United States District Court, E.D. Pennsylvania
May 20, 2004
Douglas R. Widin, John A. Wait, Sara E. Hirshon, Brian P. Flaherty, Wolf Block Schorr & Solis–Cohen LLP, Philadelphia, PA, for Plaintiff.
Andrew M. Schwartz, Arthur W. Lefco, Craig S. Hudson, Marshall Dennehey Warner Coleman & Goggin, Philadelphia, PA, for Defendant.
*1 AND NOW, this 20th day of May, 2004, upon consideration of Plaintiff's Motion to Strike Objections to Plaintiff's Document Requests and to Compel the Production of Documents and a Privilege Log (Docket No. 18), Defendant's Response and Opposition (Docket No. 19), Plaintiff's Reply (Docket No. 20), and Defendant's Sur–Reply (Docket No. 23), IT IS HEREBY ORDERED that Plaintiff's Motion is GRANTED as follows:
Diebold must produce all non-privileged documents, whether paper or contained in or on any computer or related storage device, that are responsive to Request No. 38 of Cumis' First Set of Document Requests or to Request Nos. 11 or 13 of Cumis' Second Set of Document Requests.
IT IS FURTHER ORDERED that Diebold produce a privilege log in accordance with the Federal Rules of Civil Procedure for any document that it withholds from production on the basis of any privilege.
This case concerns a claim by Cumis Insurance Company against Diebold, Inc., to recover losses allegedly incurred by 18 credit unions insured by Cumis. The losses allegedly occurred when Tri–State Armored Co., a Diebold subcontractor, misappropriated millions of dollars that it was supposed to use to replenish cash in ATM machines owned by the 18 credit unions and other Diebold customers. Cumis asserts that Diebold is liable for the losses incurred by the Cumis-insured credit unions because Diebold knew or should have known that Tri–State was incompetent and dishonest. Cumis also asserts that Diebold informed some of its customers about Tri–State's malfeasance but did not inform the Cumis-insured companies.
The instant motion concerns Cumis' disputed document requests. Generally, Cumis has requested documents from Diebold in an effort to determine Diebold's knowledge of Tri–State's misappropriations. To that end, Cumis has requested communications about Tri–State (1) made between Diebold and the 18 credit unions, (2) made between Diebold and any customer serviced by Tri–State after January 1, 1999, and (3) made between Diebold and the subcontractors Diebold considered using to replace Tri–State after January 1, 2000.
As to the first category, Diebold does not object to responding, but insists that it possesses no responsive documents relating to the credit unions. As to the second and third categories, Diebold objects to producing communications between it and so-called “non-related entities” because they are not relevant and not likely to lead to the discovery of admissible evidence.
“It is well-established that the scope and conduct of discovery are within the sound discretion of the trial court.” Marroguin–Manriques v. Immigration and Naturalization Serv., 699 F.2d 129, 134 (3d Cir.1983). The Federal Rules of Civil Procedure permit discovery of “any matter, not privileged, that is relevant to the claim or defense of any party.” Fed.R.Civ.P. 26(b)(1). Discovery is not limited solely to admissible evidence but encompasses matters which “appear[ ] reasonably calculated to lead to the discovery of admissible evidence.” See id.;
Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 98 S.Ct. 2380, 57 L.Ed.2d 253 (1978). “Relevance is construed broadly and determined in relation to the facts and circumstances of each case.” Hall v. Harleysville Ins. Co., 164 F.R.D. 406, 407 (E.D.Pa.1996). Once the party from whom discovery is sought raises an objection, the party seeking discovery must demonstrate the relevancy of the information requested. Vitale v. McAtee, 170 F.R.D. 404, 406 (E.D.Pa.1997). At that point, the burden shifts back to the objecting party to show why discovery should not be permitted. Id.
The communications requested by Cumis are well within the scope of discovery. Communications between Diebold and the so-called non-related entities regarding Tri–State's malfeasance are relevant to Cumis' claim that Diebold knew or should have known about the malfeasance and failed to alert the 18 Cumis-insured credit unions. As such, these communications must be produced to the extent they are not privileged. The Court orders Diebold to produce all documents responsive to Request No. 38 of Cumis' First Set of Document Requests and to Request Nos. 11 and 13 of Cumis' Second Set of Document Requests.
The parties also dispute to what extent and where Diebold must search for responsive documents. Cumis asserts Diebold must search its electronic storage devices and electronic data compilations, specifically the electronic data in the possession of certain enumerated Diebold employees. Diebold seems to assert that it has already performed the appropriate searches and has produced to Cumis all communications between it and non-related entities that are responsive to the document requests at issue. Further, on May 4, 2004, Diebold produced a group of documents responsive to Cumis' requests regarding the enumerated employees. Cumis has convinced the Court that Diebold may not have made available to Cumis all discoverable documents, electronic or otherwise, that may be responsive to the disputed document requests. Cumis shows that it has obtained from other sources Diebold documents and emails responsive to its document requests that have yet to be produced by Diebold itself. As such, the Court grants Cumis' motion and orders Diebold to respond to the document requests at issue by searching its electronic storage devices and electronic data compilations.
End of Document.