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1:04-cv-01304-JBM-JAG # 16 Page 1 of 21 E-FILED Friday, 11 February, 2005 12:24:33 PM Clerk, U.S. District Court, ILCD IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF ILLINOIS PEORIA DIVISION KAY F. MANN, Plaintiff, v.
NATIONAL ASSET MANAGEMENT
ENTERPRISES, INC.;
LAW OFFICES OF GERALD E. MOORE
& ASSOCIATES, P.C.,
Defendants.
04 C 1304
Judge McDade Magistrate Gorman Plaintiff’s Memorandum in Support of First Motion to Compel Plaintiff has brought a motion to compel discovery in this case. This memorandum is submitted in support of that motion.
I.
Nature of the Case This Fair Debt Collection Practices Act, 15 U.S.C.§ 1692 et seq., class action concerns the legality of sending a debt collection letter that attempts to charge a “processing and handling” fee of $7.50 per transaction for use of their “check by phone” system. Defendants routinely add this “check by phone” fee.
The FDCPA prohibits "[t]he collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law". 15 U.S.C. §1692f(1). Further, a debt collector cannot represent that it will charge a fee if the fee is not so authorized.
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1:04-cv-01304-JBM-JAG # 16 Page 2 of 21 15 U.S.C. §§ 1692c, 1692e(2), 1692e(3).
“A debt collector may attempt to collect a fee or charge in addition to the debt if either (a) the charge is expressly provided for in the contract creating the debt and the charge is not prohibited by state law, or (b) the contract is silent but the charge is otherwise expressly permitted by state law. Conversely, a debt collector may not collect an additional amount if either (a) state law expressly prohibits collection of the amount, or (b) the contract does not provide for collection of the amount and state law is silent." Federal Trade Commission Staff Commentary on the Fair Debt Collection Practices Act, 53 Fed.Reg. 50,097 at 50,108 (Dec. 13, 1988). See opinion on motion to dismiss in Longo v. Gerald E. Moore, (Exhibit D). Furthermore, it is deceptive for defendants to state that they will impose the charge, in violation of 15 U.S.C. §§1692e and 1692e(10). Section 1692e provides: § 1692e.
False or misleading representations [Section 807 of P.L.]
A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section: . . .
(2) The false representation of -(A) the character, amount, or legal status of any debt; (B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt. . . .
(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer. . . .
Ms. Mann seeks statutory damages for herself, and statutory plus actual damages for those class members who paid the illegal fee. Keele v. Wexler, 149 F.3d 589, 594-95 (7th
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Cir. 1998) (expressly permitting class representatives without actual damages to represent a class of persons who do have actual damages in FDCPA case).
II.
Local Rule 37.3 Certification Plaintiff propounded discovery on defendants (Exhibit A). Defendants responded
to interrogatories on December 23, 2004 (Exhibit B). Since many of defendants’ responses were insufficient, and since defendants have not produced any documents at all, plaintiff’s counsel initiated Rule 37 conferences with defense counsel, none of which have been fruitful. Alex Burke had several Rule 37 conferences with David Hartsell, counsel for defendants between December 23, 2004, and January 13, 2005, with respect to these requests. Mr. Hartsell told Mr. Burke repeatedly that he was “working on” getting amended responses and documents for Mr. Burke, but never did. On January 14, 2005, counsel had a telephonic Rule 37 conference, where Mr. Burke asked Mr. Hartsell whether defendants had anything further to produce for this case. Mr. Hartsell told Mr. Burke to go ahead and file his motion to compel. In a further effort to secure the discovery without having to involve this Court, Mr. Burke and Mr. Hartsell spoke in person after a hearing on a motion to compel in another case. Mr. Hartsell told Mr. Burke that he required a “letter” before he spoke about these discovery requests. He also told Mr. Burke that he required a Rule 37 conference discovery in another case before he would even speak about this discovery. Mr. Burke told him that these were impermissible restraints on communication about discovery. Instead of speaking further about the case, Mr. Hartsell then got in a taxi cab and drove off while Mr. Burke was still speaking. (Exhibit C).
III. Discovery Standard
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1:04-cv-01304-JBM-JAG A.
