Column: Madison Square Garden CEO Dolan can’t evade deposition in ex-Knick's assault lawsuit

MSG Knickerbockers

11/09/2024 21:40

(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)