Techniques and Potential Conflicts in the Handling of Depositions Copyright (c) 2007 Victoria E. Brieant. All Rights Reserved.
By Victoria E. Brieant n1
I. Discovery Plan
Depositions can be the largest single item in your case's litigation budget, can decide whether the case settles before trial and can be outcome determinative. It is therefore important at the onset of a case to identify what are the key elements in a case -- it will then be the goal of discovery and depositions to establish those key elements. Planning discovery strategy includes: (a) identifying who to depose and why; (b) scheduling depositions after receiving documents in response to document requests from the other side; (c) identifying how discovery will be used in motion practice and ultimately at trial; and (d) timing depositions early on in a case to permit both sides to evaluate the testimony for settlement purposes. In addition, consider how you may be able to benefit from the oversight of a Special Master to ensure the best uses of your client's resources.
The purpose of taking depositions is to gather information - find out about the case, identify what the facts are, how the events occurred, what the other side knows, what the strengths and weaknesses of each side are, etc.
Use the deposition process to find out what you do not know about your case, confirm what you think you know, test out your legal and factual theories, facilitate settlement, and ultimately as a preparation tool for trial. See generally, D. MALONE AND P. HOFFMAN, The Effective Deposition: Techniques and Strategies that Work p. 22-23 (2nd ed. 1996).
Federal Rule of Civil Procedure 30 governs the taking of depositions. The rule sets forth: (a) when a deposition may be taken; (b) the guidelines for the notice of deposition, as well as requirements for recording and production of documents and things; (c) the scope and extent of cross examination and objections; (d) the schedule and duration of a deposition; (e) review of the record by the witness; (f) the duties of the stenographer; and (g) the respective penalties associated with the failure to attend a deposition and the failure to serve a subpoena upon the witness. Fed. R. Civ. Pro. 30.
n1 Ms. Brieant is Of Counsel at Stroock & Stroock & Lavan LLP, resident in the Miami office. This article is updated from a prior article, drafted with my former associate, Minh T. Hoang, now a litigation associate at Duane Morris in San Francisco.
B. Party Admissions
The testimony of a witness during a deposition constitutes a party admission. This may be particularly helpful in motion practice, including summary judgment or summary adjudication, as well as during trial. Fed. R. Evid. 801(d)(2).
C. Depositions of Party Representatives
Federal Rule of Civil Procedure 30(b)(6) permits a party to notice the deposition of an organization and specify "the matters on which examination is requested." Fed. R. Civ. Pro 30(b)(6). The notice "need only designate, with reasonable particularity, the topics for examination." Marker v. Union Fidelity Life Ins. Co., 125 F.R.D. 121, 126 (M.D.N.C. 1989). In response to the notice, the organization must designate one or more individuals to testify on its behalf, who must have knowledge of the subjects described in the deposition notice. Pesaplastic, C. A. v. Cincinnati Milacron Co., 799 F.2d 1510 (11th Cir. 1986). These designated corporate deponents must be prepared to give complete, knowledgeable, and binding answers. Nevada Power Co. v. Monsanto Co., 891 F. Supp. 1406 (D. Nev. 1995); see also, U.S. v. Massachusetts Indus. Finance Agency, 162 F.R.D. 410 (D. Mass. 1995).
The designated individual must be prepared to testify to "matters known or reasonably available to the organization;' Fed. R. Civ. P. 30(b)(6), including beliefs and opinions of the organization with respect to its position in the litigation. See e.g., Lapenna v. Upjohn Co., 110 F.R.D. at 20. The standard for designation is not someone with personal knowledge to appear on behalf of the corporation, but rather the rule governing corporations only requires that the designated corporate deponent testify regarding matters "known or reasonably available to the organization:" Reed v. Bennett, 193 F.R.D. 689 (D. Kan. 2000).
If the only person available to testify is the organization's expert, attorney, or investigator, that person must be offered as the organization's designated deponent, International Woodworkers Local 5-396 v. Chesapeake Bay Plywood Corp., 659 F 2d 1259, 1272-73 (4th Cir. 1980), and may not claim privilege to refuse to disclose facts. Penk v. Oregon State Bd. of Higher Educ., 99 F.R.D. 511, 514-17 (D. Or. 1983) (attorney cannot prevent discovery of factual information obtained from third party, and client cannot resist testifying to facts on grounds facts were contained in attorney/client communication). Further, a witness may not claim work product protection for the corporation's position in the litigation and the basis for it. Nutmeg Ins. Co. v. Atwell, Vogel & Sterling, 120 FRD. 504, 509 (W.D. La. 1988).
