*1 This Report and Recommendation addresses Plaintiff/Counterclaim Defendant, Profit Point Tax Technologies, Inc.’s Motion to Compel, filed on February 5, 2021 (ECF No. 155, referred to herein as “PPTT's Motion”).[1] Based on a thorough review of PPTT's Motion and Defendants/Counter-Plaintiffs DPAD Group, LLP, John Manning and Daniel Steele's Brief in Opposition to Plaintiff/Counter-Defendant Profit Point Technologies, Inc.’s Motion to Compel Continued Depositions, filed on February 10, 2021 (ECF No. 162, referred to herein as “Defendants’ Brief”), including all exhibits attached to the above-referenced documents and the authorities cited therein, it is respectfully recommended that PPTT's Motion be denied. It is further recommended that the parties’ respective requests for awards of fees and costs be denied.

II. REPORT

A. Background

Plaintiff, Profit Point Tax Technologies, Inc. (“PPTT”), is pursuing claims against Defendants for alleged breach of contract (Count I), breach of fiduciary duty (Count II), unjust enrichment (Count III) (against defendant DPAD Group, LLP only), intentional misrepresentation (Count VI), and negligent misrepresentation (Count VII). Amended Complaint (ECF No. 27).[2] PPTT's claims arise from Defendants’ alleged usurpation of PPTT's business through the use of PPTT's confidential information and other resources in soliciting PPTT's clients. Defendants are asserting counterclaims against PPTT for alleged breach of contract (Counterclaims, Count I), breach of a release (Counterclaims, Count II), breach of contract in the alternative (Counterclaims, Count III), and unjust enrichment (Counterclaims, Count IV). Defendants/Counter-Plaintiffs DPAD Group, LLP, John Manning and Daniel Steele's Answer Affirmative Defenses, and Counterclaims to the First Amended Complaint, filed on August 11, 2020 (ECF No. 101).

Through the present Motion, PPTT requests the entry of an order compelling defendants Manning and Steele to reappear for their depositions and answer questions that are the subject of PPTT's Motion and any reasonable follow-up questions. PPTT's Motion, Proposed Order (ECF No. 155-9), ¶ 1. PPTT further requests an award of the attorneys’ fees and costs incurred in connection with the Motion, as well as the fees and costs incurred in resuming the depositions. Id., ¶ 2. PPTT contends that such relief is warranted because the witnesses were instructed by their counsel not to answer certain questions during the depositions that properly sought to elicit discoverable information. Defendants oppose PPTT's Motion, contending that the Motion fails to identify any appropriate questions that were not answered over the three days during which Manning's and Steele's depositions were taken. Defendants’ Brief, passim. Defendants request an award of the fees and costs incurred by them in opposing PPTT's Motion. Id. at 12-13.

B. Legal Standards Applicable to PPTT's Motion

*2 The scope of discovery under Rule 26 generally “embraces all ‘relevant information.’ ” Keeler v. Esurance Ins. Servs., No. 20-271, 2020 U.S. Dist. LEXIS 231031, at *4 (W.D. Pa. Dec. 9, 2020). Subject to proportionality considerations and several other limitations found in Rule 26(b)(2), “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense.” Id., quoting Fed.R.Civ.P. 26(b)(1). Information does not need to be admissible in order for it to be discoverable. Id.

A party moving to compel discovery under Rule 37 bears the burden of proving the relevance of the requested information. Keeler, 2020 U.S. Dist. LEXIS 231031, at *5. If that burden is met, the party resisting the discovery has the burden to establish its lack of relevance by demonstrating that the requested information either does not fall within the broad scope of relevance as defined by Rule 26(b)(1) or is of such marginal relevance that the potential harm occasioned by discovery would outweigh the ordinary presumption in favor of broad disclosure. Id., see also Hughes v. Allegheny Co. Airport Authority, No. 15-221, 2017 U.S. Dist. LEXIS 24349, at *2 (W.D. Pa. Feb. 22, 2017) (a party moving to compel discovery “bears the initial burden to show the relevance of the requested information and that it is proportional to the needs of the case and once this initial burden is met, the burden shifts to the party resisting discovery to demonstrate the lack of relevance of the requested documents or that responding to the discovery would be unduly burdensome, etc.”).

