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Georgia Supreme Court Rejects "Apex Doctrine"

Impact on Depositions of High Ranking Corporate Officers And Discovery Generally in Georgia Litigation

    Client Alerts
  • June 06, 2022

On June 1, 2022, the Georgia Supreme Court issued a ruling that has the potential to significantly impact discovery in Georgia courts. In Gen. Motors, LLC v. Buchanan, No. S21G1147, 2022 WL 1750716 (Ga. June 1, 2022), the Court expressly rejected the apex doctrine, which limits the ability of parties to depose high-ranking corporate officials, and emphasized the broad nature of discovery under Georgia law. While the direct analysis of the Court applied to the deposition of corporate officers, the ramifications of the Court’s holding may prove to be much broader.

Ruling

The Buchanan case directly addressed whether the “apex doctrine” applied in Georgia. As described in the opinion, the apex doctrine is a federal court creation that shifted the burden of proof on a motion for protective order when the issue was whether a party may depose a high-ranking corporate officer, in this case, the CEO of General Motors. General Motors, and several amicus curiae, argued that upon a showing that (i) a high-ranking officer lacked specific knowledge of the particular case and (ii) the sought-after information was available through other sources or means, protection against the officer’s deposition should be presumed. This doctrine's net result ultimately shifts the burden of proof to the party seeking the deposition to prove that it needed the specific deposition in the particular case rather than the deponent proving the deposition should not happen.

The Supreme Court of Georgia rejected this approach. Making a point to note the doctrine was not even fully established in federal courts, the Court emphasized the difference in the scope of discovery under federal law versus Georgia law. Under federal law, Rule 26 of the Rules of Civil Procedure permits the discovery of relevant matters “proportional to the needs of the case.” Fed. R. Civ. P. 26(b)(1). Georgia law permits discovery on any matter “not privileged, which is relevant to the subject matter involved in the pending action.” O.C.G.A. § 9-11-26(b). The Court emphasized that the scope of discovery in Georgia is very broad and based on the language in the statute broader than the scope of discovery in federal courts.

Accordingly, the Supreme Court rejected the apex doctrine and remanded the case to the trial court to consider the motion for protective order under the more traditional factors available under Georgia law.

What this means for the deposition of corporate officers

On the one hand, the decision in Buchanan makes corporate officers more likely to be deposed than they would be under the apex doctrine. On the other hand, the ruling can be read to say merely that corporate officers are entitled to the same protection as any other witness in a Georgia case and certainly not less protection.

The Court did make clear that it does not believe, under current Georgia law, that corporate officers are entitled to special protection.

High-ranking corporate executives are not immune from discovery and are not automatically given special treatment excusing them from being deposed simply by virtue of the positions they hold or the size of the organizations they lead. And large multinational companies are subject to the same Georgia discovery rules as smaller ones. With respect to the discovery rules, we have said that “[t]he availability of one form of proof does not make other forms of proof irrelevant[.]” Bowden, 297 Ga. at 296 (2) (b), 773 S.E.2d 692. Thus, discovery is not usually limited to “unique” knowledge. Very often, discovery is sought to uncover what witnesses do or do not know and to reveal inconsistencies between witnesses.

Buchanan, 2022 WL 1750716, at *8.

However, the Court also made it clear that a corporate officer may be protected from being deposed under the appropriate circumstances. A protective order may be issued under Georgia law to “protect against ‘annoyance, embarrassment, oppression, or undue burden or expense,’ as this determination is directed to be made in the interest of ‘justice,’ which must include consideration of all concerned parties.” Buchanan, 2022 WL 1750716, at *9.

In sum, a corporate officer must be treated like any other witness, albeit one with a much bigger target on his or her back. 

What this generally means about litigating in Georgia

While the Buchanan case will receive the most publicity because of its rejection of the apex doctrine, its ultimate impact may be significantly broader. The ruling clearly dictates from the State’s highest court that discovery in Georgia is extremely broad. A party who seeks to withhold information on any basis other than privilege may find the challenge it faces to be significant.

The very first line in the Court’s legal analysis is that the “scope of discovery under [Georgia law] is broad.” Buchanan, 2022 WL 1750716, at *3. The Court also rejected efforts to use federal law to restrict the scope of discovery in Georgia. “And although we acknowledge as a general principle that we look to federal case law interpreting the Federal Rules of Civil Procedure as persuasive authority, where the language of a Georgia statute deviates from the federal rules, the persuasive value of the authority interpreting and applying the federal rules is diminished.” Buchanan, 2022 WL 1750716, at *7.

Ultimately, any party litigating in Georgia must acknowledge that it may have a higher burden with respect to discovery than it may like. The starting and ending point with respect to discovery seems to be that if a party can make a nexus between the information sought and the broad definition of relevance, it can be discovered. This will undoubtedly increase costs associated with bringing or defending a lawsuit in Georgia.

Georgia’s Supreme Court as a Beacon of Textualism

We have recently made a point to emphasize the change in the Georgia Supreme Court to one being dominated by the judicial philosophy of textualism. Buchanan is another piece of evidence in support of this reality.

As part of its analysis rejecting the apex doctrine, the Court addressed “policy concerns about inefficiencies in discovery involving corporate defendants absent mandatory application of the apex doctrine . . .” Buchanan, 2022 WL 1750716, at *9. The Court rejected out of hand not only the concerns but that the argument was properly presented to the judiciary. These “policy concerns are properly addressed not by this Court but by petitioning the General Assembly and advocating for a change in the law.” Id.

The Georgia Supreme Court must be considered a strict textualist court, and businesses will do well to consider that reality in not only litigation but how they approach legal issues within the state.

What this means for ADR in Georgia

Alternative dispute resolution is beyond the scope of this update. However, one direct result of the Buchanan decision seems likely to be increased discovery costs in Georgia courts. Any party doing business in Georgia should consider its options, including mediation, arbitration, and all other forms of alternative dispute resolution.