Facts
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Sun Capital Partners, Inc. sued its insurer, Twin City Fire Insurance Company, seeking coverage under a supplemental insurance policy.
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During discovery, Twin City noticed depositions of Sun Capital’s co-founders/co-CEOs (Marc Leder and Rodger Krouse) and Sun Capital’s general counsel/managing director (Deryl Couch).
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Sun Capital moved to quash the notices and sought a protective order, arguing:
- The CEOs were “apex” witnesses lacking unique, nonduplicative knowledge.
- Twin City had not pursued less intrusive discovery, including depositions of other witnesses or Sun Capital’s offered Rule 30(b)(6) designee (outside counsel Thomas Clare).
- Deposing general counsel would likely intrude on attorney-client privilege and work product and was unjustified absent a strong showing of necessity.
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Twin City argued the executives and general counsel had unique first-hand involvement in underlying settlement negotiations, reflected in extensive communications, and that apex protection should not apply where top officials directly participated.
Issues
- Under Rule 26(c) and apex-deposition standards, whether Twin City showed that deposing Sun Capital’s co-CEOs was necessary because they had unique, crucial, nonprivileged information unavailable by less intrusive discovery.
- Whether Twin City showed a sufficient need to depose Sun Capital’s general counsel despite privilege and work-product concerns and the availability of alternative sources.
Decision
- The court granted Sun Capital’s motion to quash and for a protective order.
- The deposition notices for Leder, Krouse, and Couch were quashed, and their depositions were barred at that time.
- The ruling was without prejudice to Twin City later seeking these depositions after pursuing other discovery and developing a record showing unique, crucial, nonprivileged information unobtainable elsewhere.
Legal Principles
- A party seeking to depose high-ranking corporate officials must generally show that the official has unique, nonduplicative, first-hand knowledge of relevant, nonprivileged facts and that the information cannot be obtained through less intrusive means.
- Courts commonly require litigants to pursue alternative discovery (documents, lower-level witnesses, and Rule 30(b)(6) testimony) before compelling apex depositions.
- Depositions of in-house counsel are disfavored when they risk invading attorney-client privilege or work product, and require a focused showing that nonprivileged, necessary factual information cannot be obtained from other sources.
- Under Federal Rule of Civil Procedure 26(c), courts may issue protective orders for good cause to prevent undue burden or expense and to manage discovery sequencing where requested depositions are premature.
Conclusion
The court exercised Rule 26(c) discretion to prevent depositions of Sun Capital’s co-CEOs and general counsel because Twin City had not first pursued less intrusive discovery or shown that these witnesses possessed unique, crucial, nonprivileged information unavailable from other sources.