Auld v. New Penn Financial LLC

Background

Cindy M. Auld and Scott B. Auld sued New Penn Financial LLC doing business as Shellpoint Mortgage Servicing, John Doe, Mortgage Contracting Services, LLC, and Champion Property Services, LLC. Their complaint asserted claims under the Fair Debt Collection Practices Act, as well as abuse of process and slander. They alleged that the unnamed John Doe was an employee or representative of Shellpoint who visited their home on May 10, 2017, and reported false information about the home and an alleged risk to their minor children to Hennepin County.

To identify John Doe, the plaintiffs served Hennepin County Human Services and Public Health Department with a subpoena seeking documents related to the County’s case involving the Aulds, including the identity and contact information of the person or persons who reported information about them and their home on May 10 and May 17, 2017. Hennepin County produced 60 pages of documents but redacted the reporter’s identity.

Arguments

Hennepin County relied on Minnesota Statute § 626.556, subd. 11(a), which permits disclosure of a child-welfare reporter’s name only with the reporter’s consent or after a court makes a written finding that the report was false and made in bad faith. The plaintiffs argued that the Federal Rules of Civil Procedure governing discovery superseded the state-law restriction. They also argued that the County waived its objection by serving it one day late and that no other cost-effective way existed to identify John Doe.

The County argued that the statutory protection prevented it from disclosing the reporter’s identity without the required court order. It also argued that the court should balance the interests of discovery against Minnesota’s policy of encouraging reports of child endangerment by protecting reporters’ confidentiality.

Court’s Analysis

The court declined to treat the County’s objection as waived. Although the objection was one day late, the court found that the delay was understandable, there was no evidence of an improper purpose, and the plaintiffs did not claim prejudice. The court also noted that the reporter, rather than the County, arguably had the primary interest in maintaining confidentiality under Minnesota law.

The court did not definitively decide how the Federal Rules of Civil Procedure interact with Minnesota Statute § 626.556, subd. 11(a). Instead, it concluded that the current record did not show that the plaintiffs had exhausted other reasonable ways to identify the Shellpoint employee or representative who inspected the home. The court noted that the statute did not prevent Shellpoint or the other named defendants from identifying people who inspected the home on their behalf, or prevent the plaintiffs from questioning those people about whether they made the report.

The court stated that, if those efforts were unsuccessful or inconclusive, the plaintiffs could renew their motion. At that point, the court might consider privately reviewing the reporter’s identity to compare it with the names of defendants’ employees and representatives involved in the inspection. The court also observed that if the reporter was not affiliated with any defendant, the identity might be irrelevant to the plaintiffs’ claims.

Disposition

The court denied the Plaintiffs’ Motion to Overrule Subpoena Objections and Compel Subpoena Compliance without prejudice.