Willis v. Big Lots, Inc. et al
OPINION and ORDER denying 94 Motion for Protective Order. Signed by Magistrate Judge Kimberly A. Jolson on 6/16/2017. (ew)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
ALAN WILLIS, Individually and on Behalf
of All Others Similarly Situated,
Civil Action 2:12-cv-604
Judge Michael H. Watson
Magistrate Judge Jolson
BIG LOTS, INC., et al.,
OPINION AND ORDER
This matter is before the Court on Defendants’ Motion for a Protective Order Precluding
the Deposition of David J. Campisi.
For the reasons that follow, Defendants’
Motion is DENIED.
This is a securities class action in which Plaintiffs allege that Defendants unlawfully
inflated the value of Big Lots stock during the period from March 2, 2012 to August 23, 2012 by
concealing the company’s true financial condition. Plaintiffs seek to depose David J. Campisi
(see Doc. 96-3 (deposition notice)), Big Lots’ current President and Chief Executive Officer
(“CEO”) who joined the company on May 3, 2013, and became a Director on May 30, 2013.
Plaintiffs have agreed to limit the deposition to three hours at a location and time of Mr.
Campisi’s choosing, and seek three general categories of information.
The first category of information Plaintiffs seek from Mr. Campisi concerns the firing or
departure of individual Defendants and other key Big Lots executives.
Plaintiffs seek information on:
Mr. Campisi’s firing of Big Lots’ General Counsel Defendant Charles W.
Haubiel II who is alleged to have sold personally and illegally $2.5 million
worth of Big Lots stock and presided over sale of $33 million worth of
stock by other insiders while charged with administering Big Lots’ insider
Mr. Campisi’s firing of Chief Financial Officer Defendant Joe Cooper, who
is alleged to have sold illegally $3.1 million worth of Big Lots stock;
Mr. Campisi’s firing of Senior Marketing Executive Rob Claxton who is
alleged to have sold illegally $2.4 million worth of Big Lots stock;
Mr. Campisi’s knowledge of the retirement of former Merchandising
Department head John Martin, who is alleged to have sold illegally over $4
million worth of Big Lots stock; and
Mr. Campisi’s succession of former CEO Defendant Steven S. Fishman at
a time when Big Lots had been notified about various investigations into
(Doc. 104 at 6–10).
The second category of information concerns Mr. Campisi’s knowledge of Big Lots’
operations during or immediately following the class period.
Plaintiffs allege that the Board of
Directors hired Mr. Campisi to replace Mr. Fishman and “turnaround the Company’s poor
performance during the Class Period and the second half of 2012.” (Id. at 10).
To that end,
Plaintiffs seek information on Mr. Campisi’s knowledge of class-period strategies (including
merchandising strategies), sales trends, and personnel, and changes he made based on that
(Id. at 10–12).
Plaintiffs also wish to inquire about Mr. Campisi’s decision to
undertake a 2013 assessment concerning Big Lots’ culture during the class period and his
“takeaways” and the “resulting changes” at Big Lots.
The third category of information concerns what Plaintiffs refer to as the Special
Committee and Defendants refer to as the Demand Committee formed in March 2013, which
Plaintiffs contend “investigated many of the same facts underlying this litigation….” (Id. at 12).
Plaintiffs explain that Mr. Campisi “occupied the unique role” of being “the only Big Lots
director who neither was on the Special Committee nor a defendant in the underlying derivative
litigation” in September 2013, when Big Lots’ Board of Directors adopted the Committee’s
recommendation that no further action be taken.
Plaintiffs also seek Mr. Campisi’s
perspective on the Special Litigation Committee formed in August 2016.
(Id. at 12–13).
On May 15, 2017, Defendants filed a Motion for a Protective Order precluding Mr.
That Motion is now ripe for consideration.
(See Doc. 104
(opposition); Doc. 108 (reply)).
