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The Apex Doctrine and the C-Suite Deponent

The First Line of Defense Against Plaintiff Overreach

Introduction

The suit has been filed, the troops have been marshaled, and written discovery is underway. What’s next are the inevitable requests for depositions of current and former company employees – both by name and topic. At this point, the question of whether a corporate client will be asked to offer an executive for deposition is not a matter of “if” it will happen, but rather “when” it will happen. That being the case, perhaps a more apt inquiry is “how” it will happen – and, taken a step further, what we, as a defense team, can do to prevent or limit the request when it lands.

This is not a new development in the context of complex pharmaceutical, medical device and biologics litigation. History is rich with plaintiff’s counsel seeking depositions of corporate CEOs, CFOs, COOs and CIOs. After all, what better person to call than a company “Chief” – especially one that may have a public presence – as a vessel to discuss the putative deficiencies, defects, design flaws and adverse event disasters associated with the drug or device at issue? These lawyers would like nothing more than a few choice sound bites from a well-paid, high-profile face of the company. If effective, this testimony could end up as the proverbial “shot heard ‘round the world.” Having it played in courtrooms in trial and after trial can be damaging in and of itself, but the prejudicial impact could also be felt on a more global scale in the court of public opinion via the press, and, worse, via the juggernaut of disinformation and speculation found on the internet and social media outlets. It is the perfect scenario for the other side and, if executed properly, is seen as a not-so-subtle attempt to harass the witness and open the door to settlement discussions.

From a defense perspective, high-ranking corporate depositions provide a unique set of issues. Depositions of executives are disruptive to busy schedules that do not allow for hours or days of litigation preparation and testimony. Corporate executives may have minimal or no substantive knowledge about the product or issues at stake, and thus could be exposed to areas of attack that other, better-informed employees would not. If the company has other litigation or is the subject of any investigation, those are additional contingencies to consider. Finally, a corporate deposition could have long-lasting implications for the company from an investor, shareholder and public relations perspective.

Fortunately, in many cases, there are means to limit, if not quash, an improperly requested corporate deposition. Sure, a carefully worded request that is consistent with the rules (general, local and case-specific) and one that provides viable grounds as to why this particular individual is the only/best-suited corporate employee to testify may get some traction. Such a deposition, however, is the exception to the rule and is protected by the Apex Doctrine. 

The Apex Doctrine

The Apex Doctrine is designed to shield high-ranking corporate employees from being improperly and/or unnecessarily deposed. While the Federal Rules of Civil Procedure do not expressly address this issue, courts across the country have adopted the Apex Doctrine as a means to thwart abusive discovery tactics aimed at high-ranking corporate employees. The goals of the Apex Doctrine have been described by the judiciary as follows:

(1) to promote efficient discovery; and

(2) to prevent the use of depositions to annoy, harass or unduly burden the parties.[1]

To achieve those goals, before allowing the deposition of an executive, courts consider:

(1) does the high-ranking employee have superior or unique personal knowledge of facts that are relevant to the litigation; and

(2) can the party seeking the deposition obtain that information from less burdensome sources.[2]

1. Who is an “Apex” employee?

The Apex Doctrine protects a “high-level corporate official.”[3] Most courts assume that someone in a chief officer position, a board director or a president is an “Apex” employee.[4] For example, the former Chief Executive Officer and Chair of Continental Airlines was automatically afforded Apex status without question.[5] But the Doctrine may also protect witnesses lower in the company’s hierarchy. To make the assessment, trial courts consider the size of the company as well as the ranking and responsibilities of the employee.

