Profit Point Tax Techs., Inc. v. DPAD Grp., LLP
Profit Point Tax Techs., Inc. v. DPAD Grp., LLP
2023 WL 11968110 (W.D. Pa. 2023)
June 8, 2023

Stickman IV, William S.,  United States District Judge

Proportionality
Sanctions
Special Master
Spoliation
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Summary
The Court denied a motion for sanctions and a motion for reconsideration or certification for interlocutory appeal filed by Profit Point Tax Technologies, Inc. (PPTT) regarding alleged spoliation of ESI and other discovery-related misconduct. The Court found that PPTT failed to meet the high standard for a successful reconsideration motion and that none of the criteria for certification for interlocutory appeal were met.
Additional Decisions
PROFIT POINT TAX TECHNOLOGIES, INC., Plaintiff,
v.
DPAD GROUP, LLP, JOHN MANNING, and DANIEL STEELE, Defendants
Civil Action No. 2:19-cv-698
United States District Court, W.D. Pennsylvania
Filed June 08, 2023
Stickman IV, William S., United States District Judge

ORDER OF COURT

*1 On February 27, 2023, the Court entered summary judgment in favor of Defendants John Manning (“Manning”) and Daniel Steele (“Steele”) and against Profit Point Tax Technologies, Inc. (“PPTT”) as to Counts I and II, in favor of Defendant DPAD Group, LLP (“DPAD”) and against PPTT as to Count III, and in favor of Defendants DPAD, Manning, and Steele and against PPTT at to Counts VI and VII in the First Amended Complaint. It further held that only the breach of contract counterclaims – Count I (breach of contract under the January 2011 Revenue Sharing Agreement) and Count II (breach of contract under the February 2, 2016 Master Fee Splitting Agreement and Release) – will proceed to trial. (ECF Nos. 311-313).
PPTT filed a Renewed Motion for Sanctions. (ECF No. 266). It sought sanctions in the form of entry of judgment in its favor and against Defendants as to all claims and counterclaims, for the Court to award attorney's fees and costs, and any other relief the Court deemed appropriate due to Defendants’ alleged spoliation of electronically stored information (“ESI”) and other alleged discovery-related misconduct. (ECF Nos. 266 and 267). Special Master Michael J. Betts issued a Report and Recommendation that the Renewed Motion for Sanctions be denied. (ECF No. 326). On May 16, 2023, the Court denied PPTT's Renewed Motion for Sanctions. (ECF No. 330). PPTT then filed a Motion for Reconsideration or, in the Alternative, for Certification for Interlocutory Appeal. (ECF No. 332). The motion will be denied for the following reasons.
1. Motion for Reconsideration
“The purpose of a Motion for Reconsideration ... is to correct manifest errors of law or fact or to present newly discovered evidence.” Howard Hess Dental Lab'ys Inc. v. Dentsply Intern., Inc., 602 F.3d 237, 251 (3d Cir. 2010) (citing Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir. 1985)). Generally, a motion for reconsideration will only be granted on one of the following three grounds: (1) if there has been an intervening change in controlling law; (2) if new evidence, which was not previously available, has become available; or (3) if it is necessary to correct a clear error of law or to prevent manifest injustice. See Howard Hess Dental, 602 F.3d at 251 (citing Max's Seafood Cafe ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999)). “[A] motion for reconsideration addresses only factual and legal matters that the Court may have overlooked.... It is improper on a motion for reconsideration to ask the Court to rethink what [it] had already thought through—rightly or wrongly.” Glendon Energy Co. v. Borough of Glendon, 836 F. Supp. 1109, 1122 (E.D. Pa. 1993) (citations and internal quotation marks omitted).
Plaintiffs’ motion does not assert that there has been a change of controlling law or discovery of new evidence. Instead, it asserts that the Court's decision was premised on clear error and has effectuated manifest injustice. (ECF No. 33, pp. 2-3). Plaintiffs are of the opinion that “the Order's conclusion that PPTT and Sweet have failed to identify missing ESI places an obligation on PPTT and Sweet to provide what was on the discarded hard drive to obtain relief. This burden is not contemplated within the rules.” (Id. at 3). They take the position that the Court failed to make a finding “as to relevancy and preservation obligation itself,” and they further contend it “is an error of law which has the effect of restricting access to relevant discovery under Fed. R. Civ. P. 26.” (Id. at 4). Plaintiffs next posit that “the Order has the practical effect of creating a gatekeeper question that PPTT and Sweet must prove what was on the hard drive to obtain any relief.” (Id.). Plaintiffs want the Court to “conduct the rule 37(e) analysis as it relates to the preservation obligation of the hard drive itself.” (Id. at 5).
*2 Plaintiffs have failed to meet the high standard for a successful reconsideration motion. They are dissatisfied with the Court's decision and are attempting to relitigate matters already reviewed and adjudicated. What Plaintiffs proffer in their motion simply does not constitute a clear error of law. The Report and Recommendation of Special Master Betts, which was adopted by the Court, thoroughly set forth all of the applicable standards of review and why Plaintiffs failed to meet their burden to establish that Defendants spoliated ESI (including alleged preservation obligations of the hard drive). (ECF Nos. 326 and 330). The Court remains steadfast in its belief that sanctions were not warranted for the reasons previously articulated. No manifest injustice has occurred. There are no grounds for reconsideration. Plaintiffs’ motion will be denied.
