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Hill v. Asset Acceptance, LLC

United States District Court, S.D. California

July 3, 2014

DREW HILL individually and on behalf of all others similarly situated, Plaintiff,
v.
ASSET ACCEPTANCE, LLC, Defendant.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION TO COMPEL [ECF NO. 36]

BARBARA L. MAJOR, Magistrate Judge.

Currently before the Court is Plaintiff's May 9, 2014 motion to compel [ECF No. 36-2 ("MTC")], Defendant's May 16, 2014 opposition to the motion to compel [ECF No. 37 ("Oppo.")], and Plaintiff's May 23, 2014 reply [ECF No. 38 ("Reply")]. For the reasons set forth below, Plaintiff's motion is GRANTED IN PART AND DENIED IN PART.

FACTUAL AND PROCEDURAL BACKGROUND[1]

Plaintiff filed a complaint in this matter on July 23, 2013 [ECF No. 1] and a first amended class action complaint on August 22, 2014 [ECF No. 3 ("FAC")], alleging that Defendant violated the Fair Debt Collection Practices Act ("FDCPA") and the Rosenthal Fair Debt Collection Practices Act, California Civil Code section 1788 ("Rosenthal Act") "which prohibit debt collectors from engaging in abusive, deceptive and unfair practices." FAC at 1. Plaintiff seeks actual damages, statutory damages, attorneys fees, and costs for the alleged violations. Id. at 9. The alleged violations arose when Plaintiff allegedly fell behind in payments that he owed on a debt prior to April 2009. Id. at 2. The debt was then assigned to Defendant for collection[2] and Defendant contacted Plaintiff multiple times in an attempt to collect on the debt. Id. at 3. Defendant sued Plaintiff in the Superior Court of California, San Diego on July 27, 2012 and Plaintiff had to hire an attorney and incur expenses to defend the lawsuit. Id . Plaintiff believes that the credit card agreement between himself and the original creditor was governed by Delaware law which provides a three year statute of limitations for credit card accounts, open book and account stated. Id. at 3-4. Accordingly, Plaintiff alleges that Defendant "attempted to collect a debt that was barred by the applicable statute of limitations" and thereby, violated the FDCPA and Rosenthal Act. Id . The class Plaintiff seeks to represent includes:

(1) all natural persons in the State of California; (2) that were sued by defendant for a credit card account; (3) where said obligations were primarily for personal, family or household purposes; (4) between July 27, 2012 and July 27, 2013; (5) where the last payment or charge on the underlying account was made more than 3 years from the date the lawsuit was filed by Asset; and (6) and the underlying credit card agreement that gave rise to the purported debt is governed by the laws of the State of Delaware. Plaintiff defines "Rosenthal Act Class" as (1) all natural persons in the State of California; (2) that were sued by defendant for a credit card account; (3) where said obligations were money, property or their equivalent owing from a natural person by reason of a transaction between that person and a partnership, corporation, limited liability company, trust, estate cooperative, association or other similar entity in which that property, services or money was acquired on credit by that natural person primarily for personal, family or household purposes; (4) between July 27, 2012 and July 27, 2013; (5) where the last payment or charge on the underlying account was made more than 3 years from the date the lawsuit was filed by Asset; and (6) and the underlying credit card agreement that gave rise to the purported debt is governed by the laws of the State of Delaware.

FAC at 4.

