October 26, 2020

Volume X, Number 300

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Can You Subpoena The President? If It’s Anyone Other Than “The Donald,” The Answer Is Likely “Yes”

Whether a president or other high-ranking officer of a business can be deposed will not be determined by the federal courts’ officer-friendly “Apex Doctrine,” but instead by the liberal discovery rules of N.C.R.C.P. 26 and the extent of the officer’s personal knowledge about the issues. Duke Energy Carolinas, LLC v. AG Ins. SA, et al., 2019 NCBC 73 (J. Bledsoe).  Because Plaintiffs’ CEO and COO both had personal knowledge about the matters at issue, the Business Court permitted Defendants to depose both officers (albeit within certain parameters).

Plaintiffs own a number of coal-fired power plants in North and South Carolina. Plaintiffs filed suit against Defendants (all insurance companies) seeking compensation from Defendants for alleged liabilities linked to coal combustion residuals (i.e., coal ash) at a number of Plaintiffs’ power plants.  As part of their defense, Defendants sought to depose Plaintiffs’ current President/CEO, Lynn Good, and its COO, Dhiaa Jamil, concerning Plaintiffs’ strategies and actions regarding coal plant closures and coal ash remediation.  Defendants contended (with supporting documents) that these strategies and actions were critical to Plaintiffs’ lawsuit. Plaintiffs resisted the depositions, contending that the officers lacked knowledge that was unique to the matters at issue, and that anything Defendants sought could otherwise be obtained in depositions of current or former employees.  Relying on the spirit of the Apex Doctrine, Plaintiffs contended that Defendants had therefore failed to carry their burden of proving the depositions should go forward. 

The Business Court disagreed.  Although acknowledging that the federal courts’ Apex Doctrine places the burden on the party seeking the high-level (“apex”) executive’s deposition to prove why that officer should be deposed, the Business Court refused to adopt the doctrine. Instead, the Business Court relied upon the “balancing factors” contained within N.C.R.C.P. 26’s “liberal scope of discovery” to determine whether Plaintiffs (in opposing the depositions) had carried their burden of proving why the depositions were inappropriate.  (Opinion, ¶¶21-22).  In siding with Defendants, the Business Court held, ipso facto, that a higher-level executive’s testimony has greater probative value than the testimony of a lower-level employee concerning the same topics and issues. Id., ¶25.  In allowing the depositions, the Business Court did not address Plaintiffs’ assertion that the information sought was the same as what could have been obtained through depositions of lower-level employees.

Based upon this decision, any business that seeks to preclude one of its high-ranking officers from testifying should understand that the Business Court will require the business to overcome a high burden to prove the inappropriateness of the deposition, as such request will be viewed against a backdrop of encouraging a “liberal scope of discovery.”

Copyright © 2020 Womble Bond Dickinson (US) LLP All Rights Reserved.National Law Review, Volume X, Number 31
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About this Author

Phil Mohr Bankruptcy and Litigation Attorney Womble Bond Dickinson
Partner

Phil is a trial lawyer. Although he will search for creative legal and business solutions for his clients, his more than two decades of trial experience for both publicly traded and privately held companies in state and federal courts throughout the country have taught him that some cases simply have to be tried to verdict. Representing companies that have both been wronged and accused of wrongdoing, Phil has honed his trial skills in cases involving complex business litigation (including fraudulent transfer and equitable subordination cases in federal bankruptcy court)...

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