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December 1, 2010


The opinion of the court was delivered by: Martin C. Carlson United States Magistrate Judge

(Judge Conner)

(Magistrate Judge Carlson)



In the above-captioned action, which has generated considerably more rhetorical heat than substantive fire since it was first commenced in October, 2009, Defendants have filed a motion seeking entry of an order compelling Plaintiff to provide more fulsome responses to document requests and interrogatories that they have propounded in this case. (Doc. 90.) Included among the relief sought in their motion to compel, Defendants ask the Court to:

* compel Plaintiff to produce additional documents in response to requests for production ("RFP") that Defendants insist must exist, in spite of Plaintiff's general representations that they do not;

* direct Plaintiff to provide further responses to interrogatories that have been propounded, including so-called contention interrogatories, that seek answers setting for the factual basis for Plaintiff's claims in this case; and

* order Plaintiff to make available electronically stored information ("ESI"), notwithstanding an agreement reached between Plaintiff's counsel and Defendants' previous counsel early in this litigation that responsive materials would be produced either in hard copy or on disc.

In spite of Plaintiff's insistence that this litigation is "relatively narrow," and in spite of counsel's representation that he "has reassured defense counsel on numerous occasions that [Plaintiff] has complied with its discovery obligations in good faith," (Doc. 96, at 4), it is abundantly clear that Defendants do not share Plaintiff's view regarding the scope of this action, and their counsel are plainly not reassured by counsel's representations.

To the contrary, Defendants have expressed frustration with the limited extent of the document production made to date, and with what they describe as Plaintiff's counsel's failure to fulfill promises to supplement production in response to acknowledged deficiencies or omissions. Defendants have highlighted for the Court the fact that they have produced substantially more documents dating from 2008 and 2009 than Plaintiff, and they submit that Plaintiff's failure to produce similar documents evidences either intentional disregard of the bank's discovery obligations, or manifests an inadequate effort to locate and identify responsive materials that should be corrected promptly. As a corrective measure, Defendants ask the Court to compel further responses, direct Plaintiff to provide a full and detailed explanation regarding the specific efforts undertaken to comply with the discovery that has been propounded, and permit Defendants access to ESI in order to determine the full extent of responsive materials that may be available in native formats. Additionally, Defendants have taken issue with what they contend are Plaintiff's evasive responses to interrogatories that have been propounded, including contention interrogatories, and they ask that the Court direct Plaintiff to provide more complete responses without further delay.

We have carefully considered Defendants' motion, Plaintiff's response, and the competing materials submitted by the parties in support of their positions. Because we believe that important questions have arisen regarding the adequacy of Plaintiff's responses made to date with respect to document production, we will direct that Plaintiff undertake a further effort to locate and identify responsive documents and materials, and if further responsive materials are identified, they must be produced without further delay. If Plaintiff concludes by December 31, 2010, that it has no further responsive materials to produce, we will direct that Plaintiff and its counsel provide a detailed, sworn explanation regarding the specific efforts that the bank has undertaken to respond to Defendants' requests so that Defendants and the Court have an opportunity to determine the adequacy of Plaintiff's efforts.

We also agree with Defendants that Plaintiff must respond meaningfully to document requests and interrogatories regarding ESI, and that the parties must meet and confer about Defendants' ESI discovery requests so that an agreeable schedule can be reached regarding the production of such material. A serious dispute has clearly arisen between the parties as to the adequacy of the responses made to date, relating to ESI as well as other documents produced. We do not agree with Plaintiff's blanket assertion that an agreement reached with prior counsel in 2009 necessarily controls Defendants ability to discover ESI and other electronic data, particularly as some of the current Defendants were not even named in this case when such an agreement was reached, and particularly because Plaintiff has failed to persuade the Court that producing ESI and other data in native format will be unduly burdensome.

In contrast, we do not find at this time that Plaintiff should be compelled to provide additional responses to interrogatories that have been propounded, and the motion will be denied as to this request.


Susquehanna commenced this action by filing a complaint and a motion for special relief against VRI in the Court of Common Pleas of York County, Pennsylvania, on October 6, 2009. Susquehanna commenced these legal proceedings to recover nearly $3 million that Susquehanna, as a lessor, advanced to VRI -- a party with which it had no written contract -- in order for VRI to procure medical equipment that was to be used or otherwise installed in a new medical facility being constructed in York County, Pennsylvania. The party constructing the medical facility -- and the intended lessee of the equipment to be purchased with the funds that Susquehanna advanced -- Brookeside Surgical Arts, LLC ("Brookeside") is not a party to this action, although Susquehanna has recently sought leave to add it and its members as Defendants. (Doc. 106.)*fn1

VRI subsequently removed the action to this Court on October 16, 2009. Following removal, Susquehanna filed a motion for a preliminary injunction, and VRI moved to dismiss the action entirely. Both motions were denied on January 6, 2010.

