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August 5, 2010

MI Appeals Court Applies Apex Rule to Protect High Ranking Executives in Alberto v. Toyota

Rule extends to corporate executives, creates new MI law

DETROIT -- On August 5, 2010, the Michigan Court of Appeals vacated the Genesee County trial court's highly publicized ruling compelling Toyota Motor Sales, U.S.A., Inc., to produce Chairman and Chief Executive Officer Yoshimi Inaba and President and Chief Operating Officer Jim Lentz and expressly adopted the apex deposition rule for high ranking corporate officials, as well as for government officials. The Court of Appeals held that "the trial court abused its discretion by denying defendant's motion for a protective order to quash the depositions of Mssrs. Inaba and Lentz" and remanded the case, Alberto v. Toyota, to the trial court for reconsideration in accordance with its opinion.

This decision is significant in that it expressly adopted discovery protections for high ranking corporate officers where Michigan law had previously been silent. Prior to this ruling, the apex deposition rule only applied to government officials.

Importantly, the Court noted that "[i]n adopting the apex rule, we recognize, as have other courts, that an apex corporate officer, like a high-ranking government official, often has no particularized or specialized knowledge of day-to-day operations or of particular factual scenarios that lead to litigation, and has far-reaching and comprehensive employment duties that require a significant time commitment." As it applies specifically to the Alberto matter, the Court noted that "the record reflects that Mssrs. Inaba and Lentz had only generalized knowledge of Toyota's unintended acceleration problems, but had no unique or superior knowledge of or role in designing the subject vehicle or in implementing manufacturing or testing processes."

In this wrongful death action, plaintiff Lilia Alberto, as the Personal Representative for the Estate of Guadalupe Alberto, claimed the decedent experienced unintended acceleration in her 2005 Toyota Camry which resulted in a fatal collision.

The Court of Appeals has retained jurisdiction of this matter.

Attached opinion.

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