The York Group, Inc., Milso Industries Corporation, and Matthews International Corporation, Plaintiffs, v. Scott Pontone, Harry Pontone, Batesyille 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 November 16, 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. Shepard, Mark D., Special Discovery Master SPECIAL DISCOVERY MASTER'S REPORT AND RECOMMENDATION AND MEMORANDUM DECISION RE: PLAINTIFFS' MOTION TO COMPEL PONTONE DEFENDANTS TO PROVIDE RESPONSES TO PLAINTIFFS' FIRST CONSOLIDATED DISCOVERY REQUESTS REGARDING THE COUNTERCLAIMS AND TO COMPEL PRODUCTION OF DOCUMENTS BY PONTONE CASKET COMPANY PURSUANT TO REPORT & RECOMMENDATION DATED JULY 24, 2012 I. Introduction and Background *1 By letter dated October 19, 2012, Plaintiffs, pursuant to Federal Rule of Civil Procedure 37, moved to compel the Pontone Defendants to provide responses to Plaintiffs' First Consolidated Discovery Requests Regarding the Counterclaims and to Compel Pontone Casket Company's (“PCC”) Production of Documents Pursuant to Special Discovery Master's Report & Recommendation dated July 24, 2012 (“Motion to Compel”). The Pontone Defendants timely responded to Plaintiffs' Motion to Compel via letter dated October 26, 2012. Although Plaintiffs refer to their complete First Consolidated Discovery Requests regarding the Counterclaims in their Motion to Compel, they only seek to compel answers to the interrogatories and requests for production contained therein. Exhibit “A” attached to Plaintiffs' Motion to Compel only contains copies of the Pontone Defendants' Objections and Responses to Interrogatories and Requests for Production. The undersigned, therefore, will not address Plaintiffs' Requests for Admission (which, as I understand, were served contemporaneously with the interrogatories and requests for production) in this Report & Recommendation. II. Discussion and Analysis A. Authority for Plaintiffs to Conduct Written Counterclaim Discovery As an initial matter, the Pontone Defendants argue that Judge Conti's comments during the August 31, 2012 hearing before her preclude Plaintiffs from conducting any written counterclaim discovery without leave from the Court to do so. The foundation of the Pontone Defendants' argument is that Judge Conti entered an Order on August 31, 2012 that, either explicitly or by implication, precluded Plaintiffs from conducting counterclaim discovery. The only docket entry by the Court following the August 31, 2012 hearing is a Minute Entry filed on September 4, 2012. Nothing in the text of that Minute Entry states or suggests that the additional time granted by the Court for counterclaim-related discovery is limited to discovery only by the Pontone Defendants. Additionally, any argument that the Court meant to preclude Plaintiffs from conducting counterclaim discovery is inconsistent with Judge Conti's affirmance of my prior Report and Recommendation authorizing time limited depositions of Defendants Scott Pontone and Harry Pontone regarding their counterclaim allegations. It is my determination, therefore, that Plaintiffs were not precluded from serving their First Consolidated Discovery Requests Regarding the Counterclaims on the Pontone Defendants. B. Alleged Deficiencies in Pontone Defendants' Responses to Counterclaim Interrogatories The Pontone Defendants argue that they have no obligation to respond to Plaintiffs' counterclaim-related interrogatories because Plaintiffs have already served more than the 25 written interrogatories authorized by Fed.R.Civ.P, 33(a)(1). As the Pontone Defendants correctly note, Fed.R.Civ.P. 33(a)(1) requires a Party to obtain leave of Court to serve additional interrogatories. Leave of Court may be granted to the extent consistent with Rule 26(b)(2). *2 In this circumstance, I find that Judge Conti's Minute Entry following the motion hearing held before her on August 31, 2012 constitutes the Leave of Court required by Rule 33 as she authorized all discovery requests that require a 30-day response to be served by September 9, 2012. Additionally, given the number of allegations in the Counterclaim and the fact that the Counterclaim was filed at the end of the original fact discovery deadline, I find that, allowing Plaintiffs to serve these additional 20 Counterclaim-related interrogatories on each of the three Counterclaim Plaintiffs (Scott Pontone, Harry Pontone and PCC), is consistent with Rule 26(b)(2). Consistent with the standards identified in Rule 26(b)(2), I evaluate below each of the challenged interrogatory responses. 