Stratford v. Umpqua Bank

Court: Washington Supreme Court
Date filed: 2023-09-14
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            FILE                                                                    THIS OPINION WAS FILED
                                                                                   FOR RECORD AT 8 A.M. ON
                                                                                      SEPTEMBER 14, 2023
       IN CLERK’S OFFICE
SUPREME COURT, STATE OF WASHINGTON
      SEPTEMBER 14, 2023
                                                                                       ERIN L. LENNON
                                                                                    SUPREME COURT CLERK




                  IN THE SUPREME COURT OF THE STATE OF WASHINGTON

        HEATHER STRATFORD and WILLIAM B. )
        GEIBEL, JR., individually and their marital )
        community,                                  )
                                                    )
                                 Respondents,       )                  No. 100717-5
                                                    )
             v.                                     )                    En Banc
                                                    )
        UMPQUA BANK, an Oregon corporation; )
        and BRYAN JARRETT, an individual,           )
                                                    )        Filed : September 14, 2023
                                 Petitioners.       )
                                                    )


               OWENS, J.—The parties to a lawsuit have a broad right to discovery, subject

        to narrow limitations in the Civil Rules. A party may seek a protective order to limit

        discovery under CR 26(c), which requires the party to show that good cause for the

        protective order exists. This case requires us to decide whether Washington

        recognizes the “apex doctrine,” which shields certain high-ranking officials from

        deposition unless the proponent can first show that the witness has personal
Stratford v. Umpqua Bank
No. 100717-5


knowledge of the facts and that less intrusive means of discovery have been

unsuccessful.

      Respondents Heather Stratford and William Geibel Jr. (collectively

Stratford) sued petitioner Umpqua Bank and its loan officer for negligent hiring

and fraud, among other claims. After written discovery, Stratford sought to

depose three high-level Umpqua executives. Umpqua moved for a protective

order, arguing the executives had no personal knowledge and the apex doctrine

shielded them from deposition. The trial court denied the motion. We granted

Umpqua’s petition for review to decide whether Washington does or should

follow the apex doctrine.

      We answer these questions in the negative. The apex doctrine has not

been adopted by any court in this state. We decline to adopt the doctrine

because it improperly shifts the burden of proof in violation of our discovery

rules and it undermines the right of access to courts. Moreover, it is not

universally accepted or applied consistently across jurisdictions. Accordingly,

we affirm the trial court’s denial of Umpqua’s protective order and remand for

further proceedings.

                                        FACTS

      Bryan Jarrett worked as an insurance agent for several years. Clerk’s Papers

(CP) at 114. During his employment, Jarrett submitted fictitious insurance



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applications and attempted to conceal his misconduct. Id. at 114-21. In 2014, the

Office of Insurance Commissioner (OIC) investigated Jarrett and revoked his license.

Id. at 119-21.

       In 2015, Umpqua hired Jarrett as a home lending retail loan officer. Id. at 129-

30, 158-68. As part of the hiring process, Jarrett cleared a criminal background check.

Id. at 159-60. Umpqua did not learn about Jarrett’s OIC disciplinary record during its

preemployment screening and “was not provided with any information from

Mr. Jarrett or from any third party that would prohibit him from acting as a loan

officer.” Id. at 181.

       Unfortunately, Jarrett’s conduct as a loan officer resulted in numerous customer

complaints. See, e.g., id. at 132-34, 138-42, 143-44. In February 2016, Umpqua met

with Jarrett to take corrective action but did not terminate his employment at that

time. Id. at 149-51, 143.

       In late 2016, Stratford met Jarrett at the Umpqua Spokane offices to discuss a

construction loan. Id. at 4. Jarrett told Stratford that “‘his builder,’ Tony Begovich,

would be a better option” than her proposed builder. Id. at 55. Jarrett said Begovich

worked on other projects with Umpqua and had performed on time, within budget. Id.

       In May 2017, Stratford and Begovich entered into a construction agreement

with a quoted budget of $402,268 to be completed in approximately seven months.

Id. at 78-87. To fund the project, Stratford obtained a construction loan from



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Umpqua, executed in July 2017. Id. at 187-99. Shortly thereafter, Begovich began

construction. Id. at 202-03. In November 2017, while construction was ongoing,

Umpqua fired Jarrett. Id. at 143.

