Moyle et al v. Liberty Mutual Retirement Benefit Plan et al
Filing
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ORDER on 180 Joint MOTION for Discovery Resolution of Discovery Dispute with Respect to Four Executive Depositions. As provided in the attached Order, to the extent the joint motion involves a motion to quash the depositions of the four present an d former executives pursuant to the "apex doctrine" the motion is DENIED. To the extent that the joint motion involves a motion to exceed the 10 deposition limit of the Federal Rules of Civil Procedure, that motion is DENIED without prejudice. Signed by Magistrate Judge Mitchell D. Dembin on 10/30/12. (Dembin, Mitchell)
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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GEOFFREY MOYLE, et al.,
CASE NO. 10cv2179-DMS (MDD)
Plaintiffs,
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ORDER ON JOINT MOTION
FOR DETERMINATION OF
DISCOVERY DISPUTE RE:
EXECUTIVE DEPOSITIONS
vs.
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LIBERTY MUTUAL RETIREMENT
BENEFIT PLAN, et al.,
[ECF NO. 180]
Defendants.
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This case arises from Plaintiff Moyle’s former employment with Golden Eagle
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Insurance Company and later with Liberty Mutual Insurance, which acquired Golden
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Eagle in 1997. Plaintiff was employed by Golden Eagle in 1988 and was discharged
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by Liberty Mutual in 2002. In this lawsuit, among other things, Plaintiff asserts that
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he was misled regarding the extent to which his service at Golden Eagle would be
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attributed to Liberty Mutual and has sued for improperly withheld benefits.
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Before the Court is a joint motion of the parties for the determination of a
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discovery dispute. The motion was filed on October 23, 2012. (ECF No. 180).
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Plaintiffs seek to depose four of Defendant’s current and former executive officers:
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David Long, the current Chief Executive Officer and President of Liberty Mutual;
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Tim Sweeney, the current Executive Vice President of Liberty Mutual; Geoff Hunt a
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former Executive Vice President of Liberty Mutual; and Ray Mundt, a former
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member of the Liberty Mutual Board of Directors and member of that board’s
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Compensation Committee. Plaintiffs have noticed the depositions of Long, Sweeney
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and Hunt and have stated their intention to notice the deposition of Mundt.
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Defendants claim the depositions are inappropriate because: (1) the executives
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Plaintiffs want to depose are protected by the “apex doctrine;” and, (2) Plaintiff will
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exceed the 10 deposition limit of Federal Rule of Civil Procedure 30(a)(2).
David Long
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David Long is the current Chief Executive Officer and President of Liberty
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Mutual Insurance. In 1997, Mr. Long was a member of the Board of Directors of
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Golden Eagle. Golden Eagle then-CEO Fred Marziano, who gave deposition
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testimony in this case, described Mr. Long as his “right-hand man.” Citing to other
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deposition testimony, Plaintiff claims that Mr. Long “had discussions with other
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executives at Liberty Mutual specifically about whether or not the transitioning
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Golden Eagle employees would be credited with their prior years of service for the
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purpose of benefit accrual under the retirement plan.” Plaintiff further claims that
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“Mr. Long also knew that Golden Eagle employees were under (the apparently
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mistaken) impression that they would receive credit for the purposes of accrual, yet
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for reasons that Mr. Long can perhaps elaborate on, those misconceptions were never
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clarified.”
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Defendant claims that Mr. Long’s participation in the Golden Eagle
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transaction is not relevant to the instant action, that Mr. Long lacks personal
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knowledge relevant to the instant action, and that less burdensome means of
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discovery have not been exhausted.
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Tim Sweeney
Tim Sweeney is the current Executive Vice President of Liberty Mutual
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Insurance and the President of Liberty Mutual’s Personal Insurance division. In
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1997, Mr. Sweeney worked under Mr. Long and Mr. Marziano.
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Plaintiffs, again relying upon deposition testimony obtained in this case,
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contend that, like Mr. Long, Mr. Sweeney had discussions with his colleagues
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relating to Golden Eagle employee benefits and “knew there was confusion about
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what credits would be offered, yet failed to address it.” Plaintiff’s claim that Mr.
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Sweeney helped Mr. Marziano interpret and understand the terms of the 1997
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Rehabilitation Agreement that Plaintiff’s believe is a key document in the instant
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action. Plaintiff claims that Mr. Sweeney worked directly on documents analyzing
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Golden Eagle’s employee staffing and benefits. Plaintiff also claims that Mr.
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Sweeney was directly involved in an August 1997 meeting explaining how employee
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benefits would be effected by the Liberty Mutual transaction.
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Defendant claims that Plaintiff has not demonstrated that Mr. Sweeney had
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any involvement related to pension benefits in the 1997 transaction, that even if he
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had involvement such involvement is irrelevant, and that Plaintiff has not
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demonstrated that Mr. Sweeney participated in any benefit meetings.
