in Re American Airlines, Inc. ( 2021 )

Supreme Court of Texas
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No. 20-0789
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In re American Airlines, Inc.,
Relator
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On Petition for Writ of Mandamus
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PER CURIAM
Relator American Airlines, Inc. seeks relief from an order
compelling the oral deposition of a high-level corporate official. We
conditionally grant American’s petition for writ of mandamus.
When a party seeks to depose a corporate president or other
high-level corporate official, “the trial court should first determine
whether the party seeking the deposition has arguably shown that the
official has any unique or superior personal knowledge of discoverable
information.” Crown Cent. Petroleum Corp. v. Garcia, 904 S.W.2d 125,
128 (Tex. 1995). If that showing has not been made, the trial court must
grant a protective order and “first require the party seeking the
deposition to attempt to obtain the discovery through less intrusive
methods.” Id. After making a good-faith effort to secure discovery
through less intrusive methods, the requesting party may depose the
apex official only after establishing “(1) that there is a reasonable
indication that the official’s deposition is calculated to lead to the
discovery of admissible evidence, and (2) that the less intrusive methods
of discovery are unsatisfactory, insufficient, or inadequate.” Id.In this case, the real party in interest, Dr. Donald Arnette, sued
American, alleging that one of its gate agents had improperly accessed
his personal information and used it to harass him via text, email, and
phone messages. With the discovery deadline imminently approaching,
Arnette served American with a series of deposition notices for Elise
Eberwein, the Executive Vice President of People and Communications
for American’s parent company, American Airlines Group, Inc.
Eberwein is one of six officers on American’s Executive Leadership
Team. As such, Arnette has conceded she is an apex deponent.
American initially moved to quash Eberwein’s deposition because
it was scheduled without at least three days’ notice. With the close of
discovery approaching, Arnette re-noticed Eberwein’s deposition and
contemporaneously filed a motion to compel. American again moved to
quash and for a protective order, asserting that Eberwein is an apex
executive with no unique or superior personal knowledge of any relevant
matter. American also responded to Arnette’s motion to compel by
submitting Eberwein’s affidavit, in which she declared she has no
personal knowledge of relevant facts, let alone unique or superior
knowledge. American further attached Eberwein’s affidavit to
subsequent motions for protection and to quash the deposition notice.
Seeking to depose only Eberwein, Arnette refused American’s
offer to designate a corporate representative for an oral deposition. See
TEX. R. CIV. P. 199.2(b)(1) (setting the requirements for deposing an
organization). Arnette maintained that Eberwein’s knowledge of
relevant facts is substantiated by her online biography, which states
that she “manages human resources, media relations, employee
communications, social media, and public affairs.”
After two hearings on the matter, the trial court issued an order
on August 7, 2019 (1) denying American’s motion for protective order,
(2) compelling American to present Eberwein for deposition, and
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(3) requiring Arnette to serve a new deposition notice “describing with
reasonable particularity the matters on which examination is requested
in accordance with” the rules of procedure governing depositions of
designated corporate representatives. Due to an unknown error, neither
party received a copy of this order for four months. Thereafter, the case
sat essentially dormant except for an unsuccessful court-ordered
mediation and a December 2020 trial setting.
When eight months had elapsed without service of the required
deposition notice, American filed a petition for writ of mandamus,
seeking relief from the trial court’s order. Though Arnette had not
satisfied the preconditions the discovery order set for proceeding with
Eberwein’s deposition, American sought to avoid any delay of the trial
setting should Arnette serve a compliant deposition notice at the last
minute. Arnette did not file a response to American’s petition.
Without reaching the merits, the court of appeals denied relief
based on American’s “unexplained delay” in filing a mandamus petition
“more than a year after the challenged order was signed.” ___ S.W.3d
___, 2020 WL 5651658, at *1 (Tex. App.—Dallas Sept. 23, 2020).
In this original proceeding, American challenges the trial court’s
discovery order on the merits and addresses the court of appeals’ ruling
by explaining that the delay in seeking mandamus relief stemmed from
(1) the trial court’s four-month delay in notifying the parties about the
order and (2) Arnette’s lack of diligence in satisfying the discovery
order’s preconditions. Though Arnette has yet to serve a new notice for
Eberwein’s deposition, the trial, which has been rescheduled for
December 2021, is imminent. We hold that American’s mandamus
petition has merit and that mandamus relief is appropriate under the
circumstances.
