Case Studies

Case Study: Preventing The Apex Deposition

Posted by: Carlton Fields, Jul 28, 2010

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Case Study Summary new

A deposition, almost by definition, is a waste of time and resources for a corporate defendant and its otherwise productively engaged employees. A deposition of the CEO or other senior level manager, particularly in a liability suit involving one of the company's products or services about which the executive will know very little, is not only a waste of valuable time, but also is fraught with danger. The danger comes not only from the...

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The concept of what is known as an “Apex” deposition has become all too familiar to in-house counsel and their outside attorneys in liability litigation. Fortunately, federal and most state courts have limited the circumstances in which such depositions are available, and generally require that the plaintiff seeking to take the deposition show that the Apex individual possesses genuinely relevant knowledge which is not otherwise available through either another deposition or other form of discovery not requiring the time of the upper level management of the defendant.

It is the rare case in which the plaintiff requesting an Apex deposition actually seeks relevant knowledge from the top officer. Most often the real purpose of the deposition is not to gain relevant knowledge, but rather is to assert pressure in order to force settlement, show that the top officer is illinformed about issues relating to the specific product or service leading to the injury at issue in the suit, or to obtain a sound bite that is damaging to the company’s case. Sometimes the very personality that has led the Apex deponent to the upper reaches of management will result in such person giving a sound bite to the plaintiff’s counsel out
of exasperation and frustration, particularly in the face of an aggressive or rude plaintiff’s lawyer.

As noted above, there is no per se rule barring depositions of top corporate executives, although 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. See Salter v. Upjohn Co., 593 F.2d 649, 651 (5th Cir. 1979) (affirming district court decision holding that defendant’s president need not be deposed until plaintiff deposed lower level employees with relevant knowledge, and where president did not have any direct knowledge of the facts); Thomas v. Int’l Bus. Mach., 48 F.3d 478, 483-84 (10th Cir. 1995) (upholding protective order barring deposition of top executive where lower level employees were available for deposition and where executive lacked personal knowledge
of plaintiff’s case); Baine v. General Motors Corp., 141 F.R.D. 332, 334-35 (M.D. Ala. 1991) (stating that for a top executive to be deposed, prospective deponent must have unique personal knowledge of the facts of the case, Simon v. Pronational Ins. Co., 2007 WL 4893478, at *1-2. (S.D. Fla. Dec. 13, 2007) (granting motion for protective order prohibiting the deposition of the defendant’s CEO because he did not posses relevant, unique knowledge as to the defendant’s strategy, and there were other less intrusive means to garner the same information).

The proper pleading in response to a notice of deposition of the CEO or other top-level executive is a motion for protective order seeking an order preventing the deposition from going forward. However, many judges frown upon such motions, and given the broad scope of discovery in federal and most state courts, they are reluctant to place any restrictions on discovery that is arguably relevant to the subject matter of the lawsuit. Furthermore, many judges not only are hostile to the concept of precluding a deposition of the company CEO, but often relish the assertion of power evidenced by ordering such a deposition.

As a result, counsel’s response to the Apex request should not focus initially on the scope of the CEO’s responsibility, his or her importance, or the demands on his or her time that make a deposition inconvenient. From the company’s perspective, and certainly the perspective of the CEO, these may indeed be the primary concerns. A judge, however, may take offense at those concerns when balanced against the opponent’s demand for a routine deposition, leaving defense counsel with little or no expectation of any relief, particularly in jurisdictions with little or no experience with Apex depositions. There have been many efforts to forestall such depositions once ordered, such as writ of mandamus, emergency appeal or motion to recuse, and most have been unsuccessful.

The more effective approach is to demonstrate that opposition to the Apex deposition is not an attempt to limit the plaintiff’s discovery into relevant matter, but instead is an attempt to streamline discovery so that it is more efficient and effective. Because the Apex deposition notice of the CEO may be little more than an attempt to harass the defendant in order to gain some perceived tactical advantage, the response must include a discussion of the proper scope of discovery, consistent with the factual and legal contentions asserted in the case. Accordingly, the goal of the response is twofold: first, to show that genuinely relevant discovery can be provided without an intrusive Apex deposition, is already being readily provided through the usual methods of discovery, and that it will continue to be provided; and, second, to identify legitimate reasons for limiting an open-ended deposition of a highranking corporate official that are beneficial to all parties.

Those reasons include the CEO’s lack of relevant knowledge, the superior knowledge of lower-ranking employees, and the resulting unwarranted expense and burden to the CEO and the company which must prepare, pay for, and undertake an unproductive deposition. Ideally, this approach will shift the burden to the plaintiff to show some reason for specifically requiring the deposition of the CEO, rather than obtaining information through written discovery, eyewitnesses, or corporate representatives designated under Rule 30(b)(6). In fact, although the Rule 30(b)(6) deposition process has its own pitfalls, it can often be a very potent tool for blunting the effort to take the Apex deposition.

Those of us who have had the unfortunate privilege of informing the CEO of a large, publicly traded corporation of the necessity of giving a deposition in a liability case can speak from first hand knowledge of the desire to never have the experience again, and of the benefit in never placing in-house counsel in such a position.