Klein v. Affiliated Group, Inc., The

Background

Dina Klein brought claims under the Fair Debt Collection Practices Act against The Affiliated Group, Inc. and Credit Management, L.P. She alleged that both defendants sent collection communications concerning a North Memorial Health Care debt totaling $1,084.35. Among other allegations, Klein claimed that the defendants created the false impression that North Memorial had transferred the account to a second debt collector and failed to include information about North Memorial’s financial assistance plan. She also alleged that Credit Management’s collection efforts violated an agreement involving North Memorial and the Minnesota Attorney General.

Discovery Request

Klein’s second motion to compel concerned Request No. 6. The request sought all written communications between Credit Management and North Memorial patients, before October 30, 2018, when those patients had previously received written communications from The Affiliated Group, Inc. The defendants objected that the request was irrelevant, disproportionate, confidential, and sought private information about nonparties. They also said they could not determine who had actually received communications as the request was written.

Klein argued that the requested materials could provide evidence about the frequency and persistence of alleged violations, the defendants’ defense that any violation resulted from an unintentional and objectively reasonable mistake, and whether consumers were confused by the communications. She proposed using the documents to identify patients and send them a survey about confusion. Her counsel acknowledged that no expert would be used for the survey.

Rulings on Waiver and Proportionality

The court held that the defendants had not waived their objections. It concluded that Klein had not properly served the discovery request by email because the defendants had not consented in writing to electronic service. The court alternatively found good cause to excuse any delay because the objections were served only briefly after the deadline, the delay was not in bad faith, and Klein had not shown meaningful prejudice.

The court assumed, for purposes of the motion, that communications to other consumers could be relevant to the frequency and persistence of noncompliance and to the bona fide error defense. But it found Request No. 6 overbroad and not proportional under Federal Rule of Civil Procedure 26. The request covered all written communications, not just communications like the “N41” and “G41” letters at issue in Klein’s case. The court noted that the requested information could be obtained through less burdensome means, such as a deposition of Credit Management under Rule 30(b)(6) or a targeted interrogatory.

The court also rejected the proposed method of identifying patients for a confusion survey. It found that the survey’s likely benefit was limited because it would be drafted and analyzed by counsel without an expert, could face admissibility problems, and consumer confusion or materiality is often decided from the communications themselves as a matter of law. The court further weighed the privacy interests of potentially thousands of nonparty patients, the possible disclosure of protected health information, burdens on the defendants and North Memorial, risks associated with the protective order, and the amount at issue.

Disposition

Judge Elizabeth Cowan Wright denied Klein’s motion to compel. The order permitted Klein to serve one interrogatory, but only if she had not already sought the information through Credit Management’s Rule 30(b)(6) deposition or another form of discovery. The interrogatory could seek the number of North Memorial patients who received “N41” and “G41” letters before October 30, 2018, after previously receiving collection letters from The Affiliated Group, Inc. The court extended the fact-discovery deadline to May 1, 2019, for that interrogatory only.