Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_17-cv-00412/USCOURTS-casd-3_17-cv-00412-0/pdf.json

Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 15:1692 Fair Debt Collection Act

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

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JUAN PAVLOVICH, individually and on 

behalf of all others similarly situated, 

Plaintiffs, 

v. 

ACCOUNT DISCOVERY SYSTEMS, 

LLC, and DNF ASSOCIATES, LLC, 

Defendants. 

Case No.: 3:17-cv-00412-AJB-KSC 

ORDER (1) GRANTING 

PLAINTIFF'S MOTION TO 

COMPEL DOCUMENTS AND (2) 

DENYING PLAINTIFF'S REQUEST 

FOR SANCTIONS 

[Doc. No. 53] 

19 Before the Court is the parties' Joint Motion re Plaintiffs Motion to Compel 

20 Documents. [Doc. No. 53]. Plaintiff seeks responses to Requests For Production ("RFP") 

21 39-42, which ask defendant, DNF Associates ("DNF"), to provide its net worth in 2015, 

22 2016, and at present, as well as any documents that supports the contention, if made, that 

23 one percent of DNF's net worth is less than $500,000. [Id. at pp. 2-3]. For the reasons 

24 discussed in greater detail below, the Court GRANTS plaintiffs Motion, and DENIES its 

25 request for sanctions. 

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Case 3:17-cv-00412-AJB-KSC Document 63 Filed 11/28/17 PageID.<pageID> Page 1 of 7
1 BACKGROUND 

2 Plaintiff filed the instant action on February 28, 2017, against defendants, Account 

3 Discovery Systems, LLC, and DNF Associates, LLC alleging violations of the Federal Fair 

4 Debt Collection Practices Act ("FDCP A"), Rosenthal Fair Debt Collection Practices Act 

5 ("Rosenthal FDCP A"), and the California Fair Debt Buyers Practices Act ("FDBP A"). 

6 [Doc. No. 1]. On October 17, 2017, plaintiff filed an Amended Complaint. [Doc. No. 40]. 

7 In addition to the instant Joint Motion [Doc. No. 53], currently pending before the District 

8 Court is plaintiffs Motion for Partial Summary Judgment [Doc. No. 44] and defendant 

9 DNF's Motion to Dismiss for Failure to State a Claim [Doc. No. 48]. 

10 On July 18, 2017, plaintiff served a Request for Production on DNF. [Doc. No. 53, at 

11 p. 2]. Requests for Production 39, 40, and 41 request DNF's current net worth, as well as 

12 its net worth in 2015 and 2016. [Id.]. Request for Production 42 seeks documents 

13 supporting defendant's contention, if made, that one percent of defendant's net worth is 

14 less than $500,000. [Id.]. DNF objected to each RFP, stating the requests "seek[ ] 

15 information outside the allegations of the Complaint and the proportional needs of the 

16 case." [Id. at pp. 2-3]. On August 18, 2017, plaintiff served defendant Notice for a Rule 

17 30(b )(6) Deposition to which he appended renewed Requests for Production. [Id. at p. 4]. 

18 Among the RFP's attached to the deposition notice were the four identical requests to 

19 which DNF had previously objected. [Id.]. DNF did make any written objections to the 

20 second set ofRFP's, and the noticed deposition went forward on September 22, 2017. [Id.]. 

21 During the September 22, 2017 Rule 3 O(b )( 6) deposition, plaintiff asked the deponent 

22 whether he had reviewed the requested financial documents. [Id.]. Consistent with DNF's 

23 written objections, counsel for DNF informed plaintiff, on the record, that DNF "would 

24 not [provide] the requested documents relating to [its] financial worth." [Id. at pp. 4-5]. At 

25 no point has DNF provided any document relating to its financial net worth to plaintiff. 

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Case 3:17-cv-00412-AJB-KSC Document 63 Filed 11/28/17 PageID.<pageID> Page 2 of 7
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3 A. 

DISCUSSION 

Whether Defendant, DNF, Waived Its Right to Object to Plaintifrs 

4 Request for Productions 

5 Plaintiff contends DNF waived its right to object to the specific Requests for 

6 Production at issue because it failed "to properly assert any objections prior to the [Rule] 

7 3 O(b )( 6) deposition." [Id. at p. 6]. Plaintiff argues that while DNF provided written 

8 responses to plaintiff's July 18, 2017 Requests for Production [Id. at pp. 2-3], DNF's failure 

9 to respond to the duplicate RFP's attached to the August 18, 2017 Rule 30(b )(6) deposition 

10 notices constitutes waiver. Defendant contends it "properly raised an objection to 

11 [p]laintiff's [July 18, 2017] Requests for Production" and that those objections suffice for 

12 the August 18, 2017 RFP's because the requested information is identical. [Id. at p. 10]. 

