Klein v. Affiliated Grp., Inc.

Dina Klein, Plaintiff, v. The Affiliated Group, Inc., and Credit Management, L.P., Defendants.

Civil No. 18-cv-949 DWF/ECW

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

March 22, 2019

ORDER

This matter is before the Court on Plaintiff Dina Klein's ("Klein" or "Plaintiff") Second Motion to Compel (Dkt. No. 51) ("Motion to Compel"). For the reasons below, the Court denies the Motion to Compel.

I. FACTUAL BACKGROUND

A. Case Background

The present action relates to Defendants' alleged violations of the Fair Debt Collections Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA").

As alleged in the Second Amended Complaint, on November 20, 2017, Defendant The Affiliated Group, Inc. ("Affiliated"), a debt collector, attempted to collect a debt from Klein arising out of health care goods or services provided by North Memorial Health Care ("North Memorial"), providing her a billing statement for two separate accounts totaling $1,084.35. (Dkt. No. 48 ¶ 7.)

In March 2018, Klein received a letter on letterhead from Defendant Credit Management, LP ("Credit Management"), a debt collector, to collect a debt from Klein arising out of health care goods or services provided by North Memorial, providing her a billing statement for two separate accounts totaling $1,084.35. (Id. ¶ 13.) The March 2018 billing statement from Credit Management, using the same address and P.O. Box as Affiliated, included that "the above-listed account has been turned over to us by our client" and indicated that Klein could "avoid continued collection activities by sending your payment in full directly to Credit Management, LP." (Id. ¶¶ 14-15.) Plaintiff alleges that Affiliated and Credit Management conspired to give her the false impression that North Memorial had turned her account over to a second debt collector, thus increasing the pressure on her to pay, and that Credit Management's conduct constituted a misrepresentation of the legal status of the debt, and a false representation in connection with the collection of a debt. (Id. ¶¶ 21-22.) Plaintiff also alleges that both letters violated the FDCPA because they failed to contain any reference to North Memorial's financial assistance plan, much less a conspicuous written notice with the required hospital contact information, which Plaintiff contends is required under federal regulations. (Id. ¶¶ 11-12, 17-18.) In addition, Plaintiff alleges Credit Management violated the FDCPA (including §§ 1692f, 1692e(5)) by trying to collect on the same North Memorial debt because it was illegal under an agreement between North Memorial and the Minnesota Attorney General ("AG Agreement") for Credit Management to engage in collection activities in the absence of a written contract with North Memorial authorizing the collection efforts. (Id. ¶¶ 39-41; Dkt. No. 53 at 1.)

B. Discovery at Issue

On November 29, 2018, Plaintiff attempted to serve Defendants' counsel, via email, with PLAINTIFF'S DISCOVERY REQUESTS TO DEFENDANTS (SET II) ("Set II"). (Dkt. Nos. 54-1; 54-2.) Defendants assert they "never expressly consented to electronic service in this case." (Dkt. No. 56 at 12.) Plaintiff does not dispute this assertion. Set II of discovery contained a single document request—Request No. 6:

6. Produce a copy of all written communication between Credit Management LP and patients of North Memorial Health Care prior to October 30, 2018, where the patient had previously received written communication from the Affiliated Group, Inc.

(Dkt. No. 54-1 (hereinafter "Request No. 6") (emphasis added).)

On January 9, 2019, Plaintiff's counsel sent an email to Defendants asserting that the period for objections had expired, and seeking confirmation that Defendants would "produce all the responsive documents. . . ." (Dkt. No. 54-2.) On January 10, 2019, Defendants served the following response and objections to Request No. 6, via email, on Plaintiff:

RESPONSE: Defendants object to this request as irrelevant and not proportional to the needs to of the case. Defendants object to this request to the extent it seeks confidential and proprietary information. Defendants object to this request as irrelevant and not likely to lead to the discovery of admissible evidence. Defendant objects to this request as it seek [sic] confidential and private information of non-parties. Defendant is withholding documents responsive to this request.

(Dkt. No. 54-3 (emphasis in original).)

