UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

 

CONSUMER FINANCIAL ) 

PROTECTION BUREAU, ) 

 ) Case No. 20 C 4176 

Plaintiff, ) 

 ) District Judge: Franklin U. Valderrama 

 v. ) 

 ) Magistrate Judge: Gabriel A. Fuentes

TOWNSTONE FINANCIAL, INC., et al., ) 

 ) 

Defendants. ) 

 

ORDER 

The motion by Defendants Townstone Financial, Inc., and Barry Sturner (“Defendants”) 

to stay discovery (“Motion to Stay”; D.E. 77) is before the magistrate judge on referral (D.E. 92). 

Discovery already has commenced with initial disclosures and an exchange of written discovery 

requests and responses. Defendants’ Memorandum of Law in Support of the Motion to Stay (“Def. 

Mem.” (D.E. 78)) at 2. Defendants argue that further discovery, including oral depositions and 

likely motion practice to resolve discovery disputes, should be put on hold while the district court 

decides Defendants’ motion to dismiss the action under Federal Rule of Civil Procedure 12(b)(6). 

Id.; see Defendants’ Motion to Dismiss for Failure to State a Claim (“Motion to Dismiss”; D.E. 

31). Since the filing of the Motion to Stay, Defendants and Plaintiff Consumer Financial 

Protection Bureau (“CFPB”) have filed dueling, fully briefed motions to compel various discovery. 

(D.E. 87, 89.) The Court in this order addresses the Motion to Stay first, and then the dueling 

motions to compel. 

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BACKGROUND

The CFPB, an enforcement agency of the federal government, brought this action against 

Defendants under federal law to remedy Defendants’ alleged “unlawful discrimination, including 

redlining and acts or practices that would discourage prospective applicants, on the basis of race, 

from applying for credit in the Chicago [area].” Amended Complaint (D.E. 27) ⁋⁋ 1-5, citing the 

Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. §§ 1691–1691f, the Consumer Financial 

Protection Act of 2010 (“CFPA”), 12 U.S.C. § 5536(a)(1)(A), and the ECOA’s implementing 

regulation, known as Regulation B, 12 C.F.R. §§ 1002.1-16 (2022). Townstone and its principal, 

Sturner, are alleged to have been in the mortgage lending and mortgage brokering business in the 

Chicago area and other parts of the Midwest. Id. ⁋⁋ 4, 9, 13. CFPB alleges that Townstone “has 

acted to meet the credit needs of majority-white neighborhoods in the Chicago [area] while 

avoiding the credit needs of majority- and high-African-American neighborhoods,” by 

“engag[ing] in acts or practices directed at prospective applicants that, together and separately, 

would discourage prospective applicants, on the basis of race, from seeking or obtaining credit for 

properties within the Chicago [area].” Id. ⁋⁋ 14, 22. More specifically, the CFPB alleges that 

through radio programming and advertising, and through a weekly podcast available online, 

Defendants “have discussed mortgage-related issues on the show and have taken questions from 

prospective applicants. The hosts have regularly referred to their work at Townstone and promoted 

the benefits that prospective applicants might expect from applying for mortgage loans from 

Townstone.” Id. ⁋ 26. Further, CFPB alleges that at various times on these forms of programming 

and marketing, Townstone has:

regularly included statements that would discourage African-American prospective 

applicants from applying for mortgage loans, or making or pursuing an application, 

including from Townstone; would discourage prospective applicants living in 

majority- or high-African-American neighborhoods from applying for mortgage 

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loans, or making or pursuing an application, including from Townstone; and would 

discourage prospective applicants from applying for mortgage loans, or making or 

pursuing an application, for properties in majority- or high-African-American 

neighborhoods, including from Townstone. 

Id. ⁋ 32. The foregoing statements, CFPB alleges, include the following: 

• Telling a caller from a majority African-American Chicago suburb, the town of 

Markham, that “it’s crazy in Markham on weekends” and that “I know, I’ve been 

to Markham .... You drive very fast through Markham ... and you don’t look at 

anybody or lock on anybody’s eyes in Markham .... You look at your dashboard,

you don’t lock on anybody”; and also disparaging the caller’s wife by saying the 

caller should “keep those women in line over there in Markham” and “tell her to 

get a better job.” Id. ⁋ 33.

