WARTLUFT et al v. THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST et al
Filing
95
MEMORANDUM OPINION AND ORDER re: 60 MOTION to Compel filed by The Milton Hershey School And School Trust, The Hershey Trust Company, The Board Of Managers Of The Milton Hershey School, The Milton Hershey School Trust. Signed by Magistrate Judge Martin C. Carlson on October 19, 2017. (kjn)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
JULIE ELLEN WARTLUFT, et al.,
Plaintiffs
v.
THE MILTON HERSHEY SCHOOL
AND SCHOOL TRUST, et al.,
Defendants
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Civil No. 1:16-CV-2145
(Chief Judge Conner)
(Magistrate Judge Carlson)
MEMORANDUM OPINION AND ORDER
I.
Introduction
This case comes before us for consideration of a motion to compel filed by
the defendant, Milton Hershey School, that seeks to compel a non-party Rule
30(b)(6) deponent, an advocacy group known as Protect Hershey’s Children, Inc.,
(PHC) to designate a proper and fully informed witness to testify regarding the
factual basis for certain allegations and claims made by PHC, allegations and
claims which now form part of the foundation for this lawsuit. (Doc. 60.) While the
motion raises discrete discovery issues in the context of a lawsuit brought by Julie
Ellen Wartluft and Frederick Bartels in the wake of the death of their daughter who
was a student at the Milton Hershey School, the parties’ briefs and arguments
reveal that the particular discovery dispute is part of a longstanding and intractable
conflict between the Milton Hershey School and PHC. This conflict has spanned
years and is marked by competing accusations, mutual recriminations and shared,
profound, and unshakeable suspicions. For its part, the Milton Hershey School
apparently views PHC, and its President, an attorney named Ric Fouad, as
unscrupulous provocateurs, who disseminate baseless allegations against the
Milton Hershey School, and then instigate grieving families to file meritless
lawsuits in pursuit of their ideological goals. PHC and Fouad, in turn, identify
themselves as public spirited whistle-blowers, who believe that they
are the
victims of a campaign of harassment, oppression and unwarranted calumny
orchestrated by a multi-billion dollar corporate monolith.
As they litigate this narrow discovery dispute each of these protagonists
invites us to adopt their characterization of this on-going, and intractable conflict,
and rule upon this motion through the prism of their very different perspectives
regarding the broader motives and motivations they ascribe to one another. We will
decline this invitation to foray deeply into the longstanding and mutual grudges
that divide PHC and the Milton Hershey School. Instead, we choose to simply
address the two specific legal questions raised by this motion to compel; namely:
First, did PHC fail to properly designate an informed corporate official as a Rule
30(b)(6) deponent to respond to Milton Hershey’s inquiries into the factual basis of
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that organization’s allegations which form part of the foundation for this lawsuit?
Second, should PHC now be compelled to re-designate a fully informed corporate
Rule 30(b)(6) deponent to answer these questions?
For the reasons set forth below we answer these two questions, yes and yes,
and therefore will grant this motion to compel, in part.
II.
Factual Background
On June 29, 2016, the plaintiffs, Julie Ellen Wartluft and Frederick Bartels,
acting individually and on behalf of the estate of their deceased daughter, filed this
lawsuit against the Milton Hershey School and the Hershey Trust. (Doc. 1.) This
lawsuit arose out of a singular tragedy, the suicide of the plaintiffs’ 14 year-old
daughter in June of 2013, at about the time of her expulsion from the Milton
Hershey School, following two episodes of hospitalization for severe depression.
(Id.) The plaintiffs alleged that this suicide was a result of unlawful discriminatory
practices by the defendants, and specifically alleged that the Milton Hershey
School had a two-hospitalization policy which led to the expulsion of emotionally
fragile students once those students underwent two hospitalizations for mental
illness. These allegations formed one of the legal and factual pillars for this
lawsuit. (Id.)
The deposition of the plaintiff, Julie Ellen Wartluft, revealed that the
primary basis for these allegations by Wartluft was information that was publicly
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disseminated by Protect Hershey’s Children, Inc., (PHC), a non-profit corporation
which engages in public education and advocacy aimed at highlighting what it
believes to be malfeasance, misfeasance, and nonfeasance at the Milton Hershey
School.
