The Apex Doctrine is Helpful Even Where it is Not Formally Adopted

In August 2021, the Florida Supreme Court amended the Florida Rules of Civil Procedure and became the first state to codify the “apex doctrine” as a stand-alone rule.  Hopes were high among some corporate executives and legal writers that other states would follow suit.  A year later, both the Georgia Supreme Court and the Indiana Supreme Court refused to formally adopt the doctrine.  But even in states like Georgia and Indiana, making an apex doctrine argument can still lead to protection for high-level officers.

How Courts Use the Apex Doctrine

The apex doctrine surfaces when a party seeks a protective order to prevent the deposition of a high-level corporate employee, like a CEO.  The party opposing the deposition typically argues that (1) the high-level corporate employee, aka the apex witness, does not have special or unique knowledge relevant to the case and (2) there are less burdensome means of obtaining the information that the deposing party seeks. 

In many courts, the application of the apex doctrine means the deposing party has the burden of proving the apex witness’ deposition is necessary.  Hickey v. North Broward Hosp. Dist., 2014 WL 7495780, at *2 (S.D. Fla. Dec. 17, 2014).  In others, the party opposing the deposition bears the burden of establishing that good cause exists for a protective order.  Dyson, Inc. v. SharkNinja Operating LLC, 2016 WL 1613489, at *1 (N.D. Ill. Apr. 22, 2016).  Some courts even use a burden-shifting framework where if the deposing party presents evidence that the apex witness has unique or special knowledge, then the party opposing the deposition must prove the apex witness in fact has no such knowledge.  Naylor Farms, Inc. v. Anadarko OGC Co., 2011 WL 2535067, at *2 (D. Colo. June 27, 2011).

Regardless of which burden applies, courts generally agree that the apex doctrine is firmly rooted in Federal Rule of Civil Procedure 26 or its state rule equivalent.  Rule 26 grants federal courts the power to issue a protective order to protect someone from annoyance, embarrassment, oppression, or undue burden or expense.  Deposing a chairman or CEO with no special knowledge of the events leading to litigation could certainly cause undue burden and expense.  In some cases, deposing an apex witness is better described as a tactical method of harassment. 

Accordingly, the apex doctrine promotes discovery proportionate to the needs of the case.  Less intrusive means of attaining information should be attempted first, including through filing interrogatories, seeking the production of documents, and deposing lower-level employees.  Parties opposing the deposition of an apex witness frequently argue that apex depositions will be duplicative and unnecessary once less intrusive means are exhausted.  After all, lower-level employees often have superior knowledge of the events leading to litigation than their counterpart corporate executives.

The Doctrine Itself is More Important Than its Formal Adoption

It is precisely for the policy reasons stated above that the apex doctrine should be utilized even in states that refuse to formally adopt it.  Even though states like California and Texas adopted versions of the apex doctrine in the 1990s, and Michigan and West Virginia adopted versions in the early 2010s, the doctrine has traditionally been more prevalent in federal court.  The Florida Supreme Court’s decision to codify the apex doctrine in August 2021 brought more attention to the doctrine at the state level.

In General Motors, LLC v. Buchanan, the Georgia Supreme Court considered formally adopting the apex doctrine.  874 S.E. 2d 52 (Ga. 2022).  The plaintiffs sought to depose the CEO of GM regarding a faulty vehicle component in a wrongful death case.  Id. at 57.  The trial court denied GM’s motion for a protective order without considering the apex doctrine factors.  Id. at 66.  While the Georgia Supreme Court rejected GM’s plea to formally adopt the apex doctrine, it vacated the lower judgment and held the following:

[W]hen factors commonly associated with the apex doctrine are raised and adequately shown by a party seeking a protective order, a court should consider those factors . . . . That is, a court must consider whether the deposition of a particular individual would cause “annoyance, embarrassment, oppression, or undue burden or expense” based on, for example, that person's scheduling demands or responsibilities and lack of relevant or unique personal knowledge that is not available from other sources.

Id. at 65.

A little over a month later, the Indiana Supreme Court made a similar decision.  In National Collegiate Athletic Association v. Finnerty, three college football players sought to depose three high-ranking NCAA executives regarding the NCAA’s alleged failure to implement reasonable concussion-management protocols.  191 N.E.3d 211, 215 (Ind. 2022).  The Indiana Supreme Court “decline[d] to adopt the apex doctrine;” instead, it established the following framework for courts to apply:

As a threshold matter, the party seeking a protective order must show that the deponent qualifies as an apex official. . . . This fact-sensitive inquiry will instead turn on a variety of factors including the organization's size; the official's rank or title and supervisory power; the extent of the official's authority to exercise judgment and discretion when making executive decisions; and the nature and scope of the official's functions, responsibilities, and duties related to the matters involved in the litigation. . . .

If the party seeking protection makes this apex showing, the trial court must then determine whether there is “good cause” to protect the official from annoyance, embarrassment, oppression, undue burden, or expense. . . .

If the trial court finds good cause and the party seeking the deposition did not file a responsive motion, the court should issue a protective order . . . .

The court must determine whether the requesting party has negated or rebutted either the official's apex status or the good cause showing. . . .

If the court determines the official's apex status is negated, then it must next consider whether the party requesting the protective order has established good cause without any consideration of circumstances relevant to high-ranking officials as identified above.  And if the good cause showing is negated—with or without a consideration of the circumstances—the court should let the deposition proceed.

[A] showing is “rebutted” when it is disputed or opposed through particularized factual support.  For example, if the apex official asserts a lack of knowledge related to the litigation's subject matter, the party seeking the deposition may counter this allegation with specific facts demonstrating that the official has relevant, personal knowledge.  Or if an apex official alleges that the information sought is available through less intrusive discovery methods, the party seeking the deposition could show that alternative methods are unavailable, inadequate, or already exhausted.

When confronted with a responsive motion that rebuts—rather than negates—the apex official's good cause showing, the court must use its discretionary authority to balance the parties’ needs and impose a protective order that (1) restricts the topical scope of the deposition or (2) requires the exhaustion of less intrusive discovery methods.

Id. at 221-22.

Fifteen and twenty years ago, respectively, the Oklahoma and Missouri Supreme Courts reached substantially the same conclusions as the Georgia and Indiana Supreme Courts.  The apex doctrine need not be formally adopted for its factors and principles to be applied in the protection of high-level executives.  And while the Delaware Supreme Court has yet to weigh in, Delaware’s Court of Chancery seems to agree:

It is not that Delaware either embraces the apex doctrine or doesn't embrace the apex doctrine.  It is that the apex doctrine is a natural confluence of factors that typically apply in a case where a CEO doesn't have a lot of involvement, and it's usually a dispute involving lower levels of the organization, where it doesn't make sense to bring the CEO in, or not initially, and therefore, balancing the type of factors that one always balances in a discovery dispute, it is appropriate to defer that high-level individual's deposition.

ACP Master, Ltd., et al. v. Sprint Corp., et al., C.A. No. 8508-VCL (Del. Ch. July 8, 2015), Transcript at 21:14-22:1.

Conclusion

Whether practicing in Florida and enjoying the apex doctrine’s codification or practicing in a state that explicitly rejected the apex doctrine’s formal adoption, litigators would be wise to use the apex doctrine’s factors and principles to avoid the abusive discovery of high-ranking corporate officers.

This article was originally published in the Winter 2023 edition of ABA Pretrial Practice & Discovery. For more information, visit the ABA website. 

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