• Stating that “it’s a great time to sell” a home, and that ways to ready a home for 

sale included “tak[ing] down the Confederate flag.” Id. ⁋ 34.

• Calling Friday through Monday on the Chicago’s South Side, a majority AfricanAmerican part of the city, “hoodlum weekend,” and stating that the police “are the 

only ones between that turning into a real war zone and keeping it kind of where 

it’s at.” Id. ⁋ 35.1 In a similar vein, a host on one of these Townstone programs is 

alleged to have compared the “rush” from a skydive to the “rush” a person might 

experience from “walking through the South Side at 3 a.m.” Id. ⁋ 37.

• Referring to the former iteration of a Jewel-Osco supermarket (since refurbished) 

at Clark and Division Streets in Chicago as a “packed” and “scary” place known as 

“the Jungle Jewel” because “people from all over the world” went there. Id. ⁋ 36.2

1 “Hoodlum” is a pejorative term believed to have originated in the 1870s in San Francisco, when it was 

used to describe gangs of young men who were reported to have preyed upon Chinese immigrants. Lakshmi 

Gandhi, “Where Do ‘Hoodlums’ Come From? San Francisco,” National Public Radio (Nov. 6, 2013 

(https://www.npr.org/sections/codeswitch/2013/11/06/243262138/where-do-hoodlums-come-from-sanfrancisco). The term now is a synonym for “thug.” Definition of “Hoodlum,” Vocabulary.com 

(https://www.vocabulary.com/dictionary/hoodlum#:~:text=A%20hoodlum%20can%20also%20be,gangst

er%2C%20thug%2C%20or%20toughie) (last visited Dec. 10, 2022). The term “thug” is considered by 

some to be a modern-day code word for a racist slur directed at Africa Americans. Jamelle Bouie, “Richard 

Sherman Is Right: ‘Thug’ Is the New N-Word,” The Daily Beast (Apr. 14, 2017) 

(https://www.thedailybeast.com/richard-sherman-is-right-thug-is-the-new-n-world).

 

2 Chicago has a long and ingrained history of racism and the use of racist references to describe particular 

neighborhoods and places in the city. The Court takes judicial notice that many in Chicago considered the 

term “Jungle Jewel” a historically racist reference to the fact that many customers of the Jewel store at 

Clark and Division were African-American residents of the public housing project known as Cabrini Green, 

located about a half-mile west of the store. Wreckers demolished the last of the Cabrini Green high-rise 

buildings in 2011. 

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CFPB alleged that the foregoing statements, insofar as they disparaged AfricanAmerican neighborhoods or persons, characterized those “areas and people in a manner 

that would discourage those who identify or associate with those areas of people from 

applying for credit,” insofar as prospective applicants reasonably may consider statements 

made by persons “marketing themselves as real-estate experts” when house-hunting or 

seeking credit to buy residential property. Id. ⁋⁋ 38-39. In addition, CFPB has alleged that 

Townstone did not direct its marketing at the African-American community and that 

statistically, Townstone drew few African-American mortgage applicants and fewer 

applications from African-American applicants compared to “peer” lenders. Id. ⁋⁋ 40, 42-

46, 49. CFPB alleged that Townstone employed no African-American loan officers during 

the relevant period. Id. ⁋ 51. CFPB pointed to the totality of “Townstone’s hiring practices, 

consumer outreach, consumer interactions, and other business acts or practices” as 

“exclud[ing] or treat[ing] differently African-American prospective applicants for credit, 

as well as prospective applicants for credit in African-American census tracts.” Id. ⁋ 52. 

Defendants’ Rule 12(b)(6) motion to dismiss asserts that the Amended Complaint 

does not state a claim against them under the ECOA because the statute addresses 

discrimination against mortgage applicants, and not persons alleged to have been 

discouraged from applying for mortgages. Memorandum of Law in Support of 

Defendants’ Combined Motion to Dismiss (“Dismissal Mem.”; D.E. 32) at 4-10. 