STANDARD OF REVIEW
Where, as here, a party moves for a protective order to prevent a properly-noticed
deposition from proceeding, the movant carries a “heavy burden” under the Federal Rules of Civil
Ogle v. Columbia Gas Transmission, No. 2:10-cv-1059, 2014 WL 6814145, at *4
(S.D. Ohio Dec. 3, 2014). Because a protective order is difficult to obtain, it must be based on the
movant’s “specific and persuasive showing of good cause.” Libertarian Party of Ohio v. Husted,
302 F.R.D. 472, 476 (S.D. Ohio 2014) (stating that “granting such orders absent a specific and
persuasive showing of good cause would cut against the fact that, under Rule 30(a), ‘[a] party
may ... depose any person, including a party, without leave of court....’”); see also Serrano v.
Cintas Corp., 699 F.3d 884, 901 (6th Cir. 2012) (finding that the alleged harm caused by allowing
the deposition to proceed must be illustrated with particularity and specificity and not based on
“stereotyped and conclusory statements” such as the notion that corporate executive depositions
are inherently sought for harassment).
In the limited instance where the movant satisfies this
standard, it may be accomplished by demonstrating that the proposed deponent lacks any relevant
knowledge, that the testimony sought would be unreasonably cumulative, or duplicative or is
sought for the purpose of harassment. Libertarian Party, 302 F.R.D. at 475–76 (noting burden
shifting under certain circumstances); see also Bailey v. Ky. Cmty., No. 5:14-cv-143-TBR-LLK,
2015 WL 4886089, at *1 (W.D. Ky. Aug. 17, 2015) (“Practically speaking, proving that any
deposition witness lacks any relevant evidence serves as a difficult task because of the liberal
scope of discovery.”).
In sum, a motion for a protective order preventing a deposition should be
granted “rarely” and only under “extraordinary circumstances.” Libertarian Party, 302 F.R.D. at
476 (citation omitted).
In their Motion for Protective Order, Defendants argue that Mr. Campisi lacks personal
knowledge of any relevant facts, the proposed deposition topics are irrelevant and testimony on
them would be unreasonably duplicative, and Plaintiffs request to depose Mr. Campisi for the
purpose of harassment.
Defendants’ arguments fail.
Mr. Campisi’s Personal Knowledge
Again and again, Defendants repeat the mantra that Mr. Campisi does not possess personal
knowledge of any relevant facts because he joined Big Lots after the class period.
Doc. 94 at 5 (stating that Mr. Campisi “has no first-hand knowledge of the operations of Big Lots’
business before his arrival as CEO in May 2013—eight months after the end of the class period
and nearly a year after the alleged misstatement”); id. (insisting that “[a]ny information Mr.
Campisi may have gained about the Company’s operations before his employment is
second-hand, gleaned from other Big Lots personnel who worked at the Company during that
time”); id. at 6 (noting that Mr. Campisi “did not join the Company until eight months after the
end of the class period”); id. (stating that “Mr. Campisi had not begun his employment with Big
Lots when the Demand Committee was formed”); id. at 10–11 (observing that Mr. Fishman
informed the Board of his intention to retire “three years before Mr. Campisi joined Big Lots” and
the retirement was announced five months prior to Mr. Campisi’s arrival); Doc. 108 at 1 (arguing
that “that there is no basis to believe that Mr. Campisi—who was not even at the Company during
the relevant time—could provide non-cumulative information on any relevant subjects”); id. at 2
(stating that “Mr. Campisi did not join Big Lots until five months after Mr. Fishman announced
his retirement and he was not a member” of the Demand Committee or the Special Litigation
Committee); id. at 9 (observing that Mr. Campisi “was not even at Big Lots at the time the
Demand Committee was formed”).
As set forth below, this Court disagrees.
The Firing or Departure of Individual Defendants and Other
Big Lots Executives
In a declaration filed in support of the Motion for a Protective Order, Mr. Campisi admits
that he fired Mr. Claxton (Senior Marketing Executive) on June 5, 2013, and Mr. Haubiel
(General Counsel) on June 17, 2013.
