Original Filed
January 11, 2000

In re		
No. 98-34055DM
Chapter 11
INTERACTIVE NETWORK, INC., a
California corporation,
Debtor.
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Order Denying Motion For Protective Order

On January 7, 2000, this court held a hearing on the motion for
protective order filed by Interactive Network, Inc. ("Debtor").
In this motion, Debtor seeks an order quashing the deposition
subpoenas of Marshall L. Small, Esq. ("Small") and J. Robert
Nelson, Esq. ("Nelson"), both of whom are partners at Morrison &
Foerster, LLP, the law firm serving as Debtor's general
bankruptcy counsel. David R. Lockton ("Lockton"), whose
attorneys issued the subpoenas, filed an opposition to Debtor's
motion for protective order. Pending resolution of other
separate issues relating to stock options claimed by Lockton, the
court is temporarily granting the motion with respect to Small.
With respect to Nelson, however, the court will deny the motion
for protective order.

Lockton contends that Nelson is a percipient witness on issues
relating to Debtor's objections to his proof of claim. In
particular, Lockton wants to depose Nelson regarding (1) Nelson's
knowledge of TCI's purported intention to retain ownership of
Debtor's patents, an alleged event of default triggering
acceleration of amounts due to Lockton; (2) Nelson's
conversations with Lockton, upon which Lockton bases his claims
of waiver and estoppel by Debtor; (3) Nelson's knowledge
regarding the ratification of Lockton's employment agreement by
Debtor's board of directors; (4) Nelson's knowledge of and lack
of objection to Lockton's compensation arrangement; and (5)
Nelson's knowledge of Lockton's services to and activities on
behalf of Debtor (which is relevant to reasonableness of
Lockton's compensation).

Nelson is not litigation, trial or bankruptcy counsel in this
contested matter. His services as attorney which are relevant to
the proposed discovery were rendered apart from and prior to the
claims litigation. Lockton wants to depose Nelson as a fact
witness, and concedes that any discovery of Nelson is subject to
Debtor's right to claim available privileges. As such, this
court will follow the liberal approach to discovery directed at
attorneys adopted in Johnston Development Group, Inc. v.
Carpenters Local Union No. 1578, 130 F.R.D. 348, 352 (D. N.J.
1990) ("deposition of the attorney may be 'both necessary and
appropriate' where the attorney may be a fact witness, such as an
'actor or viewer', rather than one who 'was not a party to any of
the underlying transactions giving rise to the action'"). Under
these circumstances, this court is not inclined to follow Shelton
v. America Motors Corp., 805 F.2d 1323 (8^th Cir. 1986), which
involved an attorney who was not a witness to the underlying transaction and was actual trial counsel.

Most significantly, Debtor has refused to stipulate that it will
not call Nelson as a fact witness at trial, and has specifically
stated that it may call him as a rebuttal witness. In essence,
Nelson's testimony may be relevant to the prosecution of Debtor's
objection to Lockton's claim. As such, the deposition of Nelson
is both "necessary and appropriate," especially where he is a
"fact witness." Johnston, 130 F.R.D. at 352; see also American
Casualty Co. v. Krieger, 160 F.R.D. 582, 588 (S.D. Cal. 1995). In
cases where an attorney's conduct may be the basis of a claim or
defense (i.e., the basis of Lockton's claims of waiver), "there
is little doubt that the attorney may be examined as any other
witness." Johnston, 130 F.R.D. at 352.

As noted by the Krieger court, neither the federal rules of
procedure nor the federal rules of evidence prohibit taking the
deposition of any opposing party's attorney. "In fact, Rule
30(a) of the Federal Rules of Civil Procedure permits a party to
take the testimony of 'any person' by deposition, without leave
of court. The Rule sets forth certain exceptions to this
provision, none of which exempt a party's attorney from being
subject to deposition." Krieger, 160 F.R.D. at 585.
Nevertheless, "it is appropriate to require the party seeking to
depose an opposing party's attorney to establish a legitimate
basis for requesting the deposition, and to demonstrate that the
deposition will not otherwise prove overly disruptive or
burdensome." Id. at 588. In this case, Nelson is a fact witness
to the transactions underlying this contested matter, but is not
litigation counsel in this matter. Since Debtor has indicated
that it may call Nelson as a witness at trial, Lockton has shown
a legitimate basis for deposing Nelson, and has satisfied this
court that the deposition will not be disruptive or burdensome.
In fact, in light of Debtor's reservation of Nelson as a possible
trial witness, it would be unduly burdensome and disruptive to
prohibit Nelson's deposition.

At this time, the court will not place any limits on the scope,
timing or duration of Nelson's deposition. Any disputes
regarding these matters or questions of privilege may be resolved
by an emergency telephonic conference with the court. See § 3 of
this court's scheduling order signed on October 28, 1999.
Therefore, in light of the foregoing, it is hereby

ORDERED that Debtor's motion for protective order with respect to
the deposition of Nelson is DENIED.

	
Dated: January 11, 2000

______________________________
Dennis Montali
United States Bankruptcy Judge