Size addresses whether the company is large enough to have executives who are not involved in the day-to-day management of the business.[6] If so, the role and responsibilities of the potential deponent are evaluated to see if that person is typically removed from the subject matter of the litigation; in other words, whether lower-ranked employees have better information regarding the issues in dispute.[7]

In the Federal District Court of Puerto Rico, the plaintiff sought the deposition of an employee who oversaw four hospitals.[8] The lawsuit alleged medical malpractice against one of the four hospitals asserting that the emergency room failed to diagnose and treat the plaintiff.[9] The trial court denied the deposition request, finding that while the witness was ultimately responsible for the operation of the hospital, he was not involved in the day-to-day operations. Instead, the employee sought to be deposed relied on a management team to supervise and establish the protocols, policies and procedures of the emergency room.[10]

To the contrary, the Northern District of California permitted the deposition of the CEO of a “relatively small company, not a large national corporation,” because the party seeking the deposition established that the CEO was involved in the daily operations of the business, had direct knowledge of the technology running the business models and was a primary contact for a relationship in dispute in the litigation.[11]

In addition to protecting high-ranking employees or corporations, courts have also shielded high-ranking government officials from being deposed under the same reasoning.[12]  Included in the list of official positions that have been considered protected from depositions are the staff members of the Executive Office of the President,[13] governors, agency heads, former commissioners, chiefs of staff for department heads and parole board members.[14]

2. When does the Apex Doctrine apply?

Once the trial court determines that the target of the deposition qualifies as an Apex employee, the court must balance the interest of protecting the Apex employee from harassment and burdensome discovery against the broad scope of the discovery rules. To do so, courts will look at whether the employee has unique personal knowledge that may be relevant to the subject matter of the lawsuit and the extent to which that knowledge can be discovered through less burdensome means.[15] If the relevant information known to the Apex employee was obtained second-hand or there are less burdensome routes to obtain the information, courts will typically protect the Apex employee from being deposed.

Merely having some knowledge of the subject matter of a dispute is typically not enough to compel the deposition of a high-ranking executive.[16] This protects an executive when the deposition is sought simply because he or she has the ultimate responsibility for all corporate decisions or knows corporate policy.[17] Similarly, generalized knowledge about the subject matter of the litigation is not enough to justify deposing an Apex employee.[18] In a product liability case against Toyota, the court examined the need for personal, unique knowledge in order to justify an Apex deposition.[19] There, plaintiff argued that the public appearances of two executives evidenced their personal knowledge about Toyota’s recall efforts and safety issues.[20] However, because the executives spoke only in general terms about the issues, this did not show actual knowledge about the design, engineering, manufacturing or testing processes that were at issue.[21] In addition, courts will not subject an executive to a deposition simply because he or she received relevant information through a report, signed a contract, was kept informed on an issue or gave final approval for a corporate decision.[22]

To justify deposing the Apex employee, the employee must be the only source of the information.[23] In making that determination, courts explore whether the information can be obtained through other sources like interrogatories or depositions of a designated spokesperson or lower ranked employee.[24]

In an oft-cited opinion from the Fifth Circuit, the court agreed that the deposition of a pharmaceutical company’s president was unnecessary where the plaintiff already was in possession of  testimony that the witness gave at a Senate Committee hearing on substantially the same topics.[25] In addition, the plaintiff had noticed the depositions of six lower-ranked employees who were the most familiar with the issues.[26]

In Baine v. General Motors Corp., the plaintiff attempted to depose a vice president of General Motors who had written a memorandum about the restraint system at issue while it was in prototype.[27] The trial court did not allow the deposition because the plaintiff had not first attempted to get the information from other, less intrusive sources.[28] The court allowed depositions of lower-level engineering analysts, and it required the plaintiff to serve interrogatories on the vice president to explore whether he had superior knowledge of the system.[29]

As seen in the Baine case, the Apex Doctrine is not a shield to the discovery process. Rather, less burdensome, alternative discovery should take place first. If the information cannot be obtained in that way, courts can determine if an Apex deposition should proceed.[30]

3. How to apply the Apex Doctrine in practice?

In most jurisdictions, once a party notices the deposition of a corporate executive, either the executive or the corporation itself will file a motion for a protective order seeking to invoke the Apex Doctrine.[31] The motion must be supported by evidence, typically an affidavit, demonstrating that: 1) the executive is an Apex employee and 2) lacks unique personal knowledge.[32] The affidavit should make clear that whatever knowledge the executive has is not unique and is not derived from firsthand participation in the events giving rise to the lawsuit.[33]