On February 28, 2014, counsel for both parties jointly contacted the Court regarding a discovery dispute brought by Plaintiff concerning Defendant's responses to several of Plaintiff's discovery requests. ECF No. 21. In regard to this dispute, the Court found it appropriate to issue a briefing schedule. Id . In accordance with the briefing schedule, Plaintiff filed a motion to compel on March 7, 2014, Defendant filed a timely opposition on March 14, 2014, and Plaintiff filed his reply on March 21, 2014. ECF Nos. 24, 26 & 27. On March 27, 2014, the Court denied without prejudice Plaintiff's motion to compel, stayed discovery, and vacated pretrial deadlines pending resolution of the then pending motion to compel arbitration. ECF No. 28. The Court Ordered the parties to contact Judge Major's chambers no later than three business days after the ruling on the motion to compel arbitration. Id. at 4. On April 17, 2014, the parties filed a joint motion to withdraw Defendant's motion to compel arbitration with prejudice and to continue the discovery stay. ECF No. 32. The motion to compel arbitration was denied as moot by Judge Benitez on April 22, 2014. ECF No. 33. The request for a continued stay of discovery was denied on April 23, 2014 and the Court reset the remaining pretrial dates. ECF No. 34. On May 5, 2014, counsel for both parties jointly contacted the Court regarding the previous discovery dispute. ECF No. 35. The Court found it appropriate to issue another briefing schedule. Id . In accordance with that schedule, Plaintiff filed his motion to compel on May 9, 2014 [MTC], Defendant filed its opposition on May 16, 2014 [Oppo.], and Plaintiff filed his reply on May 23, 2014 [Reply].

LEGAL STANDARD

The Federal Rules of Civil Procedure generally allow for broad discovery, authorizing parties to obtain discovery regarding "any nonprivileged matter that is relevant to any party's claim or defense...." Federal Rule of Civil Procedure ("Fed. R. Civ. P.") 26(b)(1). Relevant information for discovery purposes includes any information "reasonably calculated to lead to the discovery of admissible evidence, " and need not be admissible at trial to be discoverable. Id . District courts have broad discretion to determine relevancy for discovery purposes, see Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002), and "[f]or good cause, the court may order discovery of any matter relevant to the subject matter involved in the action, " Fed.R.Civ.P. 26(b)(1). District courts also have broad discretion to limit discovery to prevent its abuse. See Fed.R.Civ.P. 26(b)(2) (instructing that courts may limit discovery where it is "unreasonably cumulative or duplicative, " "obtain[able] from some other source that is more convenient, less burdensome, or less expensive, " or where its burden or expense "outweighs its likely benefit").

A party may serve interrogatories that relate to any matter within the scope of Rule 26(b). Fed.R.Civ.P. 33(a). "The grounds for objecting to an interrogatory must be stated with specificity, " and any interrogatory not objected to must be answered fully in writing under oath. Fed.R.Civ.P. 33(b). Similarly, a party may request the production of any document within the scope of Rule 26(b). Fed.R.Civ.P. 34(a). "For each item or category, the response must either state that inspection and related activities will be permitted as requested or state an objection to the request, including the reasons." Fed.R.Civ.P. 34(b)(2)(B). The responding party is responsible for all items in "the responding party's possession, custody, or control." Fed.R.Civ.P. 34(a)(1). However, actual possession, custody or control is not required; rather, "[a] party may be ordered to produce a document in the possession of a non-party entity if that party has a legal right to obtain the document or has control over the entity who is in possession of the document." Soto v. City of Concord, 162 F.R.D. 603, 619 (N.D. Cal. 1995).

Fed. R. Civ. P. 36 states that "[a] party may serve on any other party a written request to admit, for purposes of the pending action only, the truth of any matters within the scope of Rule 26(b)(1) relating to: (A) facts, the application of law to fact, or opinions about either; and (B) the genuineness of any described documents." Fed.R.Civ.P. 36(a)(1). Subsection (a)(4) requires one of three answers: (1) an admission; (2) a denial; or (3) a statement detailing why the answering party is unable to admit or deny the matter despite making a reasonable inquiry. See Fed.R.Civ.P. 36(a)(4). Alternatively, a party may object to a requested admission. See Fed.R.Civ.P. 36(a)(5) (stating that "the grounds for objecting to a request must be stated. A party must not object solely on the ground that the request presents a genuine issue for trial").

