The Washington State Supreme Court Rejects the Apex Doctrine

From the Desk of Brian Schiewe:

The “Apex Doctrine” is a legal principle aimed at protecting top executives from having to sit for a deposition in certain situations. The Doctrine recognizes that for corporate litigants, depositions involving high-ranking officers can be burdensome and sometimes used as a harassment technique, especially when the top executive may have no personal knowledge of the facts or the relevant information being sought. The Apex Doctrine places the burden on the proponent to show that the witness has unique knowledge and that other less intrusive means of discovery have been exhausted. In this recent decision, the Washington State Supreme Court rejected this application of the Doctrine. 

Claims Pointer:

In a unanimous decision, the Washington State Supreme Court rejected the Apex Doctrine because it was contrary to the Washington Superior Court Civil Rules (“CR”), which adequately protected against any undue burden faced by a corporation.

Stratford v. Umpqua Bank, 2 Wn.3d 112, 534 P.3d 1195 (2023)

Facts:

In Stratford, Plaintiffs, Heather Stratford and William Geibel Jr. (“Plaintiffs”), alleged that they met with an Umpqua Bank loan officer who referred them to a bad builder. The construction project was fraught with delays and cost overruns. Plaintiffs filed suit against Umpqua and subpoenaed three Umpqua executives: (1) the president and chief executive officer (“CEO”); (2) the chief people officer; and (3) the head of Umpqua’s home lending division. Umpqua’s executives were not involved in the loan, and did not hire, supervise, or fire the loan offer. In fact, they had never heard of the loan officer. 

Umpqua moved for a protective order, invoking the Apex Doctrine and arguing that Plaintiffs should be required to seek testimony from any other witnesses with personal knowledge of the underlying facts before being permitted to depose its executive officers. In addition to arguing that deposing its executives was unnecessary, Umpqua maintained the depositions “appeared to be merely a harassment tool.”

Plaintiffs responded that Washington had not adopted the Apex Doctrine and urged the Court to “deny the protective order because Umpqua failed to show good cause under CR 26(c).” Plaintiffs wanted to depose the CEO because he was “responsible for complying with fiduciary duties and disclosures in highly regulated, publicly traded companies”; they also planned to ask the CEO about “bank wide calls related to hiring policies” and other relevant issues.

The Trial Court denied Umpqua’s protective order because Umpqua had not met its burden of showing why the depositions would be unnecessary, irrelevant, or unduly burdensome.

Umpqua moved for an emergency stay of the depositions and sought direct review from the Supreme Court of Washington, which that Court granted.

Law:

The Civil Rules guarantee “a broad right of discovery,” with relatively narrow restrictions. John Doe v. Puget Sound Blood Ctr., 117 Wn.2d 772, 782, 819 P.2d 370 (1991). Discovery is properly limited if:

• (A) the discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive;

• (B) the party seeking discovery has had ample opportunity by discovery in the action to obtain the information sought; or
• (C) the discovery sought is unduly burdensome or expensive, taking into account the needs of the case, the amount in controversy, limitations on the parties, resources, and the importance of the issues at stake in litigation.

CR 26(b)(1).

A trial court, for good cause shown, may enter a protective order protecting a person or party “from annoyance, embarrassment, oppression, undue burden, or expense.” Barfield v. City of Seattle, 100 Wn.2d 878, 885, 676 P.2d 438 (1984); CR 26(c). Good cause is established when a protective order would avoid the threat of the harms listed in CR 26(c) without impeding the discovery process. Rinehart v. Seattle Times Co., 98 Wn.2d 226, 232, 654 P.2d 673 (1982). The party or person seeking the protective order bears the burden of showing good cause. Cedell v. Farmers Ins. Co. of Wash., 176 Wn.2d 686, 696, 295 P.3d 239 (2013).

Analysis:

The Supreme Court of Washington concluded that Washington did not recognize, and would not adopt, the Apex Doctrine because it would improperly shift the burden of proof to the party seeking discovery.

The Court began its analysis by noting that, where recognized, the Apex Doctrine varies greatly. At its most basic level, the Court explained, the Doctrine prevents a party from deposing the high-ranking officials of another party to prevent “unwarranted harassment and abuse of the discovery process.”

Under the version of the Doctrine proposed by Umpqua, a party seeking to depose an apex officer must first show (1) that the officer has unique, non-repetitive, firsthand knowledge of the facts at issue, and (2) that other less intrusive means of discovery have been exhausted without success.

The Court observed that Washington’s discovery rules already protected against the harms addressed by the Apex Doctrine. Specifically, courts may limit discovery obtainable from a source “more convenient, less burdensome, or less expensive.” CR 26(b)(1)(A). Umpqua merely had to show good cause existed for a protective order, and having failed to do so, “essentially ask[ed] [the Court] to amend the civil rules” and flip the burden onto the party seeking to depose a high-level official.

Based on this analysis, the Court concluded that the Apex Doctrine was inconsistent with Washington discovery rules and declined to adopt it.

The Court ultimately affirmed the Trial Court’s decision because Umpqua “did not present specific facts or arguments as to how the depositions would be duplicative, burdensome, and harassing. Nor did it show prejudice or harm would result if the protective order was not issued.” In other words, Umpqua failed to show good cause.

Big Picture:

High-ranking corporate officials receive no greater protection than any other witness under Washington’s Civil Rules. Critically, in this case Umpqua did not offer facts or arguments sufficient to show good cause, instead relying on its Apex Doctrine argument. Future litigants wishing to shield a high-ranking corporate official from being deposed should carefully present facts and arguments to prove the deposition is duplicative, burdensome, or harassing, and that prejudice or harm would occur in the absence of a protective order.