This is the third in a series on CEO depositions. I invite you to read Part I and Part II here.
Many courts throughout the United States have observed that deposition requests of high level executives, such as CEOs (often referred to as "apex" depositions) are a source of tremendous potential for abuse. Litigants' attorneys frequently notice the deposition of the CEO of the adverse party in an effort to burden and harass the other party and attempt to create pressure to settle.
Although there is limited authority in New Jersey, courts throughout the United States have applied a standard to prevent abusive requests to take apex depositions.
Courts apply the following two-part test to determine whether it is appropriate to take the deposition of a high ranking corporate officer: (i) whether the top level employee has personal or unique knowledge on the relevant subject matter; and (ii) whether the information sought can be obtained from lower level employees or through other less burdensome means.
This test was adopted in New Jersey by then Magistrate Judge (now Federal Judge) the Hon. Esther Salas, in Ford Motor Company v. Edgewood Properties, Inc., 2011 WL 6773311 (D.N.J. February 15, 2011). Although the court's decision in Ford Motor Company was unreported, the test applied by Judge Salas has been applied throughout the United States. As a result, it is likely that when confronted with similar circumstances, courts in New Jersey, state and federal, will apply the same test.
Clients should be aware that they have the tools to resist efforts by litigants to take depositions of their highest ranking employees. Unless the CEO has unique or personal knowledge, the deposition should not be permitted. Alternatively, if the CEO's knowledge is duplicative of knowledge of a lower level employee, particularly where the lower level employee has a greater knowledge of the subject matter, that is also grounds to preclude the CEO's deposition.
Accordingly, New Jersey attorneys should know that if opposing counsel seeks to take the deposition of their client's high ranking officers, they may have grounds to move to quash the deposition notice.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
