Seaman v. National Collegiate Student Loan Trust 2007-2

Background

The opinion concerns two consolidated putative class actions. The plaintiffs allege that the defendants orchestrated a scheme to obtain state-court default judgments by submitting false or deceptive affidavits. The complaint includes claims under the federal Fair Debt Collection Practices Act, which prohibits certain false or misleading representations in connection with debt collection. The plaintiffs allege, among other things, that employees of Transworld Systems, Inc. (TSI) falsely claimed personal knowledge of information in those affidavits.

The plaintiffs served Document Request No. 19, seeking all documents TSI had produced to the Consumer Financial Protection Bureau (CFPB) in connection with two CFPB proceedings. TSI moved for a protective order, arguing that the request was overbroad and unduly burdensome, that the documents were subject to confidentiality protections governing CFPB investigations, and that producing them would allow the plaintiffs to reconstruct the CFPB’s investigative process.

Magistrate Judge Barbara C. Moses denied TSI’s motion on October 23, 2020, and directed TSI to comply with the request. She found that TSI had not substantiated its assertions of burden or disproportionality. She also determined that the confidentiality provisions cited by TSI governed disclosure by the CFPB, not necessarily production by a private party in civil litigation. Judge Moses further found the documents relevant because the complaint alleged a nationwide class and because the CFPB materials concerned conduct overlapping with the plaintiffs’ allegations.

TSI’s Objections

TSI objected under Federal Rule of Civil Procedure 72(a), which permits a district judge to modify or set aside a magistrate judge’s ruling on a non-dispositive pretrial matter only when the ruling is clearly erroneous or contrary to law. TSI repeated its arguments that Request No. 19 was overbroad, that producing the documents would violate CFPB confidentiality rules, and that production would expose the CFPB’s investigative methods. TSI also argued that the plaintiffs’ claims were based only on New York law and conduct in New York state courts, and that the plaintiffs had not shown that the discovery would support class certification.

Court’s Analysis

Judge Gardephe rejected TSI’s characterization of the complaint, explaining that the plaintiffs pleaded FDCPA claims and asserted a class definition that was not limited to New York consumers. He agreed with Judge Moses that the requested documents were relevant to fact discovery rather than merely to class certification.

The court also concluded that TSI had not shown that producing the documents would be difficult, time-consuming, or expensive, or that producing a narrower group of documents would be less burdensome. Because the plaintiffs had shown relevance, TSI bore the burden of establishing that the request was overbroad or unduly burdensome, and the court found that TSI had not met that burden.

The court rejected TSI’s confidentiality and reverse-engineering arguments as well. It found no clear error in Judge Moses’s conclusion that the cited CFPB regulations did not apply to materials held by private litigants. The court also noted that the CFPB had not asserted the confidentiality protections at issue and that TSI had not provided adequate legal support for its argument that production would improperly reveal the CFPB’s investigative process. The court further found that the earlier time period covered by the CFPB materials did not make them irrelevant and that the investigations involved conduct substantially overlapping with the claims in this case.

Disposition

The court concluded that TSI had not demonstrated that Judge Moses committed clear error or issued a ruling contrary to law. Judge Gardephe therefore overruled TSI’s objections to the October 23, 2020 order.