Commercial Litigation and Arbitration

Affidavits/Declarations on Summary Judgment — Requirement of Personal Knowledge

How does a CEO know anything? They are not in the field; they are not on the floor; they are not compiling the numbers; but they are required to be intimately acquainted with sales, operations and finance. Does that mean they lack firsthand knowledge sufficient to permit them to testify? Or is there a sphere of knowledge that CEOs — and other corporate executives — are expected to know and act on in the ordinary course of business and as to which, as a result, they are permitted to testify?

The University of Kansas (“KU”), in University of Kansas v. Sinks, 2008 U.S. Dist. LEXIS 23765 (D. Kan. Mar. 19, 2008), was suing to prevent unauthorized sale of KU apparel. In support of its motion for summary judgment, the plaintiff offered declarations from the Trademark Licensing Director for KU and from the Vice President and Associate General Counsel of the Collegiate Licensing Company (“CLC”). The defendants moved to strike the declarations as not based on firsthand knowledge because each began with the statement that "the facts set forth in this Declaration are based on my personal knowledge, review of corporate records, or interviews with appropriately knowledgeable persons." Although the Court denied the motion, it was not without difficulty.

Defendants complain that the attestation clauses in these declarations refer not only to personal knowledge, but also to interviews with others and reviews of corporate documents. Defendants ask how they are to know which source of information formed the basis of each statement in the declarations. In their response, plaintiffs represent that although they reviewed corporate records and spoke to others in preparing the background of issues discussed in the declarations, "each of the facts set forth therein were and are based upon their personal knowledge." Indeed, plaintiffs have filed supplemental declarations stating as much. The Court is unable to conclude, based on the record, that these declarants' statements are not based on personal knowledge.... The statements made by them are not conclusory statements outside the realm of their knowledge-base given their respective positions within KU and CLC. To the extent that each statement in the declarations is supported by corporate documents, those are authenticated, attached as exhibits and cited properly as such.

I consider that the problematic part of the introductory language was the reference to “interviews with appropriately knowledgeable persons.” CEOs and other corporate officers do in fact learn things this way. For that matter, I don’t know who the senior Senator from New York is other than through hearsay. Reference to corporate documents, which can be affixed, are much safer because the declaration has the benefit of authenticating the documents which, in turn, beef up the declaration. A safer introductory sentence for the declaration would appear to be: "the facts set forth in this Declaration are based on my personal knowledge, including review of corporate records, true and correct copies of which are attached.”

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