"A matter is admitted unless, within 30 days after being served, the party to whom the request is directed serves on the requesting party a written answer or objection addressed to the matter and signed by the party or its attorney." Fed.R.Civ.P. 36(a)(3). If a party requesting an admission feels Rule 36 has not been met, that party may move to determine the sufficiency of the answer or objection. See Fed.R.Civ.P. 36(a)(6). "Unless the court finds an objection justified, it must order that an answer be served. On finding that an answer does not comply with this rule, the court may order either that the matter is admitted or that an amended answer be served." Id . An order deeming matters admitted is a "severe sanction". Asea, Inc. v. Southern Pacific Transportation Co., 669 F.2d 1242, 1247 (9th Cir. 1981). "Even when a party's answer [fails to comply] with the literal requirements of the Rule, courts generally order an amended answer rather than deem the matter admitted." Id.

DISCUSSION

Plaintiff moves to compel Defendant to (1) answer Interrogatories 2-9 and 13, (2) produce documents responsive to Requests for Production ("RFP") 1, 3-10, and 14-15, and (3) accurately answer Requests for Admission ("RFA") 1-8 and 13-16 from Plaintiff's First Set of Written Discovery Requests. MTC at 11-27. In support, Plaintiff states that the requests at issue relate to Plaintiff, damages, and relevant policies and procedures, and are designed to ascertain the class. Id . Defendant contends that "Plaintiff is seeking information that is either invasive of the putative class' privacy, premature in light of the fact that a class has not been certified, or irrelevant to issues of liability, damages, or class certification" and should be denied in its entirety. Oppo. at 2-3. Plaintiff responds that Defendant improperly attempts to avoid its discovery obligation "because of a merits argument on Plaintiff's claim" and that Defendant's limited production after the filing of the MTC has not "mooted" the discovery issues in this matter. Reply at 2-3.

A. Requests Relating Solely to Plaintiff - RFP No. 15

RFP No. 15 seeks "[a]ll documents that concern or refer to the named plaintiffs in this action." MTC, Exh. 7 at 8-9. Defendant objected to this request but stated it would "produce non-privileged, responsive documents." Id . In his moving papers, Plaintiff argued that "Defendant still has not produced a single document responsive to Plaintiff's discovery requests, including documents that directly concern the Plaintiff" and that Defendant's objections as to privilege and work product should be overruled since Defendant has failed to produce a privilege log or a single document more than two months after the requests were made. MTC at 12. Defendant responded that it provided Plaintiff with "103 pages of documents relating to Plaintiff's account with [Defendant]" on May 14, 2014. Declaration of Ashley R. Fickle ("Fickle Decl.") at 2; see also Reply, Exhibit 1. Defendant contends, therefore, that the "relief sought in Plaintiff's motion with respect to [RFP] 15 is moot." Oppo. at 5.

Plaintiff disagrees and explains that the produced documents contain inappropriate redactions of relevant information, such as the statute of limitations date on Plaintiff's account. Reply at 4. Plaintiff argues that the redactions, including handwritten notations, are improper because the information is relevant since it is on Plaintiff's account documents, there is a protective order in this case governing the exchange of confidential information, and Defendant did not produce a privilege log stating that the redactions covered privileged communications. Id . Defendant did not provide an explanation or justification for the redactions. Oppo. at 5 ("Asset provided all non-privileged documents in its possession that concern or refer to Plaintiff's Bank of America account.").

Plaintiff's motion to compel further response to RFP No. 15 is GRANTED. Defendant must remove all redactions unless the redacted content is privileged. If Defendant redacts information based upon a privilege, Defendant must provide Plaintiff with a privilege log providing the legal basis for each redaction. See Fed.R.Civ.P. 26(b)(5) (requiring party to expressly make claim of privilege and to describe the nature of the material withheld). The privilege log must be provided to Plaintiff with the supplemental document production.

