Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-01184/USCOURTS-azd-2_08-cv-01184-8/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1332 Diversity-Insurance Contract

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA

Daniel Perez and Elizabeth Perez, on behalf 

of themselves and all others similarly 

situated, 

Plaintiffs, 

vs. 

First American Title Insurance Company, 

Defendant.

No. CV-08-1184-PHX-DGC

ORDER 

 Plaintiffs move for additional discovery (Doc. 268) and Defendant moves for class 

decertification (Doc. 259). The motions have been fully briefed. For reasons that follow, 

the Court will deny both motions and set a schedule for completion of this case.1

I. Motion for Discovery. 

 Plaintiffs move for additional limited discovery in order to validate the model of 

class members they have developed after obtaining electronic discovery ordered by this 

Court. Doc. 268. Plaintiffs request a Rule 30(b)(6) deposition to clarify certain matters 

related to the data obtained, production of a subset of data that Plaintiffs’ experts recently 

learned is informative, and production of HUD-1 closing files for the narrower list of 

transactions that Plaintiffs identified after court-ordered discovery. Id. at 9-11. 

Defendant opposes on the ground that the discovery period is closed, Plaintiffs have not 

 

1

 Defendants’ request for oral argument is denied because the issues have been 

fully briefed and oral argument will not aid the Court’s decision. See Fed. R. Civ. P. 

78(b); Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998). 

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shown good cause to amend the discovery deadline, and Defendant will be prejudiced if 

discovery is reopened. Doc. 276 at 9-13, 17. Defendant also contends that Plaintiffs’ 

request clearly establishes that Plaintiffs do not have sufficient evidence to prove liability 

without the HUD-1 closing files, and that this new discovery request should be denied in 

light of the Court’s August 27, 2010 order (Doc. 237) denying Plaintiffs discovery of 

closing files due to lack of diligence. E.g., Doc. 276 at 2, 8. 

A case management schedule entered under Rule 16 of the Federal Rules of Civil 

Procedure “may be modified only for good cause.” Fed. R. Civ. P. 16(b)(4); see Johnson 

v. Mammoth Recreations, Inc., 975 F.2d 604, 608 (9th Cir. 1992). Good cause exists 

when a deadline “cannot reasonably be met despite the diligence of the party seeking the 

extension.” Fed. R. Civ. P. 16 Advisory Comm.’s Notes (1983 Am.). Thus, “Rule 

16(b)’s ‘good cause’ standard primarily considers the diligence of the party seeking the 

amendment.” Johnson, 975 F.2d at 609; see also Coleman v. Quaker Oats Co., 232 F.3d 

1271, 1294 (9th Cir. 2000). Where that party has not been diligent, the inquiry ends and 

the motion is denied. Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1087 (9th Cir. 

2002); Johnson, 975 F.2d at 609. 

 Plaintiffs argue that they have been diligent. E.g., Doc. 268 at 9-10. Based on 

court-ordered discovery of electronic materials, Plaintiffs’ expert, Reed Simpson, created 

a model that allegedly identifies class members and the amounts they were charged. 

Doc. 286-3 at 9. Mr. Simpson asserts he is “confident that the data [Plaintiffs] now have 

contains all of the necessary information to accomplish this purpose.” Id. Nonetheless, 

he asserts that “it has not been possible to obtain answers to specific questions that would 

resolve ambiguities in the data or verify certain reasonable assumptions arising from the 

data.” Id. He requests a sample of the closing files to “verify certain findings.” Id.

 This case has been pending for more than three years. The Court entered an initial 

case management order on January 16, 2009, and established a period of class 

certification discovery that would end on May 8, 2009. Doc. 32. Following the 

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completion of this discovery and briefing on class certification, the Court held a class 

certification hearing on July 31, 2009. Doc. 100. During the hearing, the Court and the 

parties discussed the extensive discovery that might be necessary if the class was 

certified. Doc. 103 at 57-58. This included an individualized review of closing files. Id. 

