SAAD, P.J.
Defendant Toyota Motor Sales U.S.A., Inc.,
This is a personal-injury, products-liability suit wherein plaintiff seeks to depose two high-ranking Toyota corporate officers in connection with the claim that a defect in a Toyota vehicle caused the accident that resulted in the death of plaintiff's decedent.
Plaintiff filed this wrongful-death action and claimed that the decedent drove a 2005 Toyota Camry at a speed of less than 25 miles an hour when the vehicle suddenly accelerated to a speed in excess of 80 miles an hour. Plaintiff also asserts that the decedent attempted unsuccessfully to apply the vehicle's brakes, but the vehicle struck a tree, went airborne, and struck another tree, and plaintiff's decedent sustained fatal injuries.
Plaintiff noticed the video depositions of Yoshimi Inaba, defendant's chairman and chief executive officer, and Jim Lentz, defendant's president and chief operating officer, pursuant to MCR 2.306 and MCR 2.315. Defendant moved for a protective order pursuant to MCR 2.302(C) to prevent the depositions, because defendant says that neither Mr. Inaba nor Mr. Lentz "participated in the design, testing, manufacture, warnings, sale, or distribution of
In response, plaintiff argues that while Michigan has adopted the apex-deposition rule for public officials, it has not applied the apex-deposition rule in connection with high-ranking corporate officers, and that even if Michigan were to adopt the apex-deposition rule for corporate officers, it should not apply here. Plaintiff contends that Mr. Lentz has been the "public face" of Toyota as the company's safety problems became widely known and emphasized that Mr. Lentz had made numerous public appearances and testified before Congress regarding Toyota's recent recalls of vehicles.
Though the trial court found that Messrs. Inaba and Lentz were apex, or high-ranking, corporate officers, the trial court held that Michigan's caselaw and court rules did not preclude the depositions from taking place.
Defendant sought leave to appeal in this Court and moved for immediate consideration and a stay of the depositions. Ultimately, this Court granted defendant's application and continued in effect a prior order of the Court that had stayed the depositions of Messrs. Inaba and Lentz. The Court also ordered the appeal expedited and directed the parties to "address specifically the issue of whether the apex deposition rule should or does apply to corporate defendants." Alberto v. Toyota Motor Corp, unpublished order of the Court of Appeals, entered March 11, 2010 (Docket No. 296824).
This appeal presents the question whether Michigan should formally adopt the apex-deposition rule in the corporate context. As used by other state and federal courts, the apex-deposition rule provides that before a plaintiff may take the deposition of a high-ranking or "apex" governmental official or corporate officer, the plaintiff must demonstrate both that the governmental official or corporate officer possesses superior or unique information relevant to the issues being litigated and that the information cannot be obtained by a less intrusive method, such as by deposing lower-ranking employees. See, e.g., Baine v. Gen. Motors Corp., 141 F.R.D. 332, 334-335 (M.D.Ala., 1991).
Courts have applied the apex-deposition rule not to shield high-ranking officers from discovery, but to sequence discovery in order to prevent litigants from deposing high-ranking governmental officials as a matter of routine procedure before less burdensome discovery methods are attempted. See, e.g., Sneaker Circus, Inc. v.
Premised on similar reasoning, several federal appellate and district courts have extended application of the apex-deposition rule to high-ranking corporate executives. Generally, these cases hold that before a high-ranking corporate executive may be deposed, the plaintiff must establish that the executive has superior or unique information regarding the subject matter of the litigation and that such information cannot be obtained through a less intrusive method, such as by deposing lower-ranking executives. See, e.g., Salter v. Upjohn Co., 593 F.2d 649, 651 (C.A.5, 1979); Lewelling v. Farmers Ins. of Columbus, Inc., 879 F.2d 212, 218 (C.A.6, 1989); Thomas v. Int'l Business Machines, 48 F.3d 478, 482-484 (C.A.10, 1995); Mulvey v. Chrysler Corp., 106 F.R.D. 364, 366 (D.R.I., 1985); Baine, 141 F.R.D. at 334-336; Evans v. Allstate Ins. Co., 216 F.R.D. 515, 518-519 (N.D.Okla., 2003).
