Cellustar Corp. v. Sprint Solutions, Inc. et al
Filing
243
MEMORANDUM AND ORDER granting 229 Motion to Quash Subpoena to Testify at a Deposition in a Civil Action and For Protective Order Pursuant to Rule 26(c). See attached. Signed by Judge Gina R. Mendez-Miro on 2/5/2024. (GMN)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
Cellustar Corp.,
Plaintiff,
Civil No. 19-01559 (GMM)
v.
Sprint Solutions, Inc.; PR Wireless
PR, LLC; et al,
Defendants.
MEMORANDUM AND ORDER
Pending before the Court is non-party Juan Saca’s (“Saca”)
Motion to Quash Subpoena to Testify at a Deposition in a Civil
Action and For Protective Order Pursuant to Rule 26(c) (“Motion to
Quash”). (Docket No. 229). Saca centers his Motion to Quash on the
apex deposition doctrine given that he was a high-level executive
for Co-defendant PR Wireless PR, LLC (“PR Wireless”) when the
events that gave rise to Plaintiff Cellustar Corp.’s (“Plaintiff”
or
“Cellustar”)
purported
claims
occurred.
For
the
following
reasons, Saca’s Motion to Quash is GRANTED.
I. BACKGROUND RELEVANT TO THE MOTION TO QUASH1
On
May
15,
2019,
Cellustar
filed
this
case’s
original
complaint (“Complaint”) in the Puerto Rico Court of First Instance,
Superior Section of San Juan (“State Court”) in the case entitled
Cellustar Corp. vs. Sprint Corporation, Sprint Solutions, Inc., PR
The facts herein are taken as true for the purposes of this motion and were
taken from Cellustar’s Complaint. (Docket No. 1-2).
1
Civil No. 19-01559(GMM)
Page -2-
Wireless PR, LLC, Company ABC, Insurance Company ABC, Civil No.
SJ2019CV04871. (Docket Nos. 1 at 2 ¶ 1; 1-2). Then, on June 7,
2019, Co-defendants Sprint Corporation,2 Sprint Solutions, Inc.
(together, “Sprint”), and PR Wireless removed the case to federal
court. (Docket No. 1).
The Complaint seeks damages for violations of the Puerto Rico
Dealer’s Act, P.R. Laws Ann. tit. 10 §§ 278 et seq., the Puerto
Rico Antitrust Act, P.R. Laws Ann. tit. 10 §§ 258, 260, 263, the
Sherman Act, 15 U.S.C. § 1, and the Robinson-Patman Act, 15 U.S.C.
§ 13. The Complaint also seeks injunctive and declaratory relief.
In a nutshell, Cellustar, a distributor of Sprint’s Boost
Mobile prepaid phones and accessories, claims that Sprint engaged
in a pattern of discrimination that harmed Cellustar’s business.
(Docket Nos. 1-2 at 6-14). According to Cellustar, Sprint gave
another
Boost
Mobile
distributor,
Actify
LLC,
advantages
and
involved it in strategic planning for the Boost Mobile business in
Puerto Rico while excluding Cellustar from such activities. (Id.;
Docket No. 233 at 3).
In 2017, Sprint announced its purchase of PR Wireless, which
was doing business in Puerto Rico and Virgin Islands under the
Open Mobile brand and was also in the business of prepaid phones
On July 17, 2019, Cellustar moved to voluntarily dismiss all claims against
Sprint Corporation without prejudice. (Docket No. 29). On that same date, the
Court granted Cellustar’s voluntary dismissal of the action against Sprint
Corporation. (Docket No. 30).
2
Civil No. 19-01559(GMM)
Page -3-
and accessories. (Docket No. 1-2 at 10 ¶ 38). Sprint’s acquisition
provided that Open Mobile retailers would become Boost Mobile
retailers. (Id. at 10 ¶¶ 41). According to Cellustar, Sprint and
PR Wireless prevented Cellustar from becoming the distributor for
the retailers coming from Open Mobile. (Id. at 10-11 ¶ 42).
Instead, the retailers were given to Actify LLC. (Id. at 11 ¶ 43).