2. Motion for Certification of Interlocutory Appeal
Interlocutory appeals are permitted on a limited basis under 28 U.S.C. § 1292. The purpose of Section 1292 is narrow: “to permit litigants to challenge interlocutory orders posing consequences that are serious, even irreparable.” Gardner v Westinghouse Broad. Co., 559 F.2d 209, 212 (3d Cir. 1977) (citation omitted); Albert v. Sch. Dist. of Pittsburgh, 181 F.2d 690, 691 (3d Cir. 1950). The conventional wisdom is that interlocutory appeal under Section 1292(b) is the exception, rather than the rule. The Court may certify a question for interlocutory appeal under Section 1292(b) when the issue involves: (1) a controlling question of law (2) as to which there is substantial ground for difference of opinion (3) that an immediate appeal from the order may materially advance the ultimate termination of the litigation. 28 U.S.C. § 1292(b). “For certification to be appropriate, each of these three elements must be satisfied and, even if these elements are satisfied, a district court may deny certification in its sole discretion.” Vrakas v. United States Steel Corporation, Civil Action No. 17-579, 2018 WL 6065051, at *1 (W.D. Pa. Nov. 20, 2018) (citing Bachowski v. Usery, 545 F.2d 363, 368 (3d Cir. 1976)) (citations omitted). “The party seeking interlocutory review has the burden of persuading the district court that exceptional circumstances exist that justify a departure from the basic policy of postponing appellate review until after the entry of final judgment.” Id. (quoting Premick v. Dick's Sporting Goods, Inc., No. 06-530, 2007 WL 588992, at *2 (W.D. Pa. Feb. 20, 2007)) (internal quotation marks omitted).
The Court will not certify its decision on PPTT's Renewed Motion for Sanctions for interlocutory appeal. First, no controlling question of law exists. A controlling issue of law is one that will end the litigation. See Klingenhoffer v. SMC. Achille Lauro, 921 F.2d 21, 24 (2d. Cir. 1990). A controlling issue of law may also be found where the issue is “serious to the conduct of the litigation, either practically or legally.” Katz v. Carte Balance Corp., 496 F.2d 747, 755 (3d. Cir. 1974). Here, the Court's Order—essentially a discovery order—cannot reasonably be characterized as a controlling issue of law on either basis, and Plaintiffs concede that point. (ECF No. 333, pp. 5-6).
Second, Plaintiffs may surely disagree with the Court's decision—that is their prerogative—but for the purposes of Section 1292(b), they cannot seriously point to a substantial difference of opinion as to whether the Court could, as a matter of law, make the decision on the discovery dispute. Nevertheless, Plaintiffs attempt to argue that “the Order at issue brings forward a substantial ground for differences of opinion as it creates a gatekeeper question that the litigant must identify what was discarded on devices or Rule 37(e) does not apply.” (ECF No. 333, p. 5). The Report and Recommendation of Special Master Betts, which was adopted by the Court, set forth all of the applicable standards of review, including a thorough analysis as to why Plaintiffs failed to meet their burden to establish that Defendants spoliated ESI. “The decision to impose sanctions for discovery violations and any determination as to what sanctions are appropriate are matters generally entrusted to the discretion of the district court,” and “therefore [the United States Court of Appeals for the Third Circuit] review[s] a district court's decision to impose ... sanctions for abuse of discretion.” Bowers v. Nat'l Collegiate Athletic Ass'n, 475 F.3d 524, 538 (3d Cir. 2007). “While this standard of review is deferential, a district court abuses its discretion in imposing sanctions when it ‘base[s] its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence.’ ” Id. (quoting Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, (1990)). That has not occurred here.
*3 The third, and final, consideration of the Section 1292(b) analysis is whether an immediate appeal may materially advance the ultimate termination of the litigation. Plaintiffs believe that “a ruling on spoliation could potentially terminate, or sharply alter, the remaining claims,” and “the result of an appeal could simplify the remaining counterclaims or eliminate the need for a trial altogether.” (ECF No. 333, p. 6). The Court finds no merit in these arguments—indeed, they could be raised for many interlocutory issues. The Court's Order deciding the sanctions motion came two months after it ruled on summary judgment motions. (ECF Nos. 316, 317 and 330). Judicial mediation is in the process of being scheduled before Magistrate Judge Kelly. This case began in July of 2019. The Court is of the firm opinion that an appeal of a peripheral discovery issue would unnecessarily prolong, not terminate the litigation.
Plaintiffs have failed to establish that immediate appeal is warranted under Section 1292(b). The Court will not certify Plaintiffs’ issue for interlocutory appeal.
3. Conclusion
AND NOW, this 8 day of June 2023, IT IS HEREBY ORDERED that Plaintiff/Counterclaim Defendants’ Motion for Reconsideration or, in the alternative, for Certification for Interlocutory Appeal (ECF No. 332) IS DENIED.