The Court entered an order that certified the class on August 12, 2009. Doc. 102. The 

order specifically noted that Plaintiffs may need to conduct a file-by-file review to 

identify members of the class and prepare for trial. Id. at 11 (“Even if it takes a 

substantial amount of time to review files and determine who is eligible for the discount, 

that work can be done during discovery. Plaintiffs can then identify the individuals who 

are eligible for the discounts and did not receive them. . . . [W]hile this issue may involve 

a file-by-file review, it will not require a file-by-file trial.”). 

 Following certification of the class, the Court held a second case management 

conference. Plaintiffs’ portion of the Rule 26(f) report submitted in preparation for the 

conference stated that much of the discovery would be of electronic data, but that a 

review of individual closing files might also be necessary. Doc. 106 at 5 (“Depending on 

the availability, content and detail of the electronic data files, it may also be necessary to 

engage in file review of the title insurance or loan files or obtain production of those files 

or of particular documents from the files.”). The Court held the second case management 

conference on September 25, 2009, and set a schedule for completing discovery in this 

case (Doc. 108). The schedule provided that the parties would have until June 4, 2010, to 

complete fact discovery, and until August 20, 2010, to complete expert discovery. Id. at 

2-3. The order also contained this caution: “The Deadlines Are Real. The parties are 

advised that the Court intends to enforce the deadlines set forth in this Order, and should 

plan their litigation activities accordingly.” Id. at 5 (emphasis in original). 

 Near the close of fact discovery, the parties contacted the Court and requested a 

discovery conference call so Plaintiffs could request additional time for discovery. 

Doc. 217. After briefing of the issue, the Court entered an order that largely denied 

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Plaintiffs’ request. Doc. 237. The Court denied Plaintiffs’ request that Defendant be 

required to produce closing files, noting that despite the eight-month period established 

for fact discovery, Plaintiffs had not requested the files until three weeks after the 

deadline for written discovery. Id. at 2-3. The Court found “that Plaintiffs have not 

timely requested production of closing files in the possession of Defendant.” Id. at 3. 

The Court also denied Plaintiffs’ request that the Court order Defendant’s 

independent agents to produce closing files. Although Plaintiff had served subpoenas on 

the agents and had received objections to the subpoenas in December of 2009, Plaintiffs 

did not seek to compel disclosure until May 28, 2010, five days before the close of fact 

discovery. The Court held: 

This left too little time for the objecting entities to respond to the 

substantial production request before the close of discovery. Because 

Plaintiffs clearly could have sought to compel production months earlier, 

the Court concludes that Plaintiffs could not have shown good cause to 

extend the discovery period to permit production. See Johnson v. 

Mammoth Recreation, Inc., 975 F.2d 604, 609 (9th Cir. 1992) (Rule 16’s 

good cause standard primarily considers the diligence of the party seeking 

the amendment. The district court may modify the pretrial schedule only if 

it cannot be met through reasonable diligence.). 

Id. at 4. 

 Plaintiffs also sought additional time to complete discovery of electronic data. 

Although the Court found that Plaintiffs had been less than diligent on this subject as 

well, it also concluded that denying the additional electronic discovery would effectively 

result in decertification of the class. The Court permitted limited additional discovery to 

avoid such a harsh result: 

 The Court finds, on the present record, that decertification is too 

harsh a result for any dilatory or inadequate discovery practices on the part 

of Plaintiffs. The Court will allow Plaintiffs a limited, but reasonable, 

opportunity to discover the identities of potential class members through 

the data bases. 

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 Defendant shall provide Plaintiffs reasonable access to the FAST, 

STARS, and WinTrack computer systems at one of Defendant’s offices. 

Defendant may supervise, but not interfere with, Plaintiffs’ use of those 

systems. Plaintiffs’ access to the computer systems is limited by the class 

definition (Doc. 222 at 6) and is conditioned on adherence to the parties’ 

protective agreement and “claw-back” provision. Each side shall bear their 

own review and copying costs. 

