The Apex Doctrine And The C-Suite Deponent

• Published date: 03 June 2022
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Corporate and Company Law, Trials & Appeals & Compensation
• Law Firm: Butler Snow LLP
• Author: Mr Michael B. Hewes and Jordan Jarreau

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...