UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA
October 30, 2012
GEOFFREY MOYLE, ET AL.,
LIBERTY MUTUAL RETIREMENT BENEFIT PLAN, ET AL.,
The opinion of the court was delivered by: Hon. Mitchell D. Dembin U.S. Magistrate Judge
ORDER ON JOINT MOTION FOR DETERMINATION OF DISCOVERY DISPUTE RE: EXECUTIVE DEPOSITIONS
[ECF NO. 180]
This case arises from Plaintiff Moyle's former employment with Golden Eagle Insurance Company and later with Liberty Mutual Insurance, which acquired Golden Eagle in 1997. Plaintiff was employed by Golden Eagle in 1988 and was discharged by Liberty Mutual in 2002. In this lawsuit, among other things, Plaintiff asserts that he was misled regarding the extent to which his service at Golden Eagle would be attributed to Liberty Mutual and has sued for improperly withheld benefits.
Before the Court is a joint motion of the parties for the determination of a discovery dispute. The motion was filed on October 23, 2012. (ECF No. 180). Plaintiffs seek to depose four of Defendant's current and former executive officers: David Long, the current Chief Executive Officer and President of Liberty Mutual; Tim Sweeney, the current Executive Vice President of Liberty Mutual; Geoff Hunt a former Executive Vice President of Liberty Mutual; and Ray Mundt, a former
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member of the Liberty Mutual Board of Directors and member of that board's Compensation Committee. Plaintiffs have noticed the depositions of Long, Sweeney and Hunt and have stated their intention to notice the deposition of Mundt. Defendants claim the depositions are inappropriate because: (1) the executives Plaintiffs want to depose are protected by the "apex doctrine;" and, (2) Plaintiff will exceed the 10 deposition limit of Federal Rule of Civil Procedure 30(a)(2).
David Long is the current Chief Executive Officer and President of Liberty Mutual Insurance. In 1997, Mr. Long was a member of the Board of Directors of Golden Eagle. Golden Eagle then-CEO Fred Marziano, who gave deposition testimony in this case, described Mr. Long as his "right-hand man." Citing to other deposition testimony, Plaintiff claims that Mr. Long "had discussions with other executives at Liberty Mutual specifically about whether or not the transitioning Golden Eagle employees would be credited with their prior years of service for the purpose of benefit accrual under the retirement plan." Plaintiff further claims that "Mr. Long also knew that Golden Eagle employees were under (the apparently mistaken) impression that they would receive credit for the purposes of accrual, yet for reasons that Mr. Long can perhaps elaborate on, those misconceptions were never clarified."
Defendant claims that Mr. Long's participation in the Golden Eagle transaction is not relevant to the instant action, that Mr. Long lacks personal knowledge relevant to the instant action, and that less burdensome means of discovery have not been exhausted.
Tim Sweeney is the current Executive Vice President of Liberty Mutual Insurance and the President of Liberty Mutual's Personal Insurance division. In 1997, Mr. Sweeney worked under Mr. Long and Mr. Marziano.
Plaintiffs, again relying upon deposition testimony obtained in this case, contend that, like Mr. Long, Mr. Sweeney had discussions with his colleagues relating to Golden Eagle employee benefits and "knew there was confusion about what credits would be offered, yet failed to address it." Plaintiff's claim that Mr. Sweeney helped Mr. Marziano interpret and understand the terms of the 1997 Rehabilitation Agreement that Plaintiff's believe is a key document in the instant action. Plaintiff claims that Mr. Sweeney worked directly on documents analyzing Golden Eagle's employee staffing and benefits. Plaintiff also claims that Mr. Sweeney was directly involved in an August 1997 meeting explaining how employee benefits would be effected by the Liberty Mutual transaction.
Defendant claims that Plaintiff has not demonstrated that Mr. Sweeney had any involvement related to pension benefits in the 1997 transaction, that even if he had involvement such involvement is irrelevant, and that Plaintiff has not demonstrated that Mr. Sweeney participated in any benefit meetings.
