Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-00131/USCOURTS-casd-3_13-cv-00131-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

JEFFREY MOLNAR and WESLEY

THORNTON, on behalf of

themselves, all others similarly

situated and the general public,

Plaintiffs,

CASE NO. 13cv131-BAS (JLB)

ORDER ON JOINT STATEMENT

FOR DETERMINATION OF

DISCOVERY DISPUTE

vs. [ECF No. 85]

NCO FINANCIAL SYSTEMS, INC.,

a Pennsylvania Corporation,

Defendant.

Plaintiffs bring this putative class action against Defendant NCO Financial

Systems, Inc. under the Telephone Consumer Protection Act, 47 U.S.C. § 227, to stop

defendant’s alleged practice of making unsolicited telephone calls and text message

calls to the telephones of consumers nationwide and to obtain redress for all persons

injured thereby. (ECF No. 66.) Presently before the Court is the parties’ Joint

Statement for Determination of Discovery Dispute for which oral argument was held

on May 20, 2014. (ECF No. 88.) The parties’ discovery dispute concerns the scope

ofsubpoenas served on and documents produced by plaintiffs’ creditors and telephone

carriers. The creditors and telephone carriers are not parties to this litigation. For the

reasons stated below, plaintiffs’ objections are overruled with the exception that each

plaintiff may narrow the time period of call records to the extent they fall outside the

time period for which a plaintiff seeks to hold defendant NCO liable.

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I. Legal Standard

Federal Rule of Civil Procedure 45(d)(3) setsforth the limited reasons for which

a subpoena can be quashed. “As a general proposition, a party lacks standing under

Federal Rules of Civil Procedure Rule 45([d])(3) to challenge a subpoena issued to a

non-party unless the party claims a personal right or privilege with respect to the

documents requested in the subpoena.” In re REMEC, Inc. Sec. Litig., No. 04cv1948,

2008 WL 2282647, *1 (S.D. Cal. May 30, 2008); Doe v. City of San Diego, No.

12cv689, 2013 WL 2338713, *2 (S.D. Cal. May 28, 2013). If the party claims a

personal right or privilege with respect to the documentsrequested in the subpoena, the

court “must quash or modify” the subpoena “if no exception or waiver applies.” Fed.

R. Civ. P. 45(d)(3)(A). “To evaluate privacy objections under either federal or state

law, the Court must balance the party’s need for the information against the

individual’s privacy rights.” Brunsvik v. Hartford Life and Acc. Ins. Co., No. 11cv14,

2011 WL 5838221, *3 (E.D. Cal. Nov. 21, 2011).

Pursuant to Federal Rule of Civil Procedure 26(c)(1), a party may move for an

order to protect itself from “annoyance, embarrassment, oppression, or undue burden

or expense.” A subpoena is subject to the relevance requirements set forth in Federal

Rule of Civil Procedure 26(b). “Parties may obtain discovery regarding any

nonprivileged matter that is relevant to any party’s claim or defense. . . . 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). 

“For good cause, the court may order discovery of any matter relevant to the subject

matter involved in the action.” Id.

II. Analysis

A. Subpoenas to Creditors

The parties’ dispute concerns defendant’s requests for eight categories of

documents from plaintiffs’ creditors. The documents sought are to support defendant 1

The eight categories are as follows: (1) Any telephone numbers you provided to 1

NCO Financial Systems, Inc.; (2) The amount placed for collection with NCO

Financial Systems, Inc. on or about October 18, 2011 in the amount of $200.58; (3)

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NCO’s defense that it called plaintiffs to collect a debt on behalf of a creditor and had

plaintiffs’ prior express consent to be called. If defendant can prove that plaintiffs

provided prior express consent to their creditors for the calls, then under the TCPA

defendant is not liable as the third party collector. In re Rules & Regs. Implementing

Tel. Consumer Prot. Act of 1991, FCC Declaratory Ruling No. 07–232, 23 FCC Rcd.

559 ¶10 (“Calls placed by a third party collector on behalf of that creditor are treated

as if the creditor itself placed the call”). Whether there was prior express consent for

the calls is “an affirmative defense for which the defendant bears the burden of proof.” 

Grant v. Capital Mgmt. Servs., L.P., 449 Fed. Appx. 598, 600 n.1 (9th Cir. 2011). 

Thus, the documents sought are relevant to this litigation.

