has frustrated the fair examination of the deponent, it may
impose upon the persons responsible an appropriate sanction,
including the reasonable costs and attorney's fees incurred by
any parties as a result thereof.
And the Committee Notes (1993) to Rule 30(d)(3) explain its purpose:
Paragraph (3) authorizes appropriate sanctions not only when
a deposition is unreasonably prolonged, but also when an
attorney engages in other practices that improperly frustrate
the fair examination of the deponent, such as making
improper objections or giving directions not to answer
prohibited by paragraph (1). In general, counsel should not
engage in any conduct during a deposition that would not be
allowed in the presence of a judicial officer. The making of an
excessive number of unnecessary objections may itself
constitute sanctionable conduct, as may the refusal of an
attorney to agree with other counsel on a fair apportionment
of the time allowed for examination of a deponent or a refusal
to agree to a reasonable request for some additional time to
complete a deposition, when that is permitted by the local rule
or order.
And the Committee Notes (2000) further explicate this provision:
Paragraph (3) includes sanctions provisions formerly included
in paragraph (2). It authorizes the court to impose an
appropriate sanction on any person responsible for an
impediment that frustrated the fair examination of the
deponent. This could include the deponent, any party, or any
other person involved in the deposition. If the impediment or
delay results from an “other circumstance” under paragraph
(2), ordinarily no sanction would be appropriate.
And GHK contended, at oral argument, that Mr. Blumenthal and his law
firm should be sanctioned for improper and excessive objections, improperly frustrating
the deposition of Mr. Appel, and prolonging the deposition. However, GHK conceded
that it was ultimately able to obtain necessary information at the deposition and to
proceed with the hearing on its motion to dismiss,
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During court hearings, Mr. Blumenthal appeared experienced, professional and1
prepared. I trust and hope that his conduct during this deposition was anomalous.
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And upon review of the transcript of the deposition, it is apparent that Mr.
Blumenthal did make excessive and improper objections during the deposition of Mr.
Appel. For example, one of the issues posed by GHK’s motion to dismiss this chapter 11
case concerned BWP’s expenses, assets, and creditors, as related to its need for and
ability to reorganize. Mr. Blumenthal objected as early as the fourth question posed to the
deponent—which question requested the names of other businesses located at the debtor’s
address—on the basis of relevance. Not only was the information sought relevant, or
could lead to evidence germane to the motion to dismiss, but relevancy is not a valid
objection under Rule 30(d)(1). See, e.g., Resolution Trust Corp. v. Dabney, 73 F.3d 262,
266 (10th Cir. 1995),
And Mr. Blumenthal raised other improper objections, which served to
make the deposition unnecessarily contentious, and which went beyond the scope of
appropriate advocacy, 1
And for such conduct, Mr. Blumenthal is justifiably criticized. However,
beyond such criticism, GHK has not demonstrated injury or damage. Accordingly, it is
hereby ordered that monetary sanctions are denied.
BRUCE FOX
United States Bankruptcy Judge
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copies to:
Allen B. Dubroff, Esq.
Jaffe, Friedman, Schuman, Nemeroff,
Applebaum & McCaffery, P.C.
7848 Old York Road, Suite 200
Elkins Park, PA 19027
Michael Blumental, Esq.
Brown Raysman Millstein
Felder & Steiner, LLP
900 Third Avenue
New York, NY 10022
Howard Gershman, Esq.
Flamm Boroff & Bacine, P.C.
794 Penllyn Pike
Blue Bell, PA 19422
Reid E. Robison, Esq.
John D. Stiner, Esq.
McAfee & Taft
Two Leadership Square, 10th Floor
211 North Robinson
Oklahoma City, OK 73102-7103
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