PHC is a non-profit corporation, whose President is Ric Fouad, an
attorney. According to the initial Rule 30(b)(6) deponent offered by PHC in this
lawsuit, Fouad is also the principal author of many of the white papers, reports, and
statements issued publicly by PHC, statements which describe and decry the
alleged practices at the Milton Hershey School, including this alleged twohospitalization expulsion policy which the plaintiffs allege led to their daughter’s
suicide.
With Julie Ellen Wartluft having identified statements issued by PHC as the
source and basis for many of the allegations contained in her complaint, the factual
underpinning for these allegations has now become a relevant issue in this lawsuit.
In an effort to explore the factual basis for PHC’s statements concerning these
alleged practices, the Milton Hershey School served subpoenas on Fouad
individually,1 and a Rule 30(b)(6) subpoena upon PHC which called for a
For their part, Fouad and PHC invite us to engage in an extensive consideration of
proceedings in federal court in the Southern District of New York relating to
subpoenas issued to him personally, arguing that these proceedings reveal the
Milton Hershey’s School’s bad faith since the issuance of a Rule 30(b)(6) deponent
subpoena somehow in Fouad’s and PHC’s views conflicts with the rulings made
by other courts on the subpoenas served upon Fouad in his individual capacity. Just
has we have declined to embrace the Milton Hershey School’s characterization of
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1
knowledgeable corporate designee to appear and testify regarding matters relevant
to this lawsuit.
Appended to this Rule 30(b)(6) non-party corporate deposition subpoena
was a notice which detailed some 19 specific subject matter areas into which the
Milton Hershey School wished to inquire. (Doc. 60, Ex. 5.) This listing enumerated
a number of matters relating to the plaintiffs, their daughter, her death, Fouad,
PHC, and its involvement by disseminating information relating to this incident.
(Id.) In our view this notice was sufficient to place PHC on notice that the Milton
Hershey School wished to question a knowledgeable corporate deponent on those
factual matters averred by the plaintiffs which were allegedly derived from PHC’s
own investigations, reports and white papers, all of which had been broadly
disseminated by that organization as part of its advocacy mission. This subpoena
was issued on June 20, 2017, and the Rule 30(b)(6) deposition of PHC’s
designated corporate deponent took place three weeks later, on July 13, 2017.
(Doc. 60, Ex. 6.)
At that time, PHC presented Michael Kronenberg, a member of the PHC
board, and its newly appointed treasurer as the Rule 30(b)(6) deponent. (Id.)
Fouad’s motives, we will decline the invitation of PHC to have us infer a nefarious
motive from this litigation of other subpoenas in other courts. Suffice it to say that
in our view no ruling by those courts limits us in our consideration of this motion,
a matter that the New York courts seem to have recognized fell within our
jurisdiction.
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Given the apparent focus of the deposition, which sought to examine the factual
underpinning for various statements publicly disseminated by PHC relating to the
June 2013 death of the plaintiffs’ daughter, and how Milton Hershey School
policies may have contributed to that death, Kronenberg was a curious choice as a
Rule 30(b)(6) deponent for several reasons.
First, Kronenberg had only become a member of PHC in May of 2013 or
2014, and did not join the board of this organization until late 2015. (Doc. 60, Ex.
6, pp. 66, 72.) Thus, Kronenberg’s participation in the governance of this
organization began years after the events set forth in this lawsuit. Moreover, in the
course of this deposition it became abundantly clear that as a corporate deponent
Kronenberg completely lacked any knowledge regarding the factual basis for the
assertions and allegations made by PHC that related to the matters encompassed in
this lawsuit.
In addition to being an ill-suited corporate designee, it was apparent that
Kronenberg was ill-prepared to perform this function. According to Kronenberg’s
testimony at this deposition, he had learned of his proposed role in this litigation
only a few days before the scheduled deposition. Further, the counsel who was
retained to represent Kronenberg in this matter was also retained shortly before the
deposition itself. Even more troubling, it appeared that Kronenberg was singularly
uninformed regarding what he would be expected to testify to on behalf of PHC,
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and had only reviewed the Rule 30(b)(6) deposition notice immediately prior to the
deposition itself. (Id. at 15:3-22.)
During the course of this deposition, these shortcomings were cast in sharp
relief as the Milton Hershey School sought information concerning the factual
basis for a host of representations publicly disseminated by PHC, representations
which formed many of the legal and factual grounds for the plaintiffs’ complaint.