Defendants also argue that the statements made on the radio and podcast programming are 

protected speech under the First Amendment. Id. at 12-20. Further, Defendants argue that 

the district court should extend the U.S. Supreme Court’s recent holding in West Virginia 

v. EPA, 142 S. Ct. 2587 (2022), to hold that CFPB’s claims represent an unlawful 

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expansion of the agency’s authority per the “major questions” doctrine developed in West 

Virginia. Defendants’ Memorandum of Supplemental Authority (D.E. 67).

Several discovery-related motions are pending. In seeking to stay discovery, 

Defendants argue that the Motion to Dismiss is dispositive of CFPB’s claims in the case, 

so that a stay would preserve the Court’s and the parties’ resources and would avoid what 

Defendants say is a disproportionate level of prejudice upon them if discovery proceeds 

during the pendency of the Motion to Dismiss. Motion to Stay at 1-2. Meanwhile, CFPB 

moves to compel Sturner to comply with the following document three document requests:

1. All Documents, including all emails, chats, and text messages, referencing any 

ethnic, gender, religious, racial, or group-based slur or making any 

generalization, differentiation, or stereotyping, or referring to any 

generalization, differentiation, or stereotyping, based on race, color, religion, 

national origin, sex, marital status, or age.

2. All Documents referring to Mexicans or Canadians. 

3. All Communications, including emails, chats, social-media posts, and text 

messages, referring to characteristics of any geographic areas or 

neighborhoods.

Plaintiff’s Motion to Compel (D.E. 87) at 3-4. Defendants claims the requests seeking

Sturner’s personal communications are not relevant to claims and defenses in the case, are 

disproportionate to the needs of the case, and impermissibly burden his First Amendment 

speech and associational rights. Defendants’ Response to Plaintiff’s Motion to Compel 

(“Def. MTC Resp.”; D.E. 100). Defendants have moved to compel CFPB to comply with 

(1) five document requests (Nos. 34-38) seeking “[a]ll documents you allege establish, or 

that otherwise relate to, your allegations regarding the content, meaning and effect” of the 

statements CFPB quotes and relies on in Paragraphs 33-37 of the Amended Complaint, i.e., 

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the statements alleged to have discouraged prospective applicants from applying for credit; 

and (2) the following two document requests: 

41. All documents concerning the political leaning, political viewpoints, or 

social commentary of Townstone and/or Townstone’s staff. 

42. All documents concerning the political leaning or viewpoints of the AM 

radio stations in the Chicago MSA [area]. 

The parties disagree as to the relevancy and proportionality of the foregoing document 

requests, but their arguments are focused on Request Nos. 41 and 42. See Plaintiff’s 

Motion to Compel; Defendant’s Memorandum of Law in Support of Their Motion to 

Compel (“Def. MTC Mem.”; D.E. 90). In addition, the parties have filed a joint motion to 

extend the discovery schedule. (D.E. 97). 

DISCUSSION

The Court considers each of the motions by exercising the broad discretion afforded it in 

the management of discovery issues in civil litigation, with a view toward promoting the just, 

speedy, and inexpensive determination of the action. Jones v. City of Elkhart, Ind., 737 F.3d 1107, 

1115 (7th Cir. 2013); Fed. R. Civ. P. 1. The scope of federal civil discovery includes information 

that is relevant to any claim or defense in the case, and that is proportional to the needs of the case. 

Fed. R. Civ. P. 26(b)(1). The Court will address the motions in turn, beginning with the Motion to 

Stay.

I. Motion to Stay Discovery 

As movants on the Motion to Stay, Defendants have the burden to show that good cause 

exists for a stay. Harper v. Cent. Wire, Inc., No. 19 C 50287, 2020 WL 5230746, at *1 (N.D. Ill.

Sept. 2, 2020). In determining whether good cause exists to stay discovery during the pendency 

of a motion to dismiss, courts consider the following factors: (1) whether a stay will prejudice the 

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non-moving party; (2) whether a stay will simplify the issues in the case; and (3) whether a stay 

will reduce the burden of litigation for the parties or the court. Id.; Liggins v. Reicks, No. 19 C 

50303, 2021 WL 2853359, at *1 (N.D. Ill. July 8, 2021). 

