Recent Rule Change in Florida Can Protect Corporate Officials from Depositions

Recent Rule Change in Florida Can Protect Corporate Officials from Depositions

In 2021, The Supreme Court of Florida adopted the “apex rule” pertaining to attempts to depose corporate and government officials. In re Fla. R. Civ. Proc. 1.280, 324 So.3d 459, 461 (Fla. 2021). Rule 1.280(h) now provides protection for “… the operation of governmental and corporate entities by limiting the ability to depose or call as a witness the highest executives of the entity.” See id. at 460–62. Specifically, the new Rule provides that entities can seek to prevent such deposition, by motion and accompanying affidavit or declaration explaining that “… the officer lacks unique, personal knowledge of the issues being litigated.” Fla. R. Civ. Proc. 1.280 (h).

In Chewy, Inc., et al. v. Covetrus, Inc. ___ So.3d ___ (Fla. 4th DCA appeal no. 4D2023-2967, Apr. 3, 2024), the Florida 4th District Court of Appeal was confronted by a Motion for Protective Order filed by Plaintiff Chewy, Inc. (“Chewy”), seeking to prevent the deposition of its Chief Executive Officer (CEO).  Chewy had sued Covetrus, alleging corporate libel, defamation and unfair competition, arising from Chewy’s attempts to expand into “telemedicine” in the contact of veterinary practice. Covetrus filed a Notice of Deposition for Chewy’s CEO, focused on an online article by CNBC which quoted and paraphrased several comments by the CEO.  The affidavit of Chewy’s CEO in support of the Motion for Protective Order stated that he had no “personal, unique or non-repetitive knowledge of the issues…” and that he had no knowledge or personal involvement with respect to those issues which was superior to that of other Chewy’s employees.

Chewy’s Motion was denied by the trial court, on the grounds that the CEO had

“…made a public statement relevant to Defendant’s truth defense. In doing so, [the CEO] directly inserted himself into this dispute. Only [the CEO] knows why he made the statement at issue and what he meant by it. Thus [the CEO] has ‘unique, personal knowledge of the issues being litigated.’”  ___ So.3d at ___.

The 4th District Court of Appeal reversed, holding that Chewy’s Motion and supporting affidavit sufficiently invoked the protections offered by Rule 1.280(h). The Court held:

“We construe the rule requirement that the CEO affidavit ‘explain[] that the officer lacks unique, personal knowledge of the issues being litigated’ to mean the affidavit must demonstrate the officer does not have knowledge of the issues being litigated that cannot be obtained from lesser officials or employees of the entity or corporate documents.” (emphasis in the original) So.3d at__ (Fla. 4th DCA 2024)

As indicated by the last phrase in the quote above, the Court placed particular importance on the direct denial by the affidavit that the CEO’s knowledge was superior to that of others in the company. Covetrus pointed out, both to the trial court and the appellate tribunal, that the statements in question had been uttered by the CEO himself, and that he surely knew better than anyone else why the statements had been made and what was meant. However, the Court rejected this argument, stating:

“We further deem the CEO’s declaration of a lack of knowledge that is unique or superior to other employees is sufficient based on Affinity Labs of Texas v. Apple, Inc., No. C 09-4436CW, 2011 WL 1753982, at *15 (N.D. Cal. May 9, 2011). In applying the apex doctrine, the Affinity Labs court stated: “The mere fact that [CEO Steven] Jobs made public statements, even on issues that Affinity considers relevant to its claims, are insufficient to justify his deposition. Courts have repeatedly denied apex depositions even on a showing that the executive made public statements on relevant issues.” Affinity Labs, No. C 09-4436CW, 2011 WL 1753982, at *16 (citations omitted). Affinity Labs was specifically cited as authority by our supreme court in amending rule 1.280. In re Amend. to Fla. R. of Civ. Proc. 1.280, 324 So. 3d at 463.”

The result in Chewy, Inc., supra, can be seen as a vigorous enforcement of the provisions of Rule 1.280(h). Before the adoption of this provision, the statements by the CEO would have very likely led to a deposition in the lawsuit. The risks to a company arising from such proceedings need little explanation, and corporate officials should still be aware of the considerations possibly involved in media statements.