Court Opinion

ID: 9957029
Source: CourtListenerOpinion
Date Created: 2024-04-03 15:05:51.131768+00
Date Added: 2024-06-11T08:18:03.201410
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                                FOURTH DISTRICT

              CHEWY, INC., and CHEWY PHARMACY, LLC,
                             Petitioners,

                                        v.

                              COVETRUS, INC.,
                                Respondent.

                               No. 4D2023-2967

                                 [April 3, 2024]

  Petition for writ of certiorari to the Circuit Court for the Seventeenth
Judicial Circuit, Broward County; Daniel A. Casey, Judge; L.T. Case No.
CACE21-017496.

   Jay B. Shapiro, Jenea M. Reed, and Ryan Thornton of Stearns Weaver
Miller Weissler Alhadeff & Sitterson, P.A., Miami, and Matthew P. Kanny
and Sylvia R. Ewald of Goodwin Procter LLP, Santa Monica, California, for
petitioners.

   Pravin R. Patel of Weil, Gotshal & Manges LLP, Miami, and Gregory
Silbert of Weil, Gotshal & Manges LLP, New York, New York, for
respondent.

CONNER, J.

    The petitioner, Chewy, Inc., petitions for a writ of certiorari seeking
review of an order denying its motion for protective order to prevent the
deposition of its CEO. 1 The petitioner seeks to prevent the deposition of
its CEO under the “apex doctrine,” which is codified in Florida Rule of Civil
Procedure 1.280(h). The petitioner contends the trial court misapplied the
rule in permitting the CEO’s deposition. We agree with the petitioner’s
arguments and grant the petition.

1 Two petitioners, Chewy, Inc. (the “petitioner” or “Chewy”), and Chewy Pharmacy,

LLC, filed the petition in this case. However, the CEO sought to be deposed is
the CEO of Chewy and holds no officer position in Chewy Pharmacy, LLC. Thus,
we refer to a single petitioner in our discussion, with minimal reference to Chewy
Pharmacy, LLC.
                                Background

   The petitioner and the respondent, Covetrus, Inc., are competitors in
the online veterinary pharmacy business.

   Prior to the suit filed below, the petitioner and a related entity, Chewy
Pharmacy, LLC, sued the respondent in a separate suit in New York,
asserting tortious interference and violations of business regulations in
multiple states, including Florida, regarding the sale of pet medicines.

    In the suit below, the petitioner sued respondent for corporate libel,
defamation, and unfair competition. The suit is based on two emails which
the respondent had sent to thousands of veterinarians and others in
August 2021 discussing the New York litigation. Among other allegedly
false statements, the complaint alleged that the emails had stated the
petitioner:

      (i)“is engaging in a legal maneuver to” “cut” veterinarians “out
      of” “the relationships [veterinarians] build with pets and their
      owners” and to “mute [veterinarians’] voices;” (ii) “views the
      vet-client-pet relationship as an impediment to sales, and they
      want to cut out the competition;” and (iii) is engaged in efforts
      to “financially damage veterinary practices.”

The petitioner alleged that these statements mischaracterize its business
and the New York deceptive trade practices action.

   The respondent answered the complaint and asserted an affirmative
defense that its statements in the August 2021 emails were true.

   The primary focus of the disputed issues in the Florida libel-defamation
suit is the petitioner’s corporate view and policy position on the
veterinarian-client-pet relationship (“VCPR”).

   The respondent noticed the petitioner’s CEO for deposition—the first
deposition which it had sought in the case below. The respondent also
sought document discovery concerning the CEO’s January 2023 interview
with CNBC, but the petitioner objected to that discovery.

   The petitioner moved for a protective order pursuant to rule 1.280(h)
because the respondent failed to exhaust other means of discovery before
attempting to take the CEO’s deposition and did not demonstrate other
discovery has been inadequate. Additionally, the petitioner alleged the

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respondent would be unable to show the CEO has “unique and/or
personal knowledge of the issues litigated.”

