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Diodato v. Wells Fargo Insurance Services USA, Inc.

United States District Court, Third Circuit

November 15, 2013

DARRELL D. DIODATO, Plaintiff/Counter-Defendant



This action was filed by Plaintiff, Darrell Diodato, against his former employer, Defendant Wells Fargo Insurance Services USA, Inc. ("Wells Fargo"). On November 9, 2012, Diodato filed this action in the Court of Common Pleas of Cumberland County, Pennsylvania. On December 10, 2012, Wells Fargo removed this action to the United States District Court for the Middle District of Pennsylvania. (Doc. 1). Pending before this Court is Diodato's Motion for Sanctions (Doc. 18), and several outstanding discovery disputes.


Diodato was employed by Wells Fargo between December 2009 and May 16, 2011. Diodato alleges that he was wrongfully terminated by Wells Fargo and brings the following claims: fraudulent misrepresentation and/or fraudulent inducement; breach of contract/covenant of good faith and fair dealing; breach of contract arising out of nonpayment of compensation; violations of wage payment and collection law; defamation; commercial disparagement; unauthorized use of name or likeness; unjust enrichment; unfair competition; and violation of 15 U.S.C. ยง 1925 of the Lanham Act. Wells Fargo has alleged the following counterclaims against Diodato: breach of Diodato's restrictive covenant with Wells Fargo; misappropriation and misuse of trade secrets; unfair competition; conversion; and tortious interference with prospective business relations.

The original discovery deadline in this matter was July 1, 2013. That deadline was modified by this Court's May 30, 2013 Order (Doc. 17) to July 15, 2013. Diodato filed a Motion for Sanctions on June 12, 2013. (Doc. 18). On October 15, 2013, both parties submitted letter briefs to the Court outlining the remaining discovery issues in this matter. (Doc. 48; Doc. 49). This Court's July 3, 2013 Order (Doc. 27) disposed of all but two of the several issues presented in the Motion for Sanctions. The Court now considers the remaining issues in the Motion for Sanctions, and all remaining discovery disputes presented by the parties in their letter briefs.



Federal Rule of Civil Procedure 26 provides, in pertinent part, as follows:

(b) Discovery Scope and Limits.
(1) Scope in General. Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged 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).
(2) Limitations on Frequency and Extent.
(C) When Required. On motion or on its own, the court must limit the frequency or extent of discovery otherwise allowed by these rules or by local rule if it determines that:
(i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive;
(ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or
(iii) the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.

Although the scope of relevance in discovery is broader than that allowed for evidentiary purposes, it is not without its limits. Banks v. Beard , 2013 WL 3773837, at *2 (M.D. Pa. July 17, 2013). Courts will not permit discovery where a request is made in bad faith, unduly burdensome, irrelevant to the general subject matter of the action, or relates to confidential or privileged information. Banks , 2013 WL 3773837, at *2. The burden is on the objecting party to demonstrate in specific terms why a discovery request is improper and to show that the requested materials do not fall "within the broad scope of relevance... or else are of such marginal relevance that the potential harm occasioned by discovery would outweigh the ordinary presumption in favor of broad disclosure." Banks , 2013 WL 3773837, at *2 (citing Burke v. New York City Police Dept. , 115 F.R.D. 220, 224 (S.D.N.Y. 1987)).

Federal Rule of Civil Procedure 37(b)(2)(A) authorizes a court to impose sanctions on a party who violates an order of the court and Rule 37(c)(1) permits the court to impose sanctions for failure to disclose. Sanctions for violations of Rule 37(b)(2)(A) and 37(c)(1) include orders by the court ranging from designating that certain facts be admitted, to prohibiting the disobedient party from supporting or opposing designated claims or defenses, to monetary damages or even the dismissal of all or part of the action. Fed.R.Civ.P. 37(b)(2)(A)(i)-(vi). Whether to impose sanctions for failure to comply with discovery orders is committed to the court's discretion. Banks , 2013 WL 3773837, at *9 (M.D. Pa. July 17, 2013).


In the Court's July 3, 2013 Order (Doc. 27), the Court disposed of several of the issues in Diodato's Motion for Sanctions and denied any "requests to unilaterally curtail discovery for either party as a discovery sanction." (Doc. 27). Only two issues remain from Diodato's June 12, 2013, Motion for Sanctions: (1) whether Diodato is permitted to serve written discovery by email and require a response by the July 15, 2013, deadline; and (2) costs of discovery and attorney's fees. (Doc. 18). A party moving under Rule 37 to compel discovery, or for sanctions, bears the initial burden of proving the relevance of the requested information. Hill v. Lappin , 2012 WL 2049570 (M.D. Pa. June 6, 2012); citing Morrison v. Philadelphia Housing Auth. , 203 F.R.D. 195, 196 (E.D.Pa.2001). Once that initial burden is met, "the party resisting the discovery has the burden to establish the lack of relevance by demonstrating that the requested discovery: (1) does not come within the broad scope of relevance as defined ...

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