Case of the Day: In re Kirkland

Mosaic showing three classically dressed figures, one with a tool, one with the tablets of the law, and one with a laurel wreath, speaking.

The case of the day is In re Kirkland (9th Cir. 2023). John Kirkland lent money to EPD Investments between 2007 and 2009, when he was living in California. He later assigned the loans to the Bright Conscience Trust, a trust he and his wife had created for their children, and of which his wife, Poshow Ann Kirkland, is the sole trustee. Mr. Kirkland, a lawyer, also represented EPD. EPD was forced into bankruptcy in Los Angeles in 2010. Kirkland represented EPD in the bankruptcy case. The Trust filed a proof of claim in the bankruptcy case.1 The bankruptcy trustee brought an adversary proceeding against Mr. Kirkland and the Trust, seeking to disallow or equitably subordinate the Trust’s proof of claim and to avoid allegedly fraudulent transfers that EPD had made to Mr. Kirkland and the Trust when it had made mortgage payments on the Kirklands’ home. The gist of the claim was that EPD was a Ponzi scheme, and that Mr. Kirkland knew it and concealed it. Mr. Kirkland claimed a right to trial by jury, so the district court withdrew the reference of the adversary proceeding and bifurcated the issues, so that the fraudulent transfer case against Mr. Kirkland would be tried before the claims against the Trust. Mr. and Mrs. Kirkland testified in person, and the verdict was in Mr. Kirkland’s favor. The court then dismissed the equitable subordination claim against Mr. Kirkland and returned the claims against the Trust to the bankruptcy court.

The bankruptcy court granted the trustee’s motion in limine to exclude the transcripts of the Kirklands’ deposition and trial testimony from the case in the district court. The Trust argued that the transcripts should be allowed, because the Kirklands were unwilling to travel to California to testify, and thus the prior testimony exception to the hearsay rule applied. But the judge found that the Kirklands’ “unavailability … had been engineered by the BC Trust for purely strategic purposes.” The judge also thought that the testimony from the first trial would be insufficient for purposes of the second trial.

The bankruptcy judge authorized the trustees to serve subpoenas on the Kirklands for their testimony at the second trial, to be served by certified mail and publication. The subpoenas commanded the Kirklands to testify remotely by video from the U.S. Virgin Islands, where they now live. The Kirklands moved to quash, arguing that the subpoenas violated FRCP 45(c)(1), which provides:

A subpoena may command a person to attend a trial, hearing, or deposition only as follows:

  1. within 100 miles of where the person resides, is employed, or regularly transacts business in person; or
  2. within the state where the person resides, is employed, or regularly transacts business in person, if the person
    1. is a party or a party’s officer; or
    2. is commanded to attend a trial and would not incur substantial expense.

The bankruptcy judge disagreed, pointing to FRCP 43(a), which provides:

At trial, the witnesses’ testimony must be taken in open court unless a federal statute, the Federal Rules of Evidence, these rules, or other rules adopted by the Supreme Court provide otherwise. For good cause in compelling circumstances and with appropriate safeguards, the court may permit testimony in open court by contemporaneous transmission from a different location.

Although the court recognized that it could compel the Kirklands to appear in person, it reasoned:

Where a witness has been ordered to provide remote videotestimony transmitted from the witness’s home (or another location chosen by the witness) that witness has not been compelled to attend a trial located more than 100 miles from the witness’s residence.

The Kirklands sought review by way of a writ of mandamus. This appears to be the first appellate decision on the question.

The Ninth Circuit held that the subpoenas were impermissible. It began by noting the obvious: the Kirklands, who lived in the USVI, could not be compelled to travel to California for the trial. But what about Rule 43(a)? The court read the rule to be about how trial testimony may be taken, not about the court’s power to compel attendance. That view is consistent with the 2013 advisory committee notes to Rule 45, which say:

When an order under Rule 43(a) authorizes testimony from a remote witness, the witness can be commanded to testify from any place described in Rule 45(c)(1).

It is also consistent with our law’s strong preference for in-person attendance at a trial, which is held at a specific place and a specific time. “The importance of presenting live testimony in court cannot be forgotten. The very ceremony of trial and the presence of the fact-finder may exert a powerful force for truth telling.” 1996 advisory committee note to Rule 43(a).