On August 30, 2023, Cellustar served a subpoena on Saca, PR
Wireless’ former Chief Executive Officer (“CEO”) and President, so
that he could be deposed on September 19, 2023. (Docket No. 229 at
2). According to Saca, the “subpoena does not identify any matters
or topics to be covered during [Saca’s] deposition but, presumably,
he will be asked about his knowledge of the facts alleged in the
complaint because he was the President and CEO” of PR Wireless.
(Id.). Saca sustains that he “was not directly involved in the
day-to-day operations of the company” and that although he was
informed at a “high level” of PR Wireless’ “plan to integrate the
stores that previously sold Open Mobile and rebrand them to Boost,
he relied on his managerial team to execute the plan and handle
all the details of the transition.” (Id.) (emphasis supplied).
Saca
argues
that
Mr.
Juan
Rosario
(“Rosario”),
former
Director of Prepaid Sales for PR Wireless, “is the person most
knowledgeable about the plan to transition from Open Mobile to
Boost.”
(Id.).
Saca
also
identified
Mr.
Stephan
Teermat
Civil No. 19-01559(GMM)
Page -4-
(“Teermat”), Vice President of Finance of PR Wireless, as someone
with specific knowledge of the plan to transition Open Mobile
stores to Boost. (Id.). Saca posits that his deposition should be
quashed altogether because there are other individuals with direct
knowledge of the facts relevant to Cellustar’s claims. (Id. at 5).
Saca also argues that his deposition would require him to
take time off from his current role as President and Executive
Director of LUMA Energy since he would need time to prepare for
and testify at a deposition. (Docket No. 229 at 5). Saca, thus,
argues that preparing for and testifying at a deposition would
cause him undue burden and hardship. (Id.; Docket No. 229-1 at 2
¶
8).
Accordingly,
Saca
requests
a
protective
order
barring
Plaintiff from taking his deposition.
Cellustar
rejects
Saca’s
contentions
and
argues
that
no
extraordinary circumstances exist to quash Saca’s deposition.
(Docket No. 233 at 5). Cellustar notes that its interest is not
necessarily the day-to-day operations of PR Wireless or the dayto-day particulars of Sprint and PR Wireless’ plan to integrate
the stores that previously sold Open Mobile and rebrand them to
Boost Mobile. Rather, Cellustar is interested in the high-level
information that Saca, as the alleged intellectual of said plan,
possesses. (Id. at 5, 8-9, 11). Cellustar also argues that Saca’s
Civil No. 19-01559(GMM)
Page -5-
status as the Executive Director of LUMA Energy is not a proper
basis for quashing his deposition. (Id. at 12).
II. APPLICABLE LAW
A.
Fed. R. Civ. P. 26(c)(1)
Fed. R. Civ. P. 26(c)(1) provides that “[a] party or any
person from whom discovery is sought may move for a protective
order in the court where the action is pending. . .[and] [t]he
court may, for good cause, issue an order to protect a party or
person from annoyance, embarrassment, oppression, or undue burden
or expense. . .” Fed. R. Civ. P. 26(c)(1). A movant has the burden
of demonstrating that good cause exists for the issuance of the
protective order. See Public Citizen v. Liggett Group, Inc., 858
F.2d 775, 789 (1st Cir. 1988). To meet this burden, the movant
must
provide
the
Court
with
“a
particular
and
specific
demonstration of fact” and not merely “stereotyped and conclusory
statements.” Equal Employment Opportunity Commission v. BDO USA,
L.L.P., 876 F.3d 690, 698 (5th Cir. 2017) (quoting In re Terra
Int’l, 134 F.3d 302, 306 (5th Cir. 1998)); see also González
Berrios v. Mennonite General Hospital, Inc., Civil No. 18-1146
(RAM), 2019 WL 4785701 at *2 (D.P.R. Sept. 30, 2019). Moreover,
“[a] claimed lack of knowledge on behalf of the deponent does not
alone
provide
sufficient
grounds
for
a
protective
order.”
WebSideStory, Inc. v. NetRatings, Inc., Civil No. 06-408 WQH(AJB),
Civil No. 19-01559(GMM)
Page -6-
2007 WL 1120567, at *2 (S.D. Cal. Apr. 6, 2007); see also Digital
Equipment Corp. v. System Industries, Inc., 108 F.R.D. 742, 744
(D. Mass. 1986); Amherst Leasing Corp. v. Emhart Corp., 65 F.R.D.
