Friday, December 14, 2012

West Virginia Adopts “Apex Deposition Rule”

In State ex rel. Mass. Mutual Life Ins. Co. v. Sanders, 724 S.E.2d 353 (W.V. 2012) the West Virginia Supreme Court adopted the so-called “apex deposition rule”.  This rule protects senior officers of a corporation from being deposed until other methods of discovery have been exhausted.  As articulated by the Court, the rule prevents a party from deposing a senior corporate officer unless it can demonstrate:

(1) that there is a reasonable indication that the official’s deposition is calculated to lead to the discovery of admissible evidence, and (2) that less intrusive methods of discovery are unsatisfactory, insufficient or inadequate.

While this rule does not prohibit deposing senior officers, it does attempt to avoid placing an undue burden on those individuals. The apex deposition rule has been adopted by several other courts, including the courts in Michigan, Alabama, California, Rhode Island, Oklahoma, and Texas.  See Evans v. Allstate Ins. Co., 216 F.R.D. 515 (N.D. Okla. 2003) (defendant was granted a protective order prohibiting depositions of its CEO, Senior Vice President, and Chief Financial Officer); Baine v. Gen’l Motors Corp., 141 F.R.D. 332 (M.D. Ala. 1991) (Court quashed deposition of one of defendants Vice Presidents due “less for the potential for harassment than for the possibility of duplication, inconvenience, and burdensomeness” without prejudice to plaintiff’s ability to take said deposition later of intervening discovery was revealed to be insufficient); Mulvey v. Chrysler Corp., 106 F.R.D. 364 (D.R.I. 1985) (Court ordered interrogatories, rather than deposition, of Mr. Lee Iacocca due to potential for harassment and abuse of deposition given Mr. Iacocca’s “singularly unique and important” nature without prejudice to later deposition if still warranted following interrogatories); Alberto v. Toyota Motor Corp., 796 N.W.2d 490 (Mich. Ct. App. 2010) (granting motion to quash deposition of defendant’s Chairman and CEO, and President and COO due to their lack of personal knowledge of the subjects at issue); Crown Central Petroleum Corp. v. Garcia, 904 S.W.2d 125 (Tex. 1995) (Texas Supreme Court granted writ of mandamus directing trial court to vacate an ordered video deposition of defendant’s Chairman and CEO when the CEO filed an affidavit attesting that he had no personal knowledge of the events at issue); Liberty Mut. Ins. Co. v. San Matea Cnty. Superior Ct., 10 Cal. App. 4th 1282, 1289 (1992) (Court issued a “peremptory writ of mandate” ordering lower court to enter a protective order prohibiting plaintiff from taking the deposition of defendant’s CEO, as the CEO had signed an affidavit expressing ignorance of the facts sought by the plaintiff.).

It should be emphasized that, in none of the cases cited above, does the apex deposition rule entirely prohibit a party from deposing high-level corporate officers under all circumstances.  Rather, the rule is intended to order discovery more efficiently by requiring the parties to attempt other forms of discovery before resorting to the deposition of an “apex” officer.  Alberto, 796 N.W.2d at 495.  In Alberto, the Michigan Court of Appeals aptly explained one popular rationale behind the Apex deposition rule – that high-level corporate officers “rarely have specialized and specific first-hand knowledge of matters at every level of [a] complex organization” and that, before ordering the deposition of such an individual “it must be demonstrated that the officer has superior or unique knowledge of facts relevant to the litigation.”  Id. While this is one popular rationale for the rule, other courts have relied on the possibility of undue burden or harassment in applying the apex deposition rule.  See, e.g. Baine v. Gen’l Motors Corp., 141 F.R.D. 332 (M.D. Ala. 1991); Mulvey v. Chrysler Corp., 106 F.R.D. 364 (D.R.I. 1985). 

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