1. Interrogatories Requesting Information Regarding Specific Paragraphs of the Counterclaims As Plaintiffs correctly note in their Motion to Compel, interrogatory nos. 2 through 11 and 14 through 20 ask each of the Counterclaim Plaintiffs (Scott Pontone, Harry Pontone & PCC) to provide specific facts or evidence supporting a specific statement(s) or allegation(s) in the Counterclaims. First, as a practical matter, although Plaintiffs have served the same 20 interrogatories on each of the three Counterclaim Plaintiffs, to the extent I rule that a more specific response should be provided to a particular interrogatory, the Pontone Defendants can respond to that interrogatory collectively so long as each Counterclaim Plaintiff provides a Verification for the combined interrogatory responses. After reviewing in detail the interrogatories referenced above, it is my determination that the Pontone Defendants collectively should provide answers to the following interrogatories regarding the statements or allegations in their Counterclaims: interrogatory no. 2, interrogatory no. 3, interrogatory no. 4, interrogatory no. 5, interrogatory no. 8, interrogatory no. 14, interrogatory no. 19 and interrogatory no. 20. In my judgment, the remaining interrogatories in this category (interrogatory Nos. 6, 7, 9, 10, 15, 16, 17 and 18) can be answered by either or both Scott Pontone and Harry Pontone in their upcoming Counterclaim depositions. Scott Pontone and Harry Pontone, however, will be bound by those answers under oath and should not be permitted to use these interrogatories (to which they objected) to later supplement or amend those answers under oath. 2. Counterclaim Interrogatories Regarding Alleged Harm or Damage Interrogatory nos. 12 & 13 ask Scott Pontone and Harry Pontone to describe in detail how each has suffered damage to his reputation, goodwill, business relations and ability to obtain gainful employment as a result of conduct by Plaintiffs, and, for each form of alleged damage, to identify all individuals with knowledge regarding same. Because Scott Pontone and Harry Pontone are seeking monetary damages for each of the identified areas of harm in these two interrogatories, there is no question that the interrogatories seek relevant information. At a minimum, Scott Pontone and Harry Pontone should describe to Plaintiffs in response to these interrogatories the manner in which their respective reputations and business relationships have been damaged as a result of Plaintiffs' alleged wrongful conduct. Additionally, they should identify any individuals who they believe have knowledge regarding such alleged harm and damage and who could, therefore, potentially testify on their behalf at trial regarding such damage and harm. 3. Interrogatory No. 1 The only interrogatory addressed in Plaintiffs' Motion to Compel that does not fit into the Counterclaim contention or damage/harm category is interrogatory no. 1. In that interrogatory, Plaintiffs ask Harry Pontone and Scott Pontone to set forth with specificity how the proceeds received from Plaintiffs pursuant to the Asset Purchase Agreement, including all post-closing earn-out payments, were distributed among Harry Pontone, Scott Pontone, other members of the Pontone family and any trust or other entity that received such proceeds. In my view, the information being sought in this interrogatory is too attenuated from the Counterclaims and potential defenses to those claims to be relevant. Plaintiffs do not explain in their Motion to Compel what relevance they believe the information sought by this interrogatory might have to the Counterclaims asserted by the Pontone Defendants. It appears to the undersigned that Plaintiffs are trying to establish some type of “set-off” defense. Absent some showing, however, that amounts received pursuant to the Asset Purchase Agreement could somehow be set-off against alleged damage to goodwill, reputation and prospective business relations or some other area of relevance that is not evident to me, I fail to see the relevance of this information. Plaintiffs' Motion to Compel a further response to interrogatory no. 1, therefore, is Denied. 4. Pontone Defendants Allegedly Deficient Responses to Request for Production of Documents *3 In response to the 29 requests for production served by Plaintiffs requesting documents either reflecting or relating to various factual assertions in the Pontone Defendants' Counterclaims, the Pontone Defendants have submitted virtually the same response. That response is: Pontone Defendants object to this request on the ground that it seeks information exclusively or already in the possession of Plaintiffs and/or of third-parties. Pontone Defendants refer the Plaintiffs to their production and to the testimony of witnesses in this case. By way of further response, the Pontone Defendants' investigation of their Counterclaims is ongoing and the Pontone Defendants will supplement this response pursuant to their obligations under the Federal Rules of Civil Procedure. In their Motion to Compel, Plaintiffs argue that, even if responsive documents