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 United States District Court, W.D. Pennsylvania Filed December 15, 2011 Counsel Brian T. Himmel, David B. Fawcett, III, REED SMITH LLP, Reed Smith Centre, 225 Fifth Avenue, Pittsburgh, PA 15222, bhimmel@reedsmith.com, dfawcett @reedsmith.com, Steven 1. Cooper, Danielle J. Marlow, REED SMITH LLP, 599 Lexington Avenue, New Yark, NY 10022, scooper@reedsmith.com, dmarlow @reedsmith.com, Counsel for Plaintiffs Matthews International Corporation, Milso Industries Corporation and The York Group, Inc. Kathleen M. Anderson, Barnes & Thornburg LLP, 600 One Summit Square, Fort Wayne, IN 46802, kathleen.anderson@btlaw.com, John R. Maley, Barnes & Thornburg, 11 South Meridian Street, Indianapolis, IN 46204, jmaley@btlaw.com, A. Patricia Diulus-Myers, Martin J. Saunders, Jackson Lewis LLP, One PPG Place, 28thFloor, Pittsburgh, PA 15222, diulusmp@jacksonlewis.com, saunderm @jacksonlewis.com, Counsel for Defendant Batesville Casket Company. Valeria Calafiore Healy, Healy LLC, 154 Grand Street, New York, NY 10013, vch@healylex.com, Mindy T. Shreve, DeForest Koscelnik Yokitis Skinner & Berardinelli, 436 Seventh Avenue, 3000 Koppers Building, Pittsburgh, PA 15219, shreve@deforestlawfinn.com, Counselfor Defendant, Scott Pontone, Harry Pontone and Pontone Casket Company. Conti, Joy Flowers, United States District Judge SPECIAL DISCOVERY MASTER'S REPORT AND RECOMMENDATION AND MEMORANDUM DECISION RE: DEFENDANTS SCOTT PONTONE'S MOTION TO COMPEL PRODUCTION OF REDACTED DOCUMENTS PRODUCED BY PLAINTIFFS Introduction and Background *1 At the initial meeting with counsel for all Parties on October 27, 2011, the undersigned reviewed the nature and status of all pending discovery disputes between Defendant Scott Pontone and Plaintiffs. At that conference, counsel for Plaintiffs confirmed and stipulated that, to the extent that funeral home customers are relevant to the issues in this litigation, Plaintiffs are limiting their claims to the 37 customers in the New York metro region identified in, inter alia, Plaintiffs Second Request for Production of Documents Directed to Scott Pontone at RFP No. 15. Counsel for Plaintiffs confirmed that position in an e-mail to counsel for Defendant Scott Pontone dated October 31, 2011. A true and correct copy of that e-mail is attached hereto as Exhibit “A”. In addition, counsel for Plaintiffs agreed to submit to counsel for all other Parties the identity of the authors of any “Weekly Management Updates” produced by Plaintiffs in response to Defendants' requests for production and, to the extent available, the dates each such report was prepared or submitted. With the exception of those two resolutions, all other discovery disputes remain pending between Defendant Scott Pontone and Plaintiffs. The undersigned, therefore, established a schedule for submissions and replies with respect to Defendant Scott Pontone's Motion to Compel Plaintiffs to Produce Unredacted Copies of Responsive Documents Produced in Response to Scott Pontone's First and Amended Second Discovery Requests Directed to Plaintiffs.[1] By submission dated November 6, 2011, counsel for Scott Pontone submitted her formal motion pursuant to Rule 37 of the Fed.R.Civ.P. to compel Plaintiffs to produce non-privileged responsive documents in unredacted form. By submission dated November 14, 2011, counsel for Plaintiffs responded to Scott Pontone's Motion to Compel Production of Unredacted Documents. The undersigned thereafter granted counsel for Scott Pontone the right to file a reply to Plaintiffs' submission and said Reply was filed on November 22, 2011. The undersigned then scheduled and held a telephonic hearing and argument on the “redaction issue” on December 2, 2011 with counsel for all Parties participating.[2] Prior Course of Discovery Between Parties *2 To put this particular discovery dispute in context, it is important to review briefly the course of discovery between the Parties in this case. Plaintiffs originally sought expedited discovery when they filed their original Complaint in 2010. As a result, the Parties (Plaintiffs, Defendant Batesville Casket Company and Defendant Scott Pontone) produced a substantial quantity of documents to each other. Plaintiffs' production in the Fall of 2010 to Defendants Batesville and Scott Pontone amounted to almost 500,000 pages. In the course of this expedited document production, both Plaintiffs and Defendant Batesville redacted a limited amount of allegedly non-responsive, “business” information from selected documents. Apparently, no Party raised any objections to those limited redactions at the time of the expedited production. In connection with the expedited production of documents in this case, the Parties, through their respective counsel, negotiated and entered into an Amended Stipulated Protective Order on November 4, 2010, which this Court adopted as an Order of Court on February 4, 2011. In that Protective Order, the Parties recited the following purposes for the Order: 1. This Stipulated Protective Order is necessary to preserve and maintain the confidentiality of certain limited confidential and proprietary information that may disclosed or obtained by the Parties in the course of discovery.”; and 