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Deposing the CEO

A frequent tactic of the plaintiffs' bar is to insist upon and seek court orders of depositions of high-ranking corporate officials. (To be fair, the same is true in business vs. business litigation, where it's a tit-for-tat tactic that I participated in as a BigLaw litigator. My apologies to the executives I was partially responsible for haling in from Japan.) The deposition serves two purposes. First, by taking a day or two out of a busy executive's schedule, one imposes substantial costs upon an opponent that increases the chance of settlement to get out from under the extortionate discovery burden. Second, and this is especially true in personal-injury cases, a skilled attorney can demonstrate the ignorance of a CEO to the micro-details of decisions made three or more levels below him, and persuade a jury unfamiliar with the structure of a big corporation that this is evidence of callousness meriting findings of liability and punitive damages. (The government's Enron Task Force shamefully used similar demagogic tactics in their prosecution of Ken Lay and Jeff Skilling.) The problem for defendants is exacerbated because it's often difficult for a defense attorney to get on an often-overconfident executive's calendar to adequately prepare him or her for the deposition.

Two recent opinions see through this tactic for what it is, and decline to compel so-called "apex" depositions. Sean Wajert discusses the Michigan case Alberto v. Toyota Mot. Co. (Mich. App. Aug. 5, 2010); and Judge Easterbrook's opinion similarly declines to find error in a district court refusing apex depositions in FM Industries v. Citicorp Credit Svcs. (7th Cir. Jul. 22, 2010):

This was extortionate discovery, the kind a litigant undertakes when it hopes to be paid to go away and spare opponents the expense of vindicating their rights. FM Industries' attempt to force Charles Prince, then the chairman of Citigroup's board of directors, and Sanford Weill, his predecessor, to submit to depositions, even though they had nothing to do with Citicorp's use of TUCANS, is further evidence that FM Industries and its lawyers were engaged in an abuse of legal process.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.