C. Discussion

PPTT took the depositions of Manning and Steele on November 17-19, 2020, with the deponents appearing both as corporate designees pursuant to Fed.R.Civ.P. 30(b)(6) as well as in their individual capacities. The areas of questioning that are the subject of PPTT's Motion, about which PPTT contends that Manning and Steele were improperly instructed by their counsel not to testify, are: (i) Defendants’ alleged attempts to disclose confidential client information, which PPTT refers to as “whistleblower evidence,” in an effort to harm PPTT's relationships with clients; and (ii) Steele's alleged inappropriate use of the PPTT email server and Defendants’ knowledge concerning the reasons why PPTT searched its server. See PPTT's Motion, at 2-3, 8.

The first prong of PPTT's Motion is premised on PPTT's contention that Defendants’ counsel “instructed Defendant Manning to not answer questions related to whistleblower evidence” and “similarly instructed Defendant Steele not to testify or provide answers” concerning such information.” Id. at 3. Although PPTT asserts that “[d]iscovery has unearthed that the Defendants, specifically Defendant Steele, attempted to engage in whistleblower claims against PPTT clients and to collect a profit at the expense of PPTT's business reputation and relationships with its clients,” id., this assertion is not supported by a record citation and PPTT's Motion does not explain what the relevance of the “whistleblower evidence” might be. Rather, PPTT relies on Judge Kelly's May 29, 2020 Memorandum Order (ECF No. 69) and takes the position that Judge Kelly's allowance of document discovery concerning the alleged whistleblower claims should be regarded as a determination by the Court that information concerning this topic is relevant to the issues in the case and therefore was a proper area for questioning during the Manning and Steele depositions. PPTT's Motion, at 3, 7[3]. Defendants, on the other hand, rely on Judge Kelly's grant of a protective order with respect to PPTT's Interrogatory 12[4] with the Court ruling that “the relevance of the information sought has not been established.” Defendants’ Brief, at 5-6, quoting Memorandum Order (ECF No. 69), at 5, § 4b.

*3 The narrow threshold question presented is whether PPTT, as the moving party, has satisfied its burden in the first instance of establishing the relevance of the whistleblower evidence. Keeler, 2020 U.S. Dist. LEXIS 231031, at *5. PPTT has not done so. Although the May 29, 2020 Memorandum Order required the production of certain documents related to whistleblower complaints, that same Order not only precluded additional discovery concerning that subject but also expressly found that the relevance of such information had not been established. This reflected a reasonable approach by the Court in managing discovery, in that the document discovery that was permitted might have provided PPTT with support for making a subsequent showing of relevance regarding whistleblower-related information, but as noted above PPTT's Motion does not make an effort to establish the relevance of this information except to rely on that portion of the May 29, 2020 Memorandum Order allowing document discovery concerning the alleged whistleblower claims.

PPTT contends that the Manning and Steele depositions should be reconvened because it was improper for Defendants’ counsel to instruct the deponents not to answer questions concerning whistleblower information.[5] There is no question that the right of counsel to instruct a deposition witness not to answer a question is very limited and that such instructions should be given sparingly. E.g., Maurer v. Williams, No. 1:11-CV-2260, 2013 U.S. Dist. LEXIS 51105, at *9-10 (M.D. Pa. April 9, 2013) (observing that Fed.R.Civ.P. 30(c)(2) addresses the procedures for objecting to questions asked during a deposition and that counsel may instruct a witness not to answer a deposition question “only when necessary to preserve a privilege, to enforce a limitation ordered by the court, or to present a motion under Rule 30(d)(3)”), quoting Fed.R.Civ.P. 30(c)(2); accord, Thornton v. UL Enterprises, LLC, No. Civ. 09-287E, 2011 U.S. Dist. LEXIS 41149, at *8 (W.D. Pa. 2011). In general, the proper procedure to follow when an objection is raised during a deposition is for objecting counsel to note the objection on the record, but “the examination still proceeds” and “the testimony is taken subject to any objection.” Fed.R.Civ.P. 30(c)(2); Thornton, 2011 U.S. Dist. LEXIS 41149, at *7-8.

