IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA : : : : : : : : : :

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1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA PLAINTIFF, Successor-in-Interest to Plaintiff, vs. DEFENDANT, Defendant. CIVIL ACTION NO. MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT'S MOTION FOR PROTECTIVE ORDER AND TO REQUEST THE SCHEDULING OF A CASE MANAGEMENT CONFERENCE Defendant, Defendant ( Defendant or Defendant ), by and through its counsel, FELLHEIMER & EICHEN LLP, files this Memorandum of Law in Support of its Motion for Protective Order and to Request the Scheduling of a Case Management Conference ( Motion ) 1 and states as follows I. A PROTECTIVE ORDER AND THE SCHEDULING OF A CASE MANAGEMENT CONFERENCE ARE NEEDED IN THIS CASE Defendant files this Motion to (1) Protect Defendant from having to produce its Florida based officers and managing agents, [NAME] (Senior Vice President) and [NAME] (Vice President of Construction) in Pennsylvania; (2) Bar plaintiff, Plaintiff, LP ( Plaintiff ) from conducting irrelevant and overly broad discovery relating to other terminated leases ; and (3) Request that a case management conference be scheduled pursuant to FED. R. CIV. P. 16 with an available Magistrate Judge. 1 Defendant herein incorporates the Motion by reference pursuant to FED.R.CIV.P. 10(c).

2 II. PROCEDURAL AND FACTUAL HISTORY This case involves a commercial lease dispute brought by a local shopping center developer, plaintiff, Plaintiff ( Plaintiff ) 2 against Defendant arising out of Defendant s decision to terminate the Lease dated April 30, 2007 ( Lease ). This action which was removed from state court on July 9, Although Plaintiff originally filed a Verified Complaint in Equity ( Complaint ) asserting claims solely for declaratory judgment and injunctive relief (without expressly seeking any monetary damages), this Court s Order and Memorandum Opinion dated February 23, 2009 makes clear that because Plaintiff has an adequate remedy at law for damages and because Plaintiff did not establish a basis for injunctive relief, the Complaint was interpreted by the Court to have asserted a claim, in the alternative, against Defendant for monetary damages. 3 It is on this basis alone that Plaintiff was permitted to proceed with its Complaint. To date, Defendant has not received from Plaintiff any calculation of Plaintiff s alleged monetary damages. Plaintiff s Rule 26 Initial Disclosures identified that such monetary damages were Not applicable to this case. As the subject Lease was to be for a ten (10) year term with an annual fixed rent of $257,050.00, the potential damages being sought by Plaintiff may exceed $2.5 million dollars without consideration of Plaintiff s speculative claims for damages for such things as alleged lost revenues arising from the renegotiation of rents by other tenants at the shopping center or for breaches of by those same tenants. 4 2 Upon information and belief, Plaintiff is owned by or affiliated with [NAME]. See [WEBSITE]. (listing [NAME] among a total of seven substantial commercial real estate development projects in which it is involved). 3 See Court s Order and Memorandum dated February 23, It is submitted that the gist-of-the-action and economic loss doctrines bar these tort damages claims, especially since the dispute is one that fundamentally involves a written contract claim

3 As the Court s Order dated February 23, 2009 only recently decided Defendant s Motion to Dismiss, Defendant has not even had the opportunity to file its Answer to the Complaint. Although counsel for the parties have repeatedly attempted to negotiate a case management schedule by agreement, they have been unsuccessful in doing so. Furthermore, no Rule 16 scheduling conference has yet been scheduled in the case. Documentary discovery has been exchanged, but not depositions have thus far been taken. At the February 19, 2009 oral argument on then pending motions in the case, the undersigned committed to review Plaintiff s Rule 30(b)(6) list of subject matter to identify who its designee(s) might be and their location and to discuss same with Plaintiff s counsel in attempt to schedule the Defendant designee(s) depositions by agreement. Due to that commitment, the Court s February 23, 2009 Order denied as moot Defendant s prior Motion for Protective Order. As the Certification Counsel (attached as Exhibit A) confirms, counsel for the parties have communicated as to the issue of the Defendant designee depositions without success. The subject matter identified by Plaintiff (Item 4) includes a request for testimony as to The termination by Defendant of any other leases for shopping center space during the period January 1, 2008 through the present, and the reason(s) for any such termination. The belowsigned counsel has informed Plaintiff of Defendant s objection to this item. Defendant similarly objected to Plaintiff s First Interrogatory No. 1 which asked for the same information. The fact is that this requested discovery is irrelevant to the particular lease and its terms at issue in this case. Any other lease would relate to different factual circumstances, terms and parties. Plaintiff is attempting to fish for bad motive discovery which is irrelevant to the legal issue of whether Defendant had the lawful right under the Lease to terminate it for Plaintiff s failure to timely - 3 -