   As grounds for the deposition, the respondent relied on a CNBC article
published online in January 2023 entitled Chewy’s Push into Pet
Telehealth Runs into Regulatory Hurdles, Skeptical Veterinarians.
Pertinent portions of the article are discussed below. The article quotes
and paraphrases statements directly attributed to the CEO.

   The respondent argued to the trial court that the petitioner’s CEO told
CNBC that the VCPR concept is an impediment to the petitioner’s
business, a proposition which is central to the respondent’s truth defense.
The petitioner countered that the respondent’s assertions were false, and
that the respondent failed to acknowledge the article stated “Chewy said it
doesn’t take a stance” on VCPR. Additionally, the petitioner’s motion
asserted that because the telehealth medicine industry is “evolving,” the
statements in the article eighteen months after the August 2021 emails
“has, at best, questionable relevance and/or proportionality to this
lawsuit.”

   After conducting a hearing on the motion for protective order, the trial
court denied the motion after making the following findings:

      A. [The CEO] made a public statement relevant to Defendant’s
      truth defense. In doing so, [the CEO] directly inserted himself
      into this dispute. Only [the CEO] knows why he made the
      statement at issue and what he meant by it. Thus [the CEO]
      has ‘unique, personal knowledge of the issues being litigated.’
      In re Amend. to Fla. Rule of Civ. Proc. 1.280, 324 So. 3d 459,
      463 (Fla. 2021).

      B. Other discovery to date has been inadequate to uncover the
      meaning and intent of [the CEO]’s statements.

      C. The considerations in Florida Rule of Civil Procedure
      1.280(h) support allowing [the CEO]’s deposition to go
      forward, at which Defendant can ask questions allowed under
      the rules of discovery.[ 2]

2 We note that Second District has commented in Petro Welt Trading GES.M.B.H.

v. Brinkman, 336 So. 3d 881, 883 (Fla. 2d DCA 2022), that “[t]he new rule clearly
anticipates certain factual findings that the trial court should make in the first
instance.” We note that the trial court order in this case made no findings orally
or in writing that specifically address the burdens imposed on each side by rule

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Additionally, the trial court granted a stay so that the petitioner could
pursue certiorari review.

                              Certiorari Analysis

    By adding subdivision (h) to Florida Rule of Civil Procedure 1.280, our
supreme court formally adopted the apex doctrine, applying it to both
private and government officers. In re Amend. to Fla. R. of Civ. Proc. 1.280,
324 So. 3d 459, 461 (Fla. 2021). The apex doctrine protects the operation
of governmental and corporate entities by limiting the ability to depose or
call as a witness the highest executives of the entity. See id. at 460–62.
An erroneously entered order permitting the deposition of a CEO therefore
satisfies the jurisdictional requirements for certiorari review. DecisionHR
USA, Inc. v. Mills, 341 So. 3d 448, 452–57 (Fla. 2d DCA 2022) (determining
that an order requiring the deposition of a CEO or government official
satisfies the jurisdictional requirements for a petition for a writ of certiorari
because an erroneously entered order would result in material injury for
the remainder of the trial that cannot be corrected on post-judgment
appeal). Thus, we proceed with determining if the trial court departed from
the essential requirements of law in permitting the deposition of the
petitioner’s CEO.

   As discussed by the Second District,

      The text of rule 1.280(h) is unambiguous, and our supreme
      court has provided a detailed explanation of the reasons for
      the rule and key aspects of its application. . . . The party
      resisting the deposition is burdened to persuade the court
      that the corporate officer is high-level and must produce an
      affidavit or declaration of the officer explaining that he or she
      “lacks unique, personal knowledge of the issues being
      litigated.” See Fla. R. Civ. P. 1.280(h). If those showings are
      made, the “[trial] court shall issue an order preventing the
      deposition, unless the party seeking the deposition
      demonstrates that it has exhausted other discovery, that such
      discovery is inadequate, and that the officer has unique,
      personal knowledge of discoverable information.” Id.