121, 122 (D. Conn. 1974); Travelers Rental Co. Inc. v. Ford Motor
Co., 116 F.R.D. 140, 143 (D. Mass. 1987).
A district court has broad discretion “to decide when a
protective order is appropriate and what degree of protection is
required.” Poliquin v. Garden Way, Inc., 989 F.2d 527, 532 (1st
Cir. 1993) (quoting Seattle Times Co. v. Rhinehart, 467 U.S. 20,
36 (1984)); see also Equal Employment Opportunity Commission v.
Triple-S Vida, Inc., Civil No. 21-1463 (MDM), 2023 WL 3093499, at
*1 (D.P.R. Apr. 26, 2023).
B.
The Apex Deposition Doctrine
Under the “apex doctrine”
courts sometimes grant protective orders barring the
depositions of high-level corporate officers or managers
who are unlikely to have personal knowledge of the facts
sought by the deposing party. If a deponent is a highlevel corporate officer who certifies that he or she has
no personal knowledge of the facts, the court may grant
a protective order requiring the deposing party to first
seek discovery through less intrusive methods, e.g.,
from lower level employees who are more likely to have
direct knowledge.
6 Moore’s Federal Practice, § 26.105[2][a] (emphasis supplied);
see also González Berrios, 2019 WL 4785701 at *2. Thus, the apex
deposition doctrine aims to “prevent the deposition of a highlevel executive ‘that is sought simply because [that person is]
Civil No. 19-01559(GMM)
Page -7-
the CEO or agency head — the top official, not because of any
special knowledge of, or involvement in, the matter in dispute.”
González Berrios, 2019 WL 4785701 at *3 (quoting Minter v. Wells
Fargo Bank, N.A., 258 F.R.D. 118, 126 (D. Md. 2009)). To that
extent,
apex
deposition
doctrine
was
created
to
prevent
the
potential abuse or harassment that a deposition notice directed at
an official at the highest level of corporate governance may
entail. See Celerity, Inc. v. Ultra Clean Holding, Inc., 2007 WL
205067 at 3 (N.D. Cal. 2007); see also Chevron Corp. v. Donziger,
2013 WL 1896932, at *1 (S.D.N.Y. 2013) (“Because of the possibility
of business disruption and the potential for harassment, courts
give special scrutiny to requests to depose high-ranking corporate
and governmental officials.”).
Many federal courts throughout the nation, including the
District of Puerto Rico, have applied the apex deposition doctrine
to
evaluate
the
propriety
of
deposing
high-level
corporate
officials. See e.g., In re Application of Oasis Focus Fund LP, No.
1:23-CV-00239-DII, 2023 WL 6278882, at *8 (W.D. Tex. Sept. 26,
2023), report and recommendation adopted sub nom. In re Oasis Focus
Fund LP, No. 1:23-CV-239-DII, 2023 WL 7238594 (W.D. Tex. Nov. 2,
2023) (“A district court may act to delay or prevent the taking of
an apex deposition where the court finds that the executive lacks
information that is relevant to the opposing party’s claims or
Civil No. 19-01559(GMM)
Page -8-
defenses or that the opposing party can obtain the information it
seeks through less-intrusive means.”; González Berrios, 2019 WL
4785701 at *3; B. Fernandez & Hnos. V. Intern. Broth. of Teamsters,
285 F.R.D. 185 (D.P.R. 2012) (“If, however, “[a] deponent is a
high-level corporate officer who certifies that he has no personal
knowledge of the facts, the court may grant a protective order
requiring the deposing party to first seek discovery through less
intrusive methods, e.g., from lower level employees who are more
likely to have direct knowledge.”); Roman v. Cumberland Ins. Group,
2007 WL 4893479, at *1 (E.D. Pa. 2007) (“Courts throughout the
country have prohibited the deposing of corporate executives who
have
no
direct
knowledge
of
a
plaintiff’s
claim
when
other
employees with superior knowledge are available to testify.”);
Robinson v. Nexion Health At Terrell, Inc., 312 F.R.D. 438, 443
(N.D. Tex. 2014) (“Federal courts permit the depositions of such
“apex executives” when conduct and knowledge at the highest levels
of the corporation are relevant to the case.”); Six West Retail
Acquisition, Inc. v. Sony Theatre Mgmt. Corp., 203 F.R.D. 98, 102
(S.D.N.Y. 2001) (finding that it “may be appropriate” to preclude
redundant deposition of high rank officials where other officials
of a party will also be questioned). Furthermore, this Court has
not identified any precedent from the United States Supreme Court
or the First Circuit forbidding the application of the apex
Civil No. 19-01559(GMM)
Page -9-
deposition doctrine. On the contrary, the First Circuit has already
recognized the apex deposition doctrine in the government context,
which similarly requires that prior to deposing high ranking
government officials, it be shown that they possess first-hand,
relevant knowledge that cannot be obtained from other persons. See
Bogan v. City of Boston, 489 F.3d 417 (1st Cir. 2007) (“Depositions
of high ranking officials may be permitted where the official has
first-hand
knowledge
related
to
the
claim
being
litigated.