2. This Stipulated Protective Order is also necessary to preserve and maintain the confidentiality of certain limited personal, private information (such as financial information) regarding Defendants Scott Pontone and non-parties ...” For information deemed proprietary business information, the Protective Order gave any Party the right to designate documents containing such information as “Attorney's Eyes Only Information” or “Attorney's Eyes Only”. See, Stipulated Protective Order, ¶ 5(b). On pages 10 and 11 of the Stipulated Protective Order, the Parties listed several “RIGHTS RESERVED”. Among the RIGHTS RESERVED are the following: 16. By entering into this Stipulated Protective Order, the Parties do not intend to waive any objections raised in response to discovery. Nor does this Stipulated Protective Order in any way obligate any Party to produce any specific documents or records which a Party deems inappropriate for production; 17. Nothing in this Stipulated Protective Order shall be construed as precluding a Party from seeking additional protection from the Court against the disclosure and production of any confidential information, including an Order that such information not be disclosed or that it be disclosed only in a designated manner. Prior to the scheduled hearing on Plaintiffs' Motion for Preliminary Injunction (January 10, 2011), Plaintiffs withdrew that Motion and the case moved from an “expedited” discovery process to a conventional discovery process and time period. Subsequent to Plaintiffs withdrawal of its Motion for Preliminary Injunction, Defendant Scott Pontone served extensive amended second discovery requests. Plaintiffs served objections and answers to the amended second discovery requests on May 20, 2011. A true and correct copy of Plaintiffs' Objections and Answers to Defendant Scott Pontone's Amended Second Discovery Request are attached hereto as Exhibit “B”. Many of the requests for production (“RFP”) contained in Defendant Scott Pontone's Amended Second Discovery Request were very broad.[3] In response to these broad requests for production, Plaintiffs set forth objections and, without waiving those objections, committed to produce responsive documents based on their description of the issues, subject matter, individuals and time periods relevant to the claims and defenses in this case. Predictably, when Plaintiffs made their production to Defendant Scott Pontone in July 2011, supplemented with additional documents in October of 2011, Board minutes, marketing documents, weekly management updates, e-mail communications, strategic planning documents and annual business reviews were heavily redacted, arguably consistent with the objections set forth in Plaintiffs Objections and Answers to Defendant Scott Pontone's Amended Second Discovery Requests. Decision and Analysis *3 Production of documents responsive to a request for production is governed by Fed.R.Civ.P. 34. Rule 34(b) sets forth the procedure to be followed in both responding and objecting to requests for production. Rule 34(b)(2)(C) permits parties, like Plaintiffs in this case, to object to a part of a request and permit inspection (or produce for inspection) documents responsive to the part not objected to. However, in producing documents responsive to a request, Rule 34(b)(2)(E) provides: Unless otherwise stipulated or ordered by the Court, ... (i) A Party must produce documents as they are kept in the usual course of business, all must be organized and labeled to correspond to the categories in the request. As this Court, per District Judge Terrance F. McVerry, observed in Orion Power Midwest, LP v. American Coal Sales, Co., 2008 WL 4462301 (W.D. Pa. Sept. 30, 2008), “it is at least implicit that the duty to ‘produce documents as they are kept in the usual course of business' includes the substantive contents of those documents. Id. at 2. In Orion Power, Judge McVerry, in addressing a very similar dispute regarding redacted documents, held: There is no express or implied support for the insertion of another step in the process (with its attendant expense and delay) in which a party would scrub responsive documents of non-responsive information. Id. at *2. See also, Hageman v. Accenture, LLP, 2011 LEXIS 61727 at *4 (D. Minn. June 7, 2011) (Unless the responding party can show that disclosure of the irrelevant information would harm the responding party, Rule 34 does not permit the redaction of irrelevant portions of items, documents, electronically stored information and designated tangible things.) Despite the absence of any provision in Rule 34 authorizing the redaction of non-responsive information from documents produced in response to a request for production, it is not uncommon for such redactions to be made as evidenced by the fact that both Defendant Batesville and Plaintiffs did so in their respective productions in this case. Typically, counsel for the Parties reach agreement on the scope of redactions and the manner in which redactions will be conducted and logged. Failing agreement, the Parties typically submit the matter to the Court in advance of production in order to avoid post-production disputes of this nature. In this case, the Parties negotiated a comprehensive Protective Order which provided confidentiality protection for sensitive business and propriety information but, through its “RIGHTS RESERVED” section, did not obligate a party to rely solely on designations to protect confidential business or proprietary information. Here, the better course would have been for counsel to meet and confer regarding the redaction of allegedly non-responsive information and, failing to reach agreement, submit the issue to the Court prior to production. Unfortunately, that process did not occur in this case so the issue must be decided post-production.