In response to these inquiries, Kronenberg was repeatedly compelled to disclaim
any knowledge of these factual matters reported by PHC. (Id. at 62:8-9, 62:23,
64:11, 79:3, 79:7, 81:15, 84:19-22, 114:24-115:3, 156:15, 193:13-17, 204:8, 207:4,
214:5-9, 215:4-5, 215:11, 215:18, 219:23-220:2, 222:16, 222:19, 222:22, 223:1,
223:4, 223:7, 255:5-6, 264:18, 281:2, 285:17.) Kronenberg’s lack of personal
knowledge regarding these relevant matters in the instant lawsuit was coupled with
repeated assertions that PHC’s President, Ric Fouad, was the source of this
information, the author of these reports, and the corporate officer with personal
knowledge of the matters which were the subject of the Milton Hershey School’s
inquiries. (Id. at 141:21-23, 147:3-6, 148:7-12, 154:17-18, 157:8-11, 162:16-18,
180:3-10, 184:4-6, 191:11-13, 192:13-18, 193:10-21, 201:4-5, 202:22-23, 214:59.) Indeed, according to Kronenberg, Fouad was the author of these documents and
was responsible for the public postings and dissemination of this information on
behalf of PHC. (Id., at 138:9-139:21, 141:21-23, 229:18-233:16.) Moreover,
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notably, Kronenberg testified as PHC’s corporate designee that, while Fouad was
an attorney, Fouad’s dissemination of this information was done “for PHC, not [in]
his capacity as an attorney.” (Id. at 26:23-24.)
It is in the wake of this Rule 30(b)(6) non-party corporate designee
deposition, that the Milton Hershey School filed this motion to compel which
sought multi-facetted relief in the form of an order “compel[ling] PHC to designate
F. Frederic Fouad to appear as PHC’s 30(b)(6) corporate designee and testify on
the topics previously delineated in the Notice of Deposition, and sanction Protect
the Hershey’s Children, Inc., F. Frederic Fouad, Royer Cooper Cohen Braundfeld,
LLC, and Alexander J. Nassar, Esq, ordering them to pay the costs and fees
associated with this filing,, as well as Defendants’ costs and fees associated with
the July 13, 2017 deposition of Protect the Hershey’s Children, Inc.’s inadequate
Rule 30(b)(6) witness.” (Doc. 60, p. 19.) This motion has been fully-briefed,
(Docs. 60, 61, 70-72, 79, 80, 85 and 86), and is therefore ripe for resolution.
For the reasons set forth below this motion will be granted in part, as
follows: Finding that PHC has not previously designated an adequate corporate
designee deponent pursuant to Rule 30(b)(6), PHC will be ordered to re-designate
an appropriate Rule 30(b)(6) deponent within 20 days, and the parties shall
schedule a mutually convenient place, date and time for this deposition within the
next 45 days. The defendant’s request for further sanctions will be deferred
8
pending completion of this deposition, since the nature of PHC’s compliance with
this order will greatly inform the court’s determination regarding whether further
sanctions are necessary or appropriate in this matter.
III.
Discussion
Several basic guiding principles inform our resolution of the instant motion
to compel. At the outset, rulings regarding the proper scope of discovery are
matters consigned to the court's discretion and judgment. Wisniewski v. JohnsManville Corp., 812 F.2d 81, 90 (3d Cir. 1987). Thus, a court's decisions regarding
the conduct of discovery will be disturbed only upon a showing of an abuse of
discretion. Marroquin-Manriquez v. I.N.S., 699 F.2d 129, 134 (3d Cir. 1983). This
far-reaching discretion extends to rulings by United States Magistrate Judges on
discovery matters. In this regard:
District courts provide magistrate judges with particularly broad
discretion in resolving discovery disputes. See Farmers & Merchs.