However, even in such cases, discovery is permitted only where it
is
shown
that
other
persons
cannot
provide
the
necessary
information.”) (internal citations omitted).
Nonetheless,
the
apex
deposition
doctrine
does
not
automatically prohibit the deposition of an apex if their knowledge
is relevant in a case. See Apple Inc. v. Samsung Electronics Co.,
LTD, 282 F.R.D. 259, 263 (N.D. Cal. 2012) (quoting WebSideStory,
Inc., 2007 WL 1120567, at *2) (“[W]hen a witness has personal
knowledge of facts relevant to the lawsuit, even a corporate
president or CEO is subject to deposition.”).
In determining whether to allow an apex deposition, courts
usually consider: “(1) whether the deponent has unique first-hand,
non-repetitive knowledge of the facts at issue in the case and (2)
whether the party seeking the deposition has exhausted other less
intrusive
discovery
methods.”
Apple
Inc.,
282
F.R.D.
at
263
Civil No. 19-01559(GMM)
Page -10-
(quoting In re Google Litig., C 08–03172 RMW (PSG), 2011 WL
4985279, at *2 (N.D.Cal. Oct. 19, 2011)).
III. ANALYSIS
A.
Apex Deposition Doctrine and Good Cause for Protective Order
Pursuant to Federal Rule of Civil Procedure 26(c), a district
court may grant a protective order from discovery for “‘good cause
shown.’” Bogan v. City of Boston, 489 F.3d at 423. The First
Circuit has stated repeatedly that the district court has broad
discretion over discovery matters and that an appellate court will
“intervene in [those] matters only upon a clear showing of manifest
injustice, that is, where the lower court’s discovery order was
plainly
wrong
aggrieved
and
party.”
resulted
Id.
in
(internal
substantial
citation
prejudice
and
to
quotation
the
marks
omitted); see also Rivera-Freytes v. Puerto Rico, 286 F.R.D. 201,
203–04 (D.P.R. 2012). In the context of the deposition of a highranking government official, the First Circuit in Bogan held that,
absent
extraordinary
circumstances,
the
use
of
high-ranking
government officials as witnesses should be limited. See Bogan,
489 F.3d at 423. The First Circuit reasoned that those officials
have “‘greater duties and time constraints than other witnesses’”
and, therefore, should not spend an excessive amount of time
dealing with litigation matters. Id. The same reasoning has been
applied to cases involving high ranking corporate officials.
Civil No. 19-01559(GMM)
Page -11-
Here, Saca opposes the taking of his deposition on the grounds
that he is an “apex deponent” and that he does not possess “unique
personal knowledge” of the information sought. As a threshold
matter, the Court concludes that Saca has adequately established
that he qualifies as an “apex deponent” entitled to the protections
of the apex deposition doctrine. Saca was the President and CEO of
PR Wireless from 2017 to 2019 and is currently the President and
Executive Director of LUMA Energy.3
1.
Unique first-hand, non-repetitive knowledge of the facts
at issue in the case
Because the apex doctrine applies to
Saca, to take his
deposition, Plaintiff must establish that he possesses unique,
first-hand, non-repetitive knowledge of facts at issue in this
action and that the information he possesses is not available from
other sources.
