The York Group, Inc., Milso Industries Corporation, and Matthews International Corporation, Plaintiffs, v. Scott Pontone, Harry Pontone, Batesville Casket Company, Inc., and Pontone Casket Company, LLC, Defendants CIVIL DIVISION No. 2:10-CV-1078-JFC Filed December 05, 2012 Counsel Brian T. Himmel, David B. Fawcett, III, Reed Smith LLP, Pittsburgh, PA, Danielle J. Marlow, Steven I. Cooper, Reed Smith LLP, New York, NY, for Plaintiffs. Mindy J. Shreve, DeForest Koscelnik Yokitis Skinner & Berardinelli, A. Patricia Diulus-Myers, Jackson Lewis P.C., Pittsburgh, PA, Valeria Calafiore Healy, Healy LLC, New York, NY, John R. Maley, Larry A. Mackey, Barnes & Thornburg LLP, Indianapolis, IN, Kathleen M. Anderson, Barnes & Thornburg LLP, Fort Wayne, IN, for Defendants. Conti, Joy Flowers, United States District Judge SPECIAL DISCOVERY MASTER'S REPORT AND RECOMMENDATION AND MEMORANDUM DECISION RE: 1. PONTONE DEFENDANTS' MOTION TO COMPEL PLAINTIFFS TO RESPOND TO REQUEST NOS. 16, 26 AND 39 AND ENFORCE MY PRIOR RULING REGARDING REQUEST NO. 10 OF PONTONE CASKET COMPANY'S THIRD AND HARRY PONTONE' FIFTH DISCOVERY REQUESTS TO PLAINTIFFS; 2. PONTONE DEFENDANTS' MOTION TO COMPEL PLAINTIFFS TO RESPOND TO CERTAIN COUNTERCLAIM-RELATED DISCOVERY REQUESTS; AND 3. PONTONE DEFENDANTS' MOTION TO ENFORCE PRIOR AGREEMENT BETWEEN PONTONE DEFENDANTS AND PLAINTIFFS AND ENFORCE PRIOR RULING FROM REPORT AND RECOMMENDATION AT DCK. NO. 297 I. Introduction and Background *1 By three separate letter submissions dated November 12, 2012, the Pontone Defendants submitted two Motions to Compel and a Motion to Enforce as described above in the title to this Report and Recommendation. By letter submissions dated November 19, 2012, Plaintiffs responded to both Motions to Compel and the Motion to Enforce. Given the limited time remaining for fact discovery in this case and my commitment to the Parties and the Court to expedite decisions regarding these remaining discovery disputes, I will address each of these Motions in a single combined Report and Recommendation. II. Decision and Analysis A. Pontone Defendants' Motion to Compel Plaintiffs to Respond to Request Nos. 16, 26 and 39 and to Enforce Prior Ruling Regarding Request No. 10 of Pontone Casket Company's Third and Harry Pontone's Fifth Discovery Requests to Plaintiffs It is my understanding that, pursuant to the Court's direction following an August 31, 2012 hearing relating to the discovery requests contained in Pontone Casket Company's Third and Harry Pontone's Fifth Discovery Requests, counsel for Plaintiffs and the Pontone Defendants conducted a meet and confer at which Plaintiffs agreed to respond to the majority of the discovery requests but maintained their objections to the four requests at issue in the Pontone Defendants' Motion to Compel. In evaluating the discovery requests at issue with respect to this Motion to Compel, I am guided by the fact that, despite the numerous claims and counterclaims that have been exchanged between the Parties in this litigation, at its core, this case is about a selected number of funeral homes in the New York Metropolitan market with respect to which Plaintiffs claim they lost business or had to offer increased discounts because of alleged misdeeds by Defendants. Defendants, in both their defenses to Plaintiffs' claims and their Counterclaims, allege just as passionately that any loss of business suffered by Plaintiffs is a result of permissible competition and/or independent customer choices based on price, quality or service. Although counsel for the Parties may argue that there are numerous other “sub-issues” and back stories that are relevant to the claims, counterclaims and defenses in this case, experience with the Parties has brought me to the conclusion that the description above adequately captures what this case is about. Against that backdrop, I evaluate each of the discovery requests at issue. 1. Request No. 16: Produce all documents and communications regarding consignments to any of the 37 Funeral Homes at Issue including the date and result of any audits of such consignments from 2007 to the present. In their Motion to Compel, Pontone Defendants cite three reasons for the relevance of this consignment information. They contend it is relevant to (i) their counterclaims; (ii) Plaintiffs' contentions regarding what they sold to the funeral homes at issue; and (iii) Plaintiffs' knowledge regarding sales of products by other manufacturers to the funeral homes. I have carefully evaluated the counterclaims asserted by the Pontone Defendants in this case and fail to see how “consignment information” is relevant to any of those counterclaims. I also see no relevance to the scope of Plaintiffs' knowledge regarding sales of products by other manufacturers to funeral homes. As for Plaintiffs' actual sales of caskets and other products to the funeral home customers put at issue in this