On January 28, 2019, Defendants served on Plaintiff the following amended response and objections to Request No. 6, via email and U.S. Mail:

AMENDED RESPONSE: Defendants object to this request as irrelevant and not proportional to the needs to of the case. Defendants object to this request to the extent it seeks confidential and proprietary information. Defendants object to this request as irrelevant and not likely to lead to the discovery of admissible evidence. Defendants object to this request as it seeks confidential and private information of non-parties. Additionally, Defendants are unable to respond to this request as written because Defendants do not have a way to determine who "received" actual communication.

(Dkt. No. 54-5 (emphasis in original).)

The parties were unable to resolve their dispute as part of the meet and confer process. Plaintiff's Motion to Compel followed. The Court held a hearing on the Motion to Compel on February 22, 2019. (Dkt. No. 58.)

II. LEGAL STANDARD

Rule 26 of the Federal Rules of Civil Procedure governs the scope of discovery:

Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.

Fed. R. Civ. P. 26(b)(1).

Relevancy encompasses "any matter that bears on, or that reasonably could lead to other matter[s] that could bear on, any issue that is or may be in this case." Oppenheimer Fund v. Sanders, 437 U.S. 340, 351 (1978). While Rule 26 contemplates a liberal scope of discovery, this Court "possess[es] considerable discretion in determining the need for,and form of, discovery. . . ." In re Nat'l Hockey League Players' Concussion Injury Litig., 120 F. Supp. 3d 942, 949 (D. Minn. 2015) (citations omitted).

Further, as set forth above, not only must information sought in discovery be relevant, it must also be "proportional to the needs of the case." Fed. R. Civ. P. 26(b)(1). "In determining proportionality, courts consider numerous factors, including 'the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to the relevant information, the parties' resources, and importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.'" Beseke v. Equifax Info. Servs., LLC, No. 17-CV-4971-DWF-KMM, 2018 WL 6040016, at *3 (D. Minn. Oct. 18, 2018). To this end, a court upon a motion or on its own "must" limit discovery, when the discovery is "unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive," if "the party seeking discovery has had ample opportunity to obtain the information by discovery in the action" or if the discovery is outside of the scope of Rule 26(b)(1). See Fed. R. Civ. P. 26(b)(2)(C)(i)-(iii).

III. ANALYSIS

A. Overview of the Parties' Arguments

Plaintiff's Motion to Compel asserts as follows:

Plaintiff's request for production seeks letters sent by Defendants to patients of North Memorial Health Care prior to October 30, 2018. October 30, 2018 is the date of the signature by Credit Management, LP on the alleged agreement between North Memorial Health Care and Credit Management, LP. The request is further limited to letters sent to consumerin the same situation as Plaintiff - consumers who had previously been sent collection letters by The Affiliated Group Inc.

(Dkt. No. 53 at 1.)

In her brief, Plaintiff argues that the letters sent to North Memorial patients by Credit Management who also received previous collection letters from Affiliated are relevant to issues in this case because: "(1) 'the frequency and persistence of such noncompliance by the debt collector' is relevant to the amount of statutory damages. 15 U.S.C. § 1692k(b)(1); (2) the frequency of such an alleged violation relates to the 'bona fide error' defense asserted by the Defendants; and (3) it goes to the issue of consumer confusion or 'materiality.'" (Dkt. No. 53 at 1-2, 5-9.) With respect to the issue of consumer confusion, Plaintiff intends to use the documents obtained pursuant to Request No. 6 to identify the third parties who received the communications and "send a short survey to each consumer who improperly received the letter about their confusion or lack thereof." (Id. at 8-9.)

As to Defendants' objections, Plaintiff argues: (1) that any objections have been waived because they are untimely; (2) the objections are improper boilerplate objections; and (3) the discovery at issue does not implicate concerns under the Health Insurance Portability and Accountability Act ("HIPAA") because the Protective Order (Dkt. No. 28) in place provides sufficient protection to non-party patients of North Memorial. (Id. at 10-13.)

Defendants respond that the Motion to Compel should be denied because (1) the discovery sought by Plaintiff is not proportional to the needs of this case in that it "wouldinclude written communications that are not at issue in this lawsuit, such as validation requests,...