United States District Court, E.D. Pennsylvania
BRAND ENERGY & INFRASTRUCTURE SERVICES, INC., et al.
IREX CORPORATION, et al.
MEMORANDUM AND ORDER
ELIZABETH T. HEY, U.S.M.J.
the court considers dueling motions regarding the Rule
30(b)(6) deposition of Jason Dodd, the Controller for the
defendant Irex entities (“Irex”) and their
designated deponent. Based on the deposition testimony, Brand
“renews its request for an Order compelling [Irex] to
produce financial documents sufficient to identify what
profit [Irex] earn[ed] on any job for a Brand customer or how
the money flowed between Irex entitites.” Doc. 256 at
1. Irex responds that the documentation provided is the
information kept in the ordinary course of business that
establishes the revenue and profit earned by Irex from Brand
customers. Doc. 258 at 2-4. In its motion, Irex complains
that Brand violated the discovery orders in this case and
asks the court to mark the Rule 30(b)(6) deposition of Mr.
Dodd completed. Doc. 255. Brand responds that Irex's
accusations regarding the deposition are baseless. Doc. 259.
For the reasons that follow, both motions will be denied.
order to understand Brand's many complaints about the
deposition, I need to review some history of the discovery
disputes that have plagued this case. On October 20, 2017, I
held oral argument on two motions to compel (Docs. 220 and
222) filed by Brand. As discussed at the hearing, in
Brand's fourth request for production of documents
numbered 1, 14, and 15, Brand was looking for the profit made
by Irex from any former Brand customer in order to prove its
damages. N.T. 10/30/17 at 7. As explained by Brand,
this could be complicated by the movement of money between
Irex entities if one Irex entity contracted with another to
perform part of the work. Id. According to Brand,
depending on the internal-Irex contracts, “[they] can
actually make [their] profit look like zero” by billing
services related to the job to different Irex entities.
Id. at 20.
hearing Irex's counsel represented to the court that
through use of the Earned Revenue and Margin Reports (Bates
Nos. IREX 0273536-39) and the Recognized Revenue Margin
Reports (Bates Nos. IREX0273552-55) anyone could track the
flow of money through the Irex entities. N.T.
10/30/17 at 26-27. As explained by defense counsel, the
Recognized Revenue charts showed customer-level detail and
the Earned Revenue charts showed the job-level detail.
Id. at 26. Defense counsel then walked through two
examples using the Earned Revenue and Margin Report from 2016
(Bates No. IREX0273539) to show the contracts for the
Dominion Clover Outage and Dominion Opossum Point Station,
showing the job level contract numbers and costs, and then to
the Recognized Revenue Margin for 2016 (Bates No.
IREX0273555) to show the customer level revenue and margin.
Id. at 27.
questioning Mr. Dodd regarding these reports for the relevant
years, Brand argues that “Defendants'
representations to the Court were not true or accurate in any
way.” Doc. 256 at 2. Specifically, Brand argues that
Mr. Dodd testified that, “unless one has a working
knowledge of the operations of the Irex organization, one
cannot interpret all of the information contained in the
financial reports.” Id at 3. However, the
excerpt of Mr. Dodd's deposition cited for this
proposition shows Mr. Dodd was asked to look at one of the
Recognized Revenue Reports, which contain customer-level
detail, not job-level detail. Dodd Dep. at 217:18-23. Defense
counsel explained at the oral argument that the Recognized
Revenue Reports and the Earned Revenue Reports needed to be
reviewed to obtain both customer and project based data.
complains that it cannot identify the customer from the
Earned Revenue and Margin Reports. Brand also argues that the
financial documents “do not identify all of
Defendants' customers who may have worked on jobs for
Brand customers . . . and do not tell which job
corresponds to a particular customer, how much Defendants
earned on any particular job, or what Irex entities billed
for services for such jobs.” Doc. 256 at
support of this proposition, Brand cites to deposition
testimony in which Mr. Dodd was specifically asked to
identify the customer for whom a specific project was done on
the Earned Revenue and Margin Report for 2013. Doc. 256 at 3
(citing Dodd Dep. at 199:14-25). Mr. Dodd responded that the
document did not identify the customer and the only way to
cross-reference to a customer would be to access the ERP,
Irex's accounting software. Dodd Dep. at 199:25-200:10;
200:23-201:5; 202:7-18; 252:21-25. The upshot of Brand's
argument is that Irex has produced documentation showing the
earned revenue by customer and by project, both of which are
over inclusive, i.e., the project information
provided does not identify the customer and the customer
information does not identify the project. Brand wants a
single report that identifies revenue/profit for its former
customers project by project.
complains that Brand's motion in this respect is nothing
more than an untimely motion for reconsideration of this
court's October 24, 2017 Order (Doc. 236). Doc. 258 at 2.