B. Requests Designed to Ascertain the Class - RFAs 1-8, 13-16

Requests for Admission 1-4 state:

1. You filed more than 500 lawsuits in California to collect a debt allegedly owing on a consumer credit card account.
2. You filed more than 1, 000 lawsuits in California to collect a debt allegedly owing on a consumer credit card account.
3. You filed more than 2, 500 lawsuits in California to collect a debt allegedly owing on a consumer credit card account.
4. You filed more than 5, 000 lawsuits in California to collect a debt allegedly owing on a consumer credit card account.

MTC, Exh. 4 at 2-8. Initially, Defendant provided a partial answer but stated that it did not have sufficient information to admit or deny each request. Id . On May 14, 2014, Defendant supplemented its responses, providing the same response to RFAs 1-4 with the only difference being the number before "lawsuits" and that number matched whatever number was in the RFA. Fickle Decl. at 2, Exh. B. The supplemental response is as follows:

Asset admits that is has filed more than [] lawsuits to collect a debt allegedly owing on a credit card account in California. Asset, having made reasonable inquiry, is without sufficient information to admit that these credit card accounts were consumer accounts and therefore denies the remainder of the request.

Id.

Requests for Admission 5-8 and 13-16 state:

5. You filed more than 500 lawsuits in California to collect a debt allegedly owing on a consumer credit card account where the underlying credit card agreement has a Delaware choice of law provision.
6. You filed more than 1, 000 lawsuits in California to collect a debt allegedly owing on a consumer credit card account where the underlying credit card agreement has a Delaware choice of law provision.
7. You filed more than 2, 500 lawsuits in California to collect a debt allegedly owing on a consumer credit card account where the underlying credit card agreement has a Delaware choice of law provision.
8. You filed more than 5, 000 lawsuits in California to collect a debt allegedly owing on a consumer credit card account where the underlying credit card agreement has a Delaware choice of law provision.
13. You filed more than 500 lawsuits in California to collect a debt allegedly owing on a consumer credit card account where the underlying credit card agreement has a Delaware choice of law provision and the last payment or charge by the consumer on the account was made more than three years prior to the date of the lawsuit
14. You filed more than 1, 000 lawsuits in California to collect a debt allegedly owing on a consumer credit card account where the underlying credit card agreement has a Delaware choice of law provision and the last payment or charge by the consumer on the account was made more than three years prior to the date of the lawsuit.
15. You filed more than 2, 500 lawsuits in California to collect a debt allegedly owing on a consumer credit card account where the underlying credit card agreement has a Delaware choice of law provision and the last payment or charge by the consumer on the account was made more than three years prior to the date of the lawsuit.
16. You filed more than 5, 000 lawsuits in California to collect a debt allegedly owing on a consumer credit card account where the underlying credit card agreement has a Delaware choice of law provision and the last payment or charge by the consumer on the account was made more than three years prior to the date of the lawsuit.

MTC, Exh. 4 at 3-8. Defendant provided the same response to RFAs 5-8 and 13-16:

Asset objects because request is vague and ambiguous as to "a debt allegedly owing on a consumer credit card account." Asset further objects to the extent that the court records of the State of California are publically available to plaintiff. Without waiving the foregoing objections, having made reasonable inquiry, the information Asset knows or can readily obtain is insufficient to enable it to admit or deny the remaining allegations of this request.

Id. at 3-5. Defendant supplemented its responses to RFAs 13-16 on May 14, 2014, but not RFAs 5-8. Fickle Decl. at 2, Exh. B. The additional responses to RFAs 13 and 14 are identical with the exception of the number before "lawsuits" which matches whatever number was in the RFA. The supplemental response is as follows:

Asset admits that it has filed more than [] lawsuits to collect a debt allegedly owing on a credit card account in California where the last payment or charge was more than 3 years from the date of the filing of the lawsuit. Asset, having made reasonable inquiry, is without sufficient information to admit that these credit card accounts were consumer accounts or that the underlying credit card agreement had a Delaware choice of law provision, and therefore denies the remainder of the request.

Id. The supplemental responses to RFAs 15 and 16 also are identical and state "Denied." Id.