Id. at 5. The Court extended the discovery period to September 28, 2011, to permit this 

additional discovery. Id. at 5-6. During the ensuing few months, the Court held a 

number of conference calls with the parties to resolve disputes over the electronic 

discovery (e.g., Docs. 238, 241), and even extended the discovery deadline to October 13, 

2011, to accommodate Plaintiffs’ need to complete discovery. Doc. 242. 

 In short, Plaintiffs have been afforded ample time to complete their class and 

merits discovery in this case. The Court denied Plaintiffs a further opportunity to obtain 

closing files because of their lack of diligence, but repeatedly extended the period for 

Plaintiffs to complete necessary electronic discovery. 

Plaintiffs now ask the Court to reopen discovery and permit them to obtain copies 

of closing files, arguing that they need only a subset of the files and only for the limited 

purpose of verifying their model. Doc. 268 at 9-11; Doc. 286-3 at 9. They appear to 

contend that their previous request for closing files was made for the purpose of 

establishing liability, and that now they can establish liability based on electronic data 

whose discovery was ordered by the Court. Cf. Doc. 286 at 10. Because they now seek 

only a sample of the closing files to verify a model that could only have been developed 

after court-ordered discovery, the argument goes, the Court’s prior denial of access to the 

files is not relevant to the present inquiry. See id. The Court disagrees. 

Plaintiffs have known from the outset of this case that discovery of closing files 

would likely be necessary for them to prepare their case. This fact was addressed at the 

class certification hearing in July of 2009. Plaintiffs started the discovery period by 

seeking to obtain closing files by subpoena from Defendants’ independent agents. 

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Plaintiffs then failed to follow up on the subpoenas and failed to request closing files 

from Defendant until three weeks after the deadline for serving written discovery. The 

Court concludes that Plaintiffs could, through reasonable diligence, have obtained all of 

the discovery they needed during the many months allowed for discovery in this case. As 

noted above, “Rule 16(b)’s ‘good cause’ standard primarily considers the diligence of the 

party seeking the amendment” of a court-ordered deadline. Johnson, 975 F.2d at 609; 

Coleman, 232 F.3d at 1294. Where that party has not been diligent, the inquiry ends and 

the motion is denied. Zivkovic, 302 F.3d at 1087; Johnson, 975 F.2d at 609. 

 Plaintiffs assert that they could not have sought some of the discovery because 

Defendant misled them about its availability. Defendant vigorously disputes this 

accusation. But even if it is true that the need for some information only became clear 

after Plaintiffs obtained electronic data and had it analyzed by their experts, the Court 

concludes that the discovery of the data could have been completed much earlier in this 

case and the additional discovery could have been sought within the ample time allowed 

for discovery. The Court cannot conclude that the discovery deadlines could not 

“reasonably be met despite the diligence of the party seeking the extension.” Fed. R. Civ. 

P. 16 Advisory Comm.’s Notes (1983 Am.). As a result, Plaintiffs have not shown good 

cause to extend the discovery deadline, and additional discovery will be denied. 

II. Motion for Decertification. 

 Defendant seeks to decertify the class on the ground that Plaintiffs are inadequate 

class representatives. Doc. 259.2

 Defendant makes two key arguments regarding 

Plaintiffs’ alleged inadequacy: (1) Defendant may assert defenses unique to Plaintiffs 

that will dispose of the case, and (2) Plaintiffs’ failure to conduct diligent discovery has 

prejudiced the class and is indicative of Plaintiffs’ inability to vigorously represent the 

 

2

 Defendant also argues that Plaintiffs are no longer part of the certified class after this Court’s partial decertification order dated November 22, 2010 (Doc. 257). As 

Plaintiffs correctly point out in their response, this argument is moot in light of the parties’ stipulation to the current class definition (Doc. 262). 

