The opinion of the court was delivered by: KIM GIBSON, District Judge
MEMORANDUM OPINION AND ORDER
This case comes before the Court on Association of the United
States Army's (hereinafter "Plaintiff") Motion to Compel
Defendants' Production of Documents (Document No. 16), Aegis
Consulting Group, Inc., and The Aberjona Press' (hereinafter
"Defendants") Cross Motion to Compel (Document No. 18), and
Plaintiff's Brief in Opposition to Defendants' Cross Motion to
Compel (Document No. 22). Upon consideration of the record in the
case sub judice, a telephonic conference on the above-listed
motions, and pursuant to Federal Rules of Civil Procedure 26 and
37, the Court shall grant in part and deny in part Plaintiff's
Motion to Compel Defendants' Production of Documents, and the
Court shall grant in part and deny in part Defendants' Cross
Motion to Compel for the following reasons.
Jurisdiction is proper in the United States District Court for
the Western District of Pennsylvania under 15 U.S.C. § 1121 and
28 U.S.C. §§ 1331, 1338(a) and 1338(b). This Court also has
jurisdiction pursuant to 28 U.S.C.A. § 1332 as there is complete
diversity between the Plaintiff, a citizen of the District of
Columbia, and Defendants, who are citizens of Pennsylvania. Additionally, the amount in controversy exceeds $75,000.00,
exclusive of interest and costs.
Venue is proper in this Court pursuant to 28 U.S.C. § 1391, and
the Defendants are subject to personal jurisdiction within this
judicial district. The Defendants' principal places of business
are located within the Western District of Pennsylvania, and a
substantial part of the events giving rise to Plaintiff's claim
occurred in the Western District of Pennsylvania.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff is a private educational organization that supports
active Army members, retirees, and family members. (Document No.
1). One of the Plaintiff's distinguishing markers is that since
approximately 1950, it has used a logo that incorporates the
phrase "Association of the United States Army" ("AUSA") in a
circular pattern around a depiction of an eagle holding a shield
and olive branch. Id. Throughout the years, the Plaintiff has
provided "professional education and information programs" in an
effort to foster support for the Army. Id. One of the
informational products and services provided by the Plaintiff is
the distribution of the Army magazine. Id. Another product is
the AUSA News publication provided by the Plaintiff. Id.
Defendant, Aegis Consulting Group, Inc. (hereinafter "Aegis")
is a publishing house, with its principal place of business
located in Bedford, Pennsylvania. (Document No. 1). The
Defendant, The Aberjona Press (hereinafter "Aberjona") is a
division of Aegis. Id. Collectively, Aegis and Aberjona
(hereinafter "Defendants") publish historical and military
professional literature. Id.
On or about May 1, 2002, the above parties outlined a marketing
agreement and publishing agreement (hereinafter "Outline").
(Document No. 1). Under the terms of this agreement, the
Plaintiff and the Defendants "addressed the parties' joint
marketing efforts and publishing efforts." Id.*fn1 For example, Plaintiff agreed to permit the use of
its name as a sponsor of AUSA books published by Defendants.
Id. The Plaintiff also agreed to provide a "hotlink" from its
website to Defendants' website. Id. Additionally, the Plaintiff
agreed to provide space in its publications for book reviews and
to list Aegis book discounts as part of its member benefits.
Id. Finally, the Plaintiff was to provide manuscripts from its
holdings for publication with Defendants. Id.
The Defendants, on the other hand, agreed to publish,
distribute and provide fulfillment for "AUSA books."*fn2
(Document No. 1). Defendants also agreed to pay the Plaintiff a
3% royalty on each AUSA book that was sold. Id. Moreover, the
Defendants' website was to likewise provide a "hotlink" and
artwork for the Plaintiff's website. Id. The Defendants further
agreed to offer a 20% discount for all AUSA members. Id.
On or about May 24, 2002, the parties entered into a signed
Memorandum of Understanding ("MOU") regarding the above-mentioned
publishing agreement. (Document No. 1). Under the terms of this
signed agreement, the Plaintiff agreed to advance funds in the
amount of $50,000.00 to Defendants for the publication of books
"if specific conditions are met". Id. This advance was to be
made in increments, with each increment to be in two installments
after each of four books was published by the Defendants.*fn3 Id.
The MOU also provided that the Plaintiff would review each
book, advertise books on its website, provide a "hotlink" to
Defendants for ordering, and the Plaintiff would publicize its
relationship with Defendants. (Document No. 1). Additionally, the
MOU provided that the Defendants would have temporary use of the
advancement made by the Plaintiff. Id. In return, the
Defendants were to publish four AUSA owned books during a
twelve-month period following the advancement. Id. Defendants
were also to repay the advancement, as well as pay the Plaintiff
a 15% royalty on all AUSA-owned books that the parties agreed
would be published by the Defendants. Id.
The Defendants further contend that a third document creates
the entire contract between the parties. (Document No. 25).
Specifically, the Defendants argue that the three documents which
comprise the contract are the Outline, the MOU, and the May 8,
2001 letter from General Stroup to the Defendants. Id. at p. 9.
In this letter, the Defendants claim that General Stroup
expressed that "he had procured over 100 never before seen
manuscripts written either in combat or shortly thereafter by
historical research teams," and the Defendants contend that these
manuscripts are central to the contested issues between the
parties in the case sub judice. Id.
Plaintiff alleges that Defendants have failed to publish any
AUSA books as per the MOU. (Document No. 1). Additionally, the
Plaintiff asserts that the Defendants have not repaid the
$50,000.00 advancement, nor have Defendants paid royalties owed
to the Plaintiff. Id. Moreover, the Plaintiff states that ...