State courts, including those in California and Texas, have also adopted the apex-deposition rule in the corporate context. For example, in Liberty Mut. Ins. Co. v. San Mateo Co. Superior Court, 10 Cal.App.4th 1282, 1289, 13 Cal.Rptr.2d 363 (1992), the California Court of Appeal, relying on federal decisions such as Salter, Mulvey, and Baine, adopted the apex-deposition rule in the corporate context and held that the potential deponent, the president and chief executive officer of Liberty Mutual, could not be deposed absent a showing that the officer had "unique or superior personal knowledge of discoverable information." The Liberty Mut. court held that absent such a showing, "the trial court should issue the protective order and first require the plaintiff to obtain the necessary discovery through less intrusive methods." Id. If after these less intrusive methods are exhausted and the plaintiff makes a showing that the apex officer has information relevant to the case, the trial court may allow the deposition to proceed. Id. Similarly, in Monsanto Co. v. May, 889 S.W.2d 274, 277 (Tex., 1994), the Texas Supreme Court, relying on federal decisions such as Salter and Mulvey and on the decision in Liberty Mut., adopted the apex-deposition rule and held that the rule "presents a fair balance between the right of a plaintiff to conduct discovery in its case within the limits of the rules, and the right of someone at the apex of the hierarchy of a large corporation to avoid being subjected to undue harassment and abuse."
The question posed by Toyota's motion and the trial court's order is whether Michigan caselaw should take into account the position within an organization of the person sought to be deposed. Because Michigan's court rules contemplate such a rule and because our courts have, in essence, applied the principles of the apex-deposition rule to governmental officials, albeit, without using the aforementioned terminology, and because there is no principled reason for not affording similar safeguards to corporate defendants, we hereby adopt the apex-deposition rule as explained more thoroughly below.
We hold that the apex-deposition rule applies to high-ranking officials in the public sector and to high-ranking corporate officers in the private sector.
Michigan has a broad discovery policy that permits the discovery of any matter that is not privileged and that is relevant to the pending case. MCR 2.302(B)(1); Reed Dairy Farm v. Consumers Power Co., 227 Mich.App. 614, 616, 576 N.W.2d 709 (1998). However, Michigan's court rules acknowledge the wisdom of placing reasonable limits on discovery. MCR 2.302(C) provides, in part:
Michigan's rules of discovery largely track the federal discovery rules.
This Court has applied the apex-deposition rule, while not referring to it as such, in two cases involving governmental officials. In Fitzpatrick v. Secretary of State, 176 Mich.App. 615, 617-618, 440 N.W.2d 45 (1989), this Court reversed the trial court's order that denied the defendant's motion to quash the deposition of the Secretary of State on the grounds that the Secretary of State lacked personal knowledge of the relevant facts and that the information sought could be obtained by other means. More recently, in Earned v. Wayne Co., 271 Mich.App. 106, 109-110, 719 N.W.2d 612 (2006), this Court reversed the trial court's order that denied the defendants' motion to quash the depositions of the Wayne County Executive and the Wayne County Sheriff on the ground that the plaintiff had made no showing that either official possessed relevant information that could not be obtained through other methods.