4 deliver the Premises. Thus, Defendant needs a protective order to bar Plaintiff from conducting this discovery. Defendant identified two designees which it would need to respond to the remaining subject matter identified by Plaintiff. One designee, [NAME] (Construction Project Manager) can address the majority of the subject matter (Items 5-14). With [NAME] being located in New Jersey, Defendant agreed to produce [NAME] at Plaintiff counsel s office at a mutually acceptable date. 5 The other designee, [NAME] (Senior Vice President, Real Estate & Construction) can address more limited subject matter (Items 1-3, 8 and 13). As the Declaration of [NAME] (attached as Exhibit B) confirms, [NAME] s office is located in Boca Raton, FL and his absence from the office would be adverse to Defendant s business interests. As a result, Defendant has offered [NAME] s deposition via telephone (or video conference) or in Florida (with Defendant offering to pay the expense of Plaintiff s counsel s reasonable airline expenses and reasonable attorney s fees for his flying time). FED. R. CIV. P. 30(b)(4). Plaintiff has refused these offers, and contrary to the law of this district, insists that Defendant produce all of its designees in this district. Plaintiff previously noticed the deposition of [NAME] (Vice President of Construction), who is also located in Florida as well. 6 [NAME] is not a Defendant designee, however, he is an officer and managing agent of Defendant. Plaintiff has not indicated that it no longer wishes to depose [NAME]. 5 Plaintiff has stated that Mr. Cruz is expected to be the longest deposition. [NAME] s first date of availability is April 1, The other witness noticed for deposition by Plaintiff, [NAME], is no longer employed with Defendant and is in Florida

5 To have Messrs. [NAMES] appear for deposition in Pennsylvania would be disruptive to Defendant s business in these stressful economic times. Their absence would be unreasonably burdensome and detrimental to Defendant as the Real Estate Committee has designated them as the signing representatives on behalf of the company for real estate, construction and design documentation and certificates for the corporation. Furthermore, the recent economic downturn has caused Defendant to institute travel restrictions on its employees, including key personnel like Messrs. [NAMES]. For these two gentlemen to forced to appear in Pennsylvania threatens to take them out of their offices for approximately three (3) days each and will otherwise cause Defendant to incur two times the travel and lodging expenses, than if it simply pays the airfare and related travel time for Plaintiff s counsel to conduct the depositions in Boca Raton, FL. This is especially wasteful if Plaintiff intends to take the depositions of any other Florida located witness. For Plaintiff, a commercial developer of retail complexes owned by or affiliated with [COMPANY NAME], to ignore the general rule and insist that Defendant bring to Pennsylvania any of its personnel Plaintiff identifies is meritless, unreasonable and far beyond the just, speedy, and inexpensive determination goals of FED. R. CIV. P. 1. Accordingly, a protective order under FED. R. CIV. P. 26(c) is warranted under the circumstances. III. LEGAL ARGUMENT A. A Protective Order Is Needed to Bar Defendant From Having to Produce Its Florida Officers and Managing Agents in Pennsylvania. For good cause shown, a court may enter a protective order to prevent a deposition from being conducted. Per FED.R.CIV.P. 32(d)(1), Defendant objects that any of its Florida located officer employees be deposed in Pennsylvania. [T]he deposition of a corporate officer or - 5 -