litigation, it is my understanding that Plaintiffs have produced all of the actual sales information, including price and cost information, sufficient for Defendants to challenge the damage calculations submitted by Plaintiffs. In my view, the number of caskets consigned to a particular funeral home is not relevant to the damage issues in this case. *2 Based on the record before me, therefore, I recommend that the Pontone Defendants' Motion to Compel be denied. If the Pontone Defendants could somehow establish some relevance with respect to consignment information, I note for the benefit of the Court that any such information should be limited to those funeral homes for which Plaintiffs are seeking damages in this case and to a time period that corresponds to the time period for which Plaintiffs are seeking damages. 2. Request No. 26: Produce all documents and communications regarding all funeral home customers “converted”, in whole or in part, from Batesville's to Matthews' customers during the time period from June 1, 2007 to the present, including the gross sales, net sales, “margin”, material costs, sales person's bonuses, historical and current discount amounts and effective dates, and casket purchase quantities for such funeral homes. Following the September 11, 2012 meet and confer between counsel for Plaintiffs and the Pontone Defendants, it is my understanding from the Parties' submissions that the Pontone Defendants agreed to limit this request to the customers in the New York Metropolitan area listed on Exhibit C to Scott Pontone's Key Employee Contract. It is also my understanding that there are hundreds of such customers listed on Exhibit C to that contract. In their response, Plaintiffs state that they provided this information for the 37 customers in the New York Metropolitan area that were originally put at issue in this case. They also state that they have produced this information for certain other customers designated by the Pontone Defendants and Batesville. As a practical matter, I fail to understand how Plaintiffs are to determine whether or not a particular funeral home customer has been “converted” from Batesville to Plaintiffs. If that customer was buying 100% of its requirements from Batesville and now is purchasing 50% from Plaintiffs, does that constitute a conversion? Does a conversion require a complete change from purchasing Batesville's products to purchasing solely Plaintiffs' products or something in between those two examples? The request also begs the question of whether a change in a customer's buying pattern is a result of “conversion” or simply the customer's choice based on whatever factor that particular customer believes is most important (price, quality, service, relationship with salesperson or a combination of these factors). In my view, this request is overly broad, seeks information and documents that are not relevant to the more narrowly defined claims and defenses in this case and is not calculated to lead to discovery of relevant and admissible information. I take at face value Plaintiffs' representation that they have produced the requested information relating to the 37 funeral homes at issue and selected additional funeral homes. From that information, Defendants have all they need to make arguments that the changes in buying patterns by a particular funeral home from one manufacturer to another are the result of normal competitive practices and activities and not the result of any alleged breach of fiduciary duties and unfair completion as alleged by Plaintiffs in this case. It is my recommendation, therefore, that the Pontone Defendants' Motion to Compel further a response to this request be denied. 3. Request No. 39: Produce a list of all free-of-charge giveaways given to customers in the NY Metro Area as testified by Plaintiffs' witnesses during the May 2012 depositions. *3 In their Motion to Compel, the Pontone Defendants principally argue that the information and documents sought in this request are relevant to Plaintiffs' damage calculations, in particular costs to be potentially deducted from Plaintiffs' damage calculations. In response, Plaintiffs argue that this request seeks information that is irrelevant and that it appears designed to obtain Plaintiffs' confidential and proprietary information regarding hundreds of its customers over a five year period. In trying to rectify the Parties' opposing positions with respect to this discovery request, I again focus on the narrowed damage claims that Plaintiffs have asserted in this case and the information that Defendants need and/or are entitled to in order to defend against those claims. With that in mind, to the extent Plaintiffs provided giveaways to any of the funeral home customers for which they are seeking damages in this case, documents relating to those giveaways should be produced to Defendants for the time period for which Plaintiffs are seeking those damages. Additionally, to the extent Plaintiffs instituted any giveaway program that was applicable to all New York Metropolitan area funeral home customers during the time period for which Plaintiffs are seeking damages in this case, documents relating to any such programs should also be produced to Defendants. With those limited exceptions, I recommend that the remainder of the Pontone Defendants' Motion to Compel a response to this request be denied. 