We find that application of the apex-deposition rule in the public sector and private corporate context is consistent with Michigan's broad discovery policy, Reed Dairy Farm, 227 Mich.App. at 616, 576 N.W.2d 709, and with Michigan's court rules, which allow a trial court to control the timing and sequence of discovery "for the convenience of parties and witnesses and in the interests of justice," MCR 2.302(D), and to enter protective orders "for good cause shown," MCR 2.302(C). As noted, in Fitzpatrick, 176 Mich.App. at 617-619, 440 N.W.2d 45, this Court reversed the trial court's denial of a motion for a protective order to preclude the taking of the deposition of the Secretary of State. The Fitzpatrick Court did not specifically state that the Secretary of State could be deposed if the plaintiff could show that doing so would be necessary to prevent injustice. However, in Homed, 271 Mich.App. at 112, 719 N.W.2d 612, this Court adopted the holding in Fitzpatrick and clarified that depositions of governmental
Recognizing that the highest positions within a juridical entity rarely have specialized and specific first-hand knowledge of matters at every level of the complex organization, courts have adopted the apex-deposition rule in the corporate context to (1) promote efficiency in the discovery process by requiring that before an apex officer is deposed it must be demonstrated that the officer has superior or unique personal knowledge of facts relevant to the litigation, see Salter, 593 F.2d at 651, and (2) prevent the use of depositions to annoy, harass, or unduly burden the parties. See Lewelling, 879 F.2d at 218; Baine, 141 F.R.D. at 335-336. Of course, no court has applied the apex-deposition rule to hold that an apex or high-ranking corporate officer cannot be deposed under any circumstances. And neither do we. Rather, courts have applied the rule to ensure that discovery is conducted in an efficient manner and that other methods of discovery have been attempted before the deposition of an apex officer is conducted. See, e.g., Salter, 593 F.2d at 651-652; Liberty Mut., 10 Cal. App.4th at 1287-1289, 13 Cal.Rptr.2d 363. Moreover, those cases adopting the apex-deposition rule in the corporate context do not shift the burden of proof, but merely require the party seeking discovery to demonstrate that the proposed deponent has unique personal knowledge of the subject matter of the litigation and that other methods of discovery have not produced the desired information only after the party opposing discovery has moved for a protective order and has made a showing regarding the lack of the proposed deponent's personal knowledge and that other discovery methods could produce the required information. Cf. Crest Infiniti II, LP v. Swinton, 2007 OK 77, ¶ 17, 174 P.3d 996, 1004 (2007) (declining to adopt a form of the apex-deposition rule that shifts the burden to the party seeking discovery on the ground that the burden of showing good cause is statutorily placed on the party seeking discovery). In other words, after the party opposing the deposition demonstrates by affidavit or other testimony that the proposed deponent lacks personal knowledge or unique or superior information relevant to the claims in issue, then the party seeking the deposition of the high-ranking corporate officer or public official must demonstrate that the relevant information cannot be obtained absent the disputed deposition.
Application of the apex-deposition rule does not, contrary to plaintiff's argument, shift the burden of proof to the party seeking discovery. If the defendant and the potential deponent make the requisite showing outlined above, only then must the party seeking the deposition show that the potential deponent has unique or superior knowledge of issues relevant to the litigation and that the information cannot be obtained by less intrusive means, such as by deposing lower-level officials or employees. Moreover, nothing herein can or should be read to preclude the deposition of high-ranking public or corporate officials who possess relevant personal knowledge of matters in issue that cannot be obtained by other allowable discovery.
In adopting the apex-deposition rule, we recognize, as have other courts, that an
We review for an abuse of discretion a trial court's decision on a motion for a protective order. Bloomfield Charter Twp. v. Oakland Co. Clerk, 253 Mich.App. 1, 35, 654 N.W.2d 610 (2002).
Defendant moved for a protective order on the ground that neither Mr. Inaba nor Mr. Lentz had unique, personal knowledge of facts relevant to the litigation.
In terms of plaintiff's contention that Messrs. Inaba and Lentz had general knowledge of the issues, the instant case is analogous to In re Continental Airlines, Inc., 305 S.W.3d 849 (Tex.App., 2010). In Continental, the plaintiffs filed suit following an accident involving a Continental Airlines flight that injured 37 persons. Id. at 851. The plaintiffs noticed the deposition of Larry Kellner, Continental's chief executive officer (CEO) and chairman of the board of directors, arguing that Kellner had unique or superior knowledge of discoverable information regarding the accident. Id. The plaintiffs pointed to the following facts: (1) Kellner briefed members of the media immediately following the accident, (2) Kellner repeatedly stated that he would learn the cause of the accident in order to prevent future accidents, (3) Kellner sent personal letters to the passengers, (4) Kellner interviewed the pilots and gave commendations to crew and flight members, and (5) Kellner served on the board of directors of the Air Transport Association of America (ATA), a safety organization, and thus had knowledge regarding Continental's implementation of the ATA's policies. Id.
The trial court denied the defendant's motion for a protective order and granted the plaintiffs' motion to compel the deposition. Id. The defendant moved for a writ
The appellate court reviewed the pertinent law and the evidence, including statements made by other Continental employees in depositions and statements in Kellner's own affidavit, id. at 853-857, and found that the defendant showed that Kellner did not have "unique or superior knowledge regarding what occurred before and during the accident or the cause of the accident." Id. at 858. The court noted that while Kellner made public statements following the accident, the information he provided was given to him by another Continental employee; that Kellner was not Continental's representative with regard to the investigation by the National Transportation Safety Board (NTSB); that Kellner had not received information regarding the cause of the accident in his executive briefs; and that Kellner did not serve as Continental's representative on the ATA's safety committee. Id.