The fact that a corporation no longer employs any individual who has a memory of the distant event at issue, or if that particular individual is deceased, does not relieve the corporation from preparing a designee to the extent matters are reasonably available, whether from documents, from past employees, or other sources. U.S. v. Taylor, 166 F.R.D. 356, aff'd, 166 F.R.D. 367.
Rule 30(b)(6) is only effective before trial. A party may not attempt to end-run Rule 30(b)(6) by issuing a Rule 45 subpoena to a corporation during trial to compel the appearance of unnamed witnesses with knowledge on specific subjects. Donoghue v. Orange County, 848 F.2d 926, 931 (9th Cir. 1987) (the requirements of Rule 30(b)(6) are not imported into Rule 45 to enable a party to serve a Rule 45 subpoena on a corporation or government agency and thereby obtain a witness to testify at trial to matters identified in the subpoena). Further, a 30 (b)(6) deposition only applies to parties at the time of depositions. Any party dismissed from the action before the time for the deposition is exempt from Rule 30(b)(6). Cohn v. Wilkes General Hosp., 127 F.R.D. 117 (D.N.C. 1989).
Producing an unprepared witness may be tantamount to a non-appearance, warranting the imposition of sanctions. Taylor, 166 F.R.D. 356. In fact, a party's failure to produce an adequately prepared Rule 30(b)(6) witness may result in severe sanctions ranging from contempt and fees, see Pesaplastic, 799 F.2d 1510, to having adverse facts deemed established, see S.E.C. v. Allison, 35 Fed. R. Serv. 2d 548 (N.D.Cal. 1982), to having the attorney assess fees personally, see Thomas v. Hoffmann-LaRoche, Inc., 126 F.R.D. 522 (N.D. Miss. 1989), to a preclusion order, see In re Anthracite Coal Antitrust Litig., 82 F.R.D. 364 (M.D. Pa. 1979). But see, Hebron Public School Dist. No. 13 of Morton County, State of N.D. v. U.S. Gypsum Co., 1989 WL 168985 (D.N.D. 1989) (failure to produce an adequately prepared witness does not result in summary judgment against the offending party if, without 30(b)(6) testimony, there is a genuine issue of material fact); Federal Sav. and Loan Ins. Corp. v. Village Creek Joint Venture, 130 F.R.D. 357, 359 (N.D. Tex. 1989) (failure to produce 30(b)(6) representative not an admission that plaintiff did not have a factual basis for complaint and thereby violated Rule 11 by filing, because answers to interrogatories supported plaintiffs claims).
Designation of an attorney as a 30(b)(6) witness may result in his disqualification from that action. Eastway Gen. Hosp v. Eastway Women's Clinic, 737 F.2d 503 (5th Cir. 1984]; International Woodworkers, 659 F.2d 1259. Further, failure of a designated attorney to testify on privilege grounds may result in dismissal of the case. Loctite Corp. v. Fel-Pro, Inc., 667 F.2d 577 (7th Cir. 1981):
In addition, Rule 11 sanctions may be imposed, as well as sanctions pursuant to Rule 30(b)(6). The failure of a party to tender an appropriate Rule 30(b)(6) deponent is justification for a court to call into question "the plaintiff's good faith in filing the lawsuit." AMP, Inc. v. Molex, Inc., 227 U.S.P.Q. (BNA) 172 (N.D. I11. 1985). Attorneys who receive a 30(b)(6) notice should not wait until the scheduled deposition to question or object to it. If the parties cannot reach an adequate stipulation with opposing counsel, the court's assistance should be promptly sought under Rule 26(c). See E.E.O.C. v. Thurston Motor Lines, Inc., 124 F.R.D. 110, 115 (M.D.N.C. 1989).
In Cobell v. Norton, 213 F.R.D. 48 (D.C. D.C. 2003), a Special Master was appointed to "oversee the discovery process in this case...; to ensure that discovery is conducted in the manner required by the Federal Rules of Civil Procedure and the orders of this Court" and "to regulate all proceedings in every hearing." The Special Master supervised the depositions. If you read the case, which I recommend, you will see that the term "Special Master-Monitor" is used. Part of the duties included monitoring reform of the Individual Indian Money trusts managed by the Bureau of Indian Affairs. It was a dual role.
