09/29/2016 12:09 pm ET Updated Sep 30, 2017

May Top Corporate Executives Be Compelled to Testify in Routine Cases?

Plaintiffs may assert that the defendant corporation's top executives (the "C suite") either created, ordered, and supervised the events complained of or should have ultimate responsibility because "the buck stops here." What appears to be a fairly routine contractual dispute, for example, results in individuals such as the CEO and COO being notified that they must provide a deposition (oral testimony under oath in advance of a trial). These individuals might honestly assert that they have no personal knowledge of the alleged events. This comment briefly discusses deposition requests directed to top officials. Always consult an experienced attorney in specific situations.

The legal balance is between merely harassing requests directed to top executives and the executives' actual involvement and the need to know the facts.

The Federal Rules of Civil Procedure, especially Rules 26-37, address the required disclosures and discovery process for obtaining information from the other party in advance of the trial. The modern rules date from 1938 with occasional amendments. State rules often follow the federal model but may be unique. The broad purposes of the discovery rules are to encourage out-of-court settlements since the facts are known, to prevent surprise and confusion in the courtroom, to level the playing field in that all parties know the facts, and to preserve the testimony of witnesses from changing or even being unavailable due to illness or death. However, critics assert that the discovery process may be abused to increase the expenses imposed on a poor litigant and to delay a trial.

When faced with a request for an executive's deposition, an initial decision is to comply or contest. Compliance may appear best if the particular situation favors the corporation. Complying may aid in requests to take the deposition of opponents. However, a deposition request may be strategic harassment and simply fishing for damaging off-the-cuff or provoked statements or an arrogant tone that may be presented to the jury.

Starting in the early 1950s courts began making reported decisions that considered the request for a "protective order" to prevent a deposition from being taken. The "apex doctrine" applies to the body of judicial decisions addressing the limitations on the taking of depositions of high level corporate officers.

This is the contested apex deposition process in general outline:

1. The application of the apex doctrine may vary in a given jurisdiction and an experienced attorney will know the unique legal standard that a local judge or a state supreme court applies. Initially determine if the apex doctrine is being loosely (often granted) or strictly (seldom granted) interpreted. In what manner does this jurisdiction recognize it?

2. Attorneys and litigants on both sides are subject to judicial sanctions if they act dishonestly or without appropriate due diligence. Hence, an attorney must investigate the facts before making an assertion. Has an investigation been appropriately undertaken?

3. In response to the notice of deposition, one requests a protective order accompanied by the executive's affidavit (sworn statement) denying knowledge of relevant facts. Note that a fact witness (for example, actually seeing the truck wreck) may always be required to give a deposition even if she or he is also a corporate executive.

4. Know under the particular circumstances who has the legal burden of persuasion and proof and be prepared to document this in a trial brief (memorandum) to the judge if necessary. Having legal precedents readily available that are similar to the current situation is always helpful.

5. The judge determines if the party seeking the deposition possesses facts that demonstrate that the executive in question does have unique or superior knowledge.

6. If the judge concludes that no special knowledge exists, the protective order is granted but less intrusive discovery may be ordered.

7. After a good faith effort to conduct the ordered discovery, the party seeking the executive's deposition may attempt to show that the executive's deposition is likely to uncover admissible evidence and that denying the deposition leads to an inadequate or unsatisfactory result.

8. If the executive possesses only limited knowledge, one representing the executive seeks to limit the scope of the deposition, perhaps by requesting that lower level corporate officials first be deposed (testify in a deposition). In all circumstances, the appropriate topical areas that the questions may address should be specified in advance. Otherwise, the deposition becomes an unlimited and unending hunt for "dirt." Having to object to questions while the deposition is in progress may appear to a jury to be a lack of candor and a demonstration of obstructionism.

9. Arguing that the executive cannot remember opens the door to a deposition that tests this asserted lack of memory and additional discovery requests for calendars and other paper and electronic materials that show the course of events.

10. Being too busy to provide a deposition is not a stand-alone excuse but might be combined with other factors such as limited or nonexistence knowledge in a cumulative manner. Be cautious not to appear arrogant or above the law as this challenges a judge to assert her or his authority.

11. Even if the executive has personal knowledge, one might argue that the requested deposition merely duplicates what is already known.

12. Of course, age, health, or lack of mental capacity issues that generally limit a deposition might be appropriately asserted in a given situation. Consider, for example, the circumstances of an elderly corporate "founder" whose physical and mental health have deteriorated.

13. It is critical that the executive property prepare for the deposition. Winging it and expecting to talk around the topic without revealing information invites disaster. If nothing else, a jury will be reminded by the opponent of the evasive and incomplete answers. Additionally, when preparing one must be alert to protect privileged communications with attorneys and attorney work product. Also consider the appropriate tone that the executive should demonstrate in this unique situation.

14. All parties should act in a spirit of fairness throughout this process to avoid alienating the judge and jury.

15. In general, appellate courts tend to affirm the trial judge's deposition orders.

This comment provides a brief and incomplete educational overview of a complex topic and is not intended to provide legal advice. Always consult an experienced attorney in specific situations.