(Doc. 95 at ¶¶ 8–9).
Mr. Campisi elaborates that the
firings were based on his “own interactions” with those individuals and unrelated to this case.
(Id.). Similarly, Mr. Campisi admits that his actions resulted in the termination of Mr. Cooper’s
employment (Chief Financial Officer) on April 18, 2014.
(Doc. 95 at ¶ 11).
He explains that
Mr. Cooper’s employment was terminated based on his decision to discontinue the company’s
Canadian operations and, again, was unrelated to this case.
Additionally, Mr. Campisi
acknowledges that Mr. Martin (Merchandising Department Head) and Mr. Fishman (former CEO
and Director) retired from Big Lots. (Doc. 95 at ¶¶ 5, 10).
Mr. Campisi states that he has “no
reason to believe” Mr. Martin’s retirement was related to this case and he has no personal
knowledge concerning Mr. Fishman’s decision to retire or the announcement of that decision.
As an initial matter, as one court observed, allowing written declarations in lieu of live
testimony “eschews the opportunity for opposing counsel to probe the veracity and contours of
the statements and denies the opportunity for probative follow-up questions.”
Wyndham Int’l, Inc., 231 F.R.D. 98, 104 (D.D.C. 2005) (also noting that deposition testimony
“permits examination and cross-examination of a live witness by counsel, where there is no
opportunity to reflect and carefully shape the information given”) (internal quotations and citation
Turning to separations from Big Lots, this Court has already ruled in this case that
high-ranking executives’ departures from Big Lots are relevant to scienter.
(See, e.g., Doc. 49 at
73–74 (finding that the resignations of executive Douglas Wurl and Mr. Fishman support an
inference of scienter)).
Because Mr. Campisi’s testimony concerning the separations of Mr.
Claxton, Mr. Haubiel, Mr. Cooper, Mr. Martin, and Mr. Fishman is likewise relevant to scienter,
Plaintiffs are entitled to question him on their departures.
See id.; see also In re Am. Serv. Grp.,
Inc., No. 3:06-0323, 2009 WL 1348163, at *58 (M.D. Tenn. Mar. 31, 2009) (finding, inter alia,
that the firing of executives constitutes evidence of scienter).
At base, Plaintiffs have the right to
discover what circumstances led to these departures from Big Lots; in other words, they are
entitled to test the veracity of Mr. Campisi’s statements even if, as with Mr. Fishman, he claims
lack of knowledge.
See Libertarian Party, 302 F.R.D. at 477.
Next, Plaintiffs seek information on Mr. Campisi’s knowledge of class-period strategies,
sales trends, and personnel, alleging that he made sweeping operational changes as CEO based on
(See Doc. 104 at 10–11).
They also seek information on Mr. Campisi’s
decision to undertake the burden and expense of the 2013 assessment pertaining to Big Lots’
culture during the class period and his views and changes as a result.
(Id. at 10–12).
determine whether Mr. Campisi has knowledge on this topic, the Court again turns to his
Mr. Campisi admits that he “undertook to understand the business”
when he joined Big Lots and learned information about “the Company’s operations, performance
or strategy” during the class period.
(Id. at ¶¶ 1–3).
However, he maintains that his knowledge
“is necessarily second-hand information obtained from Big Lots employees….” (Id. at ¶¶ 3–4).
The Court agrees with Plaintiffs that Mr. Campisi’s deposition should not be precluded
because he purportedly lacks personal knowledge of events that transpired during the class period.
(Doc. 104 at 10).
As Plaintiffs explain, “personal knowledge is not a requirement of discovery.”
(Id. (quoting Bailey, 2015 WL 4886089, at *1)).