4. Request No. 10: Produce all documents, analyses, or communications relating to amounts or trends in customer discounts during the years 2009-2012. This request was addressed in my Report and Recommendation filed at Dck. No. 277 in July of 2012. In the Report and Recommendation, I denied Plaintiffs' Motion to Strike this particular request. In their response to the Pontone Defendants' Motion to Compel with respect to this request. Plaintiffs assert that they did respond to this request with regard to funeral home customers in the New York Metropolitan area. Plaintiffs also note that they have produced a number of board minutes, strategic plans, and similar type documents where market analysis is addressed, including on a nationwide basis. Frankly, I read this document request very narrowly. If Plaintiffs conducted and/or compiled an analysis showing an industry-wide type trend in customer discounts driven by market forces in the referenced years, that type of document should be produced to Defendants. Documents, however, that may relate to discounting in particular markets outside of New York or that discuss discounts generally or general market trends or forces that may affect the prices charged funeral home customers by Plaintiffs and other competitors in the market place are not responsive to this request. Hopefully, with that explanation and clarification, Plaintiffs can determine whether they have any additional documents to produce responsive to this request. As narrowed above, Pontone Defendants' Motion to Compel a further response to this request is granted. B. Pontone Defendants' Motion to Compel Plaintiffs to Respond Fully to Certain Counterclaim-Related Discovery Requests According to Exhibit D attached to Pontone Defendants' Motion to Compel, this Motion seeks to compel responses to six separate requests for production. For ease of the Court's review and understanding, I have attached as Exhibit “A” to this Report and Recommendation the chart compiled by the Pontone Defendants showing the requests at issue and the Parties' respective arguments regarding each request. In their Response in Opposition to this Motion, Plaintiffs note that, in response to each of the discovery requests at issue, they responded with reference to documents and information previously produced in response to earlier discovery requests and they indicated that additional documents would be produced pursuant to the counterclaim ESI protocol agreed to by the Parties, as summarized in the Declaration of Brian Himmel in this case.[1] *4 Based on my review of the requests at issue and Plaintiffs' response to those requests, it is clear that Plaintiffs specifically refer the Pontone Defendants to previous discovery responses in response to Request Nos. 11, 18, 28, 29 and 50. Although the Pontone Defendants suggest in their Motion that they believe Plaintiffs may have additional, non-privileged information responsive to these requests, Plaintiffs response is consistent with the applicable Rules of Civil Procedure and, a Motion to Compel cannot be granted based on mere speculation by one Party that another Party must have more documents than those produced to date. See Martin v. Fort Wayne Police Dept., 2012 WL 5878874 at * 1 (N.D. Ind. Nov. 21, 2012) (denying plaintiff's motion to compel based upon speculation that defendant was withholding documents because “unsupported speculation is in sufficient to support [a] motion to compel.”); Conley v. U.S., 2011 WL 5326133 at *3 (S.D. Ohio Nov. 4, 2011) (holding that speculation cannot form the basis of a motion to compel); Trilegiant Corp. v. Sitel Corp., 275 F.R.D. 428, 436 (S.D.N.Y. 2011) (“Mere speculation as to the existence of additional documents is insufficient to warrant an order to compel.”); Susko v. City of Weirton, 2011 WL 98557 at *4 (N.D.W. Va. Jan 12, 2011) (“[M]ere speculation that documents exist is not a sound basis for a motion to compel production.”). In their response, Plaintiffs also acknowledge their obligation to supplement their responses to the Pontone Defendants' Request for Production with any additional documents discovered through the ESI searches being conducted by Plaintiffs as part of the counterclaim discovery in this case. As established by Mr. Himmel's Declaration, responsive documents generated through that search process have already been produced to the Defendants. The only request at issue, to