1.280(b). Both sides in this case contend the trial court “implicitly” made
determinations about the burdens. We agree with the Second District that
explicit findings as to the burdens will facilitate certiorari review.

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DecisionHR, 341 So. 3d at 454 (emphasis added). We agree with the
Second District that once the supreme court codified the apex doctrine,
the requirements of the rule became clearly established principles of law.
Id. at 453.

The Petitioner’s Burden: Sufficiency of the CEO’s Affidavit

   In moving for a protective order, the petitioner’s initial burden was to
persuade the trial court that the corporate officer is high level. See In re
Amend. to Fla. R. of Civ. Proc. 1.280, 324 So. 3d at 463. In this case, the
petitioner’s CEO undisputedly meets that requirement. Thus, we address
the sufficiency of the CEO’s affidavit regarding the CEO’s knowledge of the
issues being litigated.

   Rule 1.280(h)’s text requires that the officer’s affidavit or declaration
must explain the officer “lacks unique, personal knowledge of the issues
being litigated.” Fla. R. Civ. P. 1.280(h); Karisma Hotels & Resorts Corp.
Ltd. v. Hoffman, 346 So. 3d 59, 59 (Fla. 4th DCA 2022). In the opinion
adopting rule 1.280(h), our supreme court said:

      We emphasize the rule’s requirement that the officer “explain”
      that he or she lacks unique, personal knowledge of the issues
      being litigated. Bald assertions of ignorance will not do. A
      sufficient explanation will show the relationship between the
      officer’s position and the facts at issue in the litigation. The
      point is for the court—and the other side—to be able to
      evaluate the facial plausibility of the officer’s claimed lack of
      unique, personal knowledge.

In re Amend. to Fla. R. of Civ. Proc. 1.280, 324 So. 3d at 463 (emphasis
added).

    The CEO stated, in a sworn declaration attached to the protective order
motion, that he had reviewed the complaint in the Florida suit but did not
have any “personal, unique, and/or non-repetitive knowledge” of the
respondent’s August 2021 e-mails. The CEO also noted he was “neither
referenced nor alluded to” in the complaint and, beyond that, did “not have
any personal, unique, and/or non-repetitive knowledge of the issues being
litigated in this lawsuit” or the relevant disputed facts. He explained this
was because, as CEO, he did “not possess knowledge or personal
involvement in the matters at issue” superior to that of the petitioner’s
other employees.

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    To determine whether the CEO’s affidavit sufficiently explains the
CEO’s lack of unique, personal knowledge of the issues being litigated, the
trial court (and reviewing court) must examine the pleadings “because they
frame the ‘facts at issue in the litigation.’” DecisionHR, 341 So. 3d at 454
(quoting In re Amend. to Fla. R. of Civ. Proc. 1.280, 324 So. 3d at 463).

   The libel and defamation counts revolve around the respondent’s
emails sent on August 10 and 31, 2021. The complaint also refers to the
ongoing litigation between the two companies in New York. Specifically,
the petitioner contends the respondent lied in its August 10 email
regarding the New York litigation by stating that the petitioner’s goal in the
New York litigation was to cut veterinarians out of the relationships which
they build with pets and their owners, block veterinarians from
communicating with pet owners, dominate services historically provided
by veterinarians, and undermine the VCPR. The respondent further
asserted the petitioner views the VCPR as an impediment to sales and the
petitioner wants to cut out competition. The August 10 email also
contended the petitioner purposely did not add veterinarians in the New
York lawsuit, and stated:

      The [New York] judgment [the petitioner] seeks would cause
      substantial financial harm to veterinarians and would hurt
      your relationship with pets and pet owners. . . . Veterinarians
      risk having your right to compete with [the petitioner] to
      prescribe medicine and provide competitive options for your
      own pet patients stripped away if you are not in the case.