13 Plaintiff, in tum, rejoins that the Protective Order issued by this Court on August 10, 2017, 

14 constituted a "change of circumstances", which warranted renewed objections. [Id. at p. 8]. 

15 Plaintiff cites no caselaw to support his argument that the failure to object to an 

16 identical request for production to which a party has already objected constitutes waiver 

17 on untimeliness grounds. 1 Instead, plaintiff merely cites to two Ninth Circuit cases that 

18 stand for the unremarkable proposition that a total failure to object to a discovery request 

19 constitutes waiver under the Feral Rules of Civil Procedure. Richmark Corp. v. Timber 

20 Falling Consultants, 959 F.2d 1468, 1473 (9th Cir. 1992), citing Davis v. Fendler, 650 

21 F.2d 1154, 1160 (9th Cir. 1981). To the contrary, defendant, DNF, provided its written 

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1 The Court also notes that it is plaintiff, and not defendant, that has failed to abide by Court rules 

regarding timeliness. Judge Crawford's Chambers' Rule, V(A) states that the parties must bring any 

dispute to the attention of the Court "no later than forty-five ( 45) days after the event giving rise to the 

dispute." Defendant provided its responses, and objections, to plaintiff's RFP's on August 4, 2017. 

[Doc. No. 53, at p. 2]. Plaintiff was apprised of the dispute regarding the RFP's on that date. Thus, more 

than forty-five days elapsed between August 4, 2017 and the filing of the instant Joint Motion on 

November 3, 2017. The Court exercises its discretion to consider the Motion, but expects the parties to 

abide by this Court's Local and Chambers' Rules in the future. 

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1 responses to plaintiffs discovery requests on August 4, 2017. [Doc. No. 53, at pp. 2-3]. 

2 That plaintiff then chose to attach to its August 18, 2017, Rule 30(b)(6) deposition notice 

3 a set of identical RFP's did not impose an additional burden on DNF. DNF made clear its 

4 objections, and plaintiff nonetheless chose not to meet and confer with DNF on the matter 

5 until the on-the-record dispute during the Rule 30(b)(6) deposition on September 22, 2017. 

6 [Id. at pp. 4-5]. 

7 Plaintiff raises the additional argument that the Court-approved Protective Order, 

8 which was signed on August 10, 2017 [Doc. No. 20], allows "for sensitive financial 

9 information to be disclosed." [Doc. No. 52, at p. 8]. Therefore the "change of 

10 circumstances" warranted renewed objections by DNF because the Protective Order 

11 obviated the basis of its initial objections. [Id.]. The Court disagrees. As discussed in 

12 greater detail in Section B, infra, DNF's objections turned on its assertion that its financial 

13 net worth is irrelevant for purposes of class certification, and thus outside the current scope 

14 of discovery. [Id. at pp. 11-12]. While a protective order might make any decision to tum 

15 over financial information more palatable, DNF' s argument speaks to the independent 

16 question of the appropriate scope of discovery at this time. 

17 The Court finds that defendant, DNF, raised appropriate objections to plaintiffs 

18 Requests for Production and therefore turns to the merits of the parties' arguments. 

19 B. Whether Defendant's Financial Net Worth is Relevant Information 

20 Within the Scope of Discovery Before a Motion for Class Certification 

21 Has Been Granted 

22 Plaintiff contends defendant, DNF's, financial net worth is relevant and subject to 

23 discovery at this time because it would assist the Court in its determination of whether to 

24 grant a motion for class certification. [Doc. No. 53, at p. 7].2 Pointing to the statutory bases 

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2 Plaintiff also points to language from this Court's Scheduling Order in support of its argument that 

DNF's net worth is relevant: "Fact and class discovery are not bifurcated but all class discovery shall be 

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1 for his claims, plaintiff notes that the damages to which the class is entitled is the lesser of 

2 "$500,000 or 1 per centum of the net worth." 15 U.S.C. 1692k(a)(2)(B); see also Calif. 

3 Civ. Code § 1788.17. "Without this information, [p ]laintiff's motion will be defective in 

4 that [p ]laintiff will not be able to show that there exists sufficient funds to properly 

5 compensate each [ c ]lass member, as well as the amount that each member would receive." 

6 [Doc. No. 53, at p. 7]. 

