Iowa Public Employees' Retirement System v. Bank of America Corporation
- Katherine Failla
- 1:17-cv-06221
- U.S. District Court · Southern District of New York
- 3
Judge Failla denied Iowa Public Employees’ Retirement System v. Merrill Lynch’s motion to compel James Gorman’s deposition because relevance and apex-doctrine requirements were unmet.
The ruling affected the plaintiffs’ effort to depose James Gorman and left the requested deposition unavailable at this stage; the motion was denied without prejudice.
What happened
In Iowa Public Employees’ Retirement System v. Merrill Lynch, Pierce, Fenner & Smith Inc., the plaintiffs asked the court to require James Gorman to give a deposition. They argued that he was personally involved in an alleged agreement to restrict hiring customers from other major banks.
The plaintiffs said that alleged agreement in the prime brokerage market could support their claim about an agreement to limit competition in the stock-lending market. The defendants responded that the evidence had a more limited meaning and that Gorman had no personal knowledge of the specific facts in the case.
Judge Katherine Polk Failla denied the motion without prejudice. She ruled that the plaintiffs had not shown that Gorman’s testimony was relevant or that he had unique knowledge needed for a deposition under the protection given to senior corporate executives. The court also noted that the plaintiffs had not first sought testimony from lower-level employees.
The detailed version
- Iowa Public Employees' Retirement System v. Bank of America Corporation · No. 1:17-cv-06221
- Katherine Failla
- Aug. 28, 2020
Background
The plaintiffs filed a letter motion asking the court to compel the deposition of James Gorman. The opinion identifies Gorman as Morgan Stanley’s Chairman and Chief Executive Officer, responsible for overseeing more than 60,000 employees. The defendants opposed the motion.
Plaintiffs’ Position
The plaintiffs argued that Gorman was personally involved in an alleged conspiracy to restrict the “poaching” of prime brokerage customers of major banks. They contended that evidence of this alleged prime-brokerage agreement showed that an agreement to limit competition also existed in the stock-lending market.
Court’s Analysis
The court found that the plaintiffs had not shown how an alleged conspiracy in the prime-brokerage market was relevant to whether a conspiracy existed in the stock-lending market. The court characterized the plaintiffs’ reasoning as essentially that if something happened in one market, it could have happened in the other. The court also found that the evidence cited by the plaintiffs could more plausibly be understood as a warning against spreading rumors about a competitor’s financial condition and as criticism of an improper sales tactic.
The court separately applied the “apex doctrine,” which gives senior corporate executives additional protection from being deposed. The defendants showed that requiring Gorman to participate in a deposition would impose the type of burden covered by that doctrine. The plaintiffs did not show that Gorman had unique evidence or personal knowledge of the claims, that other witnesses could not provide the relevant testimony, or that they had first pursued discovery from lower-level employees. Gorman submitted a sworn declaration stating that he had no personal knowledge of the specific facts concerning the litigation.
Ruling
Judge Katherine Polk Failla denied the plaintiffs’ motion to compel without prejudice. The court concluded that the plaintiffs had not established either that Gorman’s testimony was relevant or that his deposition was justified under the apex doctrine.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.