Denying a motion to quash, Bankruptcy Judge Eduardo V. Rodriquez of Houston is allowing the Jackson Walker law firm to depose the region’s U.S. Trustee, the assistant to the U.S. Trustee and the former acting U.S. Trustee.

As Judge Rodriguez said in his November 13 opinion, the U.S. Trustee had “already stated under oath that, to the best of his knowledge, neither he, the former Acting United States Trustee, nor any current or former Region 7 employee had actual knowledge of the Relationship before it was reported publicly on October 6, 2023.” The judge was referring to the allegation that a former partner of the law firm owned a home together with a Houston bankruptcy judge and was living with him, without disclosure, in the cases where both were involved.

For lack of disclosure, the U.S. Trustee is moving under Rule 60 for the court to order the firm to disgorge millions of dollars in fees allowed in 16 cases.

After the U.S. Trustee and others were served with deposition notices, the U.S. Trustee filed a motion to quash. Judge Rodriguez overruled each rationale submitted by the U.S. Trustee.

The Morgan Doctrine

Judge Rodriguez quoted the Fifth Circuit for deducing from a Supreme Court decision known as Morgan that calling high-ranking government officials to testify is “discouraged.” The Fifth Circuit went on to say that there must be “exceptional circumstances” before depositions are taken of “high agency officials.”

Judge Rodriguez found “that there are at least nineteen other employees at the United States Trustee’s level alone” and that the U.S. Trustee “is not of sufficiently high-ranking status to warrant defeating the requested deposition under the Morgan doctrine.” Even if the U.S. Trustee were sufficiently high-ranking, he went on to say that the “case at bar certainly qualifies as a rare case where such testimony would be justified.”

Judge Rodriguez denied the motion to quash insofar as it relied on the Morgan doctrine, because “it ties directly to the United States Trustee’s personal knowledge” and is not “unduly burdensome.”

Relevance

Responding to the U.S. Trustee’s contention that testimony in a deposition would be irrelevant, Judge Rodriguez began by noting that he had “previously found that only the actual knowledge of the United States Trustee is discoverable.”

Moreover, “the United States Trustee’s knowledge could reasonably impact this Court’s determination of whether a ‘manifest injustice’ or ‘extraordinary circumstances’ exist as to the United States Trustee’s Rule 60 Motions,” Judge Rodriguez said. He denied the motion to quash based on relevance, allowing the firm to inquire “about the USTP Personnel’s knowledge as it is relevant to the ‘manifest injustice’ or ‘extraordinary circumstances.’”

Cumulative Information

Because he had previously stated under oath that no current or former employee for the U.S. Trustee had “actual knowledge” about the relationship, the U.S. Trustee wanted the subpoena quashed for seeking cumulative information.

Judge Rodriguez denied the motion to quash as seeking cumulative information, because the  prior statement under oath was “wholly insufficient to conclusively prohibit Jackson Walker from asking questions to the United States Trustee or USTP Personnel.”

Privileged Information

The U.S. Trustee argued that a deposition would seek privileged information, given that all of the deponents are lawyers.

Judge Rodriguez began by noting that the Fifth Circuit has said that depositions from opposing counsel are “disfavored generally” and are permitted only in “limited circumstances.” If the firm seeks privileged information in the depositions, Judge Rodriguez said that “Rule 30(c)(2) provides the mechanism for asserting the privilege during the depositions.”

Judge Rodriguez denied the motion to quash, finding “no cause . . . to limit discovery pursuant to Rule 26 here.” He permitted depositions of the U.S. Trustee, his assistant and the former acting U.S. Trustee. Previously, the U.S. Trustee agreed to allow depositions of two of his trial attorneys.