The Special Master does not agree that any instructions by Defendants’ counsel to Manning and Steele not to answer questions related to the whistleblower claims warrants a reconvening of the depositions. As is discussed above, the relevance of the information sought by the deposition questions has not been established. Therefore, the record does not reflect that Defendants’ counsel's instructions during the depositions prevented PPTT from obtaining discoverable information. This is particularly the case in view of the fact that the transcripts show that some degree of latitude was extended to PPTT's counsel in examining each witness about the whistleblower claims before defense counsel stated that the witnesses would not be permitted to answer further questions about the subject. Defendants’ Brief, Exhibit 1 (ECF No. 162-1) (Manning transcript), at 510-16; id., Exhibit 2 (ECF No. 162-2) (Steele transcript), at 122-25. See Maurer, 2013 U.S. Dist. LEXIS 51105 at *16 (even if counsel's instruction to a deposition witness not to answer a question did not fall within the Fed.R.Civ.P. 30(c)(2) exceptions, that did not necessarily mean that the deposition should be reconvened).

*4 In addition, Fed.R.Civ.P. 30(c)(2) recognizes that instructions not to answer deposition questions can be appropriate “when necessary ... to enforce a limitation ordered by the court.” For the reasons discussed above, Defendants’ counsel's instructions could be reasonably regarded as having been given to enforce Judge Kelly's determination that information related to the whistleblower claims (beyond the documents described by Paragraph 13 of PPTT's Requests for Production) was not discoverable because PPTT had not established the relevance of that information. See Hopkins v. NewDay Financial, LLC, No. 07-3679, 2008 U.S. Dist. LEXIS 83510, at *9 (E.D. Pa. Oct. 17, 2008) (discussing the procedures that counsel should follow when relevancy objections are made during depositions and stating that after counsel have conferred a witness may be instructed not to answer if the deponent's counsel “still strongly objects and has substantial grounds to believe that the question is outside the limited scope of discovery”).

Finally, PPTT asserts that counsel, in the course of discovery conferences held prior to the depositions, had agreed that questions related to the whistleblower claims could be put to the deponents in their individual capacities, rather than in their roles as Rule 30(b)(6) designees. PPTT's Motion, at 7-8 & Exhibit 7 (letter dated November 3, 2020 from Defendants’ counsel to PPTT's counsel). Defendants deny the existence of such an agreement, however, and Defendants’ counsel's November 3, 2020 letter does not reflect any specific agreement regarding questioning at the depositions about the whistleblower claims.

PPTT contends that deposition questions posed to Steele about his alleged improper use of PPTT's email server sought discoverable information because Defendants have indicated that they will assert that PPTT's search of its server triggered the running of the statute of limitations. PPTT's Motion, at 8. PPTT argues that Defendants’ knowledge concerning the reasons that might have led PPTT to search its server is relevant and therefore was a proper line of questioning at Steele's deposition. Id. at 8-9.

This prong of PPTT's Motion implicates a single question posed to Steele that Defendants’ counsel instructed him not to answer, i.e., whether Steele was aware of inappropriate photographs being sent to or from his PPTT email account. PPTT's Motion, at 3[6]. The Special Master does not regard Defendants’ counsel's instruction to Steele to decline to answer this question as a sufficient basis for reconvening the Steele deposition, as the relevance of the information sought – Steele's knowledge of inappropriate use of PPTT's email server or his belief concerning the reason for PPTT's search of its server – is not established in PPTT's Motion and would seem to be dubious at best. As Defendants point out in their Brief, any facts relevant to whether PPTT's search of its server triggered the running of the statute of limitations, including whether a search was conducted, why it was conducted and when it was conducted, are within the knowledge of PPTT. See Defendants’ Brief, at 11-12. Therefore, the record does not reflect that Defendants’ counsel's instruction to Steele regarding a question concerning an alleged inappropriate use of PPTT's email server prevented PPTT from discovering any information relevant to the issues in the case.