With regard to all of these RFAs, Plaintiff argues that Defendant should be required to respond based upon information in either Defendant's possession or the possession of counsel employed by Defendant to litigate on its behalf because both types of information are within Defendant's "custody and control." MTC at 13-15; Reply at 5-6. Defendant asserts that it has responded "as fully and completely as it can with the information in [Defendant's] custody and control" and that it cannot respond as to the exact nature of the debt or the governing terms and conditions of each account since it was not the original creditor. Oppo. at 6. Defendant argues that it is not obligated "to obtain this information from third-parties who are not under [Defendant's] control" and that the cases Plaintiff cites in support of that notion concern parties obtaining information from related entities and subsidiaries, not former parties to a business transaction. Id.

Defendant admits that is has filed more than 5, 000 lawsuits to collect a debt allegedly owing on a credit card account in California. Id . If any of those lawsuits were based on a consumer credit card account, Defendant or its attorneys would have had to file a venue declaration establishing that the action arose from "extensions of credit intended primarily for personal, family or household use." Cal. Civ. P. Code 395(b)[3]; see also Cal. Civ. P. Code 396a(a). Defendant neither admits nor denies that it filed such declarations in its collection cases and merely argues that just because it filed a venue declaration in Plaintiff's underlying case, "does not mean that Asset routinely files such declaration, or has in other instances." Oppo. at 7. Because Defendant has not provided any evidence indicating that the declarations (or facts required for the declarations) are not in the possession of its debt collection counsel, and because Defendant has filed thousands of lawsuits to collect a debt on a credit card account in California and California law requires venue declarations, the Court finds that it is likely that information enabling it to respond more fully to the RFAs is within the possession of its debt collection counsel.

Defendant argues that it does not have custody or control over the information in the possession of the attorney or attorneys Defendant employed to file the debt collection lawsuits. Oppo. at 6-7. Defendant is incorrect. In a similar case, the court held that defendant has custody and control of documents in the physical possession of defendant's former counsel. Ivy Hotel San Diego, LLC v. Houston Cas. Co., 2011 WL 4914941, *1-2 (S.D. Cal. Oct. 17, 2011). Ivy Hotel San Diego, LLC, is an insurance coverage action where plaintiff sued defendant to recover legal fees and expenses incurred while defending a cross complaint in a different matter ("Krump matter"). Ivy Hotel San Diego, LLC, 2011 WL 4914941 at *1-2. When plaintiff propounded its first set of RFPs, it requested documents regarding defendant's handling of plaintiff's claim in the Krump matter. Id. at 2. Defendant responded by withholding several documents that were subject to the attorney-client privilege or work product doctrine and identifying and producing only the documents that were in its immediate possession. Id . Defendant informed plaintiff that it was unable to force its coverage counsel to turn over her work product and that it did not request that counsel's files be made available for possible production. Id. at 2, 9. Defendant argued that coverage counsel's documents were not in defendant's possession, custody, or control because defendant was "not legally entitled to the former attorneys' work product." Id. at 9. Plaintiff argued that defendant was required to search its former counsel's records and produce responsive documents. Id . The court agreed with plaintiff and found that the "circumstances of this case indicate that responsive documents located in [coverage counsel's] files are within [defendant's] control because it maintains the right and ability to influence the former law firm to allow inspection and copying of the materials. [Defendant], as the law firm's former client, paid for the creation of the work product and is entitled to inspect and copy the materials." Id. at 10.

Similarly, in Moreno v. Autozone, Inc., 2008 WL 906510, *1 (N.D. Cal. April 1, 2008), defendant requested that plaintiff be compelled to produce documents related to nonparty witnesses. Plaintiff argued that she could not be required to produce the documents because neither she nor her current counsel had the documents in their possession. Id . The court noted that "[c]ontrol is generally defined as the legal right to obtain the documents on demand and at times has been construed more broadly to include the practical ability to obtain the documents sought upon demand" and found that since ...


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