The Price of Doing Out-of-State Business

A general contractor client fussed: “Why the hell do I have to send my project manager and superintendent to Texas for depositions just because some subcontractor is suing my company there?”

Well, Bob, here is the answer. Your company exercised its privilege to do business in the State of Texas. You got a job there. By doing that, you subjected your company to the “long-arm” jurisdiction of the Texas courts.

Regrettably, your company got involved in a dispute with the subcontractor. He sued and has the right to “discover”-find out everything he can about the controversy. Depositions are one of the discovery procedures available. Attorneys question witnesses under oath before a stenographic reporter who then produces a full written transcript of the questions asked and answers given during the deposition.

Unless clearly abusive, the courts of most states will require out-of-state parties to appear and produce their own employees for depositions in the state where the lawsuit is pending-and at their own expense.

Usually the cost of those depositions is not recoverable, even by the prevailing party. This is the law in Colorado, unless the depositions are actually used at trial in place of live testimony of witnesses who cannot be produced at trial because of death, illness or their being beyond the reach of a subpoena. See, Craulord v. French, 633 P.2d 524 (Colo. App. 1981).

So, Bob, that is one of the “privileges” of doing business in another state.