Column: Madison Square Garden CEO Dolan can’t evade deposition in ex-Knick's assault lawsuit
The opinions expressed here are those of the author, a columnist for Reuters.
By Alison Frankel
Sept 11 (Reuters) -For the last seven years, federal judge Richard Sullivan of Manhattan has been presiding over a lawsuit stemming from the forcible 2017 ejection of onetime New York Knicks All-Star Charles Oakley from Madison Square Garden.
Sullivan, who was first assigned the case when he was a federal district judge and has continued to oversee the litigation after his elevation to the 2nd U.S. Circuit Court of Appeals in 2018, has not been particularly sympathetic to Oakley, who originally brought a litany of claims against MSG MSGS.N CEO James Dolan and several MSG-related companies.
Sullivan tossed the entire case in 2020, concluding that Oakley’s lawsuit, which the judge likened to “a public relations campaign,” failed to allege a plausible legal claim. In 2021, after the 2nd Circuit revived Oakley’s claim for assault and battery against certain MSG defendants (but not Dolan), Sullivan granted summary judgment to the defense, citing video evidence “that it was Oakley who unilaterally escalated the confrontation, leading to his eventual forcible removal.”
And even after the 2nd Circuit once again revived Oakley’s assault and battery claim in 2023, Sullivan refused in April to allow the ex-Knick to add Dolan as a defendant, despite Oakley’s allegation that Dolan directed security guards to remove him from the arena.
Given Sullivan's skepticism about Oakley’s claims, you might think that the judge would be receptive to arguments that Dolan has much more important things to do than provide deposition testimony about Oakley’s ejection from that long-ago basketball game.
You would be wrong.
In a ruling on Tuesday, Sullivan rejected MSG’s arguments that Dolan should be shielded from testifying under the so-called apex doctrine, which, broadly speaking, asks courts to apply special scrutiny to plaintiffs’ demands for discovery from high-ranking corporate executives.
I told you earlier this year about the ongoing debate in both state and federal courts over the apex doctrine.
The idea behind the apex exception to general rules of discovery is that plaintiffs should not be able to weaponize discovery demands by seeking depositions from busy executives who don’t have unique or relevant information about the case. Otherwise, the thinking goes, plaintiffs with small claims against big companies will demand depositions from high-ranking corporate officials simply to obtain leverage for nuisance settlements.
But because the doctrine was developed through precedent and is (mostly) not formalized in state or federal rules of procedure, its application varies across jurisdictions. In particular, courts are divided on the burden of persuasion. In some venues, plaintiffs have to show why they need testimony from apex witnesses. In others, corporate executives bear the responsibility of proving that their testimony is unwarranted.
A pair of rulings I covered last January illustrate the vagaries of the doctrine. In Florida, an appeals court quashed a subpoena for testimony from Tesla TSLA.O CEO Elon Musk based only on Musk's sworn statement that he did not recall a phone call he allegedly made to the father of a teenager who crashed a Tesla traveling at more than 110 miles per hour. Once Musk disavowed unique knowledge, the Florida court said, plaintiffs bore the burden of proving why they still needed his testimony.
But in California federal court, companies and their executives must prove apex witnesses are entitled to special protection. Because Microsoft MSFT.O and CEO Satya Nadella failed to meet that burden in a class action by videogamers challenging the company’s Activision deal, a San Francisco federal judge ruled that Nadella was required to give a deposition.
In the Oakley case, Sullivan’s stature as an appellate judge and his previous rulings on the merits of Oakley’s claims make his holding on the controversial doctrine particularly notable.
MSG lawyers from King & Spalding asserted that under New York federal-court precedent on the apex doctrine, Oakley’s counsel from Wigdor bore the burden of proving that Dolan possessed unique knowledge that could not be obtained from another witness.
That interpretation, according to Sullivan, “misunderstands which party bears the burden here.” Precedent from such cases as Scott v. Chipotle Mexican Grill and Chevron v. Donziger, the judge said, establishes that plaintiffs do not bear a special responsibility to show that apex witnesses have unique knowledge. Instead, Sullivan said, it is up to defendants to prove that high-ranking executives cannot contribute new and relevant information.
The MSG defendants, he said, failed to satisfy that burden.
“Dolan is a far cry from the prototypical apex witness, who sits removed from the key facts of the dispute,” Sullivan wrote. “Dolan had a courtside seat to the action here. He likely possesses relevant knowledge that cannot be obtained from other witnesses.”
The judge also said that the MSG defendants hadn’t shown Oakley’s demand for a deposition was sheerly meant to harass Dolan or that Dolan’s deposition would disrupt MSG’s business.
MSG said in an email statement that Oakley’s insistence on deposing Dolan “is just another example of how the legal maneuverings of Charles Oakley and his lawyers continue to waste the time and resources of everyone involved.”
Oakley counsel Valdi Licul said his side is looking forward to questioning the CEO. “We are pleased the court rejected Mr. Dolan’s efforts to avoid giving sworn testimony about Mr. Oakley’s removal from MSG,” he said in an email statement.
Read more:
Why Elon Musk was able to duck a deposition but Satya Nadella was not
The apex doctrine and depositions of high-level executives: the divide among circuit courts
Uber's top officials can’t dodge depositions in class action over IPO
(Reporting By Alison Frankel)
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