On May 14, 2013, Judge Lewis A. Kaplan of the Southern District of New York affirmed a magistrate judge's decision denying plaintiff Chevron Corporation's ("Chevron's") motion to quash deposition notices for Chevron CEO John Watson and General Counsel Edward Scott.1 Chevron had objected to defendants' notices of deposition for these high-ranking corporate officials-so called "apex depositions" - arguing that all relevant, non-privileged information in their possession could be obtained through corporate designees pursuant to Federal Rule of Civil Procedure 30(b)(6).2 Under Judge Kaplan's order, Watson and Scott's depositions are to be taken prior to the scheduled completion of discovery at the end of May 2013.3
Judge Kaplan's ruling was made in connection with a RICO suit in which Chevron alleges that an Ecuadorian court's $18 billion judgment against the company was obtained through fraud and extortion. The Ecuadorian case involved claims that Texaco, Inc. ("Texaco") caused environmental destruction in that country prior to its merger with Chevron in 2001. Defendants in Chevron's RICO suit are the plaintiffs in the Ecuadorian suit and their lawyer, Steven Donziger.4
In the May 7, 2013 order leading to the recent ruling by Judge Kaplan, Magistrate Judge James C. Francis found that although courts give special scrutiny to requests to depose apex witnesses because of the possibility of business disruption and harassment, only "compelling circumstances" may excuse any witness from giving testimony.5 With respect to the deposition of CEO Watson, Magistrate Judge Francis described Chevron's harassment concerns as credible in light of the "rancorous history" of the litigation.6 Magistrate Judge Francis determined, however, that "there is little doubt that Mr. Watson has relevant knowledge"7 because he led the company's integration with Texaco and monitored potential litigation liabilities.8 Magistrate Francis acknowledged that, in other circumstances, it may have been prudent to defer Watson's deposition until Rule 30(b)(6) depositions were concluded in order to determine whether Watson's testimony would be redundant. But in this case, the impending discovery deadline removed the "luxury" of such a deferral.9
With respect to Edward Scott, Chevron's general counsel, Magistrate Judge Francis found that, attorney-client privilege and work product concerns notwithstanding, "[i]t cannot be assumed . . . that the only relevant information Mr. Scott possesses is privileged."10 Magistrate Judge Francis explained that "defendants have the right to develop the record by seeking Mr. Scott's knowledge and, where an objection is lodged, asking the questions that will help to determine whether the privilege is properly asserted."11
In its objections to Magistrate Judge Francis' order, Chevron raised four key arguments why broad depositions of CEO Watson and General Counsel Scott should not be permitted. First, Chevron argued that Watson and Scott possessed no unique personal knowledge on relevant topics and that defendants had not exhausted less intrusive means of obtaining the desired information.12 Second, Chevron argued that the court already had ruled that the subjects on which Watson and Scott were to be questioned were irrelevant or protected by the attorney-client privilege.13 Third, Chevron also argued that defendants, who noticed the Watson and Scott depositions on April 5, 2013-less than two months before the scheduled completion of discovery-should not be rewarded for their "dilatory discovery tactics."14 Finally, Chevron requested that, in the event the Watson and Scott depositions were allowed, they should be limited to no more than 3.5 hours.15
Judge Kaplan rejected each of Chevron's arguments, finding no error of law or fact in Francis' ruling.16 With respect to the relevance and permissibility of certain lines of questioning, Judge Kaplan ruled that those issues would "be determined by the special master(s) . . . who will apply this Court [sic] rulings and, in the absence of pertinent rulings, use their own best judgment, in each case subject to review by this Court."17 Judge Kaplan also declined to limit the duration of the depositions, leaving it to the special masters to shorten or lengthen any deposition for good cause shown.18
Three lessons can be drawn from Judge Kaplan's ruling. First, it obviously serves as a frightening reminder that even the most senior officers in a company, the CEO and general counsel, may be deposed if a court determines there is a possibility that such "apex officials" have personal knowledge relevant to a legal dispute. Such a possibility is an important consideration in shaping corporate communications, crisis management, and general strategy with respect to significant events. Second, the ruling illustrates the multifaceted roles that general counsel often play in major companies and the resulting risk that some of those roles may one day be a topic of discovery. Finally, Judge Kaplan's ruling is a reminder of the importance of special masters in managing discovery calendars and the deference that judges give them. Establishing and maintaining a strong, positive relationship with a special master is critical in any litigation.
The editors would like to thank James Treanor for his contribution to this article.