In support of taking Saca’s deposition, Cellustar points to:
(1) several e-mail chains in which Saca is present; and (2) the
deposition
Eaves’s
of
(“Ms.
PR
Wireless
Eaves”).
Chief
Commercial
Cellustar
argues
Officer,
that
these
Patricia
emails
demonstrate Saca’s day-to-day involvement in the PR Wireless/Open
Mobile transition. Furthermore, from Cellustar’s perspective,
See Thomas v. Cate, 715 F. Supp. 2d 1012, 1049-1050 (E.D. Cal. 2010) (finding
that “[t]he general rule prohibiting depositions of high-ranking government
officials applies to former high-ranking officials.”) (citing United States v.
Sensient Colors, Inc., 649 F. Supp. 2d 309, 316-17 (D.N.J. 2009)).
3
Civil No. 19-01559(GMM)
Page -12-
Ms. Eaves’ testimony confirms Saca’s involvement as she declared
that Saca and Teermat “were the intellectual masterminds behind
such integration plan”.
Conversely, Saca certifies under penalty of perjury that he
“lack[s] personal knowledge of the specific details regarding the
plan to transition from Open Mobile to Boost or the particular
retailers
that
were
assigned
to
each
distributor,
including
Cellustar.” (Docket No. 229-1 ¶ 5). He further explains that though
he was the President and CEO of PR Wireless, he was not directly
involved in the day-to-day operations of the company. In his
declaration under penalty of perjury, Saca expressly denied having
personal knowledge relevant to this case, stating that:
[a]lthough he was informed, at a high level, of the
company’s plan to integrate the stores that previously
sold Open Mobile and rebrand them to Boost, [he] relied
on [his] managerial team to execute the plan and handle
all the details of the transition, including negotiating
and entering into agreements with existing distributors
and retailers.
Saca also affirms that he lacks personal knowledge “of the specific
details regarding the plan to transition from Open Mobile to Boost
or the particular retailers that were assigned to each distributor,
including Cellustar.”
Plaintiffs failed to meet their burden of demonstrating that
Saca possesses unique, non-repetitive, firsthand knowledge about
the
facts
underlying
this
action
necessitating
his
apex
Civil No. 19-01559(GMM)
Page -13-
deposition. The mere fact that Saca as the CEO of his company was
kept apprised —at a high level, as he himself admits, either by a
direct supervisor tasked with managing or by the Vice President of
Finance— of the matters Plaintiff seeks is not enough. While Saca
may have some relevant knowledge in the broadest sense of the word,
since it seems he was advised and informed as CEO, the record
reflects that knowledge is not unique to him. See
Dawkins v.
Barnhart Crane & Rigging Co., No. 8:18CV534, 2020 WL 1535851, at
*2 (D. Neb. Mar. 31, 2020) (quoting Drake v. Steak N Shake
Operations, Inc., No. 4:14-CV-01535-JAR, 2018 WL 3625769, at *2
(E.D. Mo. July 30, 2018)(granting protective order to prevent
deposition of CEO where plaintiff failed to demonstrate the CEO
had “unique or specialized knowledge of the facts at issue in this
case” and because “less burdensome avenues exist to obtain the
information”.)).
2.
Exhaustion of other less intrusive discovery methods
The second step in the Court’s analysis is to determine
whether
Cellustar
exhausted
other
less
intrusive
discovery
methods. Particularly, Saca argues that witnesses in this case,
including Ms. Eaves, have testified that Rosario is “the person
most knowledgeable about the plan to transition from Open Mobile
to Boost” and that Rosario “was the person who conveyed the written
offer to Cellustar and met in person with Cellustar representatives
Civil No. 19-01559(GMM)
Page -14-
to present this plan.” (Docket No. 229 at 2). Ms. Eaves also
identified Teermat as someone who has knowledge about the plan to
transition Open Mobile stores to Boost. (Id.). Based on this, Saca
suggests that the knowledge Cellustar seeks from him is not unique
nor “unavailable from other sources.” (Id. at 2, 5). Indeed, both
Rosario and Teermat may be knowledgeable as to the particulars of
the plan to transition and integrate Open Mobile retailers into
Boost Mobile retailers.