# 16 Page 4 of 21 Purpose of Discovery “Mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. To that end, either party may compel the other to disgorge whatever facts he has in his possession.” Hickman v. Taylor, 329 U.S. 495, 507 (1947). The Rules have broadened the scope of discovery to “any matter, not privileged, that is relevant to the claim or defense of any party.... Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Fed.R.Civ.P. 26(b)(1). “[T]he discovery-deposition provisions of the Federal Rules, were intended to insure 'proper litigation' by making the trial less a game of blindman's buff and more a fair contest with the basic issues and facts disclosed to the fullest practicable extent.” Goldman v. Checker Taxi Co., 325 F.2d 853, 855 (7th Cir. 1963)(internal citations and quotations omitted). Furthermore, complete interrogatory responses may help the parties avoid unnecessary depositions and further cost to the parties. In re Shopping Carts Antitrust Litigation, 95 F.R.D.
299, 307-308 (S.D.N.Y. 1982).
B.
Evasive Discovery Responses and Objections Evasive responses to discovery requests, are sanctionable at the discretion of the Court. In Howard v. Sweetheart Cup Co., 2001 U.S.Dist. LEXIS 8682, at *6-7 (N.D.Ill. June 27, 2001), the court issued sanctions against defendant who did not properly respond to discovery requests with particularly insightful commentary:
[Defendant’s] production...included only some of the responsive documents. They evidently believed that by giving a cleverly-worded response to the request (a response of a type this Court has seen numerous times both in the practice of law and since appointment to the bench), they could pick and choose the documents they thought were relevant....
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**** [T]his type of answer hides the ball. It leaves the plaintiff wondering what documents are being produced and what documents are being withheld. Furthermore, it permits the defendant to be the sole arbiter of that decision. Such an objection is really no objection at all as it does not address why potentially responsive documents are being withheld.
The defendant, having no incentive to err on the side of disclosure, has arrogated to itself the authority to decide the question of relevance which is unquestionably the decision of the judge.
Asserting a relevance objection, then proceeding to agree to produce "relevant, non- privileged" documents "subject to and without waiving" that objection, serves only to obscure potentially discoverable information and provides no mechanism for either plaintiffs or the Court to review defendant's decisions. [Id., quoting Athridge v. Aetna Casualty & Surety Co., 184 F.R.D. 181, 190 (D.D.C. 1998)(certain punctuation omitted).]
In 1993 the Federal Rules of Civil Procedure were amended to require specific disclosure of the nature of confidential materials, effectively invalidating boilerplate objections based on “privilege” or confidentiality. Fed.R.Civ.P. 26(b)(5) states that: When a party withholds information otherwise discoverable under these rules, by claiming that it is privileged or subject to protection as trial preparation material, the party shall make the claim expressly and shall describe the nature of the documents, communications, or other things not produced or disclosed in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the applicability of the privilege or protection. The Advisory Committee notes to this provision, new in the 1993 amendments to Rule 26, are even more explicit:
A party must notify other parties if it is withholding materials otherwise subject to disclosure under the rule or pursuant to a discovery request because it is asserting a claim of privilege or work product production. To withhold materials without such notice is contrary to the rule, subjects the party to sanctions under Rule 37(b)(2), and may be viewed as a waiver of the privilege or protection. The party must also provide sufficient information to enable other parties to evaluate the applicability of the claimed privilege or protection. Although the person from whom the discovery is sought decides whether to claim a privilege or
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protection, the court ultimately decides whether, if this claim is challenged, the privilege or protection applies. Providing information pertinent to the applicability of the privilege or protection should reduce the need for in camera examination of the documents. [Fed.R.Civ.P. 26, Notes from Advisory Committee on 1993 Amendment (Emphasis added.)] Ritacca v. Abbott Labs., 203 F.R.D. 332, 335 (N.D.Ill. 2001) (adopting Advisory Committee commentary, and stating that “blanket objections are patently improper.”). Objections on other grounds, too, must be timely and proper, or the result is waiver. "There is no provision in the Federal Rules for preserving objections. . . Having failed to answer or make specific legitimate objections to particular interrogatories within the time allowed, defendants were held to have waived objections to all interrogatories." Hobley v. Burge, 2003 U.S. Dist. LEXIS 20585, at *11 (N.D.Ill. 2003); Josephs v. Harris Corp., 677 F.2d 985, 992 (3d Cir. 1982).
C.