I disagree to some extent with the characterization. Had the
Rule 30(b)(6) deposition of the Controller of Irex revealed
that defense counsel had actually misrepresented the
financial documentation provided, the court would have no
problem revisiting the issue in light of new evidence.
However, the original requests for production that resulted
in the production of the financial documentation at issue
sought financial statements, income tax filings, operating
budgets, revenues generated, profits generated, Earned
Revenue & Martin Reports, Recognized Revenue by
Region/Area/Mrkt Reports, transactions between or among the
relevant Irex entities, and transfers of assets between or
among the relevant Irex entities. Plaintiff's Fourth
Request for Production of Documents, Nos. 6-8, 10-15. Mr.
Dodd's Rule 30(b)(6) deposition does not undermine the
validity of the documents produced. He testified that he
would have to consult the accounting program to cross
reference the jobs to the customers, so it does not appear
that a document with such cross referencing is kept in the
ordinary course of business. The fact that Brand is not happy
with the form of the production does not undermine its
has produced the documentation to show what amounts it has
made from former Brand customers based on documents it keeps
in the ordinary course of business. I will not require it to
manipulate its software to create reports it does not use in
the ordinary course of business. See Fed.R.Civ.P.
34(b)(2)(E)(i) (requiring production of documents as they are
kept in the usual course of business). Brand's motion
will be denied.
motion, Irex argues that Brand went far afield in questioning
Mr. Dodd during his Rule 30(b)(6) deposition, and asks the
court to mark the Rule 30(b)(6) deposition of Mr. Dodd
completed. Doc. 255. Again, some history of the discovery
disputes in the case are necessary before delving into the
arguments. According to earlier filings, on May 19, 2017,
Brand served each of the six Irex Corporate Defendants with
Rule 30(b)(6) deposition notices containing 56 separate
topics. Docs. 197-1 at 2; 197-3. On August 9, 2017, Irex
filed a motion for a protective order, asking the court to
quash a number of topics listed in the deposition notices.
After considering the motion, response, and the deposition
notices, I granted Irex's motion, in part, limiting
inquiry into certain areas temporally, and other based on
relevancy. I precluded inquiry into other topics that I found
were completely irrelevant. Doc. 207. Irex now argues that
during Mr. Dodd's Rule 30(b)(6) deposition, Brand
inquired into areas previously determined to be off limits
and thereby wasted Mr. Dodd's time.
proceeding to address Irex's specific arguments, I note
that Irex appears to begin with a false premise. According to
Irex, Mr. Dodd was available for over 7½ hours for the
deposition at Brand's counsel's office and was on the
record for 5 hours and 55 minutes. Doc. 255 at 5 n.2. Irex
offered to compromise regarding Brand's request to
continue the deposition by offering to make Mr. Dodd
available for another 1 hour and 5 minutes, presumably on the
assumption that his deposition was limited to 7 hours. On the
contrary, as explained in my Order of August 30, 2017,
“[i]f Irex identifies the same individual for multiple
corporate defendants, he . . . shall be deposed for a maximum
of . . . 7 hours . . . for each defendant for which he . . .
has been designated.” Doc. 207 at 6 n.2. Thus, Brand is
entitled to depose Mr. Dodd for 7 hours for each of the
entities for which he was designated, rather than 7 hours
Deposition Topics 1-3, 9-10, and 12 - Corporate
respect to Topics 1-3, 9-10, and 12, which I previously noted
“focus on the relationship between, ownership of,
corporate structure of, transactions between/among, transfers
of assets between/among, and shared services between/among
nine Irex entities, ” I believe the confusion regarding
permissible inquiry in these areas arises from the sequence
of events prior to Mr. Dodd's deposition. When ruling on
Irex's motion for a protective order, I limited inquiry
to an explanation of the corporate structure of the Irex
entities. Doc. 207 at 3. Thus, I found ...