       Begovich did not finish building Stratford’s home, which was damaged by

exposure to the elements. Id. at 202-03, 60-61. In March 2020, Stratford sued

Begovich, his company, and his subcontractors for breach of contract, fraud, and

negligence. Id. at 201-05. In November 2020, a trial court awarded Stratford a total

of $554,631.17 in damages. Id. at 230-35.

       In May 2021, Stratford sued Jarrett and Umpqua for multiple causes of action,

including negligent misrepresentation, fraud, and negligent hiring. 1 CP at 1-12, 12-

20. Umpqua answered and asserted affirmative defenses. Id. at 21-30. The parties

engaged in extensive and contentious written discovery for months until filing cross

motions for summary judgment. See, e.g., CP at 811-15, 774, 819-60, 863-78, 902-

13; CP at 31-168, 158-237.

       In January 2022, Stratford issued subpoenas to three Umpqua executives:

(1) Cort O’Haver, the president and chief executive officer (CEO) of Umpqua

Holdings Corporation, (2) Sheri Burns, the chief people officer at Umpqua, and

(3) Kevin Skinner, the head of Umpqua’s home lending division. Id. at 499. The



1
 Stratford later released Jarrett from the lawsuit pursuant to a settlement agreement. See
CP at 970-73.


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parties discussed the purpose of the depositions and were ultimately unable to agree

about whether they were necessary. Id. at 499-500.

       Umpqua moved for a protective order. Id. at 601-14, 499-501. It argued

deposing its senior executives (“apex” officers) was unnecessary and appeared to be

merely a harassment tool. Id. at 502. It asserted the executives “were not involved in

[Stratford’s] loan, they did not supervise Jarrett, they did not hire Jarrett, nor did any

of them have any involvement with Jarrett’s termination from the Bank.” Id. at 503.

Of the three proposed deponents, only Skinner was “vaguely aware of who Jarrett is”

due to this litigation. Id. Umpqua emphasized that “none of these three APEX

officers have any personal knowledge relevant to [the] claims,” yet Stratford sought

“to depose them before taking testimony from any other witness with actual

knowledge of the underlying facts alleged.” Id.

       In support of its motion, Umpqua submitted a declaration from Skinner. Id. at

495-98. Skinner was not involved with Jarrett’s hiring or termination because he

became executive vice president for home lending in January 2020. Id. at 496.

Skinner stated that he and the other deponents needed to invest “incredible amounts of

time and resources in the continued bank operations” because the bank was

undergoing a merger. Id. at 497.

       Before filing a response to the protective order, Stratford offered to “withdraw

the O’[H]aver notice and proceed only with the depositions of Skinner and Burns” if



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Umpqua agreed to withdraw its motion for a protective order. Id. at 647. Umpqua

apparently did not respond.

         The next day, Stratford filed her response, arguing that Washington has not

adopted the apex doctrine and urging the court to deny the protective order because

Umpqua failed show good cause under CR 26(c). Id. at 614-27. She specifically

criticized Umpqua for failing to describe any harm or prejudice that would result from

the depositions. Id. at 621.

         The trial court held a discovery hearing. Stratford argued she wanted to depose

O’Haver, via Zoom, because the CEO is responsible for complying with fiduciary

duties and disclosures in highly regulated, publicly traded companies. Verbatim Tr.

of Proc. (Feb. 11, 2022) (VTP) at 10. Counsel wanted to ask O’Haver about

bankwide calls related to hiring policies and other issues that are “relevant for the jury

to hear certainly.” Id. at 11.

         Umpqua responded that it is “premature” to go directly to the CEO and pointed

out that Stratford’s offer to take O’Haver off the deposition list is “a clear admission”

that his deposition is unnecessary. Id. at 12. Umpqua then argued that neither Burns

nor Skinner had personal knowledge of Jarrett; Umpqua conceded that they may be

relevant later but maintained it wanted “to streamline and not burden these folks.” Id.

at 17.




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       The trial court denied Umpqua’s protective order. CP at 653-54. In an oral

ruling, the court reasoned:

              Washington law has some pretty . . . easy discovery rules, pretty
       wide discovery. And considering the claims that the plaintiff’s making .
       . . how [Stratford’s counsel] decides who he thinks is relevant to prove
       his case is up to him. He doesn’t have to ask for a [corporate deposition
       under CR 30(b)(6)] if he doesn’t want to. And if he believes that these
       witnesses . . . have valid information . . . on . . . policies and procedures,
       hiring, offering.