Meanwhile, Susquehanna sought to take discovery from VRI, principally by seeking answers to the bank's questions regarding the whereabouts of the nearly $3 million that it paid to VRI, and details regarding any medical equipment that may have been purchased with the funds. Susquehanna was frustrated from the start with what it considered to be inadequate responses from VRI, and Susquehanna resorted to two discovery conferences with the Court in an effort to extract further or more accurate responses from VRI.

In addition to the difficulty that Susquehanna claimed to have had in obtaining satisfactory answers to its initial discovery, the discovery process in this case, and the litigation generally, has proceeded fitfully from the outset due in part to the fact that VRI has had several of its lawyers or their law firms withdraw from representing the company since the action was removed to this Court. Likewise, Defendant Bruce Wallace was not even added as a Defendant until January 5, 2010, and did not file an answer until March 22, 2010 -- nearly two weeks after Susquehanna filed a motion to compel Mr. Wallace to permit inspection and copying of documents. Replacement counsel for VRI and Mr. Wallace entered their appearances on March 12, 2010 -- the day that Susquehanna moved to compel VRI to provide further discovery answers, and the day after Susquehanna filed its motion directed at Mr. Wallace. The Court denied Plaintiff's motion to compel on April 30, 2010. (Doc. 68.)

On the same day, following the entrance of new counsel for Defendants, Plaintiff sought leave to file a second amended complaint, in order to add as additional Defendants Congero Development, LLC, Congero Management, LLC, Gary Savlov, Joe Vasconcellos, and Kathryn Wallace.*fn2 (Doc. 69.) Defendants did not oppose Plaintiff's request to further amend the complaint, (Doc. 73), and the Court granted the request on May 12, 2010. (Doc. 74.)

With the addition of new parties, new counsel, and new issues in the case, discovery proceeded, although not without further disputes almost immediately arising. Thus, on June 24, 2010, in response to information from Plaintiff that intractable disagreements had surfaced, the Court directed the parties to confer and provide the Court with a joint schedule for the production of documents. (Doc. 79.) Thereafter, the Court directed the parties to submit a joint report in early August, 2010, regarding the status of discovery in the case. (Doc. 84.) Unfortunately, in their joint report, the parties advised the Court that in the course of preparing the report, even further disagreements had become apparent regarding the scope of permissible discovery and related matters. (Doc. 85.) Thereafter, the Court authorized the parties to submit additional motions relating to their discovery disputes to the extent they found that the pending disputes required judicial resolution. (Doc. 86.) Following entry of this order, Defendants filed the pending motion to compel further production of documents and answers to interrogatories. (Doc. 90.) The motion has been fully briefed (Docs. 90-2, 96, 99) and is ripe for disposition. For the reasons explained below, the motion will be granted in part and denied in part.


A. Relevant Legal Standards

Rule 26(b)(1) of the Federal Rules of Civil Procedure supplies the scope and limitations governing the use of discovery in a federal civil action:

(1) Scope in General. Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any non-privileged matter that is relevant to any party's claim or defense -- including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. All discovery is subject to the limitations imposed by Rule 26(b)(2)(C).

Fed. R. Civ. P. 26(b)(1). Issues relating to the scope of discovery permitted under the Rules are to be resolved, almost exclusively, at the discretion of the Court. Wisniewski v. Johns-Manville Corp., 812 F.2d 81, 90 (3d Cir. 1987). A court's decisions regarding the conduct of discovery will be disturbed only upon a showing of an abuse of discretion. Marroquin-Manrizuez v. I.N.S., 699 F.2d 129, 134 (3d Cir. 1983).

Rule 33 of the Federal Rules of Civil Procedure provides for discovery through written interrogatories. Rule 33(a)(2) specifically states that "[a]n interrogatory may relate to any matter that may be inquired into under Rule 26(b). Fed. R. Civ. P. 33(a)(2). The Rule further directs that, in the case of a corporate party, the interrogatories must be answered by "any officer or agent, who must furnish the information available to the party." Fed. R. Civ. P. 33(b)(1)(B). Rule 34, in turn, provides similar and additional requirements with respect to requests for the production of documents in the "responding party's possession, custody, or control." Fed. R. Civ. P. 34(a)(1).

Rule 37 authorizes a party to move to compel disclosure if the discovery propounding discovery believes that it has received incomplete or inadequate answers to discover authorized under Rule 26. Fed. R. Civ. P. 37. With respect specifically to requests for production of documents and interrogatories, Rule 37 provides:

(B) To Compel a Discovery Response. A party seeking discovery may move for an order compelling an answer, designation, production, or ...

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