Nat'l Bank v. San Clemente Fin. Group Sec., Inc., 174 F.R.D. 572,
585 (D.N.J. 1997). When a magistrate judge's decision involves a
discretionary [discovery] matter . . . , “courts in this district have
determined that the clearly erroneous standard implicitly becomes an
abuse of discretion standard.” Saldi v. Paul Revere Life Ins. Co., 224
F.R.D. 169, 174 (E.D. Pa. 2004) (citing Scott Paper Co. v. United
States, 943 F. Supp. 501, 502 (E.D. Pa. 1996)). Under that standard, a
magistrate judge's discovery ruling “is entitled to great deference and
is reversible only for abuse of discretion.” Kresefky v. Panasonic
Commc'ns and Sys. Co., 169 F.R.D. 54, 64 (D.N.J. 1996); see also
Hasbrouck v. BankAmerica Hous. Servs., 190 F.R.D. 42, 44-45
(N.D.N.Y. 1999) (holding that discovery rulings are reviewed under
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abuse of discretion standard rather than de novo standard); EEOC v.
Mr. Gold, Inc., 223 F.R.D. 100, 102 (E.D.N.Y. 2004) (holding that a
magistrate judge's resolution of discovery disputes deserves
substantial deference and should be reversed only if there is an abuse
of discretion).
Halsey v. Pfeiffer, No. 09-1138, 2010 WL 3735702, *1 (D.N.J. Sept. 17,
2010).
Although the scope of discovery is to be interpreted broadly, it “is not
without limits.” Fassett v. Sears Holdings Corp., 319 F.R.D. 143, 149 (M.D. Pa.
2017) (quoting Kresefky v. Panasonic Commc'ns & Sys. Co., 169 F.R.D. 54, 64
(D.N.J. 1996)). Federal Rule of Civil Procedure 26(b)(1), as amended, provides:
Parties may obtain discovery regarding any nonprivileged matter that
is relevant to any party's claim or defense and proportional to the
needs of the case, considering the importance of the issues at stake in
the action, the amount in controversy, the parties' relative access to
relevant information, the parties' resources, the importance of the
discovery in resolving the issues, and whether the burden or expense
of the proposed discovery outweighs its likely benefit. Information
within this scope of discovery need not be admissible in evidence to
be discoverable.
Fed. R. Civ. P. 26(b)(1). In determining “the scope of discoverable information
under Rule 26(b)(1), the Court looks initially to the pleadings.” Trask v. Olin
Corp., 298 F.R.D. 244, 263 (W.D. Pa. 2014). Furthermore, “[i]nformation within
this scope of discovery need not be admissible in evidence to be discoverable.”
Fed. R. Civ. P. 26(b)(1). Thus, “all relevant material is discoverable unless an
applicable evidentiary privilege is asserted. The presumption that such matter is
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discoverable, however, is defeasible.” Pearson v. Miller, 211 F.3d 57, 65 (3d Cir.
2000).
A party moving to compel discovery bears the initial burden of proving the
relevance of the requested information. 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 under Fed.R.Civ.P. 26(b)(1), or (2) is of such
marginal relevance that the potential harm occasioned by discovery would
outweigh the ordinary presumption in favor of broad disclosure.” In re Urethane
Antitrust Litigation, 261 F.R.D. 570, 573 (D.Kan. 2009). Likewise, “[i]n deciding
whether a federal privilege against discovery exists, plaintiffs as the objecting
party have the burden of establishing the privilege.” Bayges v. Se. Pennsylvania
Transp. Auth., 144 F.R.D. 269, 271 (E.D. Pa. 1992). Indeed, because the assertion
of a claim of privilege “may result in the withholding of relevant information and
so may obstruct the search for truth,” In re Chevron Corp., 633 F.3d 153, 164 (3d
Cir. 2011), it is well-established that, “ ‘The burden of proving that the . . .
privilege applies is placed upon the party asserting the privilege.’ United States v.
Landof, 591 F.2d 36, 38 (9th Cir. 1978).” Matter of Grand Jury Empanelled
February 14, 1978, 603 F.2d 469, 474 (3d Cir. 1979).
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In this case we are called upon to examine a motion to compel brought in the
context of a deposition of a corporate designee. Such depositions are governed by
Rule 30(b)(6) of the Federal Rules of Civil Procedure, which provides as follows:
(6) Notice or Subpoena Directed to an Organization. In its notice or
subpoena, a party may name as the deponent a public or private
corporation, a partnership, an association, a governmental agency, or
other entity and must describe with reasonable particularity the
matters for examination. The named organization must then designate
one or more officers, directors, or managing agents, or designate other
persons who consent to testify on its behalf; and it may set out the
matters on which each person designated will testify. A subpoena
must advise a nonparty organization of its duty to make this
designation. The persons designated must testify about information
known or reasonably available to the organization. This paragraph (6)
does not preclude a deposition by any other procedure allowed by
these rules.