Geoff Hunt is a former Executive Vice President of Liberty Mutual. Mr. Hunt was "the principal coordinator of mergers and acquisitions at Liberty Mutual, including the Golden Eagle merger," and was one of the chief negotiator's in the transaction.
Plaintiffs claim that Mr. Hunt was directly involved in the creation of documents containing the benefit provisions at issue in this case. Plaintiffs assert that Mr. Hunt has personal knowledge of the issue of retirement benefits that were negotiated in the transaction, the negotiations themselves and the handling of the human resources impacts of the benefits.
Defendant claims that Mr. Hunt was not the author of the benefits provisions Plaintiff wishes to discuss, and that other lower level employees are both available for deposition and have more direct knowledge of the events in question.
Ray Mundt is a former member of the Liberty Mutual Board of Directors and a member of that board's Compensation Committee. Plaintiffs point to Liberty Mutual's initial disclosures where Defendant states, regarding Mr. Mundt: "He is expected to have information and knowledge regarding the intended scope and limitations of the credit to be provided to said employees relating to their prior service with [Golden Eagle]."
Defendant admits that Mr. Mundt may have relevant information. However, Defendant claims that any information Mr. Mundt might have is already in the possession of Plaintiff. Defendant claims that all relevant information about the Compensation Committee, and its meeting approving the benefits plan for Golden Eagle employees, is contained in the minutes of that meeting and Plaintiff has access to those minutes.
The Federal Rules of Civil Procedure generally allow for broad discovery, authorizing parties to obtain discovery regarding "any non-privileged matter that is relevant to any party's claim or defense." Fed. R. Civ. P. 26(b)(1). Also, "[f]or good cause, the court may order discovery of any matter relevant to the subject matter involved in the action." Id. Relevant information for discovery purposes includes any information "reasonably calculated to lead to the discovery of admissible evidence," and need not be admissible at trial to be discoverable. Id. There is no requirement that the information sought directly relate to a particular issue in the case. Rather, relevance encompasses any matter that "bears on" or could reasonably lead to matter that could bear on, any issue that is or may be presented in the case. Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 354 (1978). District courts have broad discretion to determine relevancy for discovery purposes. See Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002). Similarly, district courts have broad discretion to limit discovery where the discovery sought is "unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive." Fed. R. Civ. P. 26(b)(2)(C). Limits also should be imposed where the burden or expense outweighs the likely benefits. Id.
The Apex Doctrine
Courts consistently define apex employees as "high-level corporate executives." See Apple Inc. v. Samsung Electronics Co., Ltd, 282 F.R.D. 259, 263 (N.D. Cal. 2012) ("the deposition of a high-level executive (a so-called apex deposition),"); DR Sys., Inc. v. Eastman Kodak Co., 2009 WL 2973008 at *2 (S.D. Cal. Sept. 14, 2009) ("an official at the highest level or apex of a corporation"); Bank of the Ozarks v. Capital Mortg. Corp., 2012 WL 2930479 at *1 (E.D. Ark. July 18, 2012) ("The apex doctrine protects high-level corporate officials . . .").
When a party seeks to take the deposition of an official at the highest level or "apex" of a corporation a stricter standard applies to the party seeking discovery, and the court may exercise its authority under the federal rules to limit discovery.
Fed.R.Civ.P. 26(b)(1). See, e.g., Mulvey v. Chrysler Corp., 106 F.R.D. 364 (D.C. R.I.1985) (Virtually every court that has addressed deposition notices directed at an official at the highest level or "apex" of corporate management has observed that such discovery creates a tremendous potential for abuse or harassment.). Even when seeking the deposition of an apex official, "it is very unusual 'for a court to prohibit the taking of a deposition altogether absent extraordinary circumstances.'" Apple, 282 F.R.D. at 263 (quoting WebSideStory, Inc. v. NetRatings, Inc., 2007 WL 1120567 at *2 (S.D. Cal. Apr. 6, 2007) ). "When a witness has personal knowledge of facts relevant to the lawsuit, even a corporate president or CEO is subject to deposition. A claimed lack of knowledge, by itself it is insufficient to preclude a deposition." Id.