Plaintiffs object to defendant’s discovery requests as overbroad, harassing, a

fishing expedition, and an invasion of privacy. Plaintiffs’ objections are overruled. By

filing this TCPA case against defendant NCO, plaintiffs placed at issue their creditors’

documentary evidence of prior express consent. Defendant proffersthatsuch evidence

of prior express consent is maintained by plaintiffs’ creditors. Under the facts of this

case, the bases for plaintiffs’ objections are outweighed by the public interest of

ascertainment of the truth in connection with legal proceedings. Defendant should be

afforded the opportunity to obtain evidence of prior express consent to defend itself

against liability.

Pursuant to binding precedent from the FCC, third party collectors are not liable

under the TCPA if the consumer provided the relevant creditor with prior express

consent for the call. See FCC Declaratory Ruling No. 07–232, 23 FCC Rcd. 559 ¶10;

Van Patten v. Vertical Fitness Group, LLC, No. 12cv1614, 2014 WL 2116602, *6

(S.D. Cal. May 20, 2014) (“this Court is inclined to follow the many other cases that

The identity of person or persons obligated to ADT Security Services, Inc. on your

Account Nos. 7194267, regarding 2404937; (4) The terms and conditions of any

agreements between you and Aileen Martinez, including any and all amendments

thereto, governing your relationship; (5) The address you provided to NCO Financial

Systems, Inc. for Aileen Martinez; (6) The work (place of employment) telephone

number you provided to NCO Financial Systems, Inc. for Aileen Martinez; (7) The

account application supplied by Aileen Martinez, including any revisions,

modifications, reaffirmations related thereto, containing a contact telephone number(s)

for Aileen Martinez; and (8) Documents Containing Telephone Number (415) 519-

8588. (ECF No. 85 (emphasis in original).)

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treat the FCC Orders as binding”). This precedent supports the proposition that

defendant NCO may rely on any documentsin the creditors’ possession. See also Wills

v. Optimum Outcomes, Inc., No. 13cv26, 2014 WL 220707, *4 (D. Utah Jan. 21, 2014). 

Plaintiffs object to the timing of defendant’s request, arguing defendant should

already be in possession of its prior express consent evidence. However, there simply

is no legal authority for the proposition that third party collectors must already be in

possession of documents in order to use them for purposes of defending against a

TCPA case. In fact, the FCC recognizes that “[t]he creditors are in the best position

to have records kept in the usual course of business showing such consent.” See FCC

Declaratory Ruling No. 07–232, 23 FCC Rcd. 559 ¶10. Thus, here, discovery directed

to the relevant creditors’ own documentary evidence of prior express consent is highly

relevant and appropriate. 

Moreover, because the parties are governed by a protective order in this case, the

Court concludes that plaintiffs’ privacy rights will be adequately protected.

B. Subpoenas to Carriers

The parties’ Joint Statement raises a discovery dispute over two categories of

document requests included as part of the subpoenas served on plaintiffs’ telephone

carriers.

The first category of documents in dispute concerns defendant NCO’s request

from the carriers for “any and all records reflecting” the identity of the subscriber(s)

for the relevant telephone account(s). Defendant NCO argues that this information is

relevant to standing to sue under the TCPA. Plaintiffs object on relevance grounds. 

(ECF No. 85 at 12.) Plaintiffs’ relevance objection is overruled. Documentsreflecting

the identity of the subscriber over time are relevant to standing to sue. Gutierrez v.

Barclays Group, No. 10cv1012, 2011 WL 579238, *5 (S.D. Cal. Feb. 9, 2011) (“TCPA

is intended to protect the telephone subscriber, and thus it is the subscriber who has

standing to sue for violations of the TCPA.”).

/ / /

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For this first category of documents, the parties also dispute the time period for

which telephone carriers should produce such records. Defendant argues that the time

period requested (January 1, 2010 to the present) is relevant because: it reflects the

class period; the complaint contains a prayer for injunctive relief; and the complaint

alleges, in some places, that calls continued to the present. Plaintiffs object on

relevance grounds to records for the time period after the filing of the complaint as the

calls ceased after the filing of the complaint. For the reasons stated at oral argument,

and because documentsreflecting the identity of the subscribers over time are relevant

to both prior express consent and standing to sue, plaintiffs’ relevance objection is

overruled.