The Special Master in Cobell noted that the plaintiff followed the directions of the Special Master in response to objections at the deposition. By contrast, he noted defendant's counsel for its "active objection to and refusal to follow" his instructions. Specifically, the Special Master over-ruled defense objections during the deposition but the defendants refused to answer the questions, despite the ruling. This resulted in a motion to compel. The District Court found that: ". . in response to the questions put forth by plaintiffs, defense counsel had repeatedly made frivolous assertions of attorney-client privilege." The Court found that defense counsel made other frivolous objections and described defense counsel's conduct as "unscrupulous tactics on the part of defense counsel to obstruct a legitimate inquiry into whether her co-counsel had lied to the Court." 213 F.R.D. at 58.
Ultimately, the District Court found that the power to oversee the discovery process and to regulate all proceedings in every hearing includes the power to regulate deposition questioning. Thus, the Special Master had authority to issue directions to the parties and their counsel in response to any objections asserted during the depositions at which he presides. 213 F.R.D. at 59. In response to defense counsel's refusal to follow the Special Master's directions, the Special Master exercised his authority to order that he would (1) terminate the deposition if the conduct continued in the future; (2) recommend that the defendant's counsel be referred to the Disciplinary Panel of the U.S. District Court for the District of Columbia for review and appropriate action under the District of Columbia Rules of Professional Conduct - specifically Rule 8.4(d) that provides that it is professional misconduct for a lawyer to engage in conduct that seriously interferes with the administration of justice; and (3) recommend referring defendant's counsel to the District Court for sanctions under Rule 37(a)(4)(A), as conduct that required a motion to compel discovery. The District Court held that the Special Master had the authority to make these recommendations.
As noted, this case contains a very good discussion on the authority of Court-Appointed Monitors to request and review documents, including documents claimed by a party as privileged. The decision is also procedurally interesting in its explanation as to why a party cannot seek a protective order against a judicial officer. The defendants moved for a protective order under Rule 26(c) to limit the discovery authority of the Special Master. The District Court not only denied defendants' motion, but sanctioned them for their discovery misconduct:
. . . defendants' motion represents the culmination of a series of displays of obstinacy, recalcitrance, and unprincipled behavior on the part of defense counsel. The Court fails to discern any circumstances in relation to the present matter that would make an award of sanctions against defendants and their counsel unjust. In fact, the Court concludes that it would be unjust not to sanction defendants and their counsel for wasting plaintiffs' time and resources by requiring them to respond to a completely frivolous motion.
213 F.R.D. at 62.
An award of sanctions for discovery abuse was also at issue in Good Stewardship Christian Center v. Empire Bank, 341 F. 3d 794 (8th Cir. 2003). In that case, lendors foreclosed on a loan used to purchase property and commenced foreclosure proceedings on the properties. One of the properties was residential and appellant Vaughn resided there. Vaughn sued the lenders and related parties under the Equal Credit Opportunity Act, the Fair Housing Act and for racial discrimination. The suit was dismissed as a sanction for discovery abuse. Prior to reaching that level of sanction, the District Court had appointed a Special Master to supervise the taking of depositions. As the Eighth Circuit stated:
The district court found that "Vaughn refused to answer simple and straightforward questions, [and] engaged in non-responsive speeches." GSCC's attorney also acted inappropriately, by "fail [ing] to advise his client of his responsibility to cooperate in discovery ... [and by lodging] constant meritless and inappropriate objections, speeches, and interruptions." As a result, the district court levied various fines and costs of the deposition against GSCC, Vaughn, and counsel, and appointed a Special Master.
341 F. 3d at 796-97. The District Court observed that: "relations between the parties and attorneys grew contentious." 341 F. 3d at 795. The case was dismissed as a sanction for failing to pay the monetary sanctions imposed for prior violation of court orders on conduct of the parties. The case never reached the stage where the Special Master actually supervised the taking of any depositions.