The record does not show that their
depositions have been sought.
As such, Plaintiff has yet to demonstrate that Saca, a highlevel official, has unique knowledge of the issues in the case.
Further, it has failed to show that the information sought has
been pursued unsatisfactorily through less intrusive means, such
as deposing Rosario and Teermat, who appear to have personal and
specific knowledge of said information. Judges in this and other
districts have noted that “even when a high-ranking official of a
corporation
does
inappropriate
to
have
direct
compel
his
knowledge
or
her
of
the
deposition
facts,
without
it
is
first
deposing lesser-ranking employees who have more direct knowledge
of the facts at issue.” See Sun Capital Partners, Inc. v. Twin
City Fire Ins. Co., 310 F.R.D. 523, 527-28 (S.D. Fla. 2015) (citing
Stelor Productions, Inc. v. Google, Inc., No. 05-80387-CIV, 2008
WL 4218107, at *4 (S.D. Fla. Sept. 15, 2008)); see also Tillman v.
Civil No. 19-01559(GMM)
Page -15-
Advanced Pub. Safety, Inc., No. 15-CV-81782, 2017 WL 679980, at *3
(S.D. Fla. Feb. 16, 2017) (finding that plaintiff could not
establish “good cause for taking an apex deposition without first
deposing
[lower-ranking
employees],
who
could
possibly
have
additional information about [p]laintiff’s [claim].”).
3.
Undue Burden
Lastly, Saca argues that taking time off from his current
role as President and Executive Director of LUMA Energy to prepare
for and testify at a deposition would cause an undue burden and
hardship.
company
Saca emphasizes that he oversees “the operations of the
that
transmission
operates
and
and
distribution
administrates
system
for
the
over
electrical
1.5
million
customers in Puerto Rico”. (Docket No. 229-1 at 2). While LUMA
Energy is a private corporation, via government contract, it
oversees the operations and management of the Puerto Rico Electric
Power Authority, which is one of the largest public power utilities
in the United States and is the only electrical energy distributor
in Puerto Rico. See In re Fin. Oversight & Mgmt. Bd. for Puerto
Rico, 7 F.4th 31, 34 (1st Cir. 2021).
Again, “[v]irtually every court that has addressed deposition
notices directed at an official at the highest level or “apex” of
corporate management has observed that such discovery creates a
tremendous potential for abuse or harassment.” Celerity, Inc. v.
Civil No. 19-01559(GMM)
Page -16-
Ultra Clean Holding, Inc., 2007 WL 205067 at 3 (N.D. Cal. 2007).
In addition, the Court also takes into consideration that Saca is
not a party to this case and concern for the unwanted burden thrust
upon
non-parties
is
a
factor
entitled
to
special
weight
in
evaluating the balance of competing needs for discovery. Cascade
Yarns, Inc. v. Knitting Fever, Inc., 755 F.3d 55, 59 (1st Cir.
2014). See also Cusumano v. Microsoft Corp., 162 F.3d 708, 717
(1st. Cir. 1998). Therefore, allowing the deposition absent a
showing that Saca possesses first-hand, unique relevant knowledge
and without exhausting other discovery methods, would certainly
cause an undue burden by significantly disrupting his managerial
responsibilities.
IV.
CONCLUSION
Based on the preceding facts and law, the Court finds good
cause to issue a protective order precluding the taking of Saca’s
deposition at this time. Accordingly, the Court GRANTS Saca’s
Motion to Quash. Plaintiff must first attempt to request the
information sought through the deposition of Rosario and Teermat
or through other less intrusive discovery methods. This ruling is
made without prejudice to the Plaintiff’s ability to request the
deposition again at another time —before discovery culminates on
July 26, 2024- if Plaintiff can demonstrate that Saca possesses
Civil No. 19-01559(GMM)
Page -17-
unique personal knowledge that goes beyond what is revealed during
discovery.
IT IS SO ORDERED.
In San Juan, Puerto Rico, February 5, 2023.
s/Gina R. Méndez-Miró
GINA R. MÉNDEZ-MIRÓ
UNITED STATES DISTRICT 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?