The second category of documentsin dispute concerns “any and all [call] records

for the account(s) related to telephone number(s) 415-[###]-[####] and 415-[###]-

[####] from January 1, 2010 to present.” Defendant argues that these documents are

relevant as they were identified by plaintiffs in their initial disclosures. Further,

defendant argues they have the potential to show the extent of damages, whether

plaintiffs were forwarding calls, whether calls were received from NCO telephone

numbers, and whether the calls at issue ever connected such that they amount to the

making of a call under the TCPA. Plaintiffs object on relevance grounds, arguing only

calls from NCO are relevant, and the documents requested would disclose irrelevant

information, including records of all calls to and from doctors, lawyers, family or

friends.

Plaintiffs propose that defendant provide all telephone numbers used by

defendant so that plaintiffs might redact all other calls from the telephone records

before providing a redacted copy of the records to defendant. At the hearing, the Court

indicated that if plaintiffs were allowed to redact telephone call records and only

produce the calls plaintiffs believe to be actionable calls placed by defendant, plaintiffs

would be limited in their proof at trial to those calls appearing on the redacted call

documents. Plaintiffs were not amenable to this limitation. Plaintiffs’ position was

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that they should be allowed to provide defendant with redacted telephone records (in

lieu of a third party subpoena to the service provider), while reserving the right to argue

that defendant has legal liability for calls plaintiffs allege were placed, but which might

not appear on the redacted telephone records. 

The Court agrees that in this TCPA case calls to and from uninvolved parties

such as doctors, lawyers, family or friends would be irrelevant. However, at oral

argument, plaintiffs’ counsel indicated that plaintiffs may seek to hold defendant liable

for calls made to plaintiffs that do not appear on plaintiffs’ telephone records. Under

these circumstances, plaintiffs’ relevancy objection is overruled. Defendant is entitled

to complete and unredacted telephone records to determine whether or not the calls

plaintiffs ascribe to NCO appear in telephone records. To the extent that any privacy

right exists over these records, defendant’s need for the records in presenting a defense

in this action outweighs any privacy right possessed by plaintiffs. See Mintz v. Mark

Bartelstein & Associates, Inc., 885 F. Supp. 2d 987, 1001 (C.D. Cal. 2012) (“[T]he

disclosure of telephone numbers, as well as the date, time, and duration of calls does

not represent a significant intrusion of Plaintiff’s privacy.”) (citing cases). Further, the

protective order in this case should protect plaintiffs’ privacy rights.

For thissecond category of documents, the partiesresolved their dispute over the

time period for which telephone carriers should produce such call records. At oral

argument, the parties agreed that plaintiffs could narrow the time period for the call

records, and that plaintiffs would then be limited to that narrowed time period for

purposes of summary judgment and trial. Should plaintiffs decide to narrow the time

period for the call records, then they must provide defendant with a writing that sets

forth this agreement to be bound by the narrowed time period. There is nothing further

for the Court to resolve on this time period issue.

/ / / 

/ / /

/ / /

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C. Subpoenas Complied with in Round One

In a prior round of discovery, NCO served subpoenas on various non-parties. 

Due to procedural deficiencies, NCO agreed to withdraw and re-serve these subpoenas.

However, four non-parties complied prior to NCO’s notice of withdrawal. The

non-parties that complied include three creditors (Bowling Green Orthopedics,

Stoneberry/Masseys/Mason Easy-Pay, PNC Bank, N.A.) and one telephone carrier

(Verizon). The parties’ discovery dispute over these documents is duplicative of the

disputes outlined above. Accordingly, for the reasons stated above, plaintiffs’

objections to documents requested from the creditors and telephone carrier are

overruled with the exception that plaintiffs may redact the call records from Verizon

to the extent they fall outside the time period for which the relevant plaintiff seeks to

hold defendant NCO liable.

III. Conclusion

For the reasons stated above, plaintiffs’ objections to documentsrequested from

third party creditors and telephone carrier are overruled with the exception that each

plaintiff may narrow the time period of call records to the extent they fall outside the

time period for which a plaintiffseeks to hold defendant NCO liable. Should plaintiffs

decide to narrow the time period for the call records, then they must provide defendant

with a writing that sets forth their agreement to be bound by the narrowed time period.

Should the parties determine an addendumto their protective order (ECF No. 53)

is appropriate, the parties may jointly move the court to amend the protective order on

or before July 22, 2014.

IT IS SO ORDERED.

DATED: July 8, 2014

JILL L. BURKHARDT

United States Magistrate Judge

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