The complaint next contended the August 31 email “double[d] down” on
the August 10 lies by stating the petitioner sent a cease-and-desist letter
demanding the respondent stop updating veterinarians on the New York
litigation, and claiming that because the petitioner did not name
veterinarians in the New York suit, “[veterinarians] do not need to be kept
apprised of the proceedings, even though if their lawsuit is successful, it
could have a significant impact on [veterinarian] practice and the vet-
client-pet relationship.” The petitioner contended the August 31 email
misrepresented its statements in the cease-and-desist letter.

   As mentioned above, to prove its truth defense, the respondent sought
to depose the petitioner’s CEO about statements which he had made in
the January 2022 CNBC article. The article was published approximately
three months after the suit below was filed and approximately eighteen
months after the August 2021 emails.

   The CNBC article states:

                                      6
      [The petitioner]’s service, called Connect With a Vet, has
      experienced significant growth, but it’s been limited by a
      specific kind of regulation known as the veterinary client
      patient relationship, or VCPR, according to [the petitioner’s
      CEO].

      “If you look at our Connect With a Vet, it’s the singular most
      scaled telehealth platform in the market today, only after two
      years, and yet, it doesn’t form a meaningful portion of our
      business. Why? Because when you research pet health, you’ll
      find that there’s a specific term called VCPR,” [the CEO] said.

      He also noted that barrier is “breaking down” in the wake of
      the Covid pandemic and multiple states “are already doing
      away with VCPR.”

A few paragraphs later, the article states:

      When asked about the company’s position on VCPR, [the
      petitioner] said it doesn’t take a stance on the issue and
      declined to say whether its veterinarians would diagnose and
      prescribe medication if the laws are changed. Currently, [the
      petitioner]’s veterinarians do not diagnose conditions or
      prescribe medications.

    Like the above paragraph, the article contains numerous references to
“Chewy,” but does not make clear whether the source of the statements
was the petitioner’s website, other corporate officials, the New York
litigation, or the CEO. The article attributes only two other statements to
the CEO:

      [The petitioner] aims to make health care about 30% of its
      overall business in the coming years, according to [the CEO].
      The company wouldn’t say how much pet health care
      accounts for in its current revenue stream, but less than 5%
      of [the petitioner]’s customer base buys their health products
      from the company.

      “If you notice, there has been little to no innovation in pet
      health over the last decade, and yet in the last three years,
      there’s been more innovation in pet health than in the last
      decade or 20 years,” [the CEO] said.

                                     7
   Having reviewed the pleadings in the suit below, we are satisfied the
petitioner’s CEO affidavit sufficiently explained he lacked unique, personal
knowledge of the issues being litigated.

    We construe the rule requirement that the CEO affidavit “explain[] that
the officer lacks unique, personal knowledge of the issues being litigated”
to mean the affidavit must demonstrate the officer does not have
knowledge of the issues being litigated that cannot be obtained from lesser
officials or employees of the entity or corporate documents. Fla. R. Civ. P.
1.280(h) (emphasis added). Our view of the lack of “unique, personal
knowledge” requirement is consistent with the pre-rule-amendment
caselaw regarding depositions of governmental agency executives. See,
e.g., Miami-Dade Cnty. v. Dade Cnty. Police Benevolent Ass’n, 103 So. 3d
236 (Fla. 3d DCA 2012) (quashing the mayor’s deposition because the
information sought was readily available from other sources including the
mayor’s statements at public hearings and “the testimony of a lower-
ranking official” (emphasis added)); Horne v. Sch. Bd. of Miami-Dade Cnty.,
901 So. 2d 238, 240 (Fla. 1st DCA 2005) (adopting the rule announced by
the United States District Court for the Eastern District of Pennsylvania
that “[d]epartment heads and similarly high-ranking officials should not
ordinarily be compelled to testify unless it has been established that the
testimony to be elicited is necessary and relevant and unavailable from a
lesser ranking officer” (emphasis added) (quoting Halderman v. Pennhurst
State Sch. & Hosp., 559 F. Supp. 153, 157 (E.D. Pa. 1982))); Dep’t of Agric.
& Consumer Servs. v. Broward Cnty., 810 So. 2d 1056, 1058 (Fla. 1st DCA
2002) (holding an agency head should not be subject to deposition unless
opposing parties have exhausted other discovery and can demonstrate
“the agency head is uniquely able to provide relevant information which
cannot be obtained from other sources”).

