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David Tourgeman v. Collins Financial Services

January 5, 2012

DAVID TOURGEMAN,
PLAINTIFF,
v.
COLLINS FINANCIAL SERVICES, INC., ET DEFENDANTS.



The opinion of the court was delivered by: Hon. Nita L. Stormes U.S. Magistrate Judge United States District Court

ORDER DENYING IN PART AND GRANTING IN PART PLAINTIFF'S MOTION FOR SANCTIONS

[Doc. No. 244.]

INTRODUCTION

Before the Court is Plaintiff's motion for sanctions based on Defendants' failure to produce documents pursuant to court-ordered discovery. Plaintiff claims Defendants' discovery violation caused the denial of Plaintiff's motion for class certification. Plaintiff requests this Court impose a sanction finding numerosity to be an established fact and further impose $18,855 in attorney fees and costs. For the reasons outlined below, the Court DENIES IN PART AND GRANTS IN PART Plaintiff's motion for sanctions.

BACKGROUND

Plaintiff, David Tourgeman, purchased a computer from Dell pursuant to a financing plan through CIT Online Bank (CIT), arranged by Dell Financial Services, L.P. (DFS). (TAC ¶ 16, 17.) In July 2006, DFS sold a portfolio of debts, including Plaintiff's, to Collins Financial Services, Inc. (Collins). (Id. ¶¶ 20-22.) Collins transferred account information to its debt collection arm, Paragon Way, who sent 256,458 letters to 49,939 account holders all identifying the original creditor as American Investment Bank (AIB).

. ¶¶ 21-24.); [Doc. No. 240 (Order Denying Motion for Class Certification) at 3.] After almost a year of collection efforts, Paragon Way sent "slightly over" 2000 remaining uncollectible accounts to the law firm of Nelson & Kennard (NK) who pursued the debts, including Plaintiff's. [Doc. No. 240 at 3.]

On July 31, 2008, Plaintiff filed this class action alleging claims for negligence, invasion of privacy, violation of California Business and Professions Code section 17200, violation of California's Rosenthal Act, and violation of the Fair Debt Collection Practices Act against all or some of the Defendants. [Doc. No. 1.] Particular to this motion, Plaintiff alleges collection letters were sent and lawsuits were filed on behalf of Collins that falsely alleged AIB was the original creditor on the accounts when in fact CIT was the original creditor.

On May 25, 2010, this Court issued an Order partially granting Plaintiff's motion to compel supplemental discovery responses. [Doc. No. 104.] Pursuant to the Order, NK was to produce all complaints filed on behalf of Collins after July 31, 2007. (Motion for Sanctions (Mot.). at 1.) Subsequently, NK produced 35,496 electronically recreated copies of the complaints based on data retrieved from a tailored electronic query. Kennard Decl. ¶ 4.

On October 21, 2011, the District Court denied Plaintiff's motion for class certification. [Doc. No. 240.] Among other things, the District Court found a lack of numerosity to support a class because "Plaintiff does not identify a single consumer, other than himself, who received [] a collection letter [from Nelson & Kennard stating AIB was the original creditor when CIT was in fact the original creditor]." [Id. at 12.] The district court further stated that "Rule 23(a)(1) does not set a high bar, but it requires more than speculation." [Id.]

Plaintiff subsequently re-reviewed the recreated complaints he received in discovery and through further investigation discovered that Defendants had not produced complaints they should have produced that would have helped establish numerosity.

Plaintiff filed this motion for sanctions on November 15, 2011. [Doc. No. 244.] On November 30, 2011 Defendants filed an Opposition. [Doc. No. 250.] On December 7, 2011 Plaintiff filed a Reply. [Doc. No. 251.] The matter was taken under submission on December 14, 2011.

DISCUSSION

I. The Parties' ...


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