Furthermore, the Continental court found that the plaintiffs had not demonstrated that less intrusive methods were inadequate to obtain the discovery sought, notwithstanding the fact that the plaintiffs in Continental, unlike plaintiff here, had conducted extensive discovery, including submitting 110 requests for production and 74 interrogatories and taking 11 depositions. Id. at 859. The court noted that Continental had asserted that the plaintiffs had not deposed Continental's corporate representative, other individuals were present when Kellner received information regarding the accident, and other employees were more directly involved in the NTSB investigation. Id. The court reasoned that, while Kellner would be "best able to address his own subjective intent in making his generalized public statements following the accident," Kellner's "subjective intent in making the subject public statements [did] not establish anything regarding negligence, proximate cause, or damages." Id. The Continental court held that the trial court had abused its discretion by compelling Kellner's deposition, and directed the trial court to set aside the order compelling the deposition. Id. Here, in contrast, virtually no discovery preceded the disputed efforts to depose Messrs. Inaba and Lentz.
We note that the CEO in Continental was in a position similar to that of the Toyota executives here, Messrs. Inaba and Lentz. The Continental CEO had generalized knowledge of the accident and served as the airline's public face in dealing with the media, but had no particular knowledge of the cause of the accident. The record reflects that Messrs. Inaba and Lentz had only generalized knowledge of Toyota's unintended acceleration problems and had no unique or superior knowledge of, or role in designing, the vehicle at issue or in implementing manufacturing or testing processes. The court's reasoning in Continental is instructive and applicable to the proposed deponents here.
We adopt the apex-deposition rule for high-ranking corporate officers, as well as for governmental officials,
Vacated and remanded. We retain jurisdiction.
DONOFRIO, J., concurred.
JANSEN, J. (dissenting).
I cannot join the majority's announcement of a broad, new "apex-deposition rule" shielding high-ranking corporate officers from certain discovery in Michigan litigation. Nor can I conclude, under existing principles of Michigan law, that the trial court abused its discretion by denying defendant's
As explained by the majority, plaintiff noticed the video depositions of Inaba, defendant's chairman and chief executive officer, and Lentz, defendant's president and chief operating officer, pursuant to MCR 2.306 and MCR 2.315. Defendant moved for a protective order under MCR 2.302(C), seeking to prevent the scheduled depositions for the reason that neither Inaba nor Lentz "participated in the design, testing, manufacture, warnings, sale, or distribution of the 2005 Camry, or the day-to-day details of vehicle production." Defendant also asserted that neither Inaba nor Lentz possessed "unique information pertinent to the issues in this case" and argued that the so-called "apex-deposition rule" should be extended to shield high-ranking corporate officers from certain discovery in Michigan.
Plaintiff responded by arguing that although Michigan's courts had occasionally applied something similar to the apex-deposition rule in the context of high-ranking governmental officials, the rule had never been applied to shield corporate officers from discovery. Plaintiff contended that Inaba and Lentz possessed specific information relevant to this case and argued that defendant's motion for a protective order should therefore be denied. In particular, plaintiff asserted that Inaba and Lentz had failed to share with the government and the public certain information in their possession concerning the phenomenon of "sudden acceleration" in Toyota vehicles. Plaintiff pointed to a letter from two congressmen alleging that Toyota had concealed information regarding this sudden-acceleration problem. Plaintiff also pointed to certain public statements by Inaba suggesting that Toyota had saved $100 million by concealing information regarding sudden acceleration and to certain portions of Inaba's testimony before Congress in which he testified that he was personally involved in the quality-control review of Toyota vehicles. Plaintiff argued that this evidence, taken together, was sufficient to show that Inaba and Lentz personally possessed information relevant to the litigation and that their depositions were therefore warranted. Plaintiff also argued that she could not obtain the desired information by deposing other lower-level employees because some of the information was uniquely within the possession of Inaba or Lentz and because several of the statements and representations at issue had been made by Inaba or Lentz directly.
