Jarboe v. Cherry Creek Mortgage Co., Inc. et al
ORDER by Magistrate Judge Kristen L. Mix on 10/15/20 OVERRULING 163 Plaintiff's Response to Court's Sua Sponte Notice and Order Regarding Appointment of Special Master filed by Thomas R. Jarboe. An Order appointing the Special Master will issue separately. (nmarb, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 19-cv-01529-CMA-KLM
THOMAS R. JARBOE,
CHERRY CREEK MORTGAGE CO., INC., a Colorado corporation,
JEFFREY S. MAY, an individual, and
STACEY L. HARDING, an individual,
ENTERED BY MAGISTRATE JUDGE KRISTEN L. MIX
This matter is before the Court on Plaintiff’s Response to Court’s Sua Sponte
Notice and Order Regarding Appointment of Special Master [#163]1 (the “Objection”)
and Declaration of Melvin N. A. Avanzado in Support of Relator Thomas R. Jarboe’s
Response to Court’s Sue Sponte Notice and Order Regarding Appointment of
Special Master [#164] (the “Declaration”). The Court has reviewed the Objection and the
Declaration, and is sufficiently advised in the premises. For the reasons set forth below,
the Objection [#163] is OVERRULED.
In short, this case is a civil fraud action under the False Claims Act in connection
“[#163]” is an example of the convention the Court uses to identify the docket number
assigned to a specific paper by the Court’s case management and electronic case filing system
(CM/ECF). This convention is used throughout this Order.
with Defendant Cherry Creek Mortgage Co., Inc’s residential mortgage lending business.
Am. Compl. [#43] ¶ 7. Discovery disputes have already consumed a disproportionate
amount of the Court’s time, so much so, in fact, that the Court declared a discovery hearing
moratorium until a ruling was issued on Plaintiff’s Second Motion for Leave to Amend
Complaint. See [#145, #157]. As ordered, the parties filed a Joint Motion Regarding Case
Management Deadlines [#158] after acceptance of the Second Amended Complaint which
illuminates a variety of discovery and case management issues (to name a few: Plaintiff’s
contention that Defendant did a late document dump in order to undermine a third-party
deposition; Plaintiff’s objection to Defendant’s assertion of an accountant-client privilege;
Plaintiff’s contention that Defendant has refused to produce documents responsive to
written discovery requests; Plaintiff’s contention that Defendant’s privilege log is improper;
Plaintiff’s contention that a third-party deponent was not adequately prepared; Plaintiff’s
contention that discovery must be reopened compared to Defendant’s contention that
discovery is properly closed; etc.). In accordance with Fed. R. Civ. P. 53(a)(1)(C), the
Court issued a Notice [#160] indicating an intention to appoint a Special Master to address
these matters “that cannot be effectively and timely addressed by an available district judge
or magistrate judge of the district.” Plaintiff’s Objection [#163] followed. The Court
addresses Plaintiff’s contentions in turn.
The Special Master’s Overqualification for the Appointment
Plaintiff contends that the Special Master’s expertise with “complicated e-discovery
issues” is unwarranted here, as “the outstanding discovery disputes submitted to the Court
have been fairly straightforward.” Based on the Court’s previous experience with the
Special Master, her knowledge of litigation involving vast quantities of documents and her
ability to effectively coax compromises on discovery disputes render her the perfect
candidate for the job. Her experience with complex e-discovery issues is simply an added
benefit that may, or may not, prove useful. This objection lacks merit.
The Special Master’s Location
Plaintiff questions the need “to appoint a discovery master so distant from Colorado.”
This objection is puzzling in light of Plaintiff’s counsel’s office location in Pasadena,
California, obviously manifesting the lack of importance of a person’s geographic location
to prosecution of the lawsuit. In these COVID-19 days, virtually all of the Special Master’s
work is likely to be conducted by telephone (as is the Court’s.) This objection lacks merit.
The Special Master’s Unfamiliarity With the Case and Colorado Law
Like Plaintiff’s counsel, the Master’s unfamiliarity with Colorado law should prove no
hurdle to efficient and effective management of the discovery process. Her need to
familiarize herself with the case is not a viable objection; if it were, the mandate of Fed. R.
Civ. P. 53 which explicitly allows appointment of Masters in these circumstances would be
meaningless. These objections lack merit.
The Lack of Need for Involvement of a Master as to All Disputes
Plaintiff contends that “typically