What if your employee plaintiff sues you and then demands to take the deposition of your company CEO or some other high-level corporate executive who has no personal knowledge about the facts of the case? No one would be excited about that prospect. Fortunately, a Texas appellate court recently ruled that high-level executives can be put off-limits for deposition unless they have particular, personal knowledge of the events in question. The decision, In re Newport Classic Homes, is an important one for companies (even if they are not in Texas) to remember if they are ever faced with a request for an “apex deposition.”

What is an Apex Deposition?

We all know that depositions are a discovery tool used to get a witness’s testimony under oath. Sometimes a plaintiff seeks a deposition of a company’s CEO or high-ranking executives who have no personal knowledge of the events in question – commonly referred to as “apex depositions.” A company’s CEO may know a lot about the company, but have zero personal knowledge of the events in the lawsuit. Plaintiffs nonetheless sometimes pursue the deposition of a high-ranking individual for a variety of reasons – some legitimate (garnering testimony that could be useful) and others maybe not as legitimate (as harassment or a veiled pressure tactic to compel a settlement). The apex doctrine is intended to direct discovery to those at lower levels with particular, personal knowledge of a dispute, as well as protect high-level executives from harassing and time-consuming depositions.

Background

Newport Classic Homes was a general contractor on a project, and Marcus Hiles was its CEO. The injured plaintiff worked for a subcontractor on the project and suffered a workplace injury. He sued Newport, alleging that it had contractual and actual control of the worksite. The plaintiff sought to depose Hiles, which triggered Newport’s motion to prevent the deposition and the plaintiff’s motion to compel. Hiles stated that he did not have any unique or superior knowledge of any facts or evidence surrounding the construction project or the incident. In fact, Hiles said the only information he would have was what others at Newport told him. The trial court, however, granted the request to depose Hiles, leading Newport to seek an immediate review of that order.

Court of Appeals Says No

The Texas State Court of Appeals reversed the trial court and found that Hiles did not have the particular personal knowledge necessary to warrant a deposition. The court stated that the plaintiff’s justification was “nothing more than the simple, obvious recognition that the highest-ranking corporate officer of any corporation has the ultimate responsibility for all corporate decisions.” Examining a previous Texas Supreme Court ruling about the issue of when to permit the deposition of a corporate president or high-level corporate official, the court concluded that the “unique or superior knowledge” threshold requires a showing “beyond mere relevance … that a high-level executive is the only person with personal knowledge of the information sought” or possesses such knowledge in greater quality or quantity than anyone else. To be sure, “some knowledge” is not enough as it would make the apex discovery indistinguishable from the scope of general discovery. Nor is knowledge of company policies sufficient. The court examined the deposition of another Newport employee that described what Hiles would know and concluded that the CEO simply did not have “unique or superior personal knowledge” to justify his deposition and that the plaintiff could obtain all necessary discovery through less intrusive means.

Takeaways

The opinion serves as a strong arrow in the quiver for a defendant to avoid having their high-level executives deposed. Each jurisdiction (and each individual judge) varies on the interpretation of the apex deposition principle, but most jurisdictions have developed law requiring some type of unique and special knowledge similar to the Texas court. Apex deposition requests could be encountered in litigation involving a discrimination claim or a workplace injury claim, and a defending company should carefully evaluate whether the requested deponent has the unique and superior personal knowledge to really warrant being deposed. Unless a plaintiff can show that type of particular knowledge, the deposition should be seen as nothing more than improper harassment.