VTP at 17-18. The court continued,

       [T]he burden is on the defendant or the moving party to show why this
       basically would not be necessary or relevant, and . . . basically unduly
       burdensome. He’s offering to do a Zoom deposition, and work around
       their schedules, and it’s not unreasonably duplicative, and it could be
       important to his case.

       ....

       [A]t this point [Stratford’s counsel] met his burden to show that these
       would be important and could lead to discoverable or admissible
       evidence to prove his case.

Id. at 18-19.

       Umpqua moved for an emergency stay of the depositions and sought direct

review. We granted the stay and review. The Washington State Association for

Justice Foundation filed an amicus curiae brief in support of Stratford.

                                          ISSUE

       Should Washington adopt the apex doctrine?




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                                           ANALYSIS

           We granted review to consider whether the apex doctrine is consistent with our

     discovery rules. This is a question of law that we review de novo. Sunnyside Valley

     Irrig. Dist. v. Dickie, 149 Wn.2d 873, 880, 73 P.3d 369 (2003).

I.      WASHINGTON DOES NOT RECOGNIZE THE APEX DOCTRINE

           a.     Principles of Discovery in Washington

           The “right to discovery is an integral part of the right to access the courts

     embedded in our constitution.” Cedell v. Farmers Ins. Co. of Wash., 176 Wn.2d 686,

     695, 295 P.3d 239 (2013); John Doe v. Puget Sound Blood Ctr., 117 Wn.2d 772, 782-

     83, 819 P.2d 370 (1991) (the right of access is implicated whenever a party seeks

     discovery). “The purpose of discovery is to allow production of all relevant facts and

     thereby narrow the issues and to promote efficient and early resolution of claims.”

     Cedell, 176 Wn.2d at 698; see also Doe, 117 Wn.2d at 782.

           The Civil Rules provide a broad right of discovery subject to relatively narrow

     restrictions set forth in CR 26. Doe, 117 Wn.2d at 782. A trial court properly limits

     discovery if it determines that

           (A) the discovery sought is unreasonably cumulative or duplicative, or is
           obtainable from some other source that is more convenient, less
           burdensome, or less expensive;

           (B) the party seeking discovery has had ample opportunity by discovery
           in the action to obtain the information sought; or




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      (C) the discovery sought is unduly burdensome or expensive, taking into
      account the needs of the case, the amount in controversy, limitations on
      the parties, resources, and the importance of the issues at stake in the
      litigation.

CR 26(b)(1).

      A court may limit discovery upon its own initiative or on a motion for a

protective order under CR 26(c). Under CR 26(c), for good cause shown, a trial court

may enter an order to protect a person or party from annoyance, embarrassment,

oppression, undue burden, or expense. Barfield v. City of Seattle, 100 Wn.2d 878,

885, 676 P.2d 438 (1984); CR 26(c). A party establishes good cause by showing that

a protective order would avoid the threat of a harm listed in CR 26(c) without

impeding the discovery process. Rhinehart v. Seattle Times Co., 98 Wn.2d 226, 232,

654 P.2d 673 (1982). The burden of persuasion rests with the party or person seeking

the protective order. Cedell, 176 Wn.2d at 696.

      b.       Background on the Apex Doctrine

      The “apex doctrine,” in those jurisdictions in which it is recognized, varies

greatly. At its most basic level, it “shields certain high-ranking officials from being

deposed.” Zimmerman v. Al Jazeera Am., LLC, 329 F.R.D. 1, 6 (D.D.C. 2018). The

doctrine is meant to prevent unwarranted harassment and abuse of the discovery

process, recognizing that adversaries may use depositions of certain high-level

officers to their advantage. Serrano v. Cintas Corp., 699 F.3d 884, 901 (6th Cir.




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2012); Zimmerman, 329 F.R.D. at 6; BlueMountain Credit Alts. Master Fund L.P. v.

Regal Entm’t Grp., 2020 COA 67, ¶ 28, 465 P.3d 122, 130.