After oral argument, the trial court ruled that Inaba and Lentz were high-ranking
As an initial matter, I cannot join the majority's announcement of a broad, new apex-deposition rule shielding high-ranking corporate officers from certain discovery in Michigan civil litigation. The majority's announcement of this new rule is neither necessary nor warranted on the facts of this case. It is well settled that Michigan law already authorizes a trial court to enter protective orders and restrict discovery in order to prevent "annoyance, embarrassment, oppression, or undue burden or expense. . . ." MCR 2.302(C); Eyde v. Eyde, 172 Mich.App. 49, 56, 431 N.W.2d 459 (1988). Similarly, Michigan's trial courts are already authorized to restrict discovery that would be abusive, excessive, or irrelevant, Hartmann v. Shearson Lehman Hutton, Inc., 194 Mich.App. 25, 29, 486 N.W.2d 53 (1992), and to limit discovery for the purpose of preserving a litigant's privacy rights, see Yates v. Keane, 184 Mich.App. 80, 84, 457 N.W.2d 693 (1990). Within the confines of these rules, Michigan's trial courts have "broad discretion to issue protective orders to prevent . . . potential abuses[.]" Marketos v. American Employers Ins. Co., 185 Mich.App. 179, 197, 460 N.W.2d 272 (1990).
Because I believe that these existing principles of law are already adequate to protect high-ranking corporate officers and their respective corporations from potential discovery abuses, I dissent from the majority's adoption of a broad apex-deposition rule in this case. I fully acknowledge that, on occasion, certain litigants may seek to depose high-ranking corporate officers who truly lack personal knowledge of the relevant facts. At times, such litigants may actually be driven by a desire to annoy or embarrass the high-ranking corporate officers or to unnecessarily prolong the discovery process. But more commonly, I suspect, such litigants are simply mistaken about their belief that the high-ranking corporate officers at issue personally possess any relevant information. Whatever the litigants' motivations, however, our present rules of civil discovery are more than sufficient to curtail any undue burden, expense, or annoyance that might result from such discovery requests. See MCR 2.302(C). Given our existing discovery rules, Michigan does not need a broad apex-deposition rule to shield high-ranking corporate officers from abusive or burdensome discovery. The new apex-deposition rule announced by the majority today is quite simply unnecessary.
Nor do I believe that the majority's new apex-deposition rule for corporate officers is merely a logical outgrowth of this Court's decisions in Fitzpatrick v. Secretary of State, 176 Mich.App. 615, 440 N.W.2d 45 (1989), and Hamed v. Wayne Co., 271 Mich.App. 106, 719 N.W.2d 612 (2006). In Fitzpatrick, this Court reversed the trial court's order denying the defendant's motion to quash the deposition of the Secretary of State. Fitzpatrick, 176 MicLApp. at 618-619, 440 N.W.2d 45. The Fitzpatrick Court observed that the Secretary of State lacked personal knowledge of the relevant facts and that the information sought by the plaintiff could
However, a faithful reading of Fitzpatrick and Hamed reveals a critical distinction between the circumstances of those cases and the circumstances of the case at bar. In Fitzpatrick and Hamed, this Court was concerned with protecting the public's interest in good government. Both the Fitzpatrick Court and the Hamed Court pointed out that the public has a strong interest in the effective and efficient operation of governmental agencies, and both panels suggested that allowing a litigant to depose a high-ranking governmental official without first making a showing of actual need might hinder the effective functioning of that official's office. See Fitzpatrick, 176 Mich.App. at 617, 440 N.W.2d 45 (explaining that "the time and exigencies of an agency head's everyday business would be severely impeded if every plaintiff filing a complaint against an agency head, in his official capacity, was allowed to take his oral deposition" and that "[s]uch a procedure is against the public interest"); Hamed, 271 Mich.App. at 111, 719 N.W.2d 612 (observing that "[t]he purpose of this heightened scrutiny is to strictly limit the intrusions that would burden the public official's efforts to advance the effective and efficient operation of the public agency"). I agree with the statement of plaintiff's counsel at oral argument before this Court that "the very purpose of the Fitzpatrick and Hamed rule is to protect a public interest—the public interest in the service of the [governmental] employee." No such public interest is implicated in the present case; there is generally no public interest in the management and operation of private corporations. I cannot conclude that the rationale underlying this Court's decisions in Fitzpatrick and Hamed applies in the case at bar.