E. Special Master by Telephone vs. Supervised Deposition
Sanctionable violations of the Rules will not necessarily result in a deposition supervised by a Special Master. In re Vitamins Antitrust Litigation, 216 F.R.D. 168 (Dist. D.C.2003) provides a good discussion of the scope of the duty to investigate the facts and prepare a Rule 30(b)(6) witness. It is also a good example of a situation where the Court imposed sanctions on the defendant who did not adequately prepare its corporate witness, while at the same time declining to order that the resumed deposition be taken in the presence of the special master. Plaintiffs argued that it was concerned that the defendant "will again fail to comply with its Rule 30(b)(6) obligations at the retaking of its Rule 30(b)(6) deposition ...." Pls. Resp. to Bioproducts Obj. at 4. The Special Master noted in his report that the Plaintiff's request to have the deposition supervised by the Special Master was reasonable, but the Court should be able to rely on that Defendant and its counsel to comply with the letter and spirit of the May 15 Report and the Court's Order. The Special Master was available by telephone to rule on issues as they arose in the resumed deposition. There is no reported case suggesting that the second deposition required further motions practice.
F. Limitations of Depositions
Federal Rule of Civil Procedure 30(d) sets forth the duration and limit of depositions. A deposition is limited to "one day of seven hours," unless leave of court is obtained based on a need for "fair examination." Fed. Civ. Pro. 30(d)(2). Because of this severely restricted time frame, it is essential that a deposition is streamlined and prepared in such a way to address all the key elements of the case. Any unnecessary colloquialism among counsel merely takes away from the time allotted to substantive questions and answers. To preserve all seven hours for the deponents, any extensive discussion among counsel should be taken off the record with the time clocked.
The Advisory Committee Notes to the purpose of the stringent time limitation is to reduce "undue costs and delays" that result from overlong depositions. The Committee explained that this "limitation contemplates that there will be reasonable breaks during the day for lunch and other reasons, and that the only time to be counted is the time occupied by the actual deposition." The Notes also provided that the duration may be "extended, or otherwise altered, by agreement. Absent agreement, a court order is needed." The standard for seeking an alteration of the time limitation is "good cause."
Under Rule 30(a)(2), a litigant may take no more than ten depositions per side unless the parties have stipulated to a different number or the court has given leave for a greater number. Fed. R. Civ. P. 30(a)(2). See Advanced Sterilization Products, etc. v. Jacob, 190 F.R.D. 284 (D. Mass. 2000) (party must seek leave of court to take more than ten depositions, in absence of stipulation). Rule 30(a)(2)(b) imposes a further limitation that a deponent may be deposed only once. Fed. R. Civ. P. 30(a)(2)(b).
Cardenas v. Prudential Insurance Co. of America, 2003 WL 21293757 (D.Minn. 2003) is also instructive. The case involved claims of employment discrimination. Following a contentious deposition, the Defendant moved to compel a further deposition of the Plaintiffs, on the grounds that plaintiffs had been so uncooperative and disruptive during questioning that the depositions were useless. Prudential also sought appointment of Special Master to supervise the continued depositions.
The Magistrate Judge denied Prudential's motion, finding that it would be "just and practicable" to apply the new (and optional in this case) federal rule limiting depositions to one day of seven hours. See Fed.R.Civ.P. 30(d)(2). The Magistrate Judge specifically rejected Prudential's arguments that plaintiffs' conduct rendered the depositions useless. The Magistrate Judge found that the depositions were "contentious," but assigned blame for the breakdown of the deposition on both parties and denied the defendant further relief. The District Court affirmed, finding that the Magistrate Judge's conclusions were "not clearly erroneous." This case is interesting because it suggests that if you have unclean hands or do not approach the deposition with your own good behavior, the Court may use the limit on the number of depositions as a sanction, and your client can be denied the benefits of an effective deposition despite the improper conduct of the deponent.
G. Objections at Deposition
1. Instructions Not To Answer
"It [has long been] settled that counsel should never instruct a witness not to answer a question during a deposition unless the question seeks privileged information or unless counsel wishes to adjourn the deposition for the purpose of seeking a protective order from what he or she believes is annoying, embarrassing, oppressive, or bad faith conduct by opposing counsel." First Tennessee Bank v. Federal Deposit Ins. CM., 108 F.R.D. 640 (E.D. Tenn. 1985). See Quantachrome Corp. v. Micromeritics Instrument Corp., 189 F.R.D. 697 (S.D. Fla. 1999) (if counsel believes deposition is being conducted in bad faith or in such a manner as to unreasonably annoy, embarrass, or oppress deponent, then counsel may instruct the witness not to answer, but may do so only if he intends to more for a protective order). Rule 30(d)(1) provides:
Any objection during a deposition must be stated concisely and in a non-argumentative and non-suggestive manner. A person may instruct a deponent not to answer only when necessary to preserve a privilege, to enforce a limitation directed by the court, or to present a motion under Rule 30(d)(4).