The mere filing of a motion to dismiss does not automatically stay discovery. SK Hand 

Tool Corp. v. Dresser Indus., 852 F.2d 936, 945 (7th Cir. 1988). Nor does filing a motion 

to stay mean that a court will automatically grant it. DSM Desotech Inc. v. 3D sys. Corp., No. 08 

C 1531, 2008 WL 4812440, at *2 (N.D. Ill. Oct. 28, 2008). In most cases, the existence of a 

dispositive motion is not the sole reason for granting the stay. Syngenta Seeds, Inc. v. BTA

Branded, Inc., No. 05 C 6673, 2007 WL 3256848, at *1 (N.D. Ill. Nov. 1, 2007). Instead, 

a stay of discovery is generally appropriate only when a party raises a potentially dispositive 

threshold issue such as a challenge to a plaintiff's standing, see U.S. Catholic Conference v.

Abortion Rights Mobilization, Inc., 487 U.S. 72, 79-80 (1988), or pending resolution of qualified 

immunity claims, see Landstrom v. Illinois Dep't of Children & Family Servs., 892 F.2d 670, 674 

(7th Cir. 1990) and Liggins, 2021 WL 2853359, at *2-3. Accordingly, courts have denied 

discovery stays where the movant’s primary argument is that the motion to dismiss has a high 

likelihood of success, because if that somewhat speculative rationale were enough, discovery 

arguably ought to be stayed every time a defendant files a dismissal motion it considers 

meritorious. New England Carpenters Health and Welfare Fund v. Abbott Labs., No. 12 C 1662, 

2013 WL 690613, at *2-3 (N.D. Ill. Feb. 20, 2013). 

In New England Carpenters, Judge Rowland, who was then a magistrate judge considering 

a party’s motion to stay discovery that Judge Rowland was supervising on referral, suggested that 

the sufficiency of a complaint’s allegations could sometimes, but relatively rarely, be akin to a 

threshold standing or qualified immunity issue, so as to justify a discovery stay. Id. at *3. Judge 

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Rowland noted that the Supreme Court’s seminal Rule 12(b)(6) cases, Ashcroft v. Iqbal, 556 U.S.

662 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), “do not mandate that a 

motion to stay should be granted every time a motion to dismiss is filed.” New England 

Carpenters, 2013 WL 690613, at *3 (emphasis added). Judge Rowland also recognized that

circumstances warranting a stay during the pendency of a motion to dismiss have included, for

example, antitrust cases in which the breadth of the discovery in question was considered

“‘especially burdensome and costly,’ and ‘extensive, voluminous, and expensive to produce.’” Id., 

quoting DSM Desotech, 2008 WL 4812440, at *2-3. In New England Carpenters, Judge Rowland 

denied the requested stay pending the movant’s Rule 12(b)(6) motion attacking the sufficiency of

a complaint’s allegations under RICO and the Robinson-Patman Act in the absence of a clear

showing as to the burden or cost of the discovery sought. Id. Judge Rowland relied in part on 

Gray v. First Winthrop Corp., 133 F.R.D. 39 (N.D. Cal. 1990): 

“Had the Federal Rules contemplated that a motion to dismiss under Fed. R. Civ. 

P. 12(b)(6) would stay discovery, the Rules would contain a provision to that effect. 

In fact, such a notion is directly at odds with the need for expeditious resolution of 

litigation .... Since motions to dismiss are a frequent part of federal practice, this 

provision only makes sense if discovery is not to be stayed pending resolution of 

such motions.” 

New England Carpenters, 2013 WL 690613, at *2, quoting Gray, 133 F.R.D. at 40. Even the 

decisions granting stay motions amid threshold questions (such as qualified immunity) presented 

on Rule 12(b)(6) motions to dismiss have noted that “delaying discovery could delay the ultimate

resolution of this case should Defendants’ motion to dismiss be denied.” Liggins, 2021 WL

2853359, at *2-3. Per the foregoing decisions, motions to stay pending a motion to dismiss will

commonly turn on the nature of the issue presented in the motion to dismiss, the nature of the 

discovery sought to be stayed, and the policy considerations presented by the Court’s obligation 

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to construe, administer, and employ the Federal Rules of Civil Procedure “to secure the just,

speedy, and inexpensive determination of every action and proceeding.” Fed. R. Civ. P. 1. 