6 employee should usually take place at the corporation s principal place of business or employment. Philadelphia Indemnity Ins. Co. v. Federal Ins. Co., 215 F.R.D. 492 (E.D. Pa. 2003) (Kelly, J.) (citing Generale Bank Nederland N.V. v. First Sterling Bank, 1997 WL (E.D. Pa. 1997) (Hutton, J.) White v. Chrysler Corp., 1994 WL at *1 (E.D. Pa. Apr. 4, 1994); and Simkins Corp. v. Wahnshaff Corp., 1986 WL 115 at *1 (E.D. Pa. Jan. 31, 1986)). See also County Council of Northampton County v. SHL Systemhouse Corp., 1999 WL (E.D. Pa. Apr. 20, 1999) (Rueter, Mag. J.) (denying request for deposition in Pennsylvania of out of state corporate designee and stating The deposition of a corporate agent or officer should ordinarily be held at the principal place of business. ) (citing 8A Wright & Miller, Federal Practice and Procedure 2112 at 81 (1994)). Thus, any deviation from the general rule would not result in compelling witness appearances in Pennsylvania, but rather would only result in a cost shifting associated with conducting the deposition. A Plaintiff s choice to set where a deposition may take place is subject to the power of the courts to grant a protective order. SHL Systemhouse Corp., 1999 WL at *2. Courts possess considerable discretion in determining the place of a deposition. Philadelphia Indemnity, 215 F.R.D. at 495. In making the determination, the court may consider the relative expenses of the parties and may order that expenses be paid by the opposing party. Generale Bank, 1997 WL at *2 (citing 8A Wright & Miller, Federal Practice and Procedure 2112). In this case, Plaintiff has not identified any good cause deviate from the abovereferenced general rule. Defendant has agreed to produce one of its two designees in Pennsylvania and that person can address the majority of subject matter identified. Defendant has also offered to pay much of Plaintiff s expenses associated with taking the depositions of its corporate officers and managing agents in Florida, notwithstanding the general rule

7 Alternatively, Defendant has suggested less expensive permissible alternatives to an in person deposition of its Florida personnel in Pennsylvania all without success. Plaintiff s insistence that Defendant be required to bring any persons Plaintiff identifies to Pennsylvania is simply without legal or economic merit or reasonable justification. Both Messrs. [NAMES] are officers and managing agents of Defendant located in Boca Raton, Florida with significant responsibilities for its worldwide Real Estate & Construction operations whose presence at Defendant is needed. B. A Protective Order Should Issue to Bar Plaintiff s Improper Other Lease Termination Discovery. Plaintiff s other Lease termination discovery should be barred as it is nothing more than a wasteful fishing expedition for other instances of suspected bad motive terminations by Defendant. Defendant objected to this discovery in its objection to First Interrogatory No. 1 back in October 2008 and again when Plaintiff listed it as part of the subject matter for the Rule 30(b)(6) deposition. This discovery should be barred because (1) it is irrelevant to the case (and therefore beyond the scope of that permitted under Rule 26) as other leases with other landlords relating to terminations for any reasons simply have nothing to do with the subject lease, its terms or whether Defendant s termination of it was proper; (2) motive is irrelevant to the legal question of whether termination of the subject lease was proper (the only question is whether Defendant was permitted to terminate, not whether it harbored any bad motive for otherwise executing a proper termination); and (3) Defendant is a worldwide office supply retailer and to even attempt to undertake such discovery take a monumental amount of effort that simply is not justified. Accordingly, the other lease termination discovery should be barred as requested. C. The Scheduling of a Case Management Conference Should Facilitate the Litigation and May Prove Useful in Reducing Motion Practice - 7 -

8 and Otherwise Discourage the Parties from Engaging in Wasteful Pretrial Activities. Although this litigation is more than eight (8) months old, it is in many ways just beginning. Plaintiff filed a Verified Complaint in Equity without expressly seeking monetary damages. In fact, Plaintiff stated that monetary damages calculations were Not applicable in its Rule 26 Initial Disclosures, thus Defendant still does not even know the full extent of the monetary damages Plaintiff is seeking. Some documentary discovery has been exchanged, but no depositions have yet been taken. In fact, Defendant only recently learned that the Court interpreted the Complaint to assert a money damages claim in the alternative and is allowing the case to proceed on that singular claim per the Court s Order dated February 23, As that latter order only recently issued, Defendant has not yet even had an opportunity to file its answer to the Complaint (but is in the process of preparing such an answer). Although the parties have repeatedly attempted to discuss a case management schedule by agreement, they have been unable to successfully conclude those negotiations. To date, no Rule 16 scheduling conference has been scheduled in the case. Rather than permit the parties to buffet each other in motion practice that is burdensome to each of them, not to mention the valuable time and effort of this Court, Defendant respectfully requests that a case management conference be scheduled pursuant to FED. R. CIV. P. 16 with an available Magistrate Judge. This is a complex commercial lease build-out case that would clearly benefit from a Rule 16 conference and plan as the parties are clearly unable to work through amicably without judicial assistance

9 IV. CONCLUSION For the foregoing reasons, Defendant respectfully requests the grant of its Motion in the form of order submitted herewith. Respectfully submitted, FELLHEIMER & EICHEN LLP Dated Attorneys for Defendant - 9 -