Fed. R. Civ. P. 30(b)(6).
By its terms Rule 30(b)(6) requires the party issuing a corporate designee
subpoena to “describe with reasonable particularity the matters for examination.”
Id. However, this aspect of Rule 30(b)(6) requiring the party noticing deposition of
a corporate designee to “describe with reasonable particularity the matters on
which the examination is requested” does not limit the scope of the deposition to
the contents of the notice. Instead, Rule 26’s definition of relevance is what defines
the proper scope of such a deposition. Cabot Corp. v. Yamulla Enterprises, Inc.,
194 F.R.D. 499 (M.D. Pa. 2000). Thus, “[t]he scope of topics a 30(b)(6) witness
can be expected to testify to is defined by Rule 26(b)(1), which allows a party to
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obtain information concerning ‘any matter, not privileged, which is relevant to the
subject matter involved in the pending action.’ ” New Jersey Dep't of Envtl. Prot.
v. Am. Thermoplastics Corp., No. 98CV4781WHWCLW, 2017 WL 498710, at *3
(D.N.J. Feb. 7, 2017).
Case law construing Rule 30(b)(6) also prescribes certain substantive
standards of knowledge and responsiveness that a corporate deposition designee
must satisfy. On this score it is important to note that:
A Rule 30(b)(6) designee “is not simply testifying about matters
within his or her personal knowledge, but rather is speaking for the
corporation about matters to which the corporation has reasonable
access.” Linerboard, 237 F.R.D. at 382 (quotation omitted).
Therefore, a corollary to the corporation's duty to designate a Rule
30(b)(6) witness is that the corporation must “prepare its designee to
be able to give binding answers on its behalf ... [and] perform a
reasonable inquiry for information” that is noticed and reasonably
available to it. Id. (quotation omitted).
State Farm Mut. Auto. Ins. Co. v. New Horizont, Inc., 250 F.R.D. 203, 216
(E.D. Pa. 2008).
Thus, when presented with a motion to compel relating to what is alleged to
have been an uninformed and uninformative corporate deposition designees we are
reminded to apply:
Rule 37(d) pragmatically in light of the purposes of Rule 30(b)(6) and
the parties' obligations thereunder. See, e.g., Starlight Int'l Inc. v.
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Herlihy, 186 F.R.D. 626, 639 (D.Kan.1999) (“Corporations,
partnerships, and joint ventures have a duty to make a conscientious,
good-faith effort to designate knowledgeable persons for Rule
30(b)(6) depositions and to prepare them to fully and unevasively
answer questions about the designated subject matter.”); The Bank of
New York v. Meridien BIAO Bank Tanzania Ltd., 171 F.R.D. 135,
151 (S.D.N.Y.1997) (“ ‘Producing an unprepared witness is
tantamount to a failure to appear.’ ”) (quoting United States v. Taylor,
166 F.R.D. 356, 363 (M.D.N.C.1996)); Taylor, 166 F.R.D. at 363
(“[I]nadequate preparation of a Rule 30(b)(6) designee can be
sanctioned based on the lack of good faith, prejudice to the opposing
side, and disruption of the proceedings.”); Zappia Middle East Constr.
Co. v. The Emirate of Abu Dhabi, No. 94 CIV. 1942, 1995 WL
686715, at *8 (S.D.N.Y. Nov. 17, 1995) (agreeing with rule
announced in Southern Union that providing a wholly inadequate
witness may amount to non-appearance under Rule 30(b)(6), but
finding that sanctions were not warranted in the circumstances of that
case); Municipal Subdistrict, Northern Colo. Water Conservancy
District v. OXY USA, Inc., 990 P.2d 701, 710 (Colo.1999) (en banc)
(following Southern Union, 985 F.2d at 197, and holding that trial
court may issue sanctions for failure to appear under Col.R.Civ.P.