      Under the iteration of the apex doctrine proposed by Umpqua, a party seeking

to depose a high-level officer at the ‘apex’ of a corporate hierarchy must first show

that the witness “[1] has unique, non-repetitive, firsthand knowledge of the facts at

issue in the case, and [2] that other less intrusive means of discovery such as

interrogatories and depositions of other employees, have been exhausted without

success.” Robinett v. Opus Bank, No. C12-1755MJP, 2013 WL 5850873, at *5 (W.D.

Wash. Oct. 30, 2013) (citing Salter v. Upjohn Co., 593 F.2d 649, 651 (5th Cir. 1979)).

This shifts the burden to the party seeking discovery rather than the party resisting it

as required by general discovery principles and our Civil Rules. See BlueMountain,

465 P.3d at 131; Cedell, 176 Wn.2d at 696; CR 26(c).

      c.     Washington Has Not Adopted the Apex Doctrine

      No reported Washington opinion has explicitly adopted the apex doctrine, at

least not in name. Umpqua argues Shields v. Morgan Financial, Inc., 130 Wn. App.

750, 125 P.3d 164 (2005) and Clarke v. Office of Attorney General, 133 Wn. App.

767, 781, 138 P.3d 144 (2006), essentially adopt the apex doctrine. We disagree.

             i.      Shields Applied CR 26(b)(1) and (c), Not the Apex Doctrine

      Shields sued her mortgage lender and broker for violations of the Consumer

Protection Act, ch. 19.86 RCW. Shields, 130 Wn. App. at 752, 756. The lender



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produced a corporate designee to testify about Shields’ loan, the lender’s interaction

with brokers, and its disclosure procedures. Id. at 754. Shields then sought to depose

the lender’s chief financial officer and chief compliance officer. Id. The trial court

granted the lender’s motion for a protective order, noting that neither officer had

personal knowledge of Shields’ file. Id.

      On appeal, Shields argued the trial court erred in granting the protective order.

Id. at 758. The Court of Appeals disagreed and affirmed, reasoning that the officers

had no knowledge of any specific facts, the lender produced a senior executive to

testify, and CR 26(c) permits regulation of discovery for good cause when it is

“unreasonably cumulative or duplicative” or “unduly burdensome or expensive,

taking into account the needs of the case.” Id. at 759-60.

      Shields did not adopt or apply the apex doctrine; it simply affirmed the

protective order based on CR 26 factors. Although Shields noted that the officers had

no knowledge of the underlying facts, its holding emphasized the trial court’s

discretion in limiting discovery based on the needs of the case. The court did not hold

that Shields would have had to show that the witnesses had unique, nonrepetitive,

firsthand knowledge of the facts and that less intrusive means of discovery had been

exhausted without success.




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             ii.    Clarke Did Not Apply the Apex Doctrine and It Involved Public
                    Rather Than Private Officials

      Clarke sued the attorney general’s office for wrongful termination. Clarke, 133

Wn. App. at 775. After written discovery, Clarke moved to compel the deposition of

the former attorney general and then current governor of the state. Id. at 777. The

trial court denied Clarke’s motion to compel. Id.

      On appeal, Clarke argued her discovery motion should have been granted

because the governor had been the attorney general during her employment and had

“relevant firsthand knowledge” about defending cases, hiring and terminating

employees, and managing the office. Id. at 781. The Court of Appeals disagreed,

noting the governor had no personal knowledge about Clarke or her termination and

had not even managed Clarke’s division. Id. at 782. The court “agree[d] with the

federal cases that protect high-ranking government officials from discovery when

other available witnesses can provide the same information” and held “the trial court

did not err when it substantively denied Clarke’s motion to compel the governor’s

deposition.” Id.

      Clarke did not adopt the apex doctrine as proposed by Umpqua. It agreed with

federal cases protecting high-ranking government officials who “‘have greater duties

and time constraints than other witnesses’” and “‘should not, absent extraordinary

circumstances, be called to testify regarding their reasons for taking official actions.’”

Id. at 781 (internal quotation marks omitted) (quoting In re United States (Reno), 197


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F.3d 310, 313 (8th Cir. 1999)). The court did not hold that Clarke would have had to

show that the governor had unique, nonrepetitive, firsthand knowledge and that she

had exhausted other means. It simply affirmed the trial court’s denial of the motion to

compel based on the deferential standard of review, noting that others would be better

sources for the information sought.