The court saw some appeal to the idea that the “place of compliance” is where the witness is when he or she testifies, rather than where the trial is to be held. such a distinction has really become possible only recently. But the court rejected the idea, noting that it would make Rule 45(d)(3)(A)(ii), which requires courts to quash subpoenas that exceed the territorial scope of the rule, a nullity, and because it is contrary to the principle that a trial has a single place in space and time. “No matter where the witness is located, how the witness ‘appears,’ or even the location of the other participants, trials occur in a court.” As FRCP 77(b) says: ” Every trial on the merits must be conducted in open court and, so far as convenient, in a regular courtroom.” The court was unwilling to revise these established ideas in light of changing technology.

I think the approach the Ninth Circuit takes is a characteristically common law approach. For us, the trial is a moment in time when the parties, the witnesses, the jury, the judge, and the public come together in a courtroom. I don’t claim to be an expert in the civil law, but I don’t think the civil law generally has the same conception of a trial, and so the Ninth Circuit’s reasoning may seem less compelling to lawyers trained in the civil law. But despite the court’s paean to live, in-person testimony at trial, the decision doesn’t and shouldn’t be read to discourage the increasingly common practice of witnesses, particularly distant witnesses, appearing voluntarily in court via video. Testimony taken by videoconferencing at trial is useful because it allows jurors to see distant witnesses in real time. Its use will only increase, I think.

How important is the 100-mile rule? It depend on whether the witness is in the United States or abroad. Suppose the witness were abroad. Could he or she be commanded to appear by video at a trial to be held in the United States? I assume everyone would agree the answer to that question is no. Could he or she be commanded to travel to the trial? Again, I assume everyone agrees the answer is no. But you would never even get to these questions if the witness is served with the subpoena abroad, because a US subpoena can only be served within the United States.

Before 2013, something similar was true for trial subpoenas directed to witnesses in the United States. Today, the rule is simply that any subpoena can be served anywhere in the United States. But the rule used to be that a trial subpoena had to be served:

at any place:

  1. within the district of the issuing court [i.e., the trial court];
  2. outside that district but within 100 miles of the place specified for the … trial …;
  3. within the state of the issuing court if a state statute or court rule allows service at that place of a subpoena issued by a state court of general jurisdiction sitting in the place specified for the … trial …; or
  4. that the court authorizes on motion and for good cause, if a federal statute so survives.

So until the rule change (in 2013), you wouldn’t even have gotten to the question of whether a witness in the USVI could be compelled to travel to California to testify in person, or could be compelled to testify remotely from the USVI, because you could not serve the witness with a trial subpoena in the USVI. You had to take the witness’s deposition beforehand.

But under the new rule, service on the Kendricks in the USVI would not be the problem, since a subpoena can be served anywhere in the United States.2

In other words, under the version of Rule 45 in effect for the past ten years, a witness in the United States won’t be able to use limitations on service to protect himself or herself from a trial subpoena. Instead, the 100-mile limitation in FRCP 45 is the only territorial protection for domestic trial witnesses.

Kirkland is likely to prove an important decision. If followed, it will force lawyers to think carefully about the need for depositions suitable for use at trial in the case of distant witnesses. Will it undermine the practice of remote depositions that has become increasingly common since COVID? Probably not (in domestic cases), since under the modern version of FRCP 45, a witness can be served with a subpoena issued by any US court and can be compelled to appear within the 100-mile radius to testify. I think we know already that while a deposition is taken in a particular place, the deposition doesn’t require the physical presence of the participants in the same locale as does a trial.

  1. I am using the language the court uses. Of course, what the court means is that Mrs. Kirkland, as trustee, filed a proof of claim.
  2. I’m assuming without checking that the USVI counts as “the United States” for these purposes. Note also that the Kendricks were served with the subpoena by certified mail and publication, which, unless there is something I don’t know about bankruptcy procedure, is probably not good service. See Fed. R. Bankr. P. 9016 (“Rule 45 F.R.Civ.P. applies in cases under the Code”). So an easier way to get to the answer the Ninth Circuit reached is to question whether the subpoenas were valid in the first place, that is, whether they were properly served.

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