37(d)—the state's analogue to Fed.R.Civ.P. 37(d)—when a
corporation designates a deponent who appears but is unable to
answer all the questions specified in the Col.R.Civ.P. 30(b)(6) notice);
see also, e.g., Turner v. Hudson Transit Lines, Inc., 142 F.R.D. 68,
78–79 (S.D.N.Y.1991) (“[A] party that fails to provide witnesses
knowledgeable in the areas requested in a Rule 30(b)(6) notice is
likewise subject to sanctions.”); Thomas v. Hoffmann–LaRoche, Inc.,
126 F.R.D. 522, 525 (N.D.Miss.1989) (“Sanctions are appropriate
when a party fails to comply with a request under Rule 30(b)(6) to
provide a knowledgeable deponent to testify on behalf of the
organization.”); see generally Boland Marine & Mfg. Co. v. M/V
Bright Field, No. 97–3097, 1999 WL 280451, at *3 (E.D.La. May 3,
1999) (acknowledging the rule announced in Southern Union but
finding that deponent was prepared adequately and that sanctions
were not warranted).
Black Horse Lane Assoc., L.P. v. Dow Chem. Corp., 228 F.3d 275, 303–04 (3d
Cir. 2000).
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Embracing this pragmatic view, “[i]n reality if a Rule 30(b)(6) witness is
unable to give useful information he is no more present for the deposition than
would be a deponent who physically appears for the deposition but sleeps through
it. Indeed, we believe that the purpose behind Rule 30(b)(6) undoubtedly is
frustrated in the situation in which a corporate party produces a witness who is
unable and/or unwilling to provide the necessary factual information on the entity's
behalf.” Black Horse Lane Assoc., L.P. v. Dow Chem. Corp., 228 F.3d 275, 304
(3d Cir. 2000). When this occurs and a corporation presents an inadequate and
unprepared corporate deposition designee, the court has broad discretion in
framing a remedy for a violation of Rile 30(b)(6)’s obligation to provide an
informed corporate designee, and may in the exercise of that discretion order the
corporation to produce another fully informed and appropriately prepared
designee. State Farm Mut. Auto. Ins. Co. v. New Horizont, Inc., 250 F.R.D. 203,
223 (E.D. Pa. 2008).
Judged against these legal guideposts we have little difficulty in finding at
the outset that Milton Hershey’s inquiries into the factual basis of PHC’s
allegations which form part of the foundation for this lawsuit was a relevant,
proper line of inquiry. Indeed, Julie Ellen Wartluft had testified that PHC’s reports
and public statements formed the basis for a number of her claims. Given this
acknowledgement by the plaintiff that she based her claims on PHC public
15
reporting, the evidentiary underpinning for that reporting was plainly relevant to
this lawsuit.
We also conclude that PHC had adequate notice that this field would be a
topic of questioning for its corporate designee. This Rule 30(b)(6) non-party
corporate deposition subpoena served upon PHC was accompanied by a notice
which detailed some 19 specific subject matter areas into which the Milton
Hershey School wished to inquire. (Doc. 60, Ex. 5.) This listing enumerated a
number of matters relating to the plaintiffs, their daughter, her death, Fouad, PHC,
and its involvement by disseminating information relating to this incident. (Id.)
Thus, Milton Hershey’s subpoena fully satisfied the dual requirements of relevance
under Rule 26 and notice under Rule 30(b)(6).
We also are constrained to conclude that PHC’s corporate deponent
designation in this case was woefully inadequate. In this regard, we do not
individually fault Mr. Kronenberg, who agreed on short notice to serve as this
corporate deponent. The fact remains, however, that Kronenberg was ill-suited and
wholly unprepared to undertake the task set before him. He had not served on the
board of PHC at the time of the events set forth in this lawsuit. He was completely
unprepared for this deposition and had in fact only reviewed the notice prepared by
Milton Hershey detailing the topics upon which he needed to be prepared to testify
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at the time of the deposition itself. Further, he was completely unfamiliar with the
factual basis for the reports, white papers and other public pronouncements made
by PHC relating to the issues in this case, since those documents were prepared
and posted by Mr. Fouad. Thus, as to these matters of critical evidentiary relevance
in this case, Mr. Kronenberg was repeatedly left to assert that he did not know
what the facts were, but that Ric Fouad would be fully conversant about those
factual matters. Therefore, our review of this deposition of Mr. Kronenberg leaves
us convinced that “[i]n reality [this] Rule 30(b)(6) witness [wa]s unable to give
useful information [and] he [was]s no more present for the deposition than would
be a deponent who physically appears for the deposition but sleeps through it.