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interests of absent class members. Id. at 5-8. Plaintiffs respond that any unique defenses 

were waived, and that Defendant’s admission in a case in the Eastern District of 

Pennsylvania can easily dispose of some of these defenses. Doc. 263 at 2, 10. Plaintiffs 

also argue that the class has not been prejudiced because they have been able to, despite 

Defendant’s alleged hiding of the ball, obtain enough information to move forward with 

the case. Id. at 3-4. The Court need not address the merits of Plaintiffs’ arguments 

because Defendants have not shown that a court is required to decertify even if 

Defendants’ contentions are assumed true. 

 A district court has discretion to decertify a class at any time before a decision on 

the merits. Vizcaino v. United States Dist. Court for W. Dist. of Wash., 173 F.3d 713, 721 

(9th Cir. 1999); see Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160 (1982) (“Even after 

a certification order is entered, the judge remains free to modify it in the light of 

subsequent developments in the litigation.”). In an employment discrimination class 

action, O'Brien v. Sky Chefs, Inc., 670 F.2d 864 (9th Cir. 1982), overruled on other 

grounds by Atonio v. Wards Cove Packing Co., 810 F.2d 1477 (9th Cir. 1987), the Ninth 

Circuit held that a district court did not abuse its discretion in decertifying a class where 

the named plaintiffs failed, after 21⁄2 years, to produce evidence of class-wide 

discrimination in employment termination. O’Brien, 670 F.2d at 869. The court 

reasoned that plaintiffs’ failure “may have been due to inadequate representation of the 

class interests rather than to absence of classwide discrimination,” and decertifying to 

avoid res judicata effect on the class was not an abuse of discretion. See id. The court 

did not, however, reach the issue of whether vulnerable claims of a named plaintiff 

should result in decertification of the entire class. Id. For that issue, the court cited four 

cases that it found informative: U.S. Parole Comm'n v. Geraghty, 445 U.S. 388, 405-08 

(1980); E. Tex. Motion Freight Sys., Inc. v. Rodriguez, 431 U.S. 395, 406 n.12 (1977);

Sosna v. Iowa, 419 U.S. 393, 403 (1975); and Satterwhite v. Greenville, 634 F.2d 231 

(5th Cir. 1981). 

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 None of these cases stand for the proposition that, after a class has been certified, 

the possibility that the named plaintiff may be subject to unique defenses requires 

decertification.3

 In Hanon v. Dataproducts Corp., 976 F.2d 497 (9th Cir. 1992), the 

Ninth Circuit agreed with other circuits that “a named plaintiff’s motion for class 

certification should not be granted if there is a danger that absent class members will 

suffer if their representative is preoccupied with defenses unique to it.” Id. at 508 

(internal quotation marks and citation omitted). Hanon is inapposite, however, because 

class certification already occurred in this case. 

 Although O’Brien recognizes that a court may decertify to avoid prejudice to the 

class that would arise from a final judgment against non-diligent named plaintiffs, 

O’Brien does not require the Court to decertify at this time. Moreover, Plaintiffs and 

class counsel assert that they have sufficient evidence to proceed with the case on behalf 

of the class despite earlier delays. Defendant’s motion will therefore be denied. 

III. New Schedule. 

By March 25, 2011, Plaintiffs shall provide notice to members of the class. Class 

members will be allowed until May 13, 2011, to respond to the notice and opt out of the 

class. By May 20, 2011, Plaintiffs shall notify Defendant of the class members who have 

opted out. The parties shall file dispositive motions by June 3, 2011. 

IT IS ORDERED: 

 1. Plaintiffs’ motion for discovery (Doc. 268) is denied as stated above. 

 2. Defendant’s motion to decertify (Doc. 259) is denied. 

 3. Defendant’s motion to seal (Doc. 284) is granted. The Clerk has sealed 

the Declaration of Bruce McFarlane (Doc. 269) and the Declaration of Reed Simpson 

(Docs. 270, 271). 

 

3

 In fact, Satterwhite v. Greenville suggests the opposite conclusion. Carpenter v. 

Austin State Univ., 706 F.2d 608, 617-18 (5th Cir. 1983). 

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 4. The parties shall follow the new schedule set forth above. 

 Dated this 1st day of March, 2011. 

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