Hunt v. 21st Mortgage Corporation

Filing 31

MEMORANDUM OPINION AND ORDER Plaintiffs Motion to Compel (Doc. 19) is GRANTED, subject to the limitations described within. The scheduling order originally entered on November 5, 2012, and amended on July 10, 2013, is AMENDED as follows: Discovery SHALL BE CONCLUDED no later than October 18, 2013, at 4:30 PM. Dispositive motions SHALL BE FILED no later than November 4, 2013, at 4:30 PM. Signed by Judge William M Acker, Jr on 9/17/13. (SAC )

FILED
2013 Sep-17 PM 02:04
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
CHARLES HUNT,
Plaintiff,
v.
21st MORTGAGE CORPORATION,
a Corporation,
Defendant.

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CIVIL ACTION NO.
2:12-CV-2697-WMA

MEMORANDUM OPINION AND ORDER
Before the court is the motion of plaintiff Charles Hunt to
compel a Rule 34 Inspection (“Pl.’s Mot.”). Defendant 21st Mortgage
Corporation opposes the motion (“Def.’s Opp’n”).
filed

a

reply

(“Pl.’s

Reply”),

and

both

Plaintiff has

parties

have

filed

supplemental briefs (“Pl.’s Mem.” and “Def.’s Mem.,” respectively)
regarding the significance of “capacity” versus actual use of
certain telephone systems under the Telephone Consumer Protection
Act (“TCPA”), 47 U.S.C. § 227.

For the reasons that follow,

plaintiff’s

GRANTED

motion

is

hereby

with

the

following

limitations.
Background
Plaintiff brought this action on August 14, 2012, alleging
that defendant made harassing phone calls to him in violation of
the TCPA, the Fair Debt Collection Practices Act (“FDCPA”), 15
U.S.C. § 1692 et. seq., and various provisions of state law.

1

On

July 3, 2013, as part of the discovery process, plaintiff sought to
inspect defendant’s facilities, including “the facilities wherein
[it]

performs

telephone

collections

systems

computer

systems

used

operations,”

in

and/or

the

“all

collection

software

used,”

of
and

telephones

and

accounts,”
“any

“any

equipment

mentioned in or referred to by Defendant in its responses to
Plaintiff’s discovery or otherwise.”

Pl.’s Mot. (Doc. 19), Ex. A.

Defendant objected to these requests.

When the parties failed to

resolve the dispute between themselves, plaintiff brought the
instant motion in this court.
DISCUSSION
It is a widely known (and widely quoted) maxim that “the
deposition-discovery

rules

[under

the

Federal

Rules

of

Civil

Procedure] are to be accorded a broad and liberal treatment.”
Hickman v. Taylor, 329 U.S. 495, 507 (1947).
compel

the

other

to

disgorge

whatever

“[E]ither party may

facts

he

has

in

his

possession.” Id. Thus, plaintiff’s motion must be granted so long
as he meets the low bar set out for him in Rule 26: his request
must be for “nonprivileged matter that is relevant to any party’s
claim or defense.”
The

analysis

Fed. R. Civ. P. 26(b)(2).
of

this

low

bar

is

uncomplicated.

Among

plaintiff’s claims is that defendant called him using an illegal
automatic dialer, and among defendant’s defenses is that, on the
contrary, it used manual dialing in all of its communications with

2

plaintiff.

Obviously,

plaintiff

is

not

required

to

take

defendant’s word for it; it is precisely these types of factual
disputes for which discovery exists.
Defendant, however, argues that there are at least three
reasons why,

notwithstanding

this

apparently

simple

analysis,

plaintiff’s motion should be denied: (1) defendant has nothing for
plaintiff to see, so any inspection would be fruitless; (2) its
system is not covered by the TCPA, and so is irrelevant to this
litigation; and (3) plaintiff’s request is overly broad. The court
turns to each of these arguments in turn.
1.

There Is Nothing To See
Defendant explains in its opposition brief that, in August,

2012,

just

days

before

plaintiff

filed

this

suit

and

after

plaintiff’s wife had filed a virtually identical suit in state
court, it “replaced the Nortel phone system previously identified
with a new and completely different phone system.” Def.’s Opp’n at
2.