In sum, I believe that Michigan's existing rules of civil discovery are fully adequate to protect high-ranking corporate officers and their respective corporations from potential discovery abuses, and I cannot conclude that the majority's creation of a new apex-deposition rule for high-ranking corporate officers is in any way compelled by this Court's decisions in Fitzpatrick and Hamed.
I also conclude that, under our existing rules of civil discovery, the trial court properly denied defendant's motion for a protective order to quash the depositions. "It is well settled that Michigan follows an
Plaintiff, through her reliance on certain statements, documents, and other evidence presented in the trial court, demonstrated a strong probability that Inaba and Lentz possessed personal knowledge of particular information relevant to the litigation in this case. Specifically, plaintiff established a high likelihood that Inaba and Lentz possessed relevant, personal knowledge concerning the phenomenon of sudden acceleration in Toyota vehicles and that they also had personal knowledge of possible efforts to conceal or obscure the scope and breadth of this problem. Thus, unlike the appellants' discovery requests in In re Hammond Estate, 215 Mich.App. 379, 386, 547 N.W.2d 36 (1996), plaintiff's requests to depose Inaba and Lentz did not amount to mere "fishing expedition[s]." Instead, the record establishes that plaintiff had in mind certain specific matters that she wished to pursue during the depositions. These matters clearly would have been pertinent and material to the present controversy. I recognize that the Toyota Camry model driven by plaintiff's decedent was apparently not among the models subject to recall for sudden acceleration. However, plaintiff was nonetheless entitled to ask Inaba and Lentz about their knowledge of sudden acceleration in other, similar Toyota models. See Savage v. Peterson Distrib. Co., Inc., 379 Mich. 197, 202, 150 N.W.2d 804 (1967); McNamara v. E. W. Ross Co., 225 Mich. 335, 339-340, 196 N.W. 336 (1923). And even if Inaba and Lentz only possessed knowledge pertaining to sudden acceleration in unrelated Toyota models, plaintiff was still entitled to ask them about this matter in order to establish that defendant was on notice of the problem of sudden acceleration in general. Dowood, 14 Mich.App. at 161, 165 N.W.2d 450. I conclude that the depositions of Inaba and Lentz likely would have led to the discovery of relevant, admissible evidence. Domako v. Rowe, 438 Mich. 347, 359 n. 10, 475 N.W.2d 30 (1991).
I also conclude that the depositions of Inaba and Lentz would not have been annoying, embarrassing, oppressive, unduly burdensome, or unduly expensive under MCR 2.302(C), which is primarily intended to protect parties from discovery "abuses." See Marketos, 185 Mich.App. at 197, 460 N.W.2d 272. The party opposing discovery of a certain matter generally has the burden of showing why the request for discovery should be denied. See Wilson v. Saginaw Circuit Judge, 370 Mich. 404, 413, 122 N.W.2d 57 (1963). In the present case, there was simply no showing that plaintiff's depositions of defendant's officers would have been "abus[ive]."
The standard for judging whether a protective order should issue under MCR 2.302(C) surely cannot be a subjective one. After all, no one generally wants to give a deposition, and under a subjective standard it could almost always be argued that a proposed deposition would subject the deponent to "annoyance" or "embarrassment" within the meaning of MCR 2.302(C). Instead, the standard clearly must be an objective one. Thus, Inaba's and Lentz's own beliefs that the scheduled depositions would be annoying, embarrassing, or burdensome certainly were not sufficient for the issuance of a protective order in this case.
Lastly, I wish to make clear my belief that high-ranking corporate officers should be held to the same civil discovery standards as any other deponent, witness, or party. Indeed, I believe that our law demands this. It is clear to me that Judge Archie Hayman, the trial judge in this case, carefully examined the evidence presented in advance of his ruling and applied the same standard to defendant and its officers as he would have applied to any party appearing before him. This is exactly what every trial judge should strive to do.
In sum, I cannot conclude that the trial court abused its discretion by denying defendant's motion for a protective order to quash the depositions of Inaba and Lentz. See Bloomfield Charter Twp. v. Oakland Co. Clerk, 253 Mich.App. 1, 35, 38-39, 654 N.W.2d 610 (2002). Because I believe that the trial court's ruling was correct, I would affirm.