7 DNF contends (1) that DNF's pending Motion to Dismiss should be ruled on before 

8 this Court requires it provide any financial records; and, (2) its financial net worth is outside 

9 the scope of discovery for purposes of class certification, Marshall v. Bonded Adjustment 

10 Co., 2011 WL 3882284 (E.D. Wash. Sept. 2, 2011). [Doc. No. 53, at p. 12, 15]. 

11 The Court finds that plaintiff is entitled to financial information regarding defendant, 

12 DNF's, financial net worth in 2015, 2016, and at present. The Court disagrees with 

13 defendant that the pending Motion to Dismiss stays defendant's discovery obligations. 

14 While a stay of discovery might be appropriate if the "complaint [were] utterly frivolous, 

15 or filed merely for settlement value[,] [s]uch does not appear to be the case here." See 

16 Turner Broadcasting Systems, Inc. v. Tracinda Corp., 175 F.3d 554, 555-56 (D. Nev. 

17 1997). Courts have broad discretionary power to control discovery, including the decision 

18 to allow or deny discovery. See Little v. City of Seattle, 863 F .2d 681, 685 (9th Cir. 1988). 

19 In sum, discovery shall proceed despite defendant's pending Motion to Dismiss. 

20 Defendant cites to a single case, Marshall v. Bonded Adjustment Co., in support of 

21 its argument that DNF's net worth is not relevant for purposes of class certification. The 

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completed by []November 13, 2017." [Doc. No. 21, at p. 1]. Plaintiff is correct in noting discovery is 

not bifurcated, however he overstates the degree to which current discovery efforts can look beyond a 

motion for class certification. This Court made clear to the parties in its telephonic Case Management 

Conference that discovery at this time should be focused on issues surrounding class certification. Thus, 

information that might be relevant both for purposes of class certification and after a potentially-granted 

motion for class certification would be discoverable information at this time. The Scheduling Order 

does not, as plaintiff contends, sanction discovery for all purposes at this time. The focus of the parties 

should be on discovery relevant to class certification; plaintiffs argument is overbroad and misstates the 

true scope of Court approved discovery at this time. 

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1 Marshall court entered a protective order "precluding discovery of information regarding 

2 [defendant's] net worth unless and until a class is certified." Marshall, 2011 WL at *2. 

3 Notably, the only two subsequent cases that cite to Marshall disagreed, and found such 

4 financial information relevant for purposes of class certification and discoverable before a 

5 motion for class certification is granted. See Nall v. Allied Interstate, LLC, 2015 WL 

6 6529233 (S.D. Ind. Oct. 27, 2015); Green v. Monarch Recovery Management, Inc., 997 

7 F.Supp.2d 932, 935 (S.D. Ind. 2014) ("While this court is mindful of the ruling in Marshall 

8 denying discovery of net worth, this case appears to be an anomaly on the issue of 

9 relevancy of net worth."). The Green court further noted that where a protective order is 

10 already in place to protect "any truly sensitive information", a plaintiff is entitled to 

11 discovery regarding a defendant's net worth. Green, at 995. Moreover, courts in this 

12 District have held, upon a similar review of existing caselaw, that "[i]t is clear that net 

13 worth is a relevant area of inquiry in FDCP A class actions even before a class is certified." 

14 Hill v. Asset Acceptance, LLC, 2014 WL 3014945, at *13 (S.D. Cal. July 3, 2014). 3 This 

15 Court agrees that DNF's financial net worth is within the scope of discovery for purposes 

16 of class certification. DNF is thus required to answer discovery on this issue. 

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3 See also Bode v. Encore Receivable Management, Inc., 2006 WL 801017 (E.D. Wisconsin Mar. 29, 

2006) ("Given that damages may be calculated based on a defendant's net worth, information 

concerning the defendant's net worth is relevant and potentially useful in determining whether a class 

action is superior to other methods of adjudication"); Bakouras v. Hecker, 2006 WL 3544585 (D. N.J. 

Dec. 8, 2006) (exemplifying the important role financial net worth information can play in a district 

court's analysis at the class certification stage). 

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1 CONCLUSION 

2 Based on the reasons set forth above, plaintiffs Motion to Compel is GRANTED. 

3 Plaintiffs Motion for Sanctions is DENIED. Defendant's objections to plaintiff's 

4 Requests for Productions No.'s 39-42 are overruled, and defendants shall fully and 

5 unequivocally respond to the Requests by no later than December 15, 2017. 

6 IT IS SO ORDERED. 

7 Dated: November 27, 2017 

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n S. Crawford -----._ 

United States Magistrate Judge 

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