Fed. R. Civ. Pro. 30(d)(1). In Convolve, Inc. v. Compaq Computer Corp., 223 F.R.D. 162, 175 (S.D.N.Y. 2004), the Court sustained defense counsel's instructions not to answer, finding that: "[t]o the extent that Seagate's counsel directed him not to answer, the questions posed violated the Special Master's direction to limit inquiry to specific Seagate drives."
Rule 30(d)(1) codifies prior practice that, "in the absence of a showing some serious harm [is] likely to result from responding to any given question, the policies behind Rule 30 require the answers to be given." Nutmeg Ins., 120 F.R.D. at 508; see also, Serafino v. Hasbro, Inc., 82 F.3d 515, 518-19 (1st Cir. 1996) (invocation of Fifth Amendment privilege that prevents defendant from mounting an effective defense by obtaining information from the plaintiff that is not available elsewhere justifies dismissal of plaintiff's, case); Hearst/ABC-Viacom Entertainment Services v. Goodway Marketing, Inc., 145 F.R.D. 593 (E.D. Pa. 1992) (instructions not to answer on basis of irrelevance was clearly inappropriate, and client must answer all questions where no privilege implicated).
Instructions not to answer are often combined with contentiousness. This is addressed neatly by one Magistrate-Judge. In a case also involving a good discussion of the scope of the attorney-client privilege and work product doctrine in the context of government employees, the Magistrate Judge in Banks v. Office of the Senate Sergeant-At-Arms, 222 F.R.D. 1 (D.C. D.C. 2004), made the following observation, which I believe is worth quoting in full:
The parties have also addressed other problems that have arisen either during the course of or during the planning for the deposition. I will not speak to hypothetical issues but, in the exercise of my obligation to keep a firm hand on the discovery process, I will provide them with guidance so that they cannot argue that they were not aware of my expectations the next time one of them complains. I will first say this. The papers in this case are all too full of the kind of bickering that is costing everyone far too much money. If it does not stop, counsel will be amazed at how much more expensive it will get once I start issuing sanctions. I am denying the motion for sanctions, but a word to the wise is sufficient.
Second, directing a witness not to answer a question on the grounds of relevance is a clear violation of the Federal Rules of Civil Procedure (F.R.Civ. P. 30(d)(1)) and sanctionable.
Third, the depositions of all remaining witnesses will be conducted in accordance with the principles elucidated in this opinion. Failure to comply with them will result in sanctions.
I specifically note that Mr. Macon's deposition may be taken again and conducted in accordance with these principles.
Instructions to experts not to answer questions also arise during depositions. For example, in Bockweg v. Anderson, 117 F.R.D. 563 (M.D.N.C. 1987), a medical malpractice action, the plaintiffs argued their experts could be asked only "non-privileged facts known or opinions held by the expert[s] relevant to the subject matter of the lawsuit . . . ." 117 F.R.D. at 563. The court disagreed, holding that Rule 26 encouraged "liberal discovery of expert witnesses, including information relevant only for impeachment." The court ordered that the plaintiffs instruct their experts "to answer questions relating to their involvement . . . in other malpractice actions . . . ". Id. at 565-66. See also Contra In re Air Crash Disaster at Stapelton Intern. Airport Denver, Colo., 720 F. Supp. 1442, 1444-45 (D. Colo. 1988) (refusing to allow inquiry into expert's retention and opinion on other cases, including cases handled by the same attorney; Bockweg disapproved).
Two decisions in the case of In re Omeprazole Patent Litigation, 2005 WL 818821 (S.D.N.Y. 2/18/05) and 227 F.R.D. 227 (S.D.N.Y.2005), n2 are also instructive on the appropriate use of instructions not to answer, objections at deposition and discovery of deleted portions of an expert's report. The defendant instructed an expert not to answer questions concerning deleted portions of the experts report (a report that had been "amended" several times). The Special Master recommended and the District Court confirmed that: (1) expert reports are not pleadings and are not therefore "amended" (i.e., they can be changed, but deleted or changed portions are proper areas for deposition examination), and (2) instructions to an expert not to answer are not proper. According to the Special Master, counsel should have objected and permitted the question to be answered, subject to the objection. Moreover, the expert is not the "client" and the party's counsel cannot instruct the expert not to answer.
n2 The citation is not a typo. It really is 227 F.R.D. 227.
