The “Apex Doctrine” Revisited

Contributed by Adam Tolin

One issue we at the Monitor have tracked is the application of the “apex doctrine,” which protects corporate executives from deposition.  See my prior post on this subject here.

First, a quick refresher on the doctrine.  “In determining whether to allow an apex deposition [i.e., the deposition of a high-level executive], courts consider (1) whether the deponent has unique first-hand, non-repetitive knowledge of facts at issue in the case and (2) whether the party seeking the deposition has exhausted other less intrusive discovery methods.”  Apple Inc. v. Samsung Electronics Co., Ltd., 282 F.R.D. 259, 263 (N.D.Cal. 2012).

The premise of the rule is that plaintiffs have myriad ways to discover information from the corporate defendant without taking the defendant’s high ranking executive’s deposition, and should not be able to compel that deposition when it really is nothing more than a litigation tactic aimed at “rattling the cage” of top executives and pressuring the company into settling the matter.  But how do you protect your client’s high ranking executives?  Two recent decisions involving the “apex doctrine” are instructive, as both courts permitted the depositions of the executives largely because the depositions of subordinates went poorly.  In both cases, the witnesses volunteered that the “apex” executives may possess unique information.

In Asarco LLC v. Noranda Min., Inc., 2015 WL 1924882 (D. Utah Apr. 28, 2015), the plaintiff sought contribution from Noranda for a portion of the $8.7 million plaintiff paid to clean up and control contamination at the Richardson Flats in Utah.  Plaintiffs sought to depose Ms. Stash, who was a former senior officer for Atlantic Richfield Company, a company that performed operations at the Richardson Flats site prior to Noranda.  Ms. Stash asserted in a declaration that she lacked personal knowledge and did “not recall having any involvement with Richardson Flats” during her term as General Manager of Atlantic Richfield.  But the court was not convinced because of testimony in a different action from other employees, which suggested she did have knowledge of Richardson Flats that was relevant to its contribution claims against Noranda.  The court was also not persuaded that it was a burden to take her deposition in England (where she now resides) even though it would require “the parties to retain foreign counsel [and] travel to London . . . .”  The court concluded that “[u]nder the current circumstances, however, the court does not find the burden to be undue given that the deposition is scheduled in London, the city of Ms. Stash’s residence, at an agreed upon time and date.”

A Middle District of Florida court reached a similar result in Maronda Homes, Inc. of Florida v. Progressive Exp. Ins. Co., 2015 WL 1565299 (M.D. Fla Apr. 8, 2015).  In Maronda Homes, a homebuilding company sued Progressive after it was forced to pay for its own attorney because its insurer, Progressive, represented multiple defendants in an accident case, and the homebuilding company believed Progressive’s attorneys had a conflict of interest. The plaintiff claimed Progressive breached the terms of the insurance policy.  At the plaintiff’s 30(b)(6) deposition, the corporate witness identified the company’s Vice President as plaintiff’s primary or point person on the accident at issue.  At various points in the deposition, the 30(b)(6) witness deferred to the Vice President as the person who did, or might, have the knowledge to answer certain questions.

After the plaintiff refused to produce the Vice President at deposition, Progressive moved to compel.  The court essentially scolded the plaintiff for failing to protect its executive.  The court began by addressing the merits of the apex doctrine.  “Virtually every court that has addressed deposition notices directed at an official at the highest level or ‘apex’ of corporate management has observed that such discovery creates a tremendous potential for abuse and harassment.” (internal citation omitted).  The court further noted its routine application.  “While there is no per se rule prohibiting depositions of top corporate executives, “courts frequently restrict efforts to depose senior executives where the party seeking the deposition can obtain the same information through a less intrusive means, or where the party has not established that the executive has some unique knowledge pertinent to the issues in the case.”

But the problem in this case was that the plaintiff did not do nearly enough to protect its executive.  “The Court doesn’t know where [the VP’s] roles as controller and vice-president places him in the hierarchy at Maronda, and without this information, it is impossible to say whether [the VP] is sufficiently senior in the company to be considered an apex witness.”  But on top of that, the court realized it had little choice but to compel the deposition because  “[e]ven if [the VP] is a high-ranking person in the company who is generally focused on the big picture, with little or no knowledge of day-to-day occurrences that was not his role in this case[,] [the plaintiff] has identified him as its point person for the motor vehicle accident litigation,” in light of the testimony at the Rule 30(b)(6) deposition.”

The court also noted the obvious – when a party asks for information at a 30(b)(6) deposition and that witness punts to an apex executive – by definition the party has attempted to discover the information through less intrusive means but obviously to no avail.

These cases are a useful reminder that before discovery begins, a party seeking to defend against an “apex” deposition should investigate alternative means for the opposition to acquire the information that the executive may possess, and develop a record in early depositions establishing the limits of the executive’s involvement and/or the fact that other employees possess the same information. This is particularly important to do before a 30(b)(6) deposition.