D. Fees and Costs

*5 The Special Master recommends the denial of PPTT's request for an award of fees and costs by virtue of the recommendation in this Report and Recommendation that the underlying relief sought in PPTT's Motion be denied. See Fed.R.Civ.P. 37(a)(5)(A). Further, the Special Master recommends that Defendants’ request for an award of the fees and costs incurred in opposing PPTT's Motion be denied, as PPTT's Motion involves genuine disputes about which reasonable people could differ. See Defendants’ Brief, at 12, citing Pierce v. Underwood, 487 U.S. 522, 565 (1988). In sum, it is appropriate for the parties to bear their own fees and costs with respect to PPTT's Motion.

E. Conclusion

For the reasons set forth above, it is respectfully recommended that PPTT's Motion (ECF No. 155) be denied. In addition, it is respectfully recommended that the parties’ respective requests for awards of fees and costs be denied.

By Order Appointing Special Master filed on September 16, 2020 (ECF No. 112), Judge Stickman appointed the undersigned as Special Master and directed the Special Master to review all motions relating to discovery and to submit reports and recommendations concerning the disposition of such motions to the Court. By Order filed on February 16, 2021 (ECF No. 166), Judge Stickman referred PPTT's Motion to the Special Master. The February 16, 2021 Order also referred two other motions to the Special Master (ECF Nos. 153 and 158). Those motions are addressed in a separate Report and Recommendation.

By Order of Court filed on July 28, 2020, Judge Stickman adopted Magistrate Judge Kelly's Report and Recommendation filed on June 2, 2020 (ECF No. 70) as the opinion of the Court and dismissed PPTT's claims for tortious interference with prospective contractual relations (Count IV) and conversion (Count V). ECF No. 100, at 4. The Court also dismissed the claim for unjust enrichment (Count III) with respect to defendants John Manning and Daniel Steele. Id.

This assertion relates to Paragraph 13 of Plaintiff's First Set of Requests for Production of Documents and Things to Defendants. See PPTT's Motion, Exhibit 5 (ECF No. 155-5) (Defendants’ responses to the Requests). In Paragraph 13 of the Requests, PPTT requested the production of documents “which reference or relate to filing a whistleblower complaint on a PPTT client, including any communications with third parties relating to same.” Id. at 9, ¶ 13. Judge Kelly denied Defendants’ motion for a protective order with respect to this request. See Memorandum Order (ECF No. 69), at 5, ¶ 3; see also Defendants/Counter-Plaintiffs DPAD Group, LLP, John Manning and Daniel Steele's Motion for Protective Order (ECF No. 52), at 9, ¶¶ 15, 16 (citing Paragraph 13 of PPTT's Requests as an example of allegedly “harassing” discovery requests).

Interrogatory 12 is found in Plaintiff's First Set of Interrogatories to Defendant, Daniel Steele. PPTT's Motion, Exhibit 4 (ECF No. 155-4). The interrogatory asked that Steele identify and set forth the substance of any and all communications with regard to potential whistleblower claims against PPTT clients. Id. at 5, ¶ 12.

The Special Master recognizes Defendants’ position that PPTT's Motion does not identify any specific questions posed to Manning or Steele during their depositions relating to the alleged whistleblower claims that the deponents were instructed not to answer. At a minimum, however, the record reflects that Defendants’ counsel took the position during each deposition that the deponents would not be permitted to respond to any further questions regarding this subject. See Defendants’ Brief, Exhibit 1 (ECF No. 162-1) (Manning transcript), at 516 & Exhibit 3 (ECF No. 162-3) (Steele transcript), at 124.

The only citation in PPTT's Motion to either of the deposition transcripts relating to this issue is to pages 232-33 of the Steele deposition transcript. PPTT's Motion, at 3. These pages of the Steele transcript are found in Exhibit 3 to Defendants’ Brief (ECF No. 162-3). It is noted that the version of the Steele transcript attached to PPTT's Motion as Exhibit 3 is a rough draft of the transcript and its page numbers do not correspond to the parties’ citations to the transcript.