may be in the possession of Plaintiffs or third-parties, it does not obviate the Pontone Defendants' obligation to produce them. To the extent the Pontone Defendants independently have such documents, I agree with Plaintiffs' assertion. But, there is nothing to be gained in this case by requiring the Pontone Defendants to reproduce documents they have obtained through Plaintiffs or third-parties in discovery during this case unless the Pontone Defendants have third-party documents obtained from some source other than Plaintiffs, that they have not produced to Plaintiffs. Thus, to the extent any of the Pontone Defendants has documents responsive to any of these document requests at issue (other than documents they obtained from Plaintiffs during discovery), they should produce those documents to Plaintiffs. Additionally, to the extent the Pontone Defendants have obtained documents from third-parties, through Subpoena or otherwise, during this case and intend to rely on any of those documents to support any of their Counterclaims, those documents should be produced to Plaintiffs. Finally, so there is no question regarding the Pontone Defendants' production of documents in response to these request for production, I direct the Pontone Defendants to file an amended response to this request for production that identifies any request to which the Pontone Defendants, after reasonable investigation, do not have any responsive documents in their possession, custody or control to produce. As with my observation regarding the Counterclaim interrogatories, the Pontone Defendants can file such a response collectively (as opposed to individual responses) particularly if the answer is the same for each of the Pontone Defendants. 5. Alleged Deficiencies in PCC's Production In their Motion to Compel, Plaintiffs identify two general deficiencies in PCC's production of documents in response to my Report & Recommendation dated July 24, 2012. The first identified deficiency is the fact that several of documents produced by the Pontone Defendants contain redactions. Consistent with my most recent Report & Recommendation dated November 13, 2012, those documents should be reproduced without any redactions unless the redaction is based on attorney-client or attorney work-product privilege. The second deficiency cited by Plaintiffs in their Motion to Compel is that the document production is completely devoid of any communications from or to any of the Pontone Defendants, whether by e-mail, letter or otherwise. Specifically, Plaintiffs note that PCC, through which Defendant Scott Pontone conducts his casket sales and related business, produced no documents regarding the marketing or sale of caskets, or the New York area funeral home customers at issue in this litigation. *4 Given the length of time PCC has been in business, I understand Plaintiffs' concern about the absence of any responsive documents relating to marketing or distribution of caskets and/or communications with the New York area funeral home customers at issue in this litigation. In order to efficiently address this issue and consistent with the requirement I imposed on Plaintiffs' counsel during the recent mediated meet and confer between counsel for all Parties related to Plaintiffs' Counterclaim-related Electronically-Stored Information (“ESI”) search and production, I direct counsel for the Pontone Defendants to prepare and submit a Declaration that contains the following information: 1. the identify of any custodians for whom searches of ESI were conducted in order to respond to the requests for production directed to PCC (as limited by my July 24, 2012 Report & Recommendation); 2. a description of the ESI files (including, but not limited to email files) actually searched by the Pontone Defendants; 3. an identification of the search terms used for those ESI searches; 4. the process used to determine the presence of responsive documents through these searches and any de-duplication process used; and 5. the identity of any hard copy or non-ESI files searched by the Pontone Defendants for documents responsive to the requests for production directed to PCC. 6. Timing of responses required by this Report & Recommendation In order to efficiently complete the remaining Counterclaim discovery within the timeframe established by Judge Conti, I direct that the Pontone Defendants respond to Plaintiffs' interrogatories and request for production consistent with this Report & Recommendation prior to the scheduled depositions of Scott Pontone and Harry Pontone if possible but, in no event, later than December 3, 2012. I also direct that counsel for Pontone Defendants provide the Declaration required by this Report & Recommendation on or before November 26, 2012. /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