When determining whether to allow an apex deposition, courts often consider:
(1) whether or not the high-level deponent has unique first-hand, non-repetitive knowledge of the facts at issue in the case and (2) whether the party seeking the deposition has exhausted other less intrusive discovery methods, such as interrogatories and depositions of lower level employees. See Salter v. Upjohn, 593 F.2d 649, 651 (5th Cir.1979) (granting protective order for executive where plaintiff had sought to depose the president of the company before deposing lower level executives); Baine v. General Motors Corp., 141 F.R.D. 332 (M.D.Ala.1991) (granting protective order for Vice President of General Motors where plaintiff had failed first to depose lower level employees).
Defendant contends that each potential deponent named in the joint motion is an apex executive. (ECF No. 180). Plaintiff does not dispute that Mr. Long is an apex executive, is silent on the issue regarding Mr. Sweeney, and claims that the doctrine does not apply to former executives Messrs. Hunt and Mundt. Id. Former executives, however, are within the scope of the apex doctrine. See Mulvey v. Chrysler Corp., 106 F.R.D. 364, 365 (D.R.I. 1985) (holding that the magistrate erred in allowing the deposition of Lee Iacocca, the former Chairman of Chrysler Corp.); Gauthier v. Union Pac. R. Co., 2008 WL 2467016 (E.D. Tex. June 18, 2008) (unpublished) (quashing the deposition of a former executive).
Each potential deponent participated to some extent in the 1997 transaction between Golden Eagle and Liberty Mutual. The questions presented are (1) whether the personal knowledge of each executive, attained during that period, is unique and relevant to issues in this case; and (2) whether means less intrusive than deposition remain available to Plaintiff's for acquiring such unique information. See Salter, 593 F.2d at 651.
The 1997 transaction is at the heart of this case. At the time of the transaction Mr. Long was a member of the Board of Golden Eagle and is described by Mr. Marziano as being his "right hand man" during the transaction. (ECF No. 180 at 16; ECF No. 180-16 at 8). Mr. Sweeney worked for both Mr. Long and Mr. Marziano, and it appears assisted with the interpretation of allegedly key documents. (ECF No. 180-16 at 5). Plaintiffs claim, and Defendant does not deny, that Mr. Hunt was a chief negotiator of the transaction. (ECF No. 180 at 7). Mr. Mundt was a member of Liberty's Mutual's Compensation Committee that approved the benefits plan at issue.
Each were in a position to have obtained unique personal relevant knowledge.
There is no evidence that Plaintiff's is seeking this discovery for the purpose of harassment. Plaintiff has demonstrated sufficiently that these individuals may have personal, non-repetitive knowledge of relevant facts. The Court does not believe that there are less intrusive means of discovery available for these witnesses. Accordingly, the apex doctrine does not bar their depositions.
The Ten Deposition Limit
Federal Rule of Civil Procedure 30(a)(2) requires leave of court when "parties have not stipulated to [a] deposition," and "the deposition would result in more than 10 depositions" taken by a party. The advisory committee notes accompanying Rule 30(a)(2) state: "A deposition under Rule 30(b)(6) should, for purposes of this limit, be treated as a single deposition even though more than one person may be designated to testify." Fed. R. Civ. Proc. 30(a)(2)(A) Advisory Committee Notes (1993).
Defendant claims that Plaintiffs have already taken ten depositions and have noticed seven others. (ECF No. 180-13 at 2). Defendant admits, in a footnote, that a number of the depositions were taken pursuant to Rule 30(b)(6). Properly counting the 30(b)(6) depositions, Plaintiffs admit to having taken seven depositions.
Plaintiffs may depose three more people before requiring leave of court. See Fed. R. Civ. Proc. 30(a)(2)(A). Plaintiffs have noticed the depositions of Messrs. Long, Sweeney and Hunt. Those depositions may proceed as noticed or Plaintiff may choose to substitute Mr. Mundt for one of these other witnesses upon proper notice. The Court is not authorizing any depositions beyond the allotted ten at this time.
Conclusion The motion to quash the deposition notices of Messrs. Long, Sweeney and Hunt is DENIED. The motion for leave to take more than ten depositions is DENIED without prejudice.
IT IS SO ORDERED
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