This Case In this case, defendant makes so many improper, boilerplate objections that
plaintiff cannot possibly address each one individually. Therefore, plaintiff refers to Section III.B. throughout this memorandum in order to make this memorandum efficient and within the local brief length rules.
With respect to confidential materials, plaintiff offered to enter into a protective order with respect to any sensitive business matters, which was summarily rejected. Plaintiff’s requests instructed defendant to create a privilege log of all materials claimed to be protected. (Exhibit A at 1, #3). Despite its claim of privilege, defendant did not produce any justification of privilege, much less a privilege log. See Exhibit B.
This Court should thus compel production of the materials sought herein to
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IV. Discovery Sought A.
Materials for Plaintiff Plaintiff requested the materials defendants have indexed for her account: Doc.Req.2 All documents relating to plaintiff, or which are indexed, filed or retrievable under plaintiff's name or any number, symbol, designation or code (such as an account number or Social Security number) assigned to plaintiff. Defendants have not objected at all, Hobley, 2003 U.S. Dist. LEXIS 20585, at *11 (untimely objections waived), and have promised to produce responsive documents, but have not done so. Plaintiff moves to compel.
Interog. 3 Describe, step-by-step, the process which resulted in Exhibits A, B, and C being transmitted to plaintiff, beginning with the date and method of transmission of debtor information to the person that sent it, e.g., computer tapes or other media delivered (when, by whom, where and to whom); content of computer tape or media; data input (where and by whom); computer entry or other means of directing transmission letters (where and by whom entry made), letter with debtor information printed (from where and by whom); letter with debtor information mailed (from where and by whom), computer tapes or media returned (on what occasion, when, by whom and to whom).
This interrogatory is aimed at getting a detailed description of how defendants’ debt collection business works. Defendants do not object to this interrogatory, they simply do not completely answer it. Hobley, 2003 U.S. Dist. LEXIS 20585, at *11 (untimely objections waived). Plaintiff moves to compel a complete response.
B.
Check By Phone Materials Plaintiff propounded two sets of discovery directed at determining how exactly the payment by telephone system complained of works.
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Interog. 20. State the process by which payments by phone are collected.
Include the name and involvement of any third party, if any, in the process, and the name and specifications of whatever machine or process is used to collect the payments.
Defendants’ response, essentially that they disclose the charge and then the consumer opts to pay it, is not responsive, and they have refused to provide a better one. A complete response would have explained the involvement of any third party, the name and specifications of the machine that collects the payments, and the process by which the payments are collected. This information is relevant and discoverable, because the check by phone is the very practice complained of. Defendant has not objected on any ground, and any potential objections not raised initially should be deemed as waived.
Hobley, 2003 U.S. Dist. LEXIS 20585, at *11.
Plaintiff moves to compel a direct and complete response.
Document request number 25 requests:
Doc. Req. 25. All records in defendant’s possession or control relating to payment by phone processing and handling fees, including but not limited to (a) financial records showing what fees that were collected, and (b) internal emails or other memoranda referencing processing and handling fees for payment by phone.
Defendants object because in their eyes, these requests are “overbroad, harassing, oppressive and unduly burdensome.” This is nonsense, because the asking for and collection of the $7.50 fee are directly at issue in the complaint. These objections are mere boilerplate objections, not tailored to the requests at all. See Section III. C., supra. During the Rule 37 conference, defense counsel told plaintiff’s counsel that defendants do not have any such records. This is impossible. How could defendants not have any records relating to the collection of a $7.50 fee, when they have a computerized machine that collects it and ostensibly transfers money into their bank accounts?
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The requests are not overbroad, harassing, oppressive or unduly burdensome because they are tailored to information about the practices complained of in the complaint. Plaintiff moves to compel complete response.
C.
Relationship Among Defendants - Plaintiff made two document
requests aimed specifically at learning more about the relationship among the defendants with respect to plaintiff:
Doc.Req.15. All agreements with the person(s) from whom you obtained plaintiff’s debt, or the right to collect same.
Doc.Req.16. All agreements authorizing you to conduct collection activities with respect to plaintiff.
Defendants boilerplate objects, arguing that these requests are irrelevant, immaterial, too broad, and that they are “harassing,” oppressive, and because the requests seek confidential, proprietary information, and information not calculated to lead to discovery of admissible evidence.