[4] The inherent difficulty with redacting information from responsive documents based on the position that the information redacted is non-responsive and irrelevant is that every Party in litigation (particularly contentious litigation such as this case) has a different view as to what information is relevant.[5] *4 Although Defendant Scott Pontone and Plaintiffs, in their respective submissions, cite and discuss several cases in which courts address the redaction of documents by one party or another, none of the cases, with the possible exception of the Orion Midwest case discussed previously, is dispositive, because the courts in those cases either determined that the existence of a “Attorney's Eyes Only” designation in a Protective Order adequately protected the party or permitted limited redaction of certain documents following the court's own review of the limited number of documents at issue. See, e.g., City of St. Petersburg v. Total Containment, Inc., 2008 WL 1995298 (M.D. Pa. May 5, 2008); New England Life Ins. Co. v. Linkowski, 2007 WL 2317459 (W.D. Pa. Aug. 7, 2007); Aqua Products, Inc. v. AquaQuality Pool & Spa, Inc., 2006 WL 2884913 (E.D. N.Y. Oct. 10, 2006); C.A. Muer Corp. v. Big River Fish Co., 1998 WL 488007 (E.D. Pa. Aug. 10, 1998). From a practical standpoint, the goal in any discovery process is to permit each of the Parties to obtain responsive and relevant documents and information that they can use to thoroughly address, through depositions and other discovery methods, all of the claims, defenses and issues reasonably framed and identified in the Complaint and Answers. In each of my decisions regarding the discovery disputes between the Parties in this case, I have attempted to make decisions that promote this purpose without allowing parties to waste time and resources on discovery, whether document production or depositions, that has no bearing on any conceivable issue in this case and is not reasonably likely to lead to the discovery of other documents or information that could bear on any issue in this case.[6] I agree with counsel for Defendant Scott Pontone that there is no support in Fed.R.Civ.P. 34 or the cases interpreting that Rule authorizing Plaintiffs' wholesale redaction of otherwise responsive documents in this case. Because the Parties have provided me with adequate examples of the type of documents redacted and the extent of redactions, however, I have been able to evaluate whether some of Plaintiffs' redactions are justified based on the absence of any conceivable relevance to the issues in the case. My ruling on Defendant Scott Pontone's Motion to Compel Plaintiffs to Produce Unredacted Copies of those documents is, therefore, as follows: 1. Plaintiffs shall produce unredacted copies of all e-mails or attachments to e-mails and calendars unless the redaction is based on attorney-client privilege or attorney work product. See, e.g., York-0438862 through York-0438868 and York-0438908 through York-0438917 as set forth in Exhibit 5 to Defendant Scott Pontone's November 22, 2011 submission; 2. Plaintiffs shall produce unredacted versions of all responsive contracts produced to Defendants. See, e.g., York-0442820 through York-0442830 as set forth in Exhibit 5 of Defendant Scott Pontone's November 22, 2011 submission; *5 3. Plaintiffs shall produce unredacted versions of all weekly management updates that address in whole or in part the metro New York region (as defined by Plaintiffs). See, e.g., York-044256 through York-044257 as set forth in Exhibit 5 of Defendant Scott Pontone's November 22, 2011 submission; 4. Plaintiffs shall produce unredacted versions of ail responsive Board of Directors meeting minutes or, in the alternative, shall submit such Board of Directors meeting minutes to the undersigned for an in camera review, at Plaintiffs' sole cost, to determine those irrelevant and non-responsive portions that can be properly redacted; 5. Plaintiffs may redact marketing reports, strategic planning documents, sales reports and pricing information that does not relate in any way to the death services business in the New York metro region but any redacted page must, at a minimum, retain a heading or other sufficient language to indicate the nature of the information being redacted. For example, the completely redacted pages such as those set forth in Exhibit 8 of Defendant Scott Pontone's November 22, 2011 submission are not acceptable; and 6. With respect to any redactions made by Plaintiffs in accordance with the above protocol, Plaintiffs shall supply counsel for Defendants a separate and complete redaction log describing the nature of the