U.S. District Judge Gerald Austin McHugh on Thursday denied Penn Engineering’s motion to quash third-party subpoenas and denied the plaintiff’s motion for sanctions, ordering a 30(b)(6) deposition to determine if the manufacturer can produce end-user data it claims is inaccessible.
McHugh gave little weight to Penn Engineering’s arguments that producing the data would be unduly burdensome. He noted that the company already produces detailed monthly distributor data and that its own expert’s offer to allow review on computer terminals suggests the information is accessible.
The judge, writing for the court, endorsed the view of a predecessor in a related action that a discovery motion is not the proper avenue to challenge the merits of a claim or defense. He stated he would give little weight to the parties’ respective views of the merits.
Penn Engineering argued that its true customers are end users, not its network of distributors, and that it lacks the capability to break out data by subsequent purchaser. McHugh found this explanation insufficient, noting that from a marketing perspective, the company would likely need such data.
"The sanction requested is extreme," McHugh wrote regarding the plaintiff’s motion for sanctions. Instead of imposing sanctions, he instructed the parties to proceed with a 30(b)(6) deposition of an appropriate Penn Engineering witness.
The witness must provide a "fulsome explanation of what relevant end user information is in the possession of the company and in what forms it can be produced," the judge ordered, adding that the request for counsel fees is held in abeyance until the deposition is completed.
Turning to the motion to quash, McHugh found the burden on Penn Engineering minimal since only records were requested and no counsel appearance was required. He noted that one distributor, Mouser, had easily complied once the request was clarified.
"Defendant’s proportionality arguments do not carry great weight," McHugh wrote, citing precedent that only the recipient of a subpoena has standing to raise undue burden.
The judge acknowledged that plaintiff Peninsula Components’ approach might not be the most efficient, but noted that if Penn Engineering proves it cannot provide the information, issuing subpoenas may be the only path forward.
Penn Engineering appears to expect the plaintiff’s case to fail at summary judgment, but McHugh refused to presume discovery on damages is unnecessary in a matter that is not bifurcated.
The motion to quash was denied.