Eberwein’s status as a high-level corporate official in American’s
six-member leadership team implicates Crown Central’s “guidelines for
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depositions of persons at the apex of the corporate hierarchy.” 904
S.W.2d at 126, 128 (adopting guidelines that apply “when a party seeks
to depose a corporate president or other high[-]level corporate official”
(emphasis added)); see also In re BP Prods. N. Am., Inc., 244 S.W.3d 840,
842 n.2 (Tex. 2008) (applying the apex-deposition guidelines to “senior
corporate official[s]”). Her affidavit disclaiming knowledge of relevant
facts precluded the trial court from ordering her deposition unless
(1) Arnette arguably showed that she possesses unique or superior
personal knowledge or (2) he first made a good-faith, but less than
fruitful, attempt to obtain discovery through less intrusive means.
Crown Cent., 904 S.W.2d at 128. Arnette did not meet either standard.
The first Crown Central guideline requires a showing beyond
“some knowledge” or mere relevance. See In re Alcatel USA, Inc., 11
S.W.3d 173, 179 (Tex. 2000). Statements in Eberwein’s online biography
that she has general knowledge about company policies are not
independently sufficient to show she has unique or superior knowledge
of discoverable information. See id. at 177 (holding that a corporate
executive’s “knowledge of company policies does not, by itself, satisfy the
first Crown Central test because it does not show that the executive has
unique or superior knowledge of discoverable information”). The record
also bears no evidence, nor even a claim, that Arnette has attempted
less intrusive means of discovery. To the contrary, Arnette does not
dispute that he declined American’s offer to produce a corporate
representative for examination on the same matters. See TEX. R. CIV. P.
199.2(b)(1). A discovering party’s discovery efforts must be reasonable,
and if they are not, “Crown Central’s standards have not been met.” In
re Daisy Mfg. Co., 17 S.W.3d 654, 659 (Tex. 2000) (discussing, as a “good
example” of failing to pursue less intrusive discovery methods, a case
where the plaintiffs “‘ha[d] not even taken the corporation’s deposition’”
through a corporate representative designated for examination on
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information the plaintiffs sought from the corporation’s chief executive
officer) (citing AMR Corp. v. Enlow, 926 S.W.2d 640, 644 (Tex. App.—
Fort Worth 1996, orig. proceeding)). Because Arnette did not satisfy
either Crown Central standard, the trial court was obligated to grant
American’s motion for protective order.
To the extent the trial court denied American’s motion based on
asserted procedural irregularities, that too was error. Although
American did not attach Eberwein’s affidavit to its initial motion for
protective order, the affidavit was before the trial court in opposition to
Arnette’s motion to compel and as an attachment to American’s
subsequent motions to quash and for protection. This evidence, which
was on file and presented for the trial court’s consideration prior to the
hearings and ruling on American’s motion, adequately invoked the
apex-deposition standards. Likewise, the filing of Eberwein’s affidavit
after the discovery deadline had expired does not vitiate her right to
protection given the proximity of the discovery deadline to service of the
deposition notices. Brinksmanship discovery tactics cannot deprive an
opposing party of the right to seek protection. Finally, no rule nor any
precedent requires a party to use a particular procedural vehicle to
invoke the apex doctrine. Rather, substance controls over form, so it
suffices that the party resisting the apex deposition has sought to
prohibit the deposition—by motion to quash, motion for protective order,
or otherwise. See In re Newport Classic Homes, L.P., L.L.C.,
No. 04-18-00126-CV, 2018 WL 4903065, at *3 (Tex. App.—San Antonio
Oct. 10, 2008, orig. proceeding) (citing Alcatel, 11 S.W.3d at 175-76);
In re Miscavige, 436 S.W.3d 430, 438-40 (Tex. App.—Austin 2014, orig.
proceeding) (allowing an out-of-state chief executive officer to raise the
apex doctrine in his special appearance).
With the apex-deponent issue squarely before the court and
properly invoked by Eberwein’s affidavit denying knowledge of relevant
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facts, the trial court clearly abused its discretion in compelling her
deposition without requiring Arnette to comply with the Crown Central
standards. The order’s requirement that Arnette produce deposition
topics in accordance with the corporate-representative rule does not cure
the error because American never designated Eberwein as its corporate
representative.
