In Hill v. Asset Acceptance, LLC, 2014 WL 3014945 (S.D.Cal. 2014), Magistrate Judge Major granted in part and denied in part Rosenthal Act discovery in a class action, some rulings for which are highlighted below. The facts were as follows:
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 FN2 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.
The Magistrate Judge Ordered the Debt Collector to provide information about the number of lawsuits filed on its behalf, rejecting the Debt Collector’s argument that the information was in the possession of its 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 plaintiff’s former counsel appeared to be in possession of the documents, plaintiff had the legal right to obtain the documents from her former counsel on demand. Id. ¶ Here, the Court finds that Defendant is obligated to obtain responsive documents from its former counsel. As the cases above demonstrate, if Defendant’s current or former counsel has responsive documents, Defendant has possession, custody, or control of those documents for purposes of discovery. Accordingly, Defendant must obtain and review the collection files in the custody and control of its debt collection counsel and use that information to supplement its responses to the identified RFAs. Defendant’s additional objection that the court records are publicly available to Plaintiff is not persuasive. See Thomas v. Hickman, 2007 WL 4302974, *19 (E.D.Cal. Dec. 6,2007) (stating that “the fact that some of the documents might be possessed by Plaintiff or be available to Plaintiff or the public is not a basis for refusing to produce documents that are otherwise discoverable”) (citing See, 6 James Wm. Moore et al., Moore’s Federal Practice, § 26.41 3d ed.2006 and Weiner v. Bache Halsey Stuart, Inc., 76 F.R.D. 624, 625 (S.D.Fla.1977)); see also Bretana v. International Collection Corp., 2008 WL 4334710, *5–6 (N.D.Cal. Sept. 22, 2008) (stating that defendant can not validly object to producing discovery because the information is contained in public records available to all parties) (citing St. Paul Reinsurance Co., Ltd. v. Commerical Fin. Corp., 198 F.R.D. 508, 514 (N.D.Iowa 2000) (“It is ‘not usually a ground for objection that the information is equally available to the interrogator or is a matter of public record.’ “ (citation omitted)).
The Defendant also was ordered to produce pre-class-certification discovery relevant to the above, including “all persons in the State of California that you sued 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” and “[identification] by case number, party defendant, date of filing, and jurisdiction every lawsuit you filed in California against a consumer alleged to owe a debt on a credit card account.”. The Magistrate Judge stated that the Defendant was “resisting Plaintiff’s every attempt to obtain the information necessary to certify the class. Defendant cannot attempt to avoid its discovery obligations by repeatedly arguing that Plaintiff should obtain the requested information via some other discovery method.” The Magistrate Judge found that the Defendant’s Stipulation that the it’s net worth exceeded the Rosenthal Act’s 1% Rule mooted Plaintiff’s discovery targeted towards net worth.
13. State your most recently calculated net worth. . . . Without waiving the foregoing objections, Asset responds by stating that 1% of its most recently calculated net worth exceeds the maximum recovery available to the putative class.. . . The Court finds that Defendant’s response to Interrogatory 13 is sufficient. It is clear that net worth is a relevant area of inquiry in FDCPA class actions even before a class has been certified. Defendant has appropriately responded to Plaintiff and stated that 1% of its net worth exceeds the maximum recovery available to the class. MTC, Exh. 5 at 4. Plaintiff has not articulated any basis for requiring a more detailed response regarding Defendant’s net worth. Accordingly, Plaintiff’s motion to compel a supplemental response to Interrogatory 13 is DENIED. [FN8. See Bode v. Encore Receivable Management, Inc., 2006 WL 801017, *1–2 (E.D.Wis. March 29, 2006) (ordering defendant to state its net worth in a FDCPA case where defendant objected stating that the request was premature and irrelevant because no class had been certified, and noting that “a party need not have a class certified to justify the relevance of a request for a defendant to state its net worth in an FDCPA action”) (citing Mailloux v. Arrow Financial Services, LLC., 2002 WL 246771, *1 (E.D.N.Y. Feb. 21, 2002) (finding that discovery requests relating to the net worth of defendant were relevant to determining class damages under 15 U.S.C. § 1692 k(a)(2)(B) and finding an affidavit in lieu of the requested documents to be insufficient as “plaintiff need not accept defendant’s interpretation of its financial data through representations in an affidavit, but is entitled herself to examine the data underlying defendant’s statement of net worth”); Trevino v. ACB American, Inc., 232 F.R.D. 612, 617 (N.D.2006) (finding that defendants in putative class action brought under the FDCPA were required “to produce complete annual financial statements for the past three years, including, but not limited to, balance sheets, and profit and loss statements with notes,” but denying without prejudice plaintiff’s request for tax returns); see also Ramirez v. Palisades Collection, LLC, 2008 WL 7506560, *1 (N.D.Ill. Jan. 7, 2008) (stating that “[i]nformation concerning a defendant’s net worth is useful in determining whether class certification is appropriate in an FDCPA action” and ordering defendant to produce evidence of net worth in response to plaintiff’s interrogatory”); and Green v. Monarch Recovery Mgmt., Inc., 2014 WL 657807, *2 (S .D. Ind. Feb. 18, 2014) (finding that net worth was relevant and that Plaintiff was entitled to the discovery).