Spears et al v. Washington Mutual, Inc. et al

Filing 359

ORDER by Magistrate Judge Howard R. Lloyd re 353 Discovery Dispute Joint Report No. 8. (hrllc2, COURT STAFF) (Filed on 12/20/2013)

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1 2 3 4 5 6 7 NOT FOR CITATION 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION United States District Court Northern District of California 11 12 13 FELTON A. SPEARS, JR. and SIDNEY SCHOLL, on behalf of themselves and all others similarly situated, Plaintiffs, 14 Case No. 5:08-cv-00868 RMW (HRL) ORDER RE DISCOVERY DISPUTE JOINT REPORT NO. 8 [Re: Docket No. 353] v. 15 16 17 18 19 FIRST AMERICAN EAPPRAISEIT (a/k/a eAppraiseIT, LLC), a Delaware limited liability company, Defendant. Plaintiffs sue for themselves and on behalf of a certified class of “[a]ll consumers in 20 California and throughout the United States who, on or after June 1, 2006, received home loans 21 from Washington Mutual Bank, FA in connection with appraisals that were obtained through 22 eAppraiseIT.” They claim that defendants engaged in a scheme to inflate the appraised values of 23 homes receiving loans in order to sell the aggregated security interests at inflated prices. First 24 American EAppraiseIT (EA) is the only defendant left. Plaintiffs’ sole remaining claim for relief 25 is that the complained-of conduct violates the anti-kickback provision of the Real Estate 26 Settlement Practices Act (RESPA), 12 U.S.C. § 2607(a). 27 At issue in Discovery Dispute Joint Report (DDJR) No. 8 is whether non-party JPMorgan 28 Chase Bank (Chase) should be compelled to produce class members’ HUD Settlement Statements 1 (i.e., HUD-1 forms) pursuant to a document subpoena plaintiffs served on December 2, 2012. The 2 matter is deemed suitable for determination without oral argument. Civ. L.R. 7-1(b). Upon 3 consideration of the respective positions set out in DDJR 8, the court grants plaintiffs’ requested 4 discovery. 5 For the better part of the past year, plaintiffs and Chase have conferred numerous times 6 over the requested HUD-1 forms. Chase eventually agreed to produce certain data about class 7 members’ loans in lieu of producing the HUD-1 forms and other documents plaintiffs requested. 8 Chase ultimately produced two spreadsheets that, plaintiffs say, did not contain all of the data 9 Chase agreed to provide. Since then, Chase has produced additional information (and will produce more before the 11 United States District Court Northern District of California 10 December 22, 2013 discovery cutoff) addressing plaintiffs’ concerns---except for one. Thus far, 12 Chase says it has been unable to confirm whether the appraisal fee listed in the spreadsheets 13 actually was the fee paid by the class member (as opposed to the fee Washington Mutual paid EA 14 for the appraisal service). Plaintiffs contend that this information is critical because it will have a 15 direct impact on their ability to prove the amount of their claimed statutory damages. Plaintiffs 16 and Chase quibble about whether plaintiffs asked for clarification re the appraisal fees on October 17 17, 2013 or some three weeks later on November 6, 2013. But the bottom line is this: Because 18 the requested information is in the HUD-1 forms, plaintiffs argue that the forms must now be 19 produced for the approximately 200,000 loans in question and that production must be made prior 20 to the December 22 discovery cutoff. (Alternatively, if Chase at some point advises that it can 21 confirm by declaration that the listed fees are the appraisal fees paid by class members, then 22 plaintiffs will forego production of the HUD-1 forms and rely on the declaration instead.) 23 Pointing out that neither party has reimbursed its significant costs incurred, Chase says that 24 it has already devoted a substantial amount of time and resources to gathering and producing the 25 information plaintiffs subpoenaed, and that it continues to do so for certain outstanding categories 26 of data. As such, Chase says that it simply cannot gather and produce some 200,000 HUD-1 27 statements, in addition to its other production efforts, before the December 22 discovery cutoff. 28 Chase suggests that plaintiffs review the sample of 300 loan files it previously produced. Those 2 1 files contain the HUD-1 statements, and Chase believes that plaintiffs could reasonably ascertain 2 who paid the appraisal fees. Plaintiffs agree that this may be a viable option, but claim that they 3 only recently obtained the sampling of loan files and have not yet had a chance to review the 4 HUD-1 statements. In any event, they express concern that relying on the sample, even if 5 statistically significant, leaves them vulnerable to an argument by EA that the sampling is not 6 100% accurate. Additionally, if the sample shows that Washington Mutual sometimes paid the 7 appraisal fee, then plaintiffs are worried that Judge Whyte might question the propriety of their 8 reliance on the sample in proving up damages for the class. 