I recently posted about a new article in the Defense Research Institute’s For the Defense publication, addressing the apex doctrine, in which courts have placed limits on depositions of senior executives of corporations and high-ranking government officials.  Shortly after publishing that post, I came across a new decision by the West Virginia Supreme Court of Appeals on this issue in an insurance case (albeit not a class action).  West Virginia’s highest court adopted the apex deposition doctrine and granted a writ prohibiting enforcement of a lower court order requiring the deposition of MassMutual’s chairman, president and CEO.

In State ex. rel. Massachusetts Mut. Life Ins. Co. v. Sanders, No. 11-1514, 2012 W. Va. LEXIS 94 (W. Va. Feb. 24, 2012), an individual case alleging fraud and tax fraud in connection with an IRS 412i plan, the plaintiffs sought to depose Roger Crandall, chairman, president and CEO of MassMutual.  Mr. Crandall had no personal involvement with the plaintiffs.  The reasons cited by the plaintiffs for taking his deposition were:

1) the annuity contract was signed with Mr. Crandall’s facsimile signature; 2) MassMutual publicly proclaims its commitment to investigating and reporting fraud; 3) Mr. Crandall is MassMutual’s “face” of compliance regarding reporting and investigating any suspected fraud or wrongdoing because he has publicly proclaimed that MassMutual is an ethical company and because, as MassMutual’s president, he signs Internal Control Certifications in accordance with the Sarbones-Oxley Act; 4) Mr. and Mrs. Demory [the plaintiffs] wrote a letter to Mr. Crandall regarding their dispute; and, 5) there have been similar lawsuits filed regarding the “defective 412i Plans.”  

 Id. at *8-9. 

The court, on an issue of first impression in West Virginia, adopted the apex deposition rule applied in Texas and other jurisdictions, setting forth the following protocol:

[T]he Court holds that when a party seeks to depose a high-ranking corporate official and that official (or the corporation) files a motion for protective order to prohibit the deposition accompanied by the official’s affidavit denying any knowledge of relevant facts, the circuit court should first determine whether the party seeking the deposition has demonstrated that the official has any unique or superior personal knowledge of discoverable information. If the party seeking the deposition cannot show that the official has any unique or superior personal knowledge of discoverable information, the circuit court should grant the motion for protective order and first require the party seeking the deposition to attempt to obtain the discovery through less intrusive methods. Depending upon the circumstances of the particular case, these methods could include the depositions of lower level corporate employees, as well as interrogatories and requests for production of documents directed to the corporation. After making a good faith effort to obtain the discovery through less intrusive methods, the party seeking the deposition may attempt to show (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 the less intrusive methods of discovery are unsatisfactory, insufficient or inadequate. If the party seeking the deposition makes this showing, the circuit court should modify or vacate the protective order as appropriate. As with any deponent, the circuit court retains discretion to restrict the duration, scope and location of the deposition. If the party seeking the deposition fails to make this showing, the trial court should leave the protective order in place.

Id. at *33-35.

A few more thoughts on using this doctrine:  I have seen some instances where defendants have tried to seek relief under this doctrine without providing an affidavit from the senior executive attesting to a lack of knowledge, perhaps because the people managing the lawsuit did not want to trouble the executive with reviewing and signing an affidavit.  I have not seen a case where that approach succeeded, nor would you want to be in the position of filing the affidavit only at the time of seeking reconsideration.  It is also essential to make sure that the affidavit does not make statements that are overly broad and could be contradicted by documents that may exist but not yet have been located.  You don’t want to get a senior executive in hot water because of what was signed in trying to keep him or her out of the deposition room.