“The Nortel system is no longer in operation,” it explained,

“and therefore, there is no telephone or telephone system to
inspect.”

Id.

Does the court misunderstand the apparent argument, offered
with

a

straight

face,

that

discovery

is

impossible

because

defendant has already destroyed any evidence that could possibly be
found

to

incriminate

explanation

that

set

it?
off

No

doubt

plaintiff’s

3

it

was

vehement

this

remarkable

accusations

of

spoliation and willful concealment of vital evidence.
Pl.’s Mem. at 7-14.1

See, e.g.,

Defendant’s claim was overenthusiastic.

The

old phone system, including both headsets and the mainframe that
drove them, has not been swept under the rug, but only into the
aptly named “phone closet.”

See Collins Dep., Pl.’s Ex. A, at

30:3-4; see also id., at 21:10-11.

Thus, contrary to defendant’s

argument (but fortunately for defendant nonetheless, given the
severe

sanctions

available

for

spoliation),

there

is

indeed

something to see.
The court agrees with plaintiff that defendant was wrong not
to

disclose

this

information

earlier,

and

doubly

wrong

to

apparently offer the hardware for sale, rather than preserving it
for purposes of this litigation.

But the court disagrees that

plaintiff has been permanently prejudiced and that sanctions are
necessary at this point.

It is true that plaintiff can never see

the system “in a ‘live’ state,” Pl.’s Mem. at 12, but that is
because the system was replaced prior to this litigation, not
because it was initially concealed.

Nor, insofar as we know at

this time, has the system been permanently altered in any way.
Presumably, if plaintiff wants to see the equipment in action, he
can simply plug it in when he arrives at the “phone closet.”

With

discovery

most

still

ongoing,

the

court

1

concludes

that

the

Because plaintiff has failed to number the pages in this
memorandum, the court refers to the pages as automatically marked
by the Electronic Case Filing system. See Doc. 29.
4

appropriate remedy is simply for defendant to now fully disclose
this information and provide plaintiff the opportunity to inspect
the Nortel phone system.
2. The Phone System Is Not the Type Covered by the TCPA, and so It
Is Irrelevant and There Is No Reason for Plaintiff to See It.
Defendant next argues that “the evidence is undisputed that
the subject telephone system as installed and used by Defendant
never had the use of an autodialer, predictive dialer or any
recording capability.”
applies

only

defendant,

to

the

Def.’s Opp’n at 4.

“automatic

non-automatic

telephone
system

Because the TCPA

dialing

that

systems,”

plaintiff

says

wishes

to

inspect is not relevant.
Defendant’s

said

argument

is

unavailing.

First,

the

“automatic telephone dialing system” definition applies only to
§

227(b)(1)(A),

one

of

several

subsections

of

the

statute.

Plaintiff has alleged that defendant has violated that subsection,
but he has also alleged that defendant made “numerous calls by
illegal pre-recorded messages.”
behavior

would

violate

§

Compl. ¶ 53.
227(b)(1)(B),

If true, this
which

prohibits

“initiat[ing] any telephone call to any residential telephone line
using an artificial or prerecorded voice to deliver a message
without the prior express consent of the called party,” regardless
of whether the phone system used was an “automatic telephone
dialing system.”
system

was

Plaintiff’s inspection may show that defendant’s

capable

of

delivering
5

artificial

or

prerecorded

messages, and it is relevant and discoverable for that purpose.
Second, defendant’s claim that “the evidence is undisputed” is
one it must save for summary judgment or some other later stage of
this litigation. Indeed, the very purpose of the instant motion is
to make the evidence disputed. Plaintiff is not required to accept
defendant’s claims that all calls were made manually; in short, he
is free to argue before a jury, whether rightly or wrongly, that
defendant’s assertion is a lie or an error, and that in fact
defendant did make “numerous calls by illegal automatic dialers
and/or predictive dialers . . . at all hours of the day and night,”
Compl. ¶ 52.

Should he choose to do so, he is permitted under the

federal discovery rules to obtain information from defendant with
which to support his argument.

Of course, he may draw back a nub.