Geoff Hunt
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Geoff Hunt is a former Executive Vice President of Liberty Mutual. Mr. Hunt
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was “the principal coordinator of mergers and acquisitions at Liberty Mutual,
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including the Golden Eagle merger,” and was one of the chief negotiator’s in the
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transaction.
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Plaintiffs claim that Mr. Hunt was directly involved in the creation of
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documents containing the benefit provisions at issue in this case. Plaintiffs assert
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that Mr. Hunt has personal knowledge of the issue of retirement benefits that were
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negotiated in the transaction, the negotiations themselves and the handling of the
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human resources impacts of the benefits.
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Defendant claims that Mr. Hunt was not the author of the benefits provisions
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Plaintiff wishes to discuss, and that other lower level employees are both available
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for deposition and have more direct knowledge of the events in question.
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Ray Mundt
Ray Mundt is a former member of the Liberty Mutual Board of Directors and
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a member of that board’s Compensation Committee. Plaintiffs point to Liberty
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Mutual’s initial disclosures where Defendant states, regarding Mr. Mundt: “He is
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expected to have information and knowledge regarding the intended scope and
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limitations of the credit to be provided to said employees relating to their prior
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service with [Golden Eagle].”
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Defendant admits that Mr. Mundt may have relevant information. However,
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Defendant claims that any information Mr. Mundt might have is already in the
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possession of Plaintiff. Defendant claims that all relevant information about the
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Compensation Committee, and its meeting approving the benefits plan for Golden
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Eagle employees, is contained in the minutes of that meeting and Plaintiff has access
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to those minutes.
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Legal Standard
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The Federal Rules of Civil Procedure generally allow for broad discovery,
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authorizing parties to obtain discovery regarding “any nonprivileged matter that is
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relevant to any party’s claim or defense.” Fed. R. Civ. P. 26(b)(1). Also, “[f]or good
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cause, the court may order discovery of any matter relevant to the subject matter
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involved in the action.” Id. Relevant information for discovery purposes includes any
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information “reasonably calculated to lead to the discovery of admissible evidence,”
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and need not be admissible at trial to be discoverable. Id. There is no requirement
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that the information sought directly relate to a particular issue in the case. Rather,
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relevance encompasses any matter that “bears on” or could reasonably lead to matter
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that could bear on, any issue that is or may be presented in the case. Oppenheimer
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Fund, Inc. v. Sanders, 437 U.S. 340, 354 (1978). District courts have broad discretion
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to determine relevancy for discovery purposes. See Hallett v. Morgan, 296 F.3d 732,
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751 (9th Cir. 2002). Similarly, district courts have broad discretion to limit discovery
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where the discovery sought is “unreasonably cumulative or duplicative, or can be
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obtained from some other source that is more convenient, less burdensome, or less
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expensive.” Fed. R. Civ. P. 26(b)(2)(C). Limits also should be imposed where the
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burden or expense outweighs the likely benefits. Id.
Discussion
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The Apex Doctrine
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Courts consistently define apex employees as “high-level corporate executives.”
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See Apple Inc. v. Samsung Electronics Co., Ltd, 282 F.R.D. 259, 263 (N.D. Cal. 2012)
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(“the deposition of a high-level executive (a so-called apex deposition),”); DR Sys., Inc.
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v. Eastman Kodak Co., 2009 WL 2973008 at *2 (S.D. Cal. Sept. 14, 2009) (“an official
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at the highest level or apex of a corporation”); Bank of the Ozarks v. Capital Mortg.
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Corp., 2012 WL 2930479 at *1 (E.D. Ark. July 18, 2012) (“The apex doctrine protects
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high-level corporate officials . . .”).
When a party seeks to take the deposition of an official at the highest level or
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“apex” of a corporation a stricter standard applies to the party seeking discovery, and
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the court may exercise its authority under the federal rules to limit discovery.
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Fed.R.Civ.P. 26(b)(1). See, e.g., Mulvey v. Chrysler Corp., 106 F.R.D. 364 (D.C.
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R.I.1985) (Virtually every court that has addressed deposition notices directed at an
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official at the highest level or “apex” of corporate management has observed that such
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discovery creates a tremendous potential for abuse or harassment.). Even when
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seeking the deposition of an apex official, “it is very unusual ‘for a court to prohibit
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the taking of a deposition altogether absent extraordinary circumstances.’” Apple,
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282 F.R.D. at 263 (quoting WebSideStory, Inc. v. NetRatings, Inc., 2007 WL 1120567
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at *2 (S.D. Cal. Apr. 6, 2007) ). “When a witness has personal knowledge of facts
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relevant to the lawsuit, even a corporate president or CEO is subject to deposition. A
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claimed lack of knowledge, by itself it is insufficient to preclude a deposition.” Id.