    As our supreme court has explained, “[a] sufficient explanation will
show the relationship between the officer’s position and the facts at issue
in the litigation. The point is for the [trial] court—and the other side—to
be able to evaluate the facial plausibility of the officer’s claimed lack of
unique, personal knowledge.” In re Amend. to Fla. R. of Civ. Proc. 1.280,
324 So. 3d at 463 (emphasis added). We conclude the petitioner’s CEO
affidavit demonstrates the facial plausibility of his claimed lack of unique,
personal knowledge that cannot be obtained from other sources.

    In responding to the certiorari petition, the respondent argues the CEO
affidavit in this case is the same as the affidavit which we determined was
insufficient in Karisma Hotels. We disagree. In Karisma Hotels, the CEO
affidavit stated only: “I lack unique or personal knowledge of the issues
being litigated in this matter apart from the information provided in the

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numerous      depositions      taken     of   the    current   and     past
executives/representatives of Defendant, Premier Worldwide Marketing,
LLC and Defendant, Premier Guest Services, LLC.” 346 So. 3d at 59. The
petitioner’s CEO affidavit in this case stated more to demonstrate his lack
of unique, personal knowledge of the issues litigated in the suit below.

   The CEO specifically stated that he reviewed the complaint in the suit
below and noted that he was not mentioned or alluded to in the
complaint. 3 The CEO additionally stated he did not have “personal,
unique and/or non-repetitive knowledge of the August 10, 2021 and
August 31, 2021 e-mail statements made by [the respondent]” or
“personal, unique and/or non-repetitive knowledge of the relevant
disputed facts.” We note that what is in dispute in this case is the
petitioner’s corporate view and policy regarding VCPR and more
particularly the petitioner’s alleged attempt to erode VCPR by not including
veterinarians in the New York litigation.

    In responding to the certiorari petition, the respondent argues it does
not want to depose the petitioner’s CEO about the statements referenced
in their August 10 and August 31 emails; instead, it wants to depose the
CEO about the statements he made to CNBC concerning the VCPR and its
effects on the petitioner’s business because those statements are
consistent with its truth defense. Additionally, the respondent argued
below and in this Court that only the CEO knows what he meant by his
statements in the CNBC article.

    Given the disputed issues in the libel-defamation suit described above,
the respondent’s arguments ignore that the CEO affidavit contains an
affirmative statement that he “do[es] not possess knowledge or personal
involvement in the matters at issue that is superior than other employees
[of the petitioner].” (Emphasis added). If the petitioner in fact maintains
the strategic position or policy towards the VCPR as the respondent
contends, it is hard to imagine that lesser corporate officers are not aware
of such a strategic position or policy, or that corporate documents do not
exist to confirm the position or policy.

3 We note that the CEO’s affidavit states he reviewed the complaint but fails to

mention whether he reviewed any other pleadings. Clearly, it would have been
better for the petitioner’s CEO’s affidavit to state he reviewed all the pleadings.
However, because the complaint references the two emails, which discuss VCPR,
and the respondent’s truth affirmative defense focuses on the petitioner’s
corporate view and policy regarding VCPR, we do not view the failure to reference
reviewing all the pleadings to be fatal to the petitioner’s arguments in the case.

                                        9
    We further deem the CEO’s declaration of a lack of knowledge that is
unique or superior to other employees is sufficient based on Affinity Labs
of Texas v. Apple, Inc., No. C 09-4436CW, 2011 WL 1753982, at *15 (N.D.
Cal. May 9, 2011). In applying the apex doctrine, the Affinity Labs court
stated: “The mere fact that [CEO Steven] Jobs made public statements,
even on issues that Affinity considers relevant to its claims, are insufficient
to justify his deposition. Courts have repeatedly denied apex depositions
even on a showing that the executive made public statements on relevant
issues.” Affinity Labs, No. C 09-4436CW, 2011 WL 1753982, at *16
(citations omitted). Affinity Labs was specifically cited as authority by our
supreme court in amending rule 1.280. In re Amend. to Fla. R. of Civ. Proc.
1.280, 324 So. 3d at 463.