While these grounds alone are sufficient to grant plaintiff’s
motion, the parties focused heavily at the oral hearing on this
motion on the legal issue of how an “automatic telephone dialing
system” ought to be defined under the TCPA. The plaintiff believes
that, even if defendant did make all calls to him manually, it
still made the calls using an “automatic telephone dialing system”
because its phone system was at least capable of automatic dialing.
Defendant counters that this interpretation stretches the meaning
of the statute too far–-that picking up a telephone and dialing
someone’s number on it is not the type of behavior the TCPA is
intended to govern, regardless of whether in some theoretical world

6

the telephone system could have dialed the number itself.

Because

the parties have already briefed this issue and the issue will no
doubt resurface in a future motion, and in the hope that resolving
the issue will assist the parties in their ongoing efforts to
resolve this case outside of the courtroom, the court will address
the statutory definition of an “automatic telephone dialing system”
now.
Section 227(a) provides the following definition:
(1) The term “automatic telephone dialing system” means
equipment which has the capacity-(A) to store or produce telephone numbers to be called,
using a random or sequential number generator; and
(B) to dial such numbers.
The statutory text plainly focuses on “the capacity” of equipment
when

defining

an

“automatic

telephone

dialing

system,”

and

virtually every court to examine the definition has taken the text
at face value.

See, e.g., Meyer v. Portfolio Recovery Associates,

LLC, 707 F.3d 1036, 1043 (9th Cir. 2012) cert. denied, 133 S. Ct.
2361 (U.S. 2013) (“[T]he focus must be on whether the equipment has
the

capacity

‘to

store

or

produce

telephone

numbers

to

be

called.’”) (quoting Satterfield v. Simon & Schuster, Inc., 569 F.3d
946,

951

(9th

Cir.

2009))

(emphasis

in

original);

Moore

v.

Firstsource Advantage, LLC, 07-CV-770, 2011 WL 4345703, at *8
(W.D.N.Y. Sept. 15, 2011) (“[T]he TCPA itself makes clear that the
issue is the equipment's capacity to store and generate such types
of calls.”); Lozano v. Twentieth Century Fox Film Corp., 702 F.
7

Supp.

2d

999,

1010

(N.D.

Ill.

2010)

(“Congress

included

a

definition that provides that in order to qualify as an automatic
telephone dialing system, the equipment need only have the capacity
to store or produce numbers.”) (emphasis in original).
interpretation

is

only

strengthened

by

the

This

interpretational

principle that, “[b]ecause the TCPA is a remedial statute, it
should be construed to benefit consumers.”

Gager v. Dell Fin.

Servs., LLC, 12-2823, 2013 WL 4463305 (3d Cir. Aug. 22, 2013).
Indeed, even defendant’s prized case, Mudgett v. Navy Fed. Credit
Union, 11-C-0039, 2012 WL 870758, at *2 (E.D. Wis. Mar. 13, 2012),
granted summary judgment to a TCPA defendant only because the
plaintiff had “not pointed to evidence from which a fact-finder
could reasonably conclude that [defendants] placed calls from
telephones

that

autodialing.”

were

connected

to

computers

capable

of

It was the lack of evidence at the summary judgment

stage, not the statutory definition, that sank the plaintiff’s
case.

Surely defendant cannot point to the same lack of evidence

at the discovery stage of this case.

The argument is deviously

circular: defendant hopes that plaintiff cannot obtain information
through discovery because he has no evidence, and cannot have
evidence because he has not obtained sufficient information in
discovery.
While the court has no trouble adopting the rule of the Ninth
Circuit and other district courts, the instant case would require
8

the court to stretch the TCPA definition yet a step further.

In

those earlier cases, the telephone systems at issue were fully
equipped and ready to automatically dial numbers at a moment’s
notice, and so had the required “capacity” to meet the “automatic
telephone dialing system” definition, regardless of how they were
actually used.

Here, the phone system was (and is) in its present

state incapable of automatic dialing. Plaintiff’s argument is that
certain software could have been installed onto defendant’s system
which would have made automatic dialing possible.