Once the motion for protection is filed, the party seeking the deposition will have to establish that the relevant information sought cannot be obtained without the Apex deposition.[34]  It is then up to the court to weigh the interests.[35] If the trial court believes that some of the factors weigh in favor of the deposition and some do not, it may permit a deposition on limited topics and for a limited amount of time.[36]

Conclusion

“Apex,” by definition, means the top or highest point of something. The Apex Doctrine should, indeed, serve as the tip of the spear to counterattack plaintiff’s attempts to put a corporate executive front and center. In most cases, the testimony plaintiffs seek can be provided by employees with front line knowledge of the issues – which better serves the interests of the trial team. Moreover, it relieves the company chiefs from having to block hours of time for preparation and testimony. In so doing, it frees them up to do what they do best: managing the company’s overall operations in a way that serves the employees, the stockholders, and, ultimately, the beneficiaries of the company’s life-changing therapies: the public. 


[1] See, for example, State ex rel. Massachusetts Mut. Life Ins. Co. v. Sanders, 724 S.E.2d 353 (W. Va. 2012).

[2] In re Google Litigation, 2011 WL 4985279, at *11 (N.D. Cal. 2011); see Salter v. Upjohn Co., 593 F.2d 649, 651 (5th Cir. 1979).

[3] See Apple Inc. v. Samsung Electronics Co., Ltd., 282 F.R.D. 259, 263 (N.D. Cal. 2012); Performance Sales & Mktg. LLC v. Lowe’s Companies, Inc., 2012 WL 4061680, at *3–4 (W.D.N.C. Sept. 14, 2012).

[4] In re Cont’l Airlines, Inc., 305 S.W.3d 849 (Tex. App—Houston [14th Dist.] 2010, no pet.). This includes former and retired executives. See Gautheir v. Union Pacific R. Co., 2008 WL 2467016 (E.D. Tex. 2008).

[5] See id.

[6] Sun Capital Partners, Inc. v. Twin City Fire Ins. Co., 310 F.R.D. 523, 528 (S.D. Fla. 2015).

[7] Gonzales Berrios v. Mennonite General Hosp., Inc., 2019 WL 4785701, at *4 (D.P.R. 2019).

[8] Id. at *1-2.

[9] Id.

[10] Id. at *4.

[11] Ray v. BlueHippo Funding, LLC, 2008 WL 4830747, at *2 (N.D. Cal. 2008).

[12] Union Sav. Bank of Patchogue, New York v. Saxon, 209 F. Supp. 319 (D.D.C. 1962); In re FDIC, 58 F.3d 1055, 1060 (5th Cir. 1995) (collecting cases); Simplex Time Recorder Co. v. Secretary of Labor, 766 F.2d 575, 586–87 (D.C. Cir. 1985); Nat’l Nutritional Foods Ass’n v. FDA, 491 F.2d 1141, 1144–46 (2d Cir. 1974); Kyle Engineering Co. v. Kleppe, 600 F.2d 226, 231 (9th Cir. 1979); Peoples v. United States Dept. of Agriculture, 427 F.2d 561, 567 (D.C. Cir. 1970); Church of Scientology of Boston v. IRS, 138 F.R.D. 9, 12 (D. Mass. 1990).

[13] The President and former Presidents are protected by a more stringent doctrine. See, e.g., In re Bush, 287 S.W.3d 899 (Tex. App.—Dallas 2009, pet. struck).

[14] Simplex Time Recorder Co. v. Secretary of Labor, 766 F.2d 575, 586-587 (D.C. Cir. 1985) (examples of government employees that have been protected from being deposed); EEOC v. K-Mart, 694 F.2d 1055, 1067-68 (6th Cir. 1982).

[15] Alberto v. Toyota Motor Corp., 796 N.W.2d 490 (Mich. 2010); Crown Cent. Petroleum Corp. v. Garcia, 904 S.W.2d 125, 128 (Tex. 1999).