The Court should strike these boilerplate and frivolous objections. See Section III. A., supra. These document requests seek information regarding the collection of plaintiff’s debt specifically. This discovery might lead to evidence requiring the joinder of additional parties, if needed. Further, information regarding a debt collector’s authority to collect a debt is discoverable. Coppola v. Arrow Financial Services, 302CV577, 2002 WL 32173704 (D.Conn., Oct. 29, 2002); Kimbro v. IC System, 301CV1676, 2002 WL 1816820 (D.Conn. July 22, 2002); Yancey v. Hooten, 180 F.R.D. 203 (D.Conn. 1998). This information might show the authority for collection of the $7.50 illegal fee, and who gets the money.
Defendants give no reasons (and have given none in the Rule 37 conferences)
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why the information is “confidential”and “proprietary” other than their two word, conclusory assertion that it is so. This nonspecific objection should therefore be deemed waived. See section III.C., supra.
D.
Class List and Number - Several of plaintiff’s discovery requests
were aimed at determining a class size and number. These include: Req. Adt 4-6. There are more than [20, 40, 100] persons who satisfy the following criteria:
a.
They were sent a letter by one or more of the defendants referring to a fee for paying by telephone, b.
in connection with a debt owned or serviced by or placed for collection with NAM, c.
which letter was sent after September 2, 2003 and before September 22, 2004.
Req. Adt 7.
There are at least 40 persons who paid a $7.50 payment by phone processing and handling fee.
Interog.8.
State the number and name and address of the natural persons who satisfy the following criteria:
a.
They were sent a letter by one or more of the defendants referring to a fee for paying by telephone, b.
in connection with a debt owned or serviced by or placed for collection with NAM, c.
which letter was sent after September 2, 2003 and before September 22, 2004.
Interog.19.
State the amount and name and address for all persons from whom defendant collected processing and handling fees for payment by phone. Interog.21.
State for which clients’ debts defendant collects payment by phone processing and handling fees.
Doc.Req. 24. The complete file, including but not limited to computer information, for all natural persons who:
a.
were sent a letter by one or more of the defendants referring to a fee for paying by telephone, b.
in connection with a debt owned or serviced by or placed for collection with NAM, c.
which letter was sent after September 2, 2003 and before September 22,
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2004.
This information is relevant because the plaintiff must have the number and names and addresses of the class members in order to notify the class, and to show numerosity. This discovery is appropriate at this juncture because plaintiff needs the identity of the class members in order to send class notice. Defendants’ primary objection is that their computer cannot easily ascertain the information requested. This type of objection is not appropriate under these circumstances.
A debt collector who is regularly sued on a class action basis should not be permitted to block discovery of putative class numbers and names by designing their computers to make such discovery difficult. Indeed, “a private corporation cannot avoid producing documents by an allegation of ‘impossibility’ if it can obtain the requested information from the sources under its control.” Kozlowski v. Sears, 73 F.R.D. 73, 76-77 (D.Mass 1976). The Kozlowski court denied defendant’s motion to vacate earlier order of default for discovery abuse where “[t]he defendant’s failure to produce records...[was] due basically to an indexing system of its own devising, so maintained as to obstruct full discovery.” Id.at 77. During the Rule 37 conference, plaintiff offered to accept, for the time being, an affidavit from defendants stating that there were more than 40 persons in the class definition in an attempt to lessen the burden on defendants in responding to these requests. This offer was summarily rejected. Defendant appears to be attempting to win the class certification motion by not providing this information.
Defendants also object to interrogatories 21 and 19 and on the basis that they are somehow “irrelevant, immaterial, overbroad, harassing, oppressive, unduly burdensome, and is
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seeking information which is confidential, proprietary and not reasonably calculated to lead to the discovery of admissible evidence.” This is not so. As explained above, these materials are directly relevant to identifying the class members and establishing numerosity. Defendant does not identify why the information is confidential or proprietary, and can not possibly justify its objection that the request is harassing or oppressive. In any event, defendants did not identify why in their objection. See also, section III.C., supra. Plaintiff moves to compel. Interrogatory 7 is crafted so that plaintiff can define her class so that a list can easily be taken from defendants’ computers.
Interog.7.
