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Vasquez v. California School of Culinary Arts Inc.

California Court of Appeals, Second District, Second Division

August 27, 2014

DANIEL VASQUEZ et al., Plaintiffs and Respondents,
v.
CALIFORNIA SCHOOL OF CULINARY ARTS, INC., et al., Defendants SALLIE MAE, INC., Real Party in Interest and Appellant.

APPEAL from an order of the Superior Court of Los Angeles County, No. BC 393129 Jane L. Johnson, Judge.

Page 36

[Copyrighted Material Omitted]

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COUNSEL

Stroock & Stroock & Lavan, Lisa M. Simonetti, Joann M. Nguyen and Wesley M. Griffith for Real Party in Interest and Appellant.

Gallo, Ray E. Gallo, Dominic R. Valerian; Kirtland & Packard, Michael Louis Kelly, Behram V. Parekh and Joshua A. Fields for Plaintiffs and Respondents.

No appearance for Defendants.

OPINION

CHAVEZ, J.

Real party in interest and appellant Sallie Mae, Inc. (Sallie Mae) appeals from an order awarding plaintiffs and respondents Daniel Vasquez, et al. (collectively, plaintiffs) $11, 487 in attorney fees and costs incurred after plaintiffs successfully opposed Sallie Mae’s motion to quash a business records subpoena seeking electronically stored information pertaining to student loans made to them by Sallie Mae. We affirm the trial court’s order.

BACKGROUND

The parties

Plaintiffs are 1, 034 former students who enrolled in a culinary school owned and/or operated by defendants California School of Culinary Arts, Inc. and Career Education Corporation. In their amended consolidated complaint, plaintiffs allege that defendants defrauded them into enrolling in culinary school by numerous misrepresentations about graduation rates, employment prospects after graduation, and anticipated income levels. Plaintiffs asserted claims for fraud, breach of contract, and violations of the Unfair Competition Law, Consumer Legal Remedies Act (Civ. Code, § 1750 et seq.), and the Private Postsecondary and Vocational Education Reform Act of 1989 (Ed. Code, former § 94300 et seq.).

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Sallie Mae services student loans obtained by some of plaintiffs for the purpose of attending defendants’ culinary program.[1]

The business records subpoenas

Plaintiffs issued a business records subpoena to Sallie Mae on July 25, 2012 (the first subpoena) seeking production of their loan files. Sallie Mae responded with an August 13, 2012 letter offering to comply with the first subpoena if plaintiffs agreed to pay Sallie Mae’s processing fees, including, as authorized by Evidence Code section 1563, subdivision (b), $.10 per page for photocopies and $24 per hour for clerical time. The letter explained that the average borrower file consists of approximately 300 pages and requires between two and three hours of clerical time to process and that some borrowers may have multiple loans and multiple loan files. Obtaining the requested documents could thus have cost the 800 plaintiffs with Sallie Mae loans more than $60, 000.

Because the cost of obtaining hard copies of their loan files was prohibitive, plaintiffs revised their document request by serving a second subpoena on September 28, 2012 (the second subpoena). The second subpoena sought electronically stored information consisting of 44 specific data fields on student loans for 786 plaintiffs and requested that the information be produced “on digital data disk(s) in a reasonably usable form, i.e., in a format that is electronically searchable and sortable.” The second subpoena also requested a cost estimate for complying with the subpoena before Sallie Mae produced the electronically stored information.

Upon Sallie Mae’s receipt of the second subpoena, counsel engaged in an e-mail exchange in which plaintiffs repeatedly asked Sallie Mae for a revised cost estimate for producing the requested electronically stored information. Sallie Mae’s counsel initially refused to comply with the subpoena, stating that “Sallie Mae has no obligation to do research on the loans... and to prepare a spreadsheet.” Sallie Mae’s counsel also expressed doubt that plaintiff’s revised request “would significantly reduce the cost, given the research involved.” Plaintiffs’ counsel explained that the second subpoena was “not a request for research, but a request for data Sallie Mae maintains in its database.” Sallie Mae’s ...


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