April 13, 2026|Franchise Frontlines
April 13, 2026 | U.S. District Court, D. Massachusetts | Unpublished Order
Executive Summary
In an unpublished decision, the U.S. District Court for the District of Massachusetts granted in part a motion for sanctions against 360° Painting, LLC and related defendants after finding repeated failures to produce an adequately prepared Rule 30(b)(6) witness. The underlying dispute arises from a franchise relationship involving claims of fraud, breach of contract, and trade secret misappropriation tied to Franchise Disclosure Documents (“FDDs”) and marketing representations. Plaintiffs argued that the franchisor failed to provide a knowledgeable corporate representative despite multiple court orders. Defendants asserted that key information resided with former outside counsel and implicated privilege concerns. The court rejected those arguments, finding that the defendants failed to meet their obligation to prepare a witness capable of testifying on designated topics. As a result, the court imposed evidentiary sanctions, including limitations on trial testimony and potential adverse inference instructions. The decision underscores the litigation risks associated with inadequate preparation of corporate designees in franchise disputes.
Relevant Background
The case arises out of a franchise relationship between the plaintiffs, a franchisee and its principal, and the franchisor defendants. The plaintiffs alleged that the defendants made material misrepresentations in FDDs, marketing materials, and promotional content, including submissions to industry publications, and that those representations induced entry into the franchise system.
During discovery, plaintiffs sought testimony under Federal Rule of Civil Procedure 30(b)(6) regarding topics central to their claims, including the preparation, accuracy, and dissemination of FDDs, the basis for financial performance representations, and the development of marketing materials. After the defendants failed to timely designate a witness, the court issued multiple orders directing them to produce a prepared corporate representative.
The defendants ultimately designated a senior executive as the Rule 30(b)(6) witness. At the deposition, however, the witness was unable to answer questions on key topics and repeatedly deferred to a former outside attorney and other individuals. The witness had not meaningfully reviewed relevant documents, consulted with knowledgeable personnel, or otherwise prepared to testify on the designated subjects.
Plaintiffs moved for sanctions, arguing that the defendants’ repeated failures to comply with court orders deprived them of critical discovery.
Decision
The court granted the motion for sanctions in part, finding that the defendants failed to satisfy their obligations under Rule 30(b)(6) despite multiple opportunities to do so.
The court emphasized that a corporation has an affirmative duty to produce a witness who is prepared to testify on its behalf regarding matters known or reasonably available to the organization. Producing an unprepared witness is treated as a failure to appear for purposes of discovery obligations. Here, the court found that the designated witness did not undertake the basic steps necessary to prepare for the deposition, including reviewing documents or consulting with other individuals who possessed relevant knowledge .
The court also rejected the defendants’ reliance on the attorney-client privilege as a basis for non-compliance. While the defendants argued that key information resided with former outside counsel and was privileged, the court made clear that a corporation cannot use privilege as a shield to avoid its obligation to provide factual testimony. The court noted that many of the topics at issue—such as the preparation and dissemination of FDDs and marketing materials—concerned business facts that are not inherently privileged.
In addition, the court found that the defendants’ conduct demonstrated a lack of seriousness in complying with discovery obligations. The defendants had been ordered more than once to produce a prepared witness and were expressly warned that sanctions could follow non-compliance. Despite those warnings, the defendants failed to provide an adequate witness and did not timely present an alternative designee.
As a remedy, the court declined to impose the most severe sanctions, such as default judgment, but determined that evidentiary sanctions were appropriate. The court limited the defendants to the testimony already provided by the unprepared witness and precluded them from introducing additional evidence on certain topics. The court also indicated that adverse inference instructions may be given, permitting the jury to infer that missing evidence would have been unfavorable to the defendants. Finally, the court ordered the defendants to pay reasonable attorney’s fees associated with the discovery dispute.
Looking Forward
This decision highlights the practical consequences of failing to meet Rule 30(b)(6) obligations in complex commercial litigation, including franchise disputes. Courts expect corporations to undertake a reasonable, good-faith effort to prepare a witness capable of providing complete and binding testimony on designated topics. Where a party fails to do so, courts may impose sanctions that materially affect the presentation of the case at trial.
The ruling is particularly instructive for disputes involving FDDs and franchise sales practices. Topics such as financial performance representations, marketing materials, and the development of disclosure documents are treated as factual matters within the corporation’s knowledge base, even where outside counsel was involved in drafting or review. The involvement of counsel does not relieve a company of its obligation to present knowledgeable testimony regarding underlying business decisions and factual content.
The decision also underscores that discovery obligations cannot be satisfied through partial compliance or by shifting responsibility to former employees or advisors. Corporations must identify and synthesize information from available sources to provide a coherent response through their designated witness. Failure to do so may result in evidentiary limitations that constrain the ability to defend against claims.
At the same time, the court’s ruling reflects a case-specific application of established discovery principles rather than a change in governing law. The sanctions imposed were tailored to the conduct at issue and the procedural posture of the case. Nevertheless, the decision illustrates how discovery missteps can have substantive consequences, particularly where the issues in dispute involve representations made to prospective franchisees and the supporting documentation for those representations.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Partner at Buchalter LLP and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