State whether information regarding your accounts is retrievable by computer and, if so, each field by which data is searchable or retrievable. State whether your computer can determine the number of instances in which the form letter represented by Exhibit A was mailed within a specified period, and the persons to whom such letters were sent.
A complete response to this interrogatory will provide plaintiff with information about how to determine numerosity. Plaintiff finds it hard to believe that defendants’ computers are unable to do search queries based on amount of money collected from a certain debtor, or whether a particular person paid the $7.50 fee. During the Rule 37 conferences, plaintiff’s counsel pointed this out to defendant, who promised to ask his client about such queries. Apparently, no such conversation happened. The significant time and expense objection is not appropriate in this case. It is the defendant debt collectors who have chosen to design their computer system in a way that makes it difficult to query a class list to comply with FDCPA discovery in class actions. Because they have done so should not excuse them from complying with probative and relevant discovery requests. Plaintiff moves to compel responses to this discovery. E.
Bona Fide Error / Damages
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Plaintiff has propounded a set of discovery designed to discover defendants’ potential bona fide error defense, and class damages.
Interr. 16.
Explain the basis for your claim that any violation was unintentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid such error. Identify what procedures are maintained and how they are adapted to avoid the matters complained of.
Interrog. 11 Identify all trade associations relating to debt collection to which you belong.
Interrog. 12 List all publications and periodicals relating to debt collection which you subscribe to or receive on a regular basis.
Doc.Req. 4 All manuals, memoranda, instructions and other documents which discuss, describe or set forth standards, criteria, guidelines, policies or practices relating to the Fair Debt Collection Practices Act, or state statutes regulating debt collectors or debt collection.
Doc.Req. 5. All manuals, memoranda, instructions, and other documents setting forth defendant's policies, procedures or practices relating to the collection of debts.
Doc.Req. 6. All manuals, memoranda, instructions, and other documents referring to the form of letter represented by Exhibit A.
Doc.Req. 7. All documents relating to any judicial or administrative proceeding (irrespective of date) in which defendant was accused of violating the Fair Debt Collection Practices Act, any state statute regulating collection practices, or of committing a tort while engaging in collection activities. Doc.Req. 8. All documents relating to any complaint, criticism or inquiry, by any person, concerning defendant's compliance with the Fair Debt Collection Practices Act, or state statutes regulating debt collection activities, or collection practices generally.
Doc.Req. 9. All documents (irrespective of date) relating to any claim made against defendant for violating the Fair Debt Collection Practices Act, any state statute regulating collection practices, or of committing a tort while engaging in collection activities.
Doc.Req. 10. All documents (irrespective of date) which constitute or reflect
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communications between defendant and public or private agencies that receive consumer complaints (such as an Attorney General's office, the Federal Trade Commission, a Better Business Bureau or newspaper column), relating to collection activities of defendant.
Doc.Req. 11. All documents (irrespective of date) that discuss defendant's compliance or lack of compliance with the Fair Debt Collection Practices Act. Doc.Req. 18. All documents relating to the maintenance by defendant of procedures adapted to avoid any violation of the Fair Debt Collection Practices Act.
Doc.Req. 23. One copy of each different form letter defendant sends to debtors. Defendants’ objection to document requests 4-11, 18 and 23 is that they are “irrelevant, immaterial, overbroad, harassing, oppressive, unduly burdensome, and seeking information which is confidential, proprietary and not reasonably calculated to lead to the discovery of admissible evidence.” First, boilerplate objections are not objections at all, and the court should deem the boilerplate, and other yet unstated objections, waived. Hobley v. Burge, 2003 U.S. Dist. LEXIS 20585, at *11 (N.D.Ill. 2003); Josephs v. Harris Corp., 677 F.2d 985, 992 (3d Cir. 1982). Second, nothing could be farther from the truth: each of these requests asks for information placed directly at issue in the statute. The FDCPA § 1692k(c) states that: A debt collector may not be held liable in any action brought under this subchapter if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. Interrogatory 16 requests that defendant state what its bona fide error defense is, if any. Defendants responded that the request is premature because they have not yet answered the complaint or “asserted their defenses.” It is these very defenses that plaintiff seeks to narrow through discovery. Indeed, although plaintiff’s counsel has requested a revised statement of bona fide error, defense counsel has refused to provide it. Defendants should be deemed to have
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waived any bona fide error defense. If this Court is not amenable to deem the bona fide error defense as waived, then the foregoing interrogatories are designed to discover what “maintenance of procedures” defendants have adapted to avoid FDCPA violations, and should be compelled.