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When determining whether to allow an apex deposition, courts often consider:
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(1) whether or not the high-level deponent has unique first-hand, non-repetitive
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knowledge of the facts at issue in the case and (2) whether the party seeking the
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deposition has exhausted other less intrusive discovery methods, such as
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interrogatories and depositions of lower level employees. See Salter v. Upjohn, 593
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F.2d 649, 651 (5th Cir.1979) (granting protective order for executive where plaintiff
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had sought to depose the president of the company before deposing lower level
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executives); Baine v. General Motors Corp., 141 F.R.D. 332 (M.D.Ala.1991) (granting
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protective order for Vice President of General Motors where plaintiff had failed first
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to depose lower level employees).
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Defendant contends that each potential deponent named in the joint motion is
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an apex executive. (ECF No. 180). Plaintiff does not dispute that Mr. Long is an
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apex executive, is silent on the issue regarding Mr. Sweeney, and claims that the
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doctrine does not apply to former executives Messrs. Hunt and Mundt. Id. Former
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executives, however, are within the scope of the apex doctrine. See Mulvey v.
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Chrysler Corp., 106 F.R.D. 364, 365 (D.R.I. 1985) (holding that the magistrate erred
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in allowing the deposition of Lee Iacocca, the former Chairman of Chrysler Corp.);
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Gauthier v. Union Pac. R. Co., 2008 WL 2467016 (E.D. Tex. June 18, 2008)
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(unpublished) (quashing the deposition of a former executive).
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Each potential deponent participated to some extent in the 1997 transaction
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between Golden Eagle and Liberty Mutual. The questions presented are (1) whether
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the personal knowledge of each executive, attained during that period, is unique and
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relevant to issues in this case; and (2) whether means less intrusive than deposition
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remain available to Plaintiff’s for acquiring such unique information. See Salter, 593
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F.2d at 651.
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The 1997 transaction is at the heart of this case. At the time of the transaction
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Mr. Long was a member of the Board of Golden Eagle and is described by Mr.
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Marziano as being his “right hand man” during the transaction. (ECF No. 180 at 16;
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ECF No. 180-16 at 8). Mr. Sweeney worked for both Mr. Long and Mr. Marziano, and
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it appears assisted with the interpretation of allegedly key documents. (ECF No.
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180-16 at 5). Plaintiffs claim, and Defendant does not deny, that Mr. Hunt was a
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chief negotiator of the transaction. (ECF No. 180 at 7). Mr. Mundt was a member of
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Liberty’s Mutual’s Compensation Committee that approved the benefits plan at issue.
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Each were in a position to have obtained unique personal relevant knowledge.
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There is no evidence that Plaintiff’s is seeking this discovery for the purpose of
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harassment. Plaintiff has demonstrated sufficiently that these individuals may have
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personal, non-repetitive knowledge of relevant facts. The Court does not believe that
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there are less intrusive means of discovery available for these witnesses.
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Accordingly, the apex doctrine does not bar their depositions.
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The Ten Deposition Limit
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Federal Rule of Civil Procedure 30(a)(2) requires leave of court when “parties
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have not stipulated to [a] deposition,” and “the deposition would result in more than
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10 depositions” taken by a party. The advisory committee notes accompanying Rule
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30(a)(2) state: “A deposition under Rule 30(b)(6) should, for purposes of this limit, be
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treated as a single deposition even though more than one person may be designated
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to testify.” Fed. R. Civ. Proc. 30(a)(2)(A) Advisory Committee Notes (1993).
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Defendant claims that Plaintiffs have already taken ten depositions and have
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noticed seven others. (ECF No. 180-13 at 2). Defendant admits, in a footnote, that a
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number of the depositions were taken pursuant to Rule 30(b)(6). Properly counting
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the 30(b)(6) depositions, Plaintiffs admit to having taken seven depositions.
Plaintiffs may depose three more people before requiring leave of court. See
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Fed. R. Civ. Proc. 30(a)(2)(A). Plaintiffs have noticed the depositions of Messrs. Long,
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Sweeney and Hunt. Those depositions may proceed as noticed or Plaintiff may
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choose to substitute Mr. Mundt for one of these other witnesses upon proper notice.
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The Court is not authorizing any depositions beyond the allotted ten at this time.
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Conclusion
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The motion to quash the deposition notices of Messrs. Long, Sweeney and Hunt
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is DENIED. The motion for leave to take more than ten depositions is DENIED
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without prejudice.
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IT IS SO ORDERED
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DATED: October 30, 2012
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Hon. Mitchell D. Dembin
U.S. Magistrate Judge
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