      Moreover, Clarke involved a public official not a corporate CEO. Umpqua

acknowledges this but asserts that the court’s rationale is not limited to public

employees. This position is unfounded. The cases cited explicitly discuss that high-

ranking governmental officials should not be deposed to explain their official actions.

This reasoning does not naturally extend to corporate officers. See Zimmerman, 329

F.R.D. at 6 (explaining that the apex doctrine “derives from the premise that

government officials should be allowed to perform their duties without undue

disruption and reflects a desire to protect the integrity of the administrative process”

(emphasis added)). Umpqua’s argument that there is “no principled or explained

reason” not to extend the doctrine ignores obvious differences between public

officials and corporate executives. Pet’r’s Opening Br. at 18.

      In sum, the apex doctrine’s requirement that high-level officials cannot be

deposed absent a showing that they have unique, nonrepetitive, firsthand knowledge

of the facts and that other methods of discovery have been exhausted without success




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is a much higher burden on proponents of discovery than either Shields or Clarke

imposed. Washington has not adopted the apex doctrine as proposed by Umpqua.

II. WE DECLINE TO ADOPT THE APEX DOCTRINE

       a.      The Civil Rules Prevent the Harms Addressed by the Apex Doctrine

       Washington discovery rules already protect potential deponents—including

high-level officers—from unduly burdensome discovery. CR 26.2 Umpqua impliedly

concedes this by arguing that courts consider apex factors (personal knowledge and

less intrusive means) when ruling on discovery requests for high-level officials. Trial

courts have wide discretion to limit discovery based on the needs of the case and will

do so if a party establishes that undue burden or expense would be avoided by a

protective order without impeding the discovery process. CR 26(c). Courts limit

discovery that “is obtainable from some other source that is more convenient, less

burdensome, or less expensive.” CR 26(b)(1)(A). Umpqua simply had to show good

cause existed for the court to limit discovery based on the CR 26 factors.

       Umpqua essentially asks us to amend the Civil Rules. The apex doctrine flips

the burden by requiring the party seeking to depose a high-level witness to show both

that the witness has unique, nonrepetitive, firsthand knowledge of the facts and that



2
  See also Diaz v. Wash. State Migrant Council, 165 Wn. App. 59, 84 n.6, 265 P.3d 956 (2011)
(“[P]articularly where corporate principals are named as parties, a trial court may determine that
one source of response is sufficient or superior. See CR 26(b)(1)(A), (B); CR 26(c). We also
recognize that some courts have acted to protect persons in upper levels of management from
discovery where there is no warrant for requiring the participation of such individuals.”).


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the party has exhausted less intrusive means, such as interrogatories and depositions

of other employees, without success. This conflicts with our otherwise broad

allowance for discovery, the rules of which adequately protect apex officials along

with all other witnesses. We decline to amend the Civil Rules in this way.

      b.     The Apex Doctrine Is Not Ubiquitous across Jurisdictions and Its
             Influence Appears To Be Declining

      Umpqua argues the apex doctrine is “almost universally accepted” in the

federal system and in other states. Pet’r’s Opening Br. at 4, 22. We disagree. We

find no majority rule, and, of those courts that have adopted the apex doctrine, there is

considerable variation in its application.

      Federal courts have treated the apex doctrine inconsistently, noting that it

“exists in tension with the otherwise broad allowance for discovery of party witnesses

under the federal rules.” Apple Inc. v. Samsung Elecs. Co., Ltd., 282 F.R.D. 259, 263

(N.D. Cal. 2012). The only federal appellate court to address the doctrine by name

has rejected it. Serrano, 699 F.3d 884. Of the courts that have adopted the doctrine,

some shift the burden of proof to the party seeking discovery, see Degenhart v. Arthur

State Bank, No. CV411-041, 2011 WL 3651312, at *1 (S.D. Ga. Aug. 8, 2011) (court

order), others require the party seeking a protective order to establish good cause

through application of the apex factors, see Scott v. Chipotle Mexican Grill, Inc., 306

F.R.D. 120, 122 (S.D.N.Y. 2015) (court order); Dyson, Inc. v. SharkNinja Operating

LLC, No. 1:14-cv-0779, 2016 WL 1613489, at *1 (N.D. Ill. Apr. 22, 2016) (court


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order), while still others have developed a burden-shifting scheme, see Naylor Farms,

Inc. v. Anadarko OGC Co., No. 11-cv-01528-REB-KLM, 2011 WL 2535067, at *2

(D. Colo. June 27, 2011) (court order) (party seeking deposition initially must show

the executive has some personal knowledge of relevant issues, then burden shifts and

ultimately rests with executive invoking the apex doctrine). Simply put, the

“majority” of federal courts do not apply the apex doctrine in the way Umpqua

asserts. Rather, courts grapple with its apparent inconsistencies with discovery

principles by developing burden-shifting schemes or other rationales for its

application.