information redacted and the reason for the redaction on a document by document basis. This will allow counsel for any of the Defendants to specifically challenge particular redactions in the event they believe the redaction is unwarranted. The undersigned recognizes that Plaintiffs' compliance with the above decision may result in Plaintiffs redesignating unredacted documents as “Attorney's Eyes Only”. Obviously, any such change in designation is permissible under the terms of the Parties' Protective Order. If Plaintiffs wish to have me undertake the in camera review of responsive Board minutes as per the decision in subparagraph 3 above, they should so indicate within the time period for filing objections to this Report and Recommendation. Conclusion As noted earlier, my decision on this “redaction issue” is meant to provide counsel for Defendant Scott Pontone and the other Defendants sufficient information to meaningfully conduct discovery on the issues framed by the pleadings in this case without needlessly exposing sensitive business, financial or personal information that, under even the most liberal interpretation of the claims and defenses in this case, cannot possibly be relevant. Of course, in a contentious case such as this one involving competitors and employees in a competitive business and marketplace, there is no way to avoid the production of sensitive business information because frankly, some of that information is relevant to the claims and defenses asserted. For that reason, the Parties have negotiated and the Court has entered the Stipulated Protective Order which should provide adequate protection to the Parties. Respectfully submitted by: /s/ Mark D. Shepard Mark D. Shepard Special Discovery Master Babst, Calland, Clements and Zomnir, P.C. Two Gateway Center, 6th Floor Pittsburgh, PA 15222 (412) 394-5400 mshepard@babstcalland.com Firm ID No. 812 Footnotes [1] The undersigned also requested counsel for Scott Pontone to submit a comprehensive list of discovery disputes on or before November 15, 2011. The undersigned subsequently extended the submission deadline to November 22, 2011. In her November 22, 2011 submission, counsel for Scott Pontone identified four remaining disputes. This Report and Recommendation addresses the dispute relating to Plaintiffs Redaction of allegedly non-responsive information from various documents on the grounds that the non-responsive information is sensitive and confidential business information. The undersigned has established procedures and submission schedules for the purposes of resolving the remaining disputes identified in the November 22, 2011 submission. [2] As per Paragraph 4 of this Court's October 12, 2011 Order appointing the undersigned, the December 2, 2011 argument and hearing regarding the “redaction” issue was recorded by a court reporter. [3] Examples include “RFP 4: Produce a copy of all agenda, minutes and transcripts for each Board of Director meeting of York, Milso and Matthews from January 1, 2006 to the present; RFP 5: Produce a copy of all drafts, notes and communications relating to discussing, referencing or used to prepare the minutes of the Board of Directors meetings for each of Matthews, York and Milso from January 1, 2007 to the present; RFP 51: Produce all “annual business reviews,” as that term is used in document York-0000929, of Matthews, York and/or Milso from June 1, 2007 to the present. [4] In fairness to counsel for all the Parties, the Court's appointment of the undersigned as a Special Discovery Master occurred somewhat in the middle of this dispute which, at a minimum, was referenced by counsel for Defendant Scott Pontone in the Amended Rule 26(f) Report filed in this case. [5] In fact, in reviewing the transcript of the April 18, 2011 hearing before this Court, I noted that counsel for Defendant Scott Pontone argued strenuously that portions of communications or documents between Scott Pontone and Jacqueline Pesce would be irrelevant and non-responsive because they dealt with personal matters (such as Mr. Pontone's divorce) and, therefore, should be immune from production. Defendant Batesville also redacted from responsive documents, sensitive business information that it determined was non-responsive and irrelevant. Thus, it is clear that counsel for all the Parties in this case has argued at one time or another that aspects of information in otherwise responsive documents are not relevant to the issues in this case. [6] Counsel for Defendant Scott Pontone both in her submission and in her oral argument to the undersigned suggested that certain of the redacted information in documents produced by Plaintiffs may be relevant to an as yet unasserted counterclaim in this case. Because the scope of discovery can only be determined based on what has been pled as opposed to what may be pled, I have not considered any threatened counterclaims in rendering my decision on the “redaction issue”. If Defendant Scott Pontone or any other Defendant should file a counterclaim against Plaintiffs, the counterclaim and any defenses to it may affect the scope of discovery going forward between the Parties. As the old saying goes, however, “we will cross that bridge when and if we come to it.”