The Court has considered each of the factors of prejudice to the non-moving party (i.e., the 

claim by Defendants that they bear the lion’s share of prejudice or burden if discovery proceeds), 

the degree to which a stay would simplify the issues, and the issue of the litigation’s burden on the 

parties and the Court. For the following reasons, the Court is denying the Motion to Stay in

consideration of these factors:

First, discovery is hardly in its infancy, and neither is this action. The parties have

exchanged Rule 26(a)(1) disclosures and written discovery requests. The Court’s ruling today on 

the two motions to compel will allow for the completion of written discovery and the beginning 

of oral depositions. The case is already almost two-and-a-half years old, having been filed in July 

2020. Defendants filed their motion to dismiss the Amended Complaint in February 2021, before

the parties entered into unsuccessful settlement negotiations that forestalled the district court’s

consideration of the motion to dismiss into 2022. (D.E. 40, 42, 43.) In January 2022, the parties

appeared to have settled the case and so advised the Court (D.E. 46), only to report in March 2022 

that the settlement had collapsed. (D.E. 52.) Defendants promptly secured new counsel, and by 

April 26, 2022, new counsel was in place, and this Court set a discovery schedule with the parties’

input. 4/26/22 Order (D.E. 64). But the schedule was notably shorter than what the parties had

proposed, because, this Court said:

This is a 2020 case in which both sides have had ample time to consider the subject 

matter and witness candidates with respect to expert testimony; considerable time 

was spent on settlement, and that is commendable, but now that settlement is not in 

the offing, the parties have opted for the litigation train, and it is moving, and it will 

pick up speed. 

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Id. Additional months passed, in which Defendants offered to the district court their argument 

based on the Supreme Court’s West Virginia case, and the Motion to Stay did not hit the docket 

until September 16, 2022, more than a year and half after the filing of the motion to dismiss. (D.E. 

65, 77). The Court does not “fault” Defendants or anyone for the long pendency of the motion to 

dismiss, or for the time taken by the settlement negotiations, but the reality now is that the entire 

case is back on the litigation track, so that the district court’s determination of the motion to dismiss 

is now reasonably nigh. The district court even heard oral argument on the motion to dismiss on 

August 10, 2022. (D.E. 74.) As the Court has said before, discovery in this case needs to begin 

and needs to move. If the district court ultimately grants the motion to dismiss relatively soon, the 

resources spent on discovery will not be overwhelming. If Defendants had moved to stay sooner, 

they might have had a better argument on the prejudice factor, but the Court today deals with the 

reality of what has happened in the case.

Second, the Court looks not only at the nature of the discovery in the case but the nature of 

the motion to dismiss, which is more garden-variety than threshold. To a certain degree, all 

motions to dismiss present “threshold” issues that could stop a case in its tracks. But cases like 

New England Carpenters suggest that a court’s evaluation of the motion to dismiss, as a basis for 

a motion to stay, are to some degree qualitative. Here, the undersigned magistrate judge naturally 

leaves resolution of the motion to dismiss fully in the hands of the district court. The district court 

could well find that ECOA and its Regulation B applies to prospective applicants and/or that 

CFPB’s administrative authority properly extends to allow it to seek the relief it demands in this 

action. The district court could well find that the radio and podcast comments alleged by CFPB 

would have served to discourage minority applicants from asking Townstone for a mortgage, 

insofar as the comments, if taken as having been made, might be construed to send a hostile 

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message to certain ethnic groups, and particularly African Americans. Or, the district court might 

make none of those findings. For our purposes today, the motion to dismiss facially does not 

present the kind of threshold issue that ordinarily would support a stay of discovery a this phase 

of the case.

Third, as for simplification of the issues, Defendants’ argument for a stay is stronger 

because a district court ruling pulling back the extent of allegations that may be at issue during 

discovery would obviously conserve resources by simplifying the case. This argument, though, is 

subsumed within Defendants’ prejudice argument, and a ruling favorable to Defendants on the 

motion to dismiss at this point would relieve the parties of the costs and burdens of only the 

discovery they conduct between now and the ruling, and the Court is exercising its discretion not 

to stay the case on that basis. 