See Collins

Dep., Pl.’s Ex. A, at 22:4-12.
The problem with this reasoning is that, in today’s world, the
possibilities
limitless.

of

modification

and

alteration

are

virtually

For example, it is virtually certain that software

could be written, without much trouble, that would allow iPhones
“to store or produce telephone numbers to be called, using a random
or sequential number generator, and to call them.” Are the roughly
20

million

American

iPhone

§ 227(b)(1)(A) of the TCPA?

users

subject to

the

mandates

of

More likely, only iPhone users who

were to download this hypothetical “app” would be at risk.
The court therefore holds that, to meet the TCPA definition of
an “automatic telephone dialing system,” a system must have a
present capacity, at the time the calls were being made, to store
or produce and call numbers from a number generator.

While a

defendant can be liable under § 227(b)(1)(A) whenever it has such

9

a system, even if it does not make use of the automatic dialing
capability, it cannot be held liable if substantial modification or
alteration

of

the

system

would

be

required

to

achieve

that

capability.
This conclusion does not affect the court’s decision on the
instant motion, inasmuch as plaintiff may still inspect defendant’s
equipment for the reasons stated earlier in this opinion, or in
order to verify defendant’s claim that the equipment did not have
the required software for automatic dialing or easy installation of
such. However, both parties must conduct all further discovery and
subsequent litigation in light of the “automatic telephone dialing
system” definition explained here.
3.

Plaintiff Wants Too Much
Defendant’s final argument is that the discovery requested by

plaintiff

is

“overly

broad,

unduly

burdensome,

oppressive,

immaterial, expensive, and is not reasonably calculated to lead to
the discovery of admissible evidence.”

Def.’s Opp’n at 2.

The

court agrees that, read literally, plaintiff’s request to inspect
“the

facilities

collections
discovery

operations”

is not

21st

wherein
is

Mortgage

too

equivalent to

Corporation

broad.

An

a

search

police

order

performs
compelling

warrant,

and

plaintiff is not to scour the entirety of defendant’s property and
files in search of evidence.
With this in mind, plaintiff’s inspection shall be limited as

10

follows:
1.

Plaintiff and his chosen expert may inspect any part of

the Nortel Meridian Telephone System that was in use by defendant
at the time of the events that gave rise to this litigation, along
with any other telephone system that was in use at that time.
shall

include

the

dummy

modules,

the

mainframe,

any

This

related

software in defendant’s possession, and any other equipment related
in any way to defendant’s business telephone calls.
2.

Subject

to

the

limitations

imposed

by

the

privacy

interests of third parties, plaintiff may observe defendant’s
employees in the act of making telephone calls to its customers.
In the alternative, defendant may simulate such a telephone call
for plaintiff’s benefit, but such simulation must use equipment
identical to that used in defendant’s actual business calls and
must follow exactly defendant’s normal procedures.
3.

To the extent plaintiff has any plans more concrete than

his ambiguous request for “[i]nspection of any equipment mentioned
in or referred to by Defendant in its responses to Plaintiff’s
discovery or otherwise,” defendant is to provide that opportunity,
as demanded by the Federal Rules, so long as the information is
relevant to any party’s claim or defense.
4. In all future discovery disputes, the parties are reminded
that all discovery motions filed in this court “must include a
certification that the movant has in good faith conferred or

11

attempted to confer with the person or party failing to make
disclosure or discovery in an effort to obtain it without court
action.”

Fed. R. Civ. P. 37(a)(1).

The rule reflects the Rules’

preference for flexible, cooperative discovery without the need for
officious court oversight.

The requesting party is to narrowly

tailor its requests to nonprivileged information it genuinely needs
and plans to use at trial; the receiving party is to honor those
requests.

Neither party is to use the process for any ulterior

strategical motive.

If the parties prefer to fight out their

disagreement, the court is happy to referee–-but the parties must
wait for the opening bell.

Rule 37 also provides a wide range of

sanctions for violations of the discovery rules.
Conclusion
In summary, plaintiff’s Motion to Compel (Doc. 19) is hereby
GRANTED,

subject

to

the

limitations

described

above.

The

scheduling order originally entered on November 5, 2012, and
amended on July 10, 2013, is hereby AMENDED as follows:
Discovery SHALL BE CONCLUDED no later than October 18, 2013,
at 4:30 PM.

Dispositive motions SHALL BE FILED no later than

November 4, 2013, at 4:30 PM.
DONE this 17th day of September, 2013.

_____________________________
WILLIAM M. ACKER, JR.
UNITED STATES DISTRICT JUDGE

12