9 There is no serious dispute that the requested information is important to plaintiffs’ ability to prove their claimed damages. No one suggests that the information is obtainable or could be 11 United States District Court Northern District of California 10 verified through some source other than the HUD-1 forms. True, there are a large number of loans 12 at issue, but that is commensurate with the nationwide certified class. The specific focus of 13 Chase’s distress appears to be the large volume of documents to be produced, coupled with the 14 very short time frame for production requested by plaintiffs. Indeed, this matter was brought 15 before the court less than two weeks before the December 22 cutoff, and at a time when Chase 16 says it is already swamped with efforts to produce other information subpoenaed by plaintiffs. 17 This court is not prepared to require plaintiffs to proceed by way of a statistical sampling. There is 18 disagreement among courts as to the propriety of statistical sampling in class actions, see 19 generally, Brown v. Wal-Mart Stores, Inc., No. 5:09-cv-03339 EJD, 2012 WL 5918300 at *3 (N.D 20 Cal., Nov. 15, 2012) (citing cases), and the determination whether plaintiffs properly may prove 21 damages through a statistical sampling in this case is not one for this court to make anyway. 22 While the court must protect against undue burden in discovery, Fed. R. Civ. P. 26(b)(2)(C)(iii), 23 45(c)(1), under the circumstances here, this court concludes that the burden imposed, while not 24 insignificant, is not undue. Plaintiffs’ request for an order compelling production of the HUD-1 25 forms therefore is granted. However, the court will not require Chase to produce them before the 26 discovery cutoff, but by a date mutually agreed by plaintiffs and Chase and, if necessary, approved 27 by Judge Whyte. Additionally, Chase will not be obliged to re-produce HUD-1 forms that were 28 3 1 2 3 4 5 already provided in the 300 sample files. SO ORDERED. Dated: December 20, 2013 ______________________________________ HOWARD R. LLOYD UNITED STATES MAGISTRATE JUDGE 6 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 1 5:08-cv-00868-RMW Notice has been electronically mailed to: 2 Allison Lauren Libeu alibeu@irell.com Alvin Matthew Ashley mashley@irell.com, sknight@irell.com Angela M. Papalaskaris apapalas@dl.com, courtalert@dl.com Christopher J Clark cjclark@dl.com David A. Super david.super@bakerbotts.com Ellen Mary M. Doyle edoyle@fdpklaw.com, filings@fdpklaw.com, gbrown@fdpklaw.com Gretchen Freeman Cappio gcappio@kellerrohrback.com, cbrewer@kellerrohrback.com, eknerr@kellerrohrback.com, tlin@kellerrohrback.com Harry Williams , IV hwilliams@kellerrohrback.com Janet Lindner Spielberg jlspielberg@jlslp.com Jenny Lee Merris jmerris@alvaradosmith.com, mault@alvaradosmith.com Joel R. Hurt jhurt@fdpklaw.com John C. Hueston jhueston@irell.com John Charles Hueston jhueston@irell.com, lhiles@irell.com John M. Sorich jsorich@alvaradosmith.com Jonathan Mark Lloyd jonathanlloyd@dwt.com, jeannecadley@dwt.com Joseph N. Kravec , Jr jkravec@fdpklaw.com, filings@fdpklaw.com, jnk561@yahoo.com Justin Nathanael Owens jowens@irell.com Kevin C Wallace kwallace@dl.com Khesraw Karmand kkarmand@kellerrohrback.com Kris Hue Chau Man kman@dl.com, sholstrom@dl.com Lynn Lincoln Sarko lsarko@kellerrohrback.com, cengle@kellerrohrback.com, kwarner@kellerrohrback.com Margaret Anne Keane margaret.keane@dlapiper.com, carol.stewart@dlapiper.com, marianne.haines@dlapiper.com Martin L. Fineman martinfineman@dwt.com, edithshertz@dwt.com, sfodocket@dwt.com McKean James Evans mevans@fdpklaw.com Michael D. Braun service@braunlawgroup.com, clc@braunlawgroup.com Ryan E. Bull Ryan.Bull@bakerbotts.com Sam N. Dawood samdawood@dwt.com, allanpatterson@dwt.com, cassandrabaines@dwt.com, nickverwolf@dwt.com Stephen M. Ng stephen.ng@bakerbotts.com, leanna.gutierrez@bakerbotts.com Stephen Michael Rummage steverummage@dwt.com, jeannecadley@dwt.com, seadocket@dwt.com Sung-Min Christopher Yoo cyoo@alvaradosmith.com, crosas@alvaradosmith.com, jyoung@alvaradosmith.com, mault@alvaradosmith.com Tana Lin tlin@kellerrohrback.com, esiegel@kellerrohrback.com, rfarrow@kellerrohrback.com Wyatt A. Lison wlison@fdpklaw.com, filings@fdpklaw.com 3 4 5 6 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5

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