[Having made these findings] we believe that the purpose behind Rule 30(b)(6)
undoubtedly [wa]s frustrated in th[is] situation in which a corporate party produces
a witness who is unable . . . to provide the necessary factual information on the
entity's behalf.” Black Horse Lane Assoc., L.P. v. Dow Chem. Corp., 228 F.3d
275, 304 (3d Cir. 2000).
Having reached these conclusions we find that an order directing PHC to
produce another fully informed and appropriately prepared designee is appropriate
here. State Farm Mut. Auto. Ins. Co. v. New Horizont, Inc., 250 F.R.D. 203, 223
(E.D. Pa. 2008). In its motion Milton Hershey School invites us to specifically
direct that Ric Fouad sit for this Rule 30(b)(6) deposition. We will decline this
17
request because we read Rule 30(b)(6) as providing that “the named organization
must then designate one or more officers” to serve as the deponent. Fed. R. Civ. P.
30(b)(6)(emphasis added.) Yet while we decline to specifically order the
appearance of Mr. Fouad as this Rule 30(b)(6) deponent, PHC and its counsel
should remain mindful of the fact “the corporation must ‘prepare its designee to be
able to give binding answers on its behalf ... [and] perform a reasonable inquiry for
information’ that is noticed and reasonably available to it.” State Farm Mut. Auto.
Ins. Co. v. New Horizont, Inc., 250 F.R.D. 203, 216 (E.D. Pa. 2008). As PHC,
Fouad and PHC’s counsel undertakes this important legal and ethical obligation
they should recognize that PHC’s prior corporate designee, Mr. Kronenberg, has
plainly and repeatedly stated under oath that Mr. Fouad, as the President of PHC,
would be the sole and exclusive repository of the information which Milton
Hershey School seeks in this deposition. PHC, Mr. Fouad and his counsel should
also keep in mind that the testimony of Mr. Kronenberg, on its face, seems to
undermine any sweeping claim of privilege regarding the factual underpinning for
the public pronouncements made by Mr. Fouad on behalf of PHC since Mr.
Kronenberg has testified that Fouad’s dissemination of this information was done
“for PHC, not [in] his capacity as an attorney.” ( Doc. 60, Ex. 6 at 26:23-24.)
Given this factual background, while we believe that Rule 30(b)(6) permits PHC to
choose its own corporate deposition designee, we are compelled to note that PHC
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acts at its legal peril if it elects to discount the testimony of its first corporate
deponent and produce someone other than Mr. Fouad to serve in this capacity.
Finally, we note that in its motion Milton Hershey asks that we also
“sanction Protect the Hershey’s Children, Inc., F. Frederic Fouad, Royer Cooper
Cohen Braundfeld, LLC, and Alexander J. Nassar, Esq, ordering them to pay the
costs and fees associated with this filing,, as well as Defendants’ costs and fees
associated with the July 13, 2017 deposition of Protect the Hershey’s Children,
Inc.’s inadequate Rule 30(b) (6) witness.” (Doc. 60, p.19.) We will defer ruling
upon this request at this time. In our view, many factors may have contributed to
the missteps which led to the presentation of an inadequate corporate deposition
designee in this case. However, having now clearly outlined our expectations in
the future, we believe that it is appropriate to defer any action on this aspect of the
defendant’s motion to compel, since the course of this discovery moving forward
will greatly inform whether, and to what degree, any sanctions may be necessary or
appropriate here.
An appropriate order follows.
III.
Order
For the foregoing reasons, the Defendants’ Motion to Compel is GRANTED
in part and DENIED in part as follows:
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Finding that PHC has not previously designated an adequate corporate
designee deponent pursuant to Rule 30(b) (6), PHC is ORDERED to re-designate
an appropriate Rule 30(b)(6) deponent within 20 days.
IT IS FUTHER ORDERED that the parties shall schedule a mutually
convenient place, date and time for this Rule 30(b)(6) deposition within the next 45
days.
Finally IT IS ORDERED that the defendant’s request for further sanctions
will be deferred pending completion of this deposition, since the nature of PHC’s
compliance with this order will greatly inform the court’s determination regarding
whether further sanctions are necessary or appropriate in this matter.
So ordered this 19th day of October, 2017.
/s/ Martin C. Carlson
Martin C. Carlson
United States Magistrate Judge
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