Arnette makes no attempt to defend the trial court’s order on the
merits but instead adopts the court of appeals’ analysis and conclusion
that mandamus relief is unavailable because American unduly delayed
seeking relief. In the alternative, Arnette asserts that mandamus relief
is unavailable because an adequate appellate remedy exists by virtue of
the permissive-appeal statute. See TEX. CIV. PRAC. & REM. CODE
§ 51.014(d) (authorizing trial courts to certify potentially dispositive
legal issues for interlocutory appeal); Daisy Mfg., 17 S.W.3d at 658
(mandamus relief is available only when an adequate remedy by appeal
is lacking). Both arguments are unpersuasive.
While mandamus “is not an equitable remedy, its issuance is
largely controlled by equitable principles. One such principle is that
‘[e]quity aids the diligent and not those who slumber on their rights.’”
Rivercenter Assocs. v. Rivera, 858 S.W.2d 366, 367 (Tex. 1993) (citations
omitted) (quoting Callahan v. Giles, 155 S.W.2d 793, 795 (Tex. 1941)).
Thus, a relator who unduly or unreasonably delays filing a petition for
mandamus relief may waive its right to such relief unless the delay is
justified. In re Int’l Profit Assocs., Inc., 274 S.W.3d 672, 676 (Tex. 2009).
In Rivercenter Associates, we held that an unexplained and unjustified
four-month delay warranted denying mandamus relief to quash a jury
demand. 858 S.W.2d at 367. But in In re International Profit Associates,
we concluded mandamus relief was warranted even though substantial
time had passed before the relator sought mandamus relief to compel
enforcement of a forum-selection clause. 274 S.W.3d at 675-77
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(discussing three periods of asserted delay, including a period of almost
eight months between issuance of the trial court’s order and relator’s
mandamus filing). The delay there did not result from the relator’s own
actions; rather, it had worked diligently to move the case along, which
“d[id] not indicate the type of delay that forfeits a party’s right to
mandamus relief.” Id. at 676. We declined to charge the relator with
the trial court’s and opposing party’s “errors and delays [that] hindered
[the relator’s] ability to initiate mandamus proceedings.” Id. Though
significant, we found the delay was justified under the circumstances.
Compare id. at 676-77, with Rivercenter Assocs., 858 S.W.2d at 367.
Here, American reasonably explained the year-long period
between the trial court’s order compelling Eberwein’s deposition and
American’s mandamus filing in the court of appeals. The record
establishes that American did not receive notice of the order until four
months after its issuance. At that point, the parties were on notice that
the order set preconditions to Eberwein’s deposition by requiring
Arnette to serve a new deposition notice designating deposition topics.
To date, neither has occurred, with no explanation on Arnette’s part. As
the trial date loomed, first in December 2020 and now in December 2021,
American prudently sought mandamus relief to avoid the necessity of
rescheduling the trial. On this record, the delay is neither unexplained
nor unreasonable. See Int’l Profit Assocs., 274 S.W.3d at 676-77 (holding
relator “did not ‘slumber on its rights’ to the extent it waived the right
to seek mandamus relief”; eight-month delay was explainable and not
“such an unreasonable time under this record”).
Arnette’s assertion that American’s only remedy is by permissive
appeal is erroneous. First, we have repeatedly found an adequate
appellate remedy lacking when a trial court erroneously compels an
apex deposition. See, e.g., Daisy Mfg., 17 S.W.3d at 659; Alcatel, 11
S.W.3d at 181. Second, the permissive-appeal statute is inapplicable.
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Under that statute, the trial court may authorize an interlocutory
appeal if (1) the order to be appealed involves a controlling question of
law as to which a substantial ground exists for difference of opinion, and
(2) “an immediate appeal from the order may materially advance the
ultimate termination of the litigation.” TEX. CIV. PRAC. & REM. CODE
§ 51.014(d). Neither element is satisfied here.
Accordingly, without hearing oral argument, we conditionally
grant American’s petition for writ of mandamus. See TEX. R. APP.
P. 52.8(c); see also In re Gonzales, 619 S.W.3d 259, 261 (Tex. 2021)
(mandamus relief is warranted when the trial court clearly abused its
discretion and no adequate appellate remedy exists). Our writ will issue
only if the trial court fails to promptly vacate the order compelling
Eberwein’s deposition.
OPINION DELIVERED: October 22, 2021
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