United States District Court, D. South Dakota, Western Division
ORDER DENYING IN PART AND GRANTING IN PART MOTION FOR
PROTECTIVE ORDER BY DEFENDANT CRUM & FORSTER HOLDINGS
CORP. [DOCKET NO. 87]
VERONICA L. DUFFY UNITED STATES MAGISTRATE JUDGE
matter is pending before the court on plaintiff David
Wetch's amended complaint alleging bad faith failure to
pay workers compensation insurance benefits, among other
claims. See Docket No. 44. Jurisdiction is premised
upon the diverse citizenship of the parties and an amount in
controversy exceeding $75, 000. See 28 U.S.C. §
the district court, the Honorable Jeffrey L. Viken, referred
defendants' three motions to dismiss for lack of personal
jurisdiction. See Docket No. 75. This court issued
a report and recommendation regarding the motion by defendant
Crum & Forster Holdings Corp. (C & F Holdings) that
recommended granting the motion, but in view of the very
limited opportunity Mr. Wetch had had to conduct discovery
regarding personal jurisdiction up to that point, the court
allowed Mr. Wetch 60 days to conduct a deposition of Marc
Adee and to conduct other discovery relevant to C & F
Holdings. See Docket No. 82. If additional relevant
facts were discovered, the court directed Mr. Wetch could
bring those before the court. Id.
Wetch very promptly contacted defense counsel and inquired as
to dates upon which Mr. Adee would be available for a
deposition. Mr. Wetch waited, with the understanding defense
counsel would get back to him with some suggested dates.
Defense counsel denies that it made any representation about
obtaining deposition dates for Mr. Adee. Instead, C & F
Holdings filed objections to this court's report and
recommendation, indicating therein it intended to resist the
deposition of Mr. Adee. See Docket No. 83.
point, two weeks of the 60-day period allotted by this court
for the taking of Mr. Adee's deposition had elapsed.
Rather than wait further, Mr. Wetch issued a notice of
deposition for Mr. Adee, unilaterally selecting January 31,
2019, as the date for the deposition.
F Holdings now moves for a protective order asking that Mr.
Adee's deposition not be taken at all or, if it is taken,
to move it to another date. C & F Holdings offers up a
different gentleman, Eric Tibak, to be deposed in place of
Mr. Adee. In addition, Mr. Wetch served C & F Holdings
with written discovery requests intended to obtain facts
pertinent to the personal jurisdiction issue. C & F
Holdings has stymied that discovery, providing few if any
Wetch asks the deposition of Mr. Adee be allowed and that an
extension of the 60-day time frame be granted. Mr. Wetch does
not wish to inconvenience Mr. Adee and is willing to take his
deposition on a different, mutally-agreeable date. Mr. Wetch
argues that defendant did not engage in a good faith effort
to resolve this discovery dispute prior to filing its motion
for protective order. Accordingly, Mr. Wetch asks that any
costs associated with rescheduling Mr. Adee's deposition
be paid by C & F Holdings.
regarding the personal jurisdiction issue, the court found
Mr. Wetch had supplied inadequate facts to support this
court's exercise of jurisdiction over C & F Holdings.
The case law Mr. Wetch cited involved facts different from
the facts discovered up until then in this case. Namely, in
the cases cited by Mr. Wetch, the officers of the parent and
subsidiary were often the same people and the salaries of the
officers of the subsidiary were paid by the parent company.
See Docket No. 82 at pp. 23-31 (this court's
opinion discussing facts and law as to C & F Holdings).
Mr. Wetch had not yet produced facts of a similar import
regarding C & F Holdings. Id. In addition, the
parent companies in the cases cited by Mr. Wetch touted the
geographic locations of their subsidiaries such that the
courts in those cases held the parent should not be surprised
to be haled into court in those locations. Id.
discovery Mr. Wetch now seeks from Mr. Adee concerns his
attempts to discover or verify these very types of facts. Mr.
Wetch has adduced proof that Mr. Adee was
simultaneously an officer in both C & F Holdings
and defendant United States Fire Insurance Company (US Fire).
Specifically, Mr. Adee was Chairman of the Board, President
and CEO as well as a Director or Trustee of U.S. Fire in 2016
while at the same time holding the position of Chief
Executive Officer of C & F Holdings, a position which he
held from January 1, 2015, to the present.
Tibak, the substitute offered up by defendants in place of
Mr. Adee for a deposition, did not hold such simultaneous
positions. Mr. Wetch seeks evidence regarding which corporate
entity paid Mr. Adee's salary and benefits during his
dual officership as well as facts regarding whether C & F
Holdings touted its connection to South Dakota in any way.
F Holdings relies on the apex deposition doctrine to prevent
the deposition of Mr. Adee. The court finds that doctrine
inapplicable in this case. The apex deposition doctrine
requires a party seeking to depose a high-level corporate
executive to demonstrate (1) that the executive has unique or
special knowledge of the facts at issue and (2) other less
burdensome avenues for obtaining the information have been
exhausted. Gladue v. Saint Francis Medical Center,
2014 WL 7205153 *1 (E.D. Mo. Dec. 17, 2014).
seeking to prevent a deposition bears a heavy burden to show
why discovery should be denied. Wells v. Lamplight Farms,
Inc., 2015 WL 225815 *1 (N.D. Iowa Jan. 16, 2015);
Bombardier Recreational Products, Inc. v. Arctic Cat,
Inc., 2014 WL 5685463 *3 (D. Minn. Sept. 24, 2014). It
is unusual for a court to prohibit the taking of a deposition
altogether, even when it is a CEO, and a claimed lack of
knowledge by itself is insufficient to preclude the
deposition. Bombardier, 2014 WL 5685463 *3 (citing
Apple Inc. v. Samsung Electronics Co, Ltd., 282
F.R.D. 259, 263 (N.D. Cal. 2012)); Raml v. Creighton
Univ., 2009 WL 3335929 *2 (D. Neb. Oct. 15, 2009). The
apex doctrine is intended to protect “busy, high-level
executives” and “is bottomed on the apex
executive lacking any knowledge of relevant
facts.” Raml, 2009 WL 3335929 at *2 (quoting
Minter v. Wells Fargo Bank, N.A., 258 F.R.D. 118,
126 (D. Md. 2009)). As the party seeking the protective
order, C & F Holdings bears the heavy burden of
demonstrating good cause for the order. Wells, 2015
WL 225815 *1; Bombardier, 2014 WL 5685463 *3;
Raml, 2009 WL 3335929 *2; see also
Mr. Wetch has shown Mr. Adee has special knowledge of facts
pertaining to the defense of personal jurisdiction-namely his
simultaneous holding of officer-level positions in both the
parent and a subsidiary company. See Mills v. Wal-Mart
Stores, Inc. 2007 WL 2298249 * 2 (W.D. Ark. Aug. 7,
2007) (holding it is sufficient if the witness has knowledge
about any fact relevant to a claim or defense, not
necessarily the plaintiff's core claim). Because C &
F Holdings has placed personal jurisdiction into issue, facts
related to that topic are relevant. Furthermore, Mr. Adee, by
holding simultaneous officer-level positions in both the
parent and subsidiary defendants herein, is the holder of
unique facts regarding that issue.
addition, by serving written discovery and asking for this
very information-and not receiving it-Mr. Wetch has exhausted
other less burdensome avenues for obtaining ...