Federal Judges Push Back On Self-Importance Of CEOs

It may have taken 40 years, but federal courts are finally pushing back on the legal theory that the CEOs of major corporations are simply too important to testify. Back in 1985, the apex doctrine was codified. In a personal injury has against Chrysler, top exec Lee Iacocca was shielded from having to sit for a deposition because he was a “singularly unique and important” individual.

Since then, C-suite individuals like Elon Musk and Mark Zuckerberg have invoked the doctrine to avoid testifying in various litigation. However, the tides are changing. As federal Judge Iain D. Johnston told Bloomberg Law, “Single moms, single dads, who’ve got part time jobs, are taking classes, are taking kids to daycare—is their time less valuable than the CEO of a major corporation sitting in a meeting? There should be a healthy skepticism of people’s self-importance.”

Biglaw partners are seeing that shift happening in real time.

David Fertig, a partner at BakerHostetler who’s litigated both sides of the apex doctrine, said the question in litigation is shifting to whether the apex witness has unique information relevant to a case, rather than if the CEO is too busy or otherwise important to be deposed. In some instances, legal fights ensue over limiting the scope and length of the deposition, rather than whether the deposition can happen, Fertig said.

“There’s increasing concern and public outcry for people of significant wealth and power to answer for corporate conduct,” Fertig said. “Courts have therefore shown some reluctance to the idea that merely by virtue of their status as senior executives, apex witnesses are immune from deposition.”

And Duane Morris partner Gerald Maatman Jr. said, “There’s no free pass anymore. There’s no presumption that just because you’re the CEO, you get to avoid depositions.”

When trying again to invoke the doctrine earlier this year, Zuckerberg wasn’t as successful as he was in the past. And he’s not the only CEO ordered to be deposed this year.

The tech titan’s change in fortune reflects a backlash against the apex doctrine by judges swayed by populist arguments that it unfairly favors the powerful. McDonald’s Corp. CEO Christopher Kempczinski, Microsoft Corp. CEO Satya Nadella, activist investor Carson Block, Madison Square Garden chief James Dolan, and now Zuckerberg all lost bids in the past year to duck depositions under the apex doctrine in federal courts.

It may not be as radical as plaintiffs attorneys might like — Robbins Geller attorney Jason Forge said “the entire concept is a disgrace” — but there’s still been significant progress pushing against the notion that corporate executives are (sigh) above the law.

Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter @Kathryn1 or Mastodon @[email protected].