      States are equally inconsistent when it comes to the apex doctrine. Five states

have adopted the apex doctrine, see, e.g., In re Amend. to Fla. Rule of Civ. Proc.

1.280, 324 So. 3d 459 (Fla. 2021); State ex rel. Mass. Mut. Life Ins. Co. v. Sanders,

228 W. Va. 749, 724 S.E.2d 353 (2012); Alberto v. Toyota Motor Corp., 289 Mich.

App. 328, 796 N.W.2d 490, 494 (2010); Crown Cent. Petrol. Corp. v. Garcia, 904

S.W.2d 125, 128 (Tex. 1995); Liberty Mut. Ins. Co. v. Super. Ct., 10 Cal. App. 4th

1282, 13 Cal. Rptr. 2d 363, 365-67 (1992), while at least seven states have rejected it,

see, e.g., Gen. Motors, LLC v. Buchanan, 313 Ga. 811, 874 S.E. 2d 52, 64 (2022);

BlueMountain, 465 P.3d 122; Crest Infiniti II, LP v. Swinton, 2007 OK 77, ¶ 17, 174

P.3d 996, 1004; State ex rel. Ford Motor Co. v. Messina, 71 S.W.3d 602 (Mo. 2002);

Andrews v. Devereux Found., 2021 WL 3465051 (Pa. Super. Ct. Aug. 6, 2021)



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(unpublished) (mem.); Bradshaw v. Maiden, 2017 WL 1238823 (N.C. Super. Ct.

2017) (unpublished) (court order); Netscout Sys., Inc. v. Gartner, Inc., 2016 WL

5339454 (Conn. Super Ct. 2016) (unpublished). A Colorado court recently surveyed

the case law and concluded that the apex doctrine is declining in influence.

BlueMountain, 465 P.3d at 132.

       We conclude that the apex rule is not widely followed; its application is

inconsistent and its acceptance is waning.

III.   APPLICATION

       Having concluded that the apex doctrine is inconsistent with Washington

discovery law, we now turn to the protective order before us.

       We defer to a trial court’s discovery rulings and will not interfere absent an

abuse of discretion causing prejudice. Doe, 117 Wn.2d at 777. A trial court abuses its

discretion if its decision is manifestly unreasonable or exercised on untenable grounds

or for untenable reasons. Cedell, 176 Wn.2d at 694.

       Umpqua had the burden of establishing good cause existed to limit discovery.

“To establish good cause, the party should show specific prejudice or harm will result

if no protective order is issued.” McCallum v. Allstate Prop. & Cas. Ins. Co., 149 Wn.

App. 412, 423-24, 204 P.3d 944 (2009) (citing Dreiling v. Jain, 151 Wn.2d 900, 916-

17, 93 P.3d 861 (2004)). When possible, parties should submit affidavits and concrete




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examples demonstrating the specific facts showing harm; broad and conclusory

allegations of potential harm will not suffice. Id.; see also Serrano, 699 F.3d at 901.

      Other than citing CR 26(b)(1) and (c), Umpqua did not present specific facts or

argument as to how the depositions would be duplicative, burdensome, and harassing.

Nor did it show prejudice or harm would result if the protective order was not issued.

Instead it reiterated that the executives had no personal knowledge and that Stratford

could obtain the information elsewhere, without naming any particular source. This is

not enough to show good cause; thus, the trial court was well within its discretion to

deny the protective order under CR 26.

                                    CONCLUSION

      Washington has not adopted the apex doctrine, and we decline to do so now.

The trial court properly denied Umpqua’s motion for a protective order because it

failed to establish good cause under CR 26. Accordingly, we affirm the trial court, lift

the emergency stay, and remand for proceedings consistent with this opinion.




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WE CONCUR:




                                Bender, J.P.T.




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