“The test under Rule 26 is not whether a
putative deponent had personal involvement in an event, or even whether he has ‘direct’
knowledge—which is merely another way of saying that he was a participant in the event—but
whether the witness may have information from whatever source that is relevant to the claim or
defense.” Johnson v. Jung, 242 F.R.D. 481, 484 (N.D. Ill. 2007).
about defendant’s policies, procedures, and actual practices—whether preceding or during the
class period—is relevant.” Meredith v. United Collections Bureau, No. 1:16cv1102, 2016 WL
6649279, at *5 (N.D. Ohio Nov. 10, 2016); see also In re Toyota Motor Corp. Sec. Litig., No. CV
10-922 DSF (AJW), 2012 WL 3791716, at *4 (C.D. Cal. Mar. 12, 2012) (“It is … beyond dispute
that discovery is not limited to the class period.”).
At bottom, Defendants ask this Court to accept their representation that Mr. Campisi’s
decision to make “strategic or operational changes” as the “new CEO” is unrelated to the events
of this case.
(Doc. 94 at 8). There is no precedent for granting a Motion for a Protective Order
on that basis.
Rather, because Mr. Campisi was the decision-maker who chose to implement the
relevant strategy and personnel changes and undergo the 2013 assessment, his testimony on this
topic is discoverable. Johnson, 242 F.R.D. at 484 (denying protective order where deponent had
knowledge about the day-to-day operations and personal involvement in the decision-making
The Special Committee and Special Litigation Committee
Finally, Plaintiffs seek to question Mr. Campisi regarding the Special Committee (or
Demand Committee) and Special Litigation Committee.
(Doc. 104 at 12–13).
Campisi was not a member of either committee, his declaration confirms that he has knowledge
concerning their formation and membership, their engagement of independent legal counsel, and
the fact that they conducted investigations.
(Doc. 95 at ¶ 6).
He also is aware that “the
Demand Committee reported on its findings and recommendations to the Board of Directors,
which in turn rejected the shareholder demand” and that the Special Litigation Committee
“conducted its investigation and informed the Court of its intention to file a motion to dismiss the
derivative action on behalf of the Company.”
Mr. Campisi again claims that he has “no
first-hand knowledge” about the committees’ findings and procedures and has never seen the
Special Litigation Committee’s report.
As set forth above, there is no requirement that Mr. Campisi have “direct” knowledge of
the committees’ actions or that he be a “participant in the event[s]” undertaken by them.
Johnson, 242 F.R.D. at 484.
By his own admission, Mr. Campisi has knowledge concerning the
(Doc. 95 at ¶ 6).
Under liberal discovery permitted by the Federal Rules of Civil
Procedure, Plaintiffs are entitled to question him concerning that knowledge. See Libertarian
Party, 302 F.R.D. at 477.
For the same reason, Plaintiffs are entitled to question Mr. Campisi
concerning his “unique role” as “the only Big Lots director who neither was on the Special
Committee nor a defendant in the underlying derivative litigation” in September 2013, when Big
Lots’ Board of Directors adopted the Committee’s recommendation that no further action be
(Id. at 12–13).
Duplication and Harassment
Defendants also seek a protective order on the ground that the testimony sought is
unreasonably duplicative and requested for the purpose of harassment.
(See generally Docs. 94,
As to duplication, Defendants contend that Plaintiffs have already learned in discovery the
information Mr. Campisi would offer concerning Mr. Fishman’s retirement and the other
departures from Big Lots.
(Doc. 94 at 11, 13–14).
They also contend that Plaintiffs have
already discovered facts Mr. Campisi would offer on the committees and strategic changes.
(Doc. 94 at 6–9).
Last, Defendants also appear to argue waiver based on Plaintiffs’ alleged
failure to question witnesses thoroughly concerning the committees and strategic changes, despite
having “ample opportunity” to do so.
(Id. at 7 (arguing Plaintiffs failed to ask Mr. Mallot (a
member of the Board at the time the Demand Committee was formed) “details concerning the
SLC investigation); id. at 9 (“[P]laintiffs have had and continue to have, ample opportunity to
obtain testimony on post-class period changes to business from other senior executives.”); Doc.