[16] In re TMX Fin. of Texas, Inc., 472 S.W.3d 864, 877 (Tex. App—Houston [1st Dist.] 2015, no pet.); In re Taylor, 401 S.W.3d 69, 74 (Tex. App.—Houston [14th Dist.] 2009, no pet.); In re BP Prods. N. Am. Inc., 2006 WL 2192546, at *6 (Tex. App.—Houston [1st Dist.] Aug. 4, 2006, no pet.); accord, e.g., Dart Indus, Inc. v. Acor, 2008 WL 1995105, at *1 (M.D. Fla. May 7, 2008).

[17] In re El Paso Healthcare Sys., 969 S.W.2d 68, 74 (Tex. App.—El Paso 1998, no pet.).

[18] Armstrong Cork Co. v. Niagara Mohawk Power Corp., 16 F.R.D. 389 (S.D.N.Y. 1954) (refusing “shotgun” deposition notice of nine officers and six directors with no personal knowledge).

[19] Alberto v. Toyota Motor Corp., 796 N.W.2d 490, 496 (Mich. App. 2010).

[20] Id. at 496.

[21] Id.

[22] Alcatel USA, Inc., 11 S.W.3d at 179; Kanter v. Cont’l Airlines, Inc., 2010 WL 11601555, at *2 (S.D. Fla. Apr. 16, 2010); Dawkins v. Barnhart Crane & Rigging Co., 2020 WL 1535851, at *2 (N.D. Neb. Mar. 31, 2020); Reinsdorf v. Skechers U.S.A., Inc., 2012 WL 12883889, at*2 (C.D. Cal. May 9, 2012).

[23] Cabrera v. Serv. Employees Int.’l Union, 2019 WL 6251451, at *2 (D. Nev. Nov. 22, 2019); City of Farmington Hills Employee Ret. Sys. v. Wells Fargo Bank, N.A., 2012 WL 13048263, at *3 (D. Minn. Sept. 17, 2012); accord In re Celadon Trucking Servs., Inc., 281 S.W.3d 93, 98 (Tex. App.—El Paso 2008, no pet.) (“An individual has unique or superior knowledge when he or she is the only person with personal knowledge of the information sought or arguably possesses relevant knowledge greater in quality or quantity than other available sources.”).

[24] Community Fed. Sav. & Loan Ass’n v. FHLBB, 96 F.R.D. 619, 621-22 (D.D.C. 1983); Google Inc. v. Am. Blind & Wallpaper Factory, Inc., 2006 WL 2578277 (N.D. Cal. 2006); M.A. Porazzi Co. v. The Mormaclark, 16 F.R.D. 383 (S.D.N.Y. 1951) (refusing vice president’s deposition where nothing could be contributed beyond that obtained from general claims agent).

[25] Salter v. Upjohn Co., 593 F.2d 649, 651 (5th Cir. 1979).

[26] Id. at 650.

[27] 141 F.R.D. 332, 334 (M.D. Ala. 1991).

[28] Id. at 335-336.

[29] Id.

[30] Porter v. Eli Lilly & Co., 2007 WL 1630697 (N.D. Ga. 2007) (unpublished decision); M.A. Porazzi, 16 F.R.D. 383; see Travelers Rental Co., Inc. v. Ford Motor Co., 116 F.R.D. 140, 145 (D. Mass. 1987) (referring with approval to “a number of cases which permit deferment of the depositions of higher executives until subordinates with supposedly equal or greater knowledge have been deposed.”).

[31] In re TMX Fin. of Tex., Inc., 472 S.W.3d 864, 875 (Tex. App—Houston [1st Dist.] 2015, no pet.).

[32] See id.

[33] In re Taylor, 401 S.W.3d 69, 74 (Tex. App.—Houston [14th Dist.] 2009, no pet.).

[34] Alberto, 796 N.W.2d at 495.

[35] See Crown Cent. Petrol Corp. v. Garcia, 904 S.W.2d 125, 128 (Tex. 1995); Liberty Mutual Ins. Co. v. Super. Ct., 10 Cal. App. 4th 1282, 1289 (Cal. 1992). If the motion for protection is granted and the party seeking the deposition later finds additional evidence supporting its position, it may submit that evidence to the trial court and move the court to lift the protective order. Crown Cent., 904 S.W.2d at 128.

[36] See id.

Finis