   Finally, we reject the respondent’s additional arguments regarding the
sufficiency of the CEO’s affidavit asserted in response to the petitioner’s
certiorari petition.

   For the above reasons, we conclude that the petitioner’s CEO affidavit
was sufficient to shift the burden to the respondent to meet the rule
requirements to take the CEO’s deposition, and the trial court’s implied
determination that the affidavit was insufficient departed from the
essential requirements of law.

The Respondent’s Burden of Persuasion

    Once the person or party resisting apex testimony has met the
requirement of a sufficient affidavit by the official whose testimony is
sought, the party seeking the official’s testimony bears the burden to
persuade the trial court that it has exhausted other discovery, that such
discovery is inadequate, and that the officer has unique, personal
knowledge of discoverable information. Fla. R. Civ. P. 1.280(h) (emphasis
added); In re Amend. to Fla. R. of Civ. Proc. 1.280, 324 So. 3d at 463. The
rule places the ultimate burden of persuasion on the party seeking the
official’s testimony. In re Amend. to Fla. R. of Civ. Proc. 1.280, 324 So. 3d
at 463 (citing Univ. of W. Fla. Bd. of Trs. v. Habegger, 125 So. 3d 323, 325
(Fla. 1st DCA 2013)).

    We agree with the petitioner’s arguments that the respondent failed to
meet its burden of persuasion to justify the CEO’s deposition. As the
petitioner points out and the respondent does not deny, the first person
whom the respondent sought to depose in this case was the petitioner’s
CEO. As discussed above, if the petitioner in fact maintains the strategic
position or policy towards the VCPR as the respondent contends, it is hard
to imagine that other corporate employees are not aware of such a strategic

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position or policy, or that corporate documents do not exist to confirm the
position or policy. The record does not reveal any attempt by the
respondent to obtain discovery regarding the petitioner’s corporate policy
on VCPR from company officers who may have greater involvement dealing
with how VCPR affects the petitioner’s business interests. Thus, not only
did the respondent fail to exhaust discovery before seeking to depose the
CEO, it also failed, as discussed above, to sustain its burden that the CEO
has unique, personal knowledge of discoverable information (i.e.,
information that cannot be obtained from other sources).

   We reject the respondent’s argument the CEO’s deposition is necessary
because the petitioner has thwarted the respondent’s discovery attempts.
We also reject the respondent’s argument that it should be allowed to
depose the CEO because its burden was to demonstrate that the CEO has
“unique, personal knowledge of discoverable information.” To apply the
rule 1.280(b)(1) scope of discovery standard to a rule 1.280(h) motion for
protective order would be absurd and would ignore that rule 1.280(h)
establishes a three-prong burden of persuasion on the party seeking apex
testimony that is in the conjunctive, rather than disjunctive. Moreover,
our supreme court has made clear in adopting rule 1.280(h), “[t]he new
rule . . . imposes burdens of production and persuasion that are distinct
from the burdens at play in rule 1.280(c).” In re Amend. to Fla. R. of Civ.
Proc. 1.280, 324 So. 3d at 463.

                                Conclusion

   For the above reasons, we conclude the trial court departed from the
essential requirements of law in determining (by implication) the
petitioner’s CEO affidavit was insufficient to meet the initial burden on the
party opposing apex testimony under rule 1.280(h), and in determining
the respondent met its burden of persuasion under rule 1.280(h). We
grant the certiorari petition and quash the order below allowing the
deposition of the petitioner’s CEO, without prejudice for the respondent to
seek to depose the CEO upon a proper showing.

   Petition granted.

WARNER and FORST, JJ., concur.

                            *        *         *

   Not final until disposition of timely filed motion for rehearing.

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