Apex doctrine, schmapex doctrine, says the Wash. Supreme Court

It’s such a cliche that we do things a little differently here in Washington state. But it’s a cliche for a reason—it’s true.

Take discovery, for example. Discovery is the process by which each party “discovers” what the other party’s evidence is, whether through the use of written question and requests for documents or by questioning witnesses under oath in a deposition. Over the last couple of decades the federal courts have made it harder for plaintiffs to get discovery by narrowing the scope of what is discoverable. The federal rules explicitly require consideration of whether the requested discovery is proportional to the needs of the case and whether the burden or expense of the discovery outweighs its likely benefits. How can a plaintiff, who by definition doesn’t have the evidence it is seeking, explain how the benefits of the unseen and unknown evidence outweighs its likely benefits? It can often be very difficult to do.

In contrast, the state Supreme Court has not made any of these substantive changes to the state court rules, leaving the scope of discovery “any matter, not privileged, which is relevant to the subject matter involved in the pending action.” CR 26(b)(1). It does not require the information to be admissible at trial, so long as it “appears reasonably calculated to lead to the discovery of admissible evidence.” Id. A party can ask the court to limit discovery, but it has to show good cause why discovery should otherwise be limited. In fact, our Supreme Court has held multiple times that the right to discovery is a constitutional right embedded in the right of access to the courts in the state constitution.

Why am I discussing all this? Well, gentle reader, the Washington Supreme Court again today affirmed—unanimously—that the scope of discovery in the state of Washington is broad and refused to adopt the so-called “Apex Doctrine.” The Apex Doctrine presumes that high level officials from businesses that have been sued cannot be deposed absent evidence showing why they should be deposed. In other words, it flips the burden to the Plaintiff to show why it should be allowed to depose the officials, rather than the Defendant’s burden to show why the official shouldn’t be deposed.

In Stratford v. Umpqua Bank, the plaintiffs sued the Bank alleging negligent misrepresentation, fraud, and negligent hiring, after one of the Bank’s loan officers allegedly committed fraud in inducing them to take out a construction loan. As part of discovery, the plaintiffs sought to depose the CEO, the Chief People Officer, and the head of the home lending division. Umpqua sought a protective order from the court, arguing these three officials had no personal knowledge about the facts of the case and should not be deposed. Plaintiffs explained they wanted to depose the officials about complying with fiduciary duties, hiring policies. The trial court denied the Bank’s motion. The Bank sought discretionary review directly with the Supreme Court, which accepted the case for review.

The Bank asked the Washington Supreme Court to adopt a two part test: the plaintiff must show the witness (1) “has unique, non-repetitive, firsthand knowledge of the facts, and (2) “that other less intrusive means of discovery such as interrogatories and depositions of other employees, have been exhausted without success.”

The court, to put it kindly, declined the opportunity to adopt the Apex Doctrine. It noted that the Apex Doctrine flipped the burden to the party seeking discovery, which conflicts with the plain language of CR 26. As a result, the court characterized Umpqua as asking it to amend the Civil Rules, which it held already provide for protection from discovery when a party shows good cause.

Rather than leave it at that, the court goes on to explain why the Bank was wrong to claim the doctrine is “almost universally accepted.” It explains that there is no majority rule and that the courts that do apply it, apply it in different ways, such that it isn’t a hard and fast rule, but more like a rule of thumb:

The court then turned to the facts of the case and held the Bank failed to present specific facts showing harm. The Bank provided only generic allegations of harm, which are not enough to show good cause. The trial court thus did not abuse its discretion.

This case is fascinating to me. The fact the court took the case at all on direct review and then unanimously affirmed the trial court ruling. That doesn’t happen often. I may be reading too much into it, but this opinion seems like a statement opinion.

I’m also honestly surprised Umpqua was so eager to put this issue in front of our state Supreme Court, given its makeup and the strong case law supporting broad discovery rights. There are regular pushes to try to get the Washington Supreme Court to adopt rule amendments to limit discovery because of claims about the rising costs of litigation. But as the court pointed out in this opinion, protections are already built into the rules that balance the rights of the parties. And the court has so far rejected making any substantive changes to the rules. As a lawyer that regularly represents plaintiffs with the kinds of cases where the most important evidence is in the sole possession of the defense, I’m glad for another opinion affirming the broad scope of discovery. But I’m left to wonder (perhaps unfairly) what exactly the Bank’s lawyers were thinking.