Citing Shapiro v. Freeman, 38 F.R.D. 308, 312 (S.D.N.Y.1965), the District Court stated that:
It is not the prerogative of counsel, but of the court, to rule on objections. Indeed, if counsel were to rule on the propriety of questions, oral examinations would be quickly reduced to an exasperating cycle of answerless inquiries and court orders. Alternatively, if the plaintiff's attorney believed that the examination was being conducted in bad faith... or that the deponents were being needlessly annoyed, embarrassed, or oppressed, he should have halted the examination and applied immediately to the ex parte judge for a ruling on the questions, or for a protective order, pursuant to Rule 30(d). He had no right whatever to impose silence or to instruct the witnesses not to answer, especially so when the witnesses were not even his clients.
227 F.R.D. at 230.
The Special Master cited other authorities to show both the impropriety of Eon's actions and that "counsel's proper course would have been to allow the questioning to continue subject to objection." See Order at 5 (citing 7-30 MOORE'S FEDERAL PRACTICE--CIVIL § 30.43 (2004)); Hanlin v. Mitchelson, 623 F.Supp. 452, 455 (S.D.N.Y.1985) ("The proper procedure to follow when an objection is raised to a question propounded in a deposition is for the attorney who raises the objection to note his objection but to allow the question to be answered").
The actual questions and objections are worth reading, under the warning of don't let this happen to you:
Eon also instructed Dr. Block not to answer questions directed to the subject matter of the deleted paragraphs, for example:
Q. Now, do you think any of the claims of the patents-in-suit are anticipated by any piece of prior art?
MR. STUART: Objection. I am going to instruct the witness not to answer that question. That's been withdrawn from his Expert Report.
Block Depo. at pgs. 115-20, pgs. 152-57. During counsel colloquy, Astra's counsel attempted to persuade Eon's counsel to withdraw his objections, but Eon's counsel, Mr. Stuart, refused:
MR. GRIEM: There is nothing I can say that would allow you to permit the witness to answer my questions since he is here and since we have time to do it?
MR. STUART: That's correct. There is nothing that will make me let him answer those questions.
2005 WL 818821 at *1.
It is worth reminding all counsel that there are only three occasions when it is proper to instruct a witness not to answer a questions:
- first, to preserve a privilege;
- second, to the enforce a limitation directed by a court, and
- third, to present a motion under Rule 30(d)(4).
Fed.R.Civ. P. 30(d)(1).
In all other cases, testimony is taken subject to objection. Fed. R. Civ. P. 30(c). The limitations on objections are confirmed in In re Omeprazole Patent Litigation, 2005 WL 818821 (S.D.N.Y. Feb. 18, 2005) at *2.
One district court has held that sanctions beyond the cost of bringing a motion to compel may not be awarded for improperly instructing a witness not to answer unless there has been a previous order compelling an answer to the question, American Hanger, Inc. v. Basic Line, Inc., 105 F. R. D. 173 (D. Mass. 1985). This holding, however, does not seem to be the majority rule. Other courts have authorized harsher sanctions, including awarding as sanctions against the party or his attorney the costs of the original deposition or a second deposition (if one is ordered). See, e.g., Frazier v Southeastern Pennsylvania Transp. Auth., 161 F.R.D. 309, 315-16, 321 (E.D. Pa. 1995) (Rule 30(d)(1) is sufficient to support sanctions independent of a prior court order), and the appointment of a special master to preside at future depositions at the expense of the misbehaving attorney. See also Shapiro v. Freeman, 38 F.R.D. 308, 311 (S.D.N.Y. 1965) (same); Coca-Cola Bottling Co. of Shreveport. Inc. v. Coca-Cola Co., 123 F.R.D. 97 (D. Del. 1988) (court denied permission for a corporate party that moved to withdraw an admission under Rule 36 (even though the admission later turned out to have been made in error) where its officers had been instructed not to answer questions on the subject of the admission and discovery had thereafter closed).