which the Plaintiffs did not respond by referring to documents and information previously produced in response to prior discovery requests, is Request No. 39. That request provides as follows: Produce all documents discussing casket branding and brand use following York's acquisition of Milso, from January 1, 2006 to the present. Plaintiffs object to this request on the basis that it is overly broad and unduly burdensome and seeks information not relevant to the claims or defenses in this litigation, nor reasonably calculated to lead to discovery of admissible evidence, notwithstanding the filing of the Counterclaims. As an initial matter, I agree that the request for production as drafted is overly broad and I fail to see the relevance of this request to the substantive counterclaims filed by the Pontone Defendants in this case. I fail to see how the manner in which Plaintiffs may have branded their caskets is relevant to the Counterclaims asserted by the Pontone Defendants or any of the alleged damages they have suffered. As I noted in my earlier Report and Recommendation at Dck. No. 359, none of the Pontone Defendants would appear to have any standing to raise claims based on the manner in which Plaintiffs brand their caskets. Any such claims would uniquely belong to Plaintiffs' customers. Additionally, based on my review of the Brian Himmel Declaration and the nature of the search terms that were utilized in the counterclaim ESI searches run by Plaintiffs, I have determined that any documents responsive to the issue of Batesville produced caskets being marked as Plaintiffs' caskets would have been produced. As a result of the above analysis, therefore, it is my recommendation that the Pontone Defendants' Motion to Compel Additional Responses to the Requests addressed in this section of my Report and Recommendation, be denied. C. Pontone Defendants' Motion to Enforce Prior Agreement Between Pontone Defendants and Plaintiffs Regarding Report and Recommendation at Dck. No. 297 In this Motion to Enforce, counsel for the Pontone Defendants complains that Plaintiffs have not yet provided an amended response to Request for Production No. 7 to reflect Plaintiffs' Stipulation that “all the confidential information that Plaintiffs claim to be at issue in this case is owned by Plaintiff Milso Industries Corporation.” Additionally, the Pontone Defendants seek enforcement of the directive in my Report and Recommendation at Dck. No. 297 that Plaintiffs confirm in writing to Defendants whether or not they are seeking a specific damages award for alleged damage to good will. In exchange for that written confirmation, my previous ruling sustained Plaintiffs' objections to the records requested in Request for Production No. 8.[2] *5 In response to the Pontone Defendants' Motion to Enforce, Plaintiffs, through counsel, submitted a letter dated November 19, 2012 in which counsel confirms that Plaintiffs are not seeking recovery for damage to good will. A copy of Plaintiffs' November 19, 2012 letter is attached as Exhibit “C”. That letter adequately serves as the required written confirmation in conformance with my Report and Recommendation at Dck. No. 297. As for the confirmation that all the confidential information that Plaintiffs claim to be at issue in this case is owned by Plaintiffs Milso Industries Corporation, I find that the August 27, 2012 letter from Valeria Healy to Danielle Marlow confirming Plaintiffs' stipulation, to which Plaintiffs have never objected, constitutes adequate confirmation of this stipulation which is binding on Plaintiffs, For benefit of the Court, I have attached as Exhibit “D” to this Report and Recommendation a copy of the August 27, 2012 letter confirming Plaintiffs' stipulation on this issue. III. Conclusion For the reasons detailed above, Pontone Defendants' Motion to Compel responses to Request for Production Nos. 16, 26, 39 and 10 is denied in part and granted in part with the limitations described above with respect to Request for Production No. 10. The Pontone Defendants Motion to Compel additional responses to counterclaim related discovery identified on Exhibit A to this Report and Recommendation, is denied. Finally, the Pontone Defendants' Motion to Enforce is denied as moot given the Plaintiffs' written confirmations and/or stipulations as identified in this Report and Recommendation and attached exhibits. Respectfully submitted by: /s/ Mark D. Shepard Mark D. Shepard Special Discovery Master Babst, Calland, Clements and Zonmir, P.C. Two Gateway Center, 6th Floor Pittsburgh, PA 15222 (412) 394-5400 mshepard@babstcalland.com Footnotes [1] Mr. Himmel's Declaration is attached as Exhibit “B” to this Report and Recommendation. [2] Request No. 8 sought “all records of the amortization payments being made by Milso for the customer list acquired from old Milso as testified by Mr. Bartolacci at March 16, 2012 Hearing.”