108 at 12 (“Tellingly, [P]laintiffs failed to ask a number of executives who worked at Big Lots …
about any strategic or operational changes implemented at the Company after Mr. Campisi
As this Court has explained, Plaintiffs have the right to discover Mr. Campisi’s
perspective as CEO on his decision to fire Mr. Claxton (Senior Marketing Executive alleged to
have sold illegally $2.4 million in stock) and Mr. Haubiel (General Counsel alleged to have sold
personally and illegally $2.5 million in stock and presided over sale of $33 million in stock by
other insiders while charged with administering insider trading policies) allegedly based on his
“own interactions” with those individuals; his decision to discontinue the company’s Canadian
operations, which resulted in Mr. Cooper’s termination (Chief Financial Officer alleged to have
sold illegally $3.1 million in stock); and his knowledge concerning Mr. Martin’s retirement
(Merchandising Department Head alleged to have sold illegally over $4 million in stock) and
succession of Mr. Fishman following his retirement (CEO and Director who was allegedly aware
of investigations into insider trading).
(See Doc. 95 at ¶¶ 8–9, 10–11).
The fact that other
discovery may exist on these topics not does warrant granting the Motion for a Protective Order
because it ignores Mr. Campisi’s unique perspective as CEO and, alternatively, renders “any
discovery seeking confirming or contradicting evidence” unreasonably cumulative.
WL 4886089, at *2).
To adopt Defendants’ position would be to accept that “no litigant could
ever revisit a topic in discovery.”
Id.; (see, e.g., Doc. 108 at 2 (arguing that Plaintiffs “fail to
articulate any basis to believe Mr. Campisi has non-duplicative information about any subject”);
id. at 10 (asserting that Plaintiffs “make no attempt to explain what testimony Mr. Campisi could
provide on this subject that is not duplicative of what they have already obtained”) i.e.,
eliminating the reasonableness requirement).
Clearly, not all duplication is unreasonable under
the Federal Rules. See id. (noting that “[u]nreasonable” serves as an important modifier in Rule
Based on its previous findings in this Opinion and Order, the Court need not have a
prolonged discussion of the alleged harassment arising from Plaintiffs’ desire to depose Mr.
Here, Plaintiffs have been reasonable—agreeing to limit the deposition to three hours
at a location and time of Mr. Campisi’s choosing and informing Mr. Campisi of the deposition
Given Mr. Campisi’s knowledge on relevant topics, the Court finds no merit in
Defendants’ “stereotyped and conclusory statement” that the CEO’s deposition is sought
inherently for harassment. Serrano, 699 F.3d at 901.
For the reasons stated, the Court, in its discretion, finds that Defendants fail to make a
specific and persuasive showing of good cause warranting the rare limitation on liberal discovery.
Consequently, Defendants’ Motion for a Protective Order Precluding the Deposition of David J.
Campisi is DENIED.
Motion for Reconsideration
Any party may, within fourteen days after this Order is filed, file and serve on the
opposing party a motion for reconsideration by a District Judge.
28 U.S.C. §636(b)(1)(A), Rule
72(a), Fed. R. Civ. P.; Eastern Division Order No. 91-3, pt. I., F., 5.
The motion must
specifically designate the order or part in question and the basis for any objection.
objections are due fourteen days after objections are filed and replies by the objecting party are
due seven days thereafter.
The District Judge, upon consideration of the motion, shall set aside
any part of this Order found to be clearly erroneous or contrary to law.
This Order is in full force and effect, notwithstanding the filing of any objections, unless
stayed by the Magistrate Judge or District Judge.
S.D. Ohio L.R. 72.3.
IT IS SO ORDERED.
Date: June 16, 2017
/s/ Kimberly A. Jolson
KIMBERLY A. JOLSON
UNITED STATES MAGISTRATE JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?