II. The Dueling Motions to Compel 

A. CFPB’s Motion to Compel

Sturner’s objection to CFPB’s Document Request Nos. 1-3 is that responding to them

would require him to search his personal cellular devices and computers for text or email

communication that touch broadly upon his social views or leanings toward ethnic groups or

particular geographical areas and then to disclose communications he calls “personal” and not 

“business,” all in a manner that unduly invades his personal privacy interests and even burdens his 

First Amendment rights of speech and association. Def. MTC Resp. at 9-11, citing Americans for 

Prosperity Found. v. Bonta, 141 S. Ct. 2373, 2389 (2021). CFPB responds that the requests are

directed at relevant information concerning Townstone’s “general business practices” and “intent,” 

that those issues bring the requests within Rule 26(b)(1)’s broad relevancy scope, and that they are

not disproportional to the needs of the case. Reply in Support of Plaintiff’s Motion to Compel 

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(D.E. 101) at 2-4. CFPB also claims that the information is relevant and discoverable because

statements Sturner made in an under-oath investigative hearing in this case show that he “relied

on his personal network as a source of potential loan applicants as well as a source of potential 

employees.” Plaintiff’s Motion to Compel at 6. 

The Court does not doubt that Sturner’s personal beliefs about ethnic groups or 

geographical neighborhoods may well be relevant to CFPB’s claims that he and Townstone acted

in an unlawfully discriminatory manner in their marketing, and the Court agrees that Sturner’s

characterization of his communications as “personal” does not win the day. The question for the 

Court is how relevant that information might be, and what burdens its compelled discovery places

on the privacy of Sturner and the family members, friends, or other associates with whom he had

private communications during the relevant period. The expansion of electronic platforms for

human communication in the past 30 years has had a dramatic effect on how individuals and courts 

view privacy when it comes to individuals’ electronic devices. As the U.S. Supreme Court stated

in 2014, “[m]odern cell phones are not just another technical convenience. With all they contain

and all they may reveal, they hold for many Americans ‘the privacies of life.’” Riley v. California, 

573 U.S. 373, 403 (2014), quoting Boyd v. United States, 116 U.S. 616, 630 (1886). Riley and

Boyd were criminal cases about the limits of state power to seize personal documents under the

Fourth Amendment, but the passage from Boyd referenced by Riley drew upon a more general

notion of privacy, as in “all invasions on the part of the government and its employees of the

sanctity of a man’s home and the privacies of life.” Boyd, 116 U.S. at 630. The Court added: 

It is not the breaking of his doors, and the rummaging of his drawers, that

constitutes the essence of the offense, but it is the invasion of the indefeasible right 

of personal security, personal liberty, and private property, where that right has

never been forfeited .... 

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Id. The Court is not deciding this discovery dispute under the Fourth or the Fifth Amendments, 

or, for that matter, the First Amendment. And the Court makes no ruling on whether being

compelled to produce documents in federal civil discovery satisfies the state action component of 

federal constitutional law. Rather, the Court simply takes note of the fact that, according to the 

U.S. Supreme Court dating back to 1886, the Founders understood that citizens and subjects of the 

United States had basic privacy rights or commonly understood notions of “indefeasible” rights of 

personal security and liberty that were never forfeited. See also U.S. Const., amend. IX (“The

enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others 

retained by the people.”) (emphasis added). And in 2014, in Riley, the Supreme Court 

acknowledged that those notions remained very much alive and placed into greater relief by the 

advent of technology that can store the virtual whole of a person’s private life in the palm of a 

hand. In the field of federal civil discovery, courts have proceeded cautiously before ordering the 

“extraordinary” remedy of a forensic examination of a litigant’s electronic devices, as a nod to

“undue intrusiveness and “the non-moving privacy interests.” Belcastro v. United Air Lines, No.

17 C 1682, 2019 WL 7049914, at *2 (Dec. 23, 2019). 

With those principles in mind, the Court moves directly to the proportionality component 

of Rule 26(b)(1). The Court is not persuaded that Sturner must turn over all communications with

his friends, family and associates touching upon his racial, religious, gender-based, or age-based

biases, if he had any. Or that he must turn over all of his communications about Mexicans or 

Canadians, or about particular neighborhoods. CFPB’s construction of Document Request Nos.