The above requests are also aimed at determining class damages. 15 U.S.C.§ 1692k(b)(2) states:
in any class action under subsection (a)(2)(B) of this section, the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, the resources of the debt collector, the number of persons adversely affected, and the extent to which the debt collector’s noncompliance was intentional.
The frequency of noncompliance is clearly discoverable, as are materials relating to previous FDCPA violations, the resources (including net worth, trade association memberships, number of employees, size of company) and the number of class members. Yancey v. Hooten, 180 F.R.D. 203 (D.Conn. 1998) (compelling discovery aimed at “establishing the intentional nature, frequency and persistence of noncompliance” with respect to all of debt collector’s records, not just those records relating to plaintiff.); Jones v. Vest, 2000 U.S.Dist.LEXIS 18413, at *8 (E.D.Va. Nov. 7, 2000) (justifying imposition of maximum damages based on fact that defendant had been sued three times in four years, finding that defendants’ “noncompliance [with the FDCPA] has been frequent, persistent and intentional.”); Clark’s Jewelers v. Humble, 16 Kan.App.2d 366, 371-72; 823 P.2d 818, 821-22 (Ct.App.Kan. 1991) (affirming lower court’s analysis regarding debt collector’s frequency of noncompliance and intent) cf. Blum v. Lawent, 2003 U.S.Dist.LEXIS 16050, at *31-32 (N.D.Ill. Sept. 8, 2003) (Finding liability in favor of plaintiff but reserving judgment on damages to permit parties to submit evidence of “frequency
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and persistence of noncompliance by the debt collector, the nature of such noncompliance, and the extent to which such noncompliance was intentional.”); Brown v. Law Offices of Butterfield, 2004 U.S.Dist. LEXIS 9822, at 15-16 (E.D.Penna. May 24, 2004) (Issuing damages of only 10% of the statutory maximum where plaintiff failed provide evidence of the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, and the extent to which such noncompliance was intentional.); Creighton v. Emporia Credit Serv., 981 F.Supp 411, 416-17(E.D.Va. 1997) (imposing damages of 75% of the statutory maximum because defendant had not been sued very much and because Court felt defendant had made a good-faith effort to comply with the FDCPA “since the law came into effect.”). Each of the above requests is aimed directly at the issues put forth in § § 1692k(c) and (b)(2), and the Court should compel production of adequate responses to these requests. Finally, defendants’ response to interrogatories 11 and 12 are incomplete: defendant Gerald E. Moore responds, but NAM does not, answering that the responses are “to be determined.” Further, NAM does not object to responding. Because NAM has not objected, but has not produced any responses, this Court should compel a response by NAM.
F.
Defendants’ Net Worth - The FDCPA puts the defendant’s net worth
directly in issue in a class case. 15 U.S.C. § 1692k states that the maximum damages is “the lesser of $500,000 or 1 per centum of the net worth of the debt collector.” § 1692k(a)(2)(B)(ii). Defendant GEM has provided some net worth information, but NAM has evaded answering by stating that it “will provide a statement of its net worth as soon as it can be determined.” (Exhibit B at 7, resp. to interrogatory 13). To date, defendant NAM has showed no sign of providing this information, and plaintiff therefore moves to compel:
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Interog.13.
State the net worth of defendant and whether its financial statements are audited. If defendant’s financial statements are not audited, identify all credit applications and financial statements issued or submitted by defendant in the last 3 years.
Interog.15.
Identify each instance in which defendant has provided financial statements or information concerning its net worth to any governmental agency. Doc.Req. 20. Defendant's annual financial statements, annual reports, semiannual and quarterly financial statements, credit applications and tax returns for the last three years.
Doc.Req. 21. All credit applications or financial statements defendant issued within the last 3 years.
Doc.Req. 22. All proposals and bids defendant submitted to governmental agencies which describe defendant's business.
Production of this information is proper at this stage of the proceeding. Scott v. Universal Fidelity Corp., 42 F.Supp.2d 837 (N.D.Ill.1999) (compelling net worth information in FDCPA case), abrogated on other grounds by Saunders v. Jackson, 299 F.3d 998 (7th Cir. 2000); Mailloux v. Arrow Financial Services, LLC., 2002 WL 246771 (E.D.N.Y. Feb. 21, 2002) (In FDCPA class action, net worth is “unquestionably relevant and discoverable.”). Indeed, NAM does not object to producing net worth information, it simply has not done so, and any objections not raised should be deemed waived. See section III.C. supra. NAM should be compelled to produce such information. To the extent NAM has objected, plaintiff is entitled to examine a defendants’ net worth from different angles in order to determine net worth. For example, a company might state its net worth is low in response to an FDCPA discovery request, but puff up its net worth in order to procure a loan or line of credit. Accounting is an imprecise science, and plaintiff should be able to examine NAM’s records from different angles. Plaintiff moves to compel.
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# 16 Page 18 of 21 Other - Plaintiff has requested production of other materials relating to her claim. Plaintiff has requested production of other materials relating to her claims. These include:
Doc.Req. 17 All insurance policies that may afford coverage with respect to the matters complained of, together with all correspondence accepting or declining coverage or reserving rights with respect thereto.
Whether defendants are insured is important in this case, in order to tell whether they will be able to cover their potential liability (1% of their net worth), which plaintiff does not know because she does not yet have financial information for NAM. See Section F, supra. Defendants do not even object to this document request; they state that they will produce the declaration page of the insurance policy. Th Plaintiff moves to compel the entire insurance policy to establish whether the class, which will likely be sizable, will be adequately compensated. Doc.Req.14 All organizational charts of defendant.
This request is designed to provide a roadmap to who may have discoverable information at defendant’s offices. Such information is tailored to lead to admissible evidence, and should be compelled.
Finally, plaintiff requests information relating to document destruction policies of defendants:
Interog.5 defendant.
Describe all document destruction and retention policies of the Doc.Req.19 All documents setting forth defendant's document destruction and retention policies.
Plaintiff is concerned that relevant documents might be destroyed, and therefore made this request. Indeed, plaintiff’s counsel had a conversation with defense counsel early on in this case
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regarding plaintiff’s account, were defense counsel stated that because plaintiff’s “paper” is so fresh, defendants have lots of documents to produce with respect to her individual account. These requests are aimed at the possibility that relevant documents have already been destroyed, and at preventing further or future destruction of relevant documents, and should be compelled. Defendants’ boilerplate response, that the requests are “irrelevant, immaterial, overbroad, harassing, oppressive, unduly burdensome, and is seeking information which is confidential, proprietary and not reasonably calculated to lead to the discovery of admissible evidence” is disingenuous. Whether defendants are going to destroy relevant documents pursuant to their standing document destruction policy is clearly relevant, and a request for such information is not harassing, oppressive or unduly burdensome. Defendants provide no reasons why a response would include any confidential proprietary information, and did not do so in the Rule 37 conference. Plaintiff requests that responses be compelled.
WHEREFORE, plaintiff respectfully requests that this Court compel defendants to respond properly to the above discovery requests.
Respectfully submitted,
s/ Alexander H. Burke Alexander H. Burke Daniel A. Edelman Cathleen M. Combs James O. Latturner Alexander H. Burke EDELMAN, COMBS, LATTURNER & GOODWIN, LLC 120 S. LaSalle Street, 18th Floor Chicago, Illinois 60603
(312) 739-4200
(312) 419-0379 (FAX)
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LOCAL RULE 7.1(B)(4) CERTIFICATION
I, Alexander H. Burke, certify that this memorandum has 5498 words, according to WordPerfect version 11, the word processing program used to produce it, and is therefore in compliance with the Central District of Illinois Local Rule 7.1(B)(4) regarding brief length.
s/ Alexander H. Burke Alexander H. Burke
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CERTIFICATE OF SERVICE
I, Alexander H. Burke, hereby certify that on February 11, 2005, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following: David L. Hartsell, dhartsell@mcguirewoods.com; Paul C. Ziebert, pziebert@mcguirewoods.com.
s/ Alexander H. Burke Alexander H. Burke Attorney for Plaintiff (6281095) EDELMAN, COMBS, LATTURNER & GOODWIN, LLC 120 S. LaSalle Street, 18th Floor Chicago, IL 60603
(312) 739-4200
(312) 917-0379 (FAX) Aburke@edcombs.com
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