1-3 is that they “relat[e] directly to the Bureau’s allegations,” Plaintiff’s Motion to Compel at 6, 

but the Court disagrees. The relation is indirect. Whatever personal biases Sturner may have

harbored – and the Court is not saying he did – might be relevant to his or Townstone’s intent 

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toward prospective applicants and might make more probable than not CFPB’s allegations that

Defendants acted in a discriminatory way, but the communications sought to be discovered are not 

public or external communications. CFPB’s allegations are that Townstone discriminated by 

taking to the airwaves through its informercials and making statements that persons including 

African Americans might find so revolting that such persons were discouraged from applying for

credit from Townstone. Sturner’s private communications to friends, family members and

associates, and not made publicly or to prospective applicants, might bear only indirectly and

tangentially on how Townstone treated prospective applicants. The relationship between CFPB’s

allegations and “bias or motivation” in Sturner’s personal communications is similarly tenuous, as

is the relevance of rebutting Sturner’s claims that he was merely repeating statements made by 

others or identifying additional witnesses in the matter. The Court does not see the foregoing 

theories of discovery relevancy as central enough to the case to warrant the privacy invasion that

would result from compelled production of every Sturner email, text, or “chat” communication

that discusses the biases or proclivities set forth in Document Request Nos. 1-3. Accordingly, 

those requests’ demand for all such communications is disproportionate to the needs of the case

and will be disallowed. 

The one theory of relevancy that the Court finds more central to the case is CFPB’s claim

that Sturner made such communications relevant because he admitted using his personal network 

to develop loan applicant leads or to recruit employees. Id. Compelled production of those emails

is not disproportionate to the needs of the case because it will be far more limited, and far more

tailored to the CFPB theories of relevancy that are far more central and less tangential to proof of 

its allegations. Without the same disproportionate impact on privacy interests, Sturner certainly

may be ordered to produce documents responsive to Request Nos. 1-3 to the extent they concern

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the identification of, or communication with, prospective loan applicants and/or prospective 

employees. Plaintiff’s Motion to Compel is granted in part and denied in part, with Sturner 

required to produce “business documents responsive to the requests,” as Sturner already has agreed

to do, Def. MTC Resp. at 1, and his responsive (to Request Nos. 1, 2, and 3) communications to

anyone, during the relevant period, concerning the identification of, or communication with,

prospective loan applicants and/or prospective employees. Having decided this discovery dispute 

purely on Rule 26(b)(1) grounds, the Court does not reach Sturner’s arguments based on the First

Amendment or the extension of Bonta to the federal civil discovery context. 

B. Defendant’s Motion to Compel

Defendants’ Request Nos. 41 and 42, seeking documents disclosing CFPB staff’s political

opinions or viewpoints, and relating to the staff’s assessments of or comments upon the political

leanings of various Chicago AM radio stations, is simply irrelevant to the claims and defenses in

the case. Perhaps Defendants want to argue that CFPB itself harbors some kind of content-based

or other bias against Sturner or Townstone, and if so, that argument might have some marginal

relevancy, but the Court sees such a theory of discovery relevancy as extremely remote. More

likely, Defendants want to turn the tables on CFPB and make the case about agency biases. 

Request Nos. 41 and 42 do not implicate the same privacy interests as the CFPB requests, but they

are a frolic and detour, and they will be disallowed, before we even reach a proportionality 

analysis. The Court agrees with CFPB that Defendants do not state an adequate theory of

discovery relevancy through their suggestion that “the Bureau filed this lawsuit because it

disagreed with the content of Defendant Sturner’s speech or his general political view....” 

Plaintiff’s Opposition to Defendants’ Motion to Compel (“Pl. MTC Opp.”; D.E. 99) at 1. The

Court respectfully declines Defendants’ invitation to politicize this lawsuit and would prefer to

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stick to the facts. The power of facts always is more useful than the power of hyperbole. See

Sanchez v. City and Cnty. of Honolulu, No. 19-cv-00072-DKW-WRP, 2019 WL 5929735, at *6

(D. Haw. Nov. 12, 2019). The Court agrees with CFPB that denying Defendants’ their proposed 

foray into the politics of CFPB staff members will not deny Defendants their opportunity to stick

to the facts, namely those concerning whether the statements Sturner or Defendants directed at

prospective applicants violated the ECOA. See Pl. MTC Opp. at 6. 

Defendants’ Request Nos. 34-38 are a different story. These requests seek disclosure of 

documents relating to CFPB’s allegations about the statements allegedly made by Sturner (or other 

Townstone infomercial hosts) in a manner that discouraged prospective applicants. CFPB’s

opposition to Defendants’ Motion to Compel is focused mostly on Request Nos. 41 and 42, and

the dispute concerning Request Nos. 34-38 seems to center on whether they call for disclosure of

internal CFPB communications about staff interpretations or opinions concerning how the Sturner 

external communications cited in the Amended Complaint may have operated to discourage

prospective applicants. Pl. MTC Opp. at 1, 5. The Court does not see Request Nos. 34-38 as

necessarily calling for disclosure of such potentially privileged communications. Without 

reaching the question of privilege, the Court simply holds that the internal staff interpretations of 

governing statutes like ECOA or regulations like Regulation B are not relevant to whether

Defendants discriminated against prospective applicants in violation of those regulations. The

parties are well able to leave the statutory and regulatory interpretations to the district court, or

ultimately to the fact finder, when it comes to whether referring to South Side residents as

“hoodlums,” to Markham as a no-go zone, or to the old Jewel at Clark and Division as “the Jungle 

Jewel” operated to discourage prospective applicants or constituted a general business practice that

did so. Discovery as to CFPB’s beliefs about that interpretation, or of staff members’ off-the-cuff

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ruminations about it, are not necessary, and in fact, in the pleadings, CFPB has made clear its

interpretation. On the other hand, to the extent Request Nos. 34 through 38 are construed to seek

documents relevant to CFPB’s proof of its discouragement claims, that sort of discovery request

is common in federal civil litigation and will not be denied. 

Accordingly, Defendants’ Motion to Compel is denied in full as to Request Nos. 41 and

42. As to Request Nos. 34-38, Defendants’ motion is granted only insofar as CFPB is to produce 

documents that tend to establish, factually, its claims that Sturner’s statements discouraged 

prospective applicants. Responsive documents could include witness statements from prospective 

applicants or other witnesses who heard the statements. Responsive documents could include 

statistical analyses. This relevancy also includes any non-privileged documents that CFPB 

possesses and that tend to disprove CFPB’s allegations of discouragement. But the documents to

be produced are not to include internal CFPB ruminations about what the applicable statutes and

regulations do or do not cover.

III. Motion to Extend the Discovery Schedule 

The Court agrees with the joint motion’s assertion that good cause exists to extend the 

schedule, in view of the pending discovery-related motions decided today by the Court. 

Accordingly, the Court grants the motion to extend, by agreement and as follows: (1) the fact

discovery cutoff is moved from December 23, 2022 to February 28, 2023; (2) Rule 26(a)(2) expert 

reports are due to be served by CFPB no later than 5 p.m. on March 24, 2023, and by Defendants 

no later than 5 p.m. on April 28, 2023; and (3) expert depositions are to be completed by May 26, 

2023 for CFPB’s experts and by June 30, 2023 for Defendants’ experts, with all discovery thus 

closed on June 30, 2023. The “good cause” requirement for any extension would be the same for

any future extension request, except that “good cause” is interpreted within the context of the

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progress and needs of the case. The parties should consider the current schedule to be firm. A 

further joint written status report on the anticipated closure of fact discovery is due by noon on 

February 23, 2023. 

CONCLUSION

For the foregoing reasons, the Motion to Stay (D.E. 77) is denied, the motions to compel 

discovery by CFPB (D.E. 87) and by Defendants (D.E. 89) are each partially denied and partially

granted as set forth in this order. The joint motion to extend the discovery schedule (D.E. 97) is

granted as stated in this order.

SO ORDERED.

 ENTER:

 ________________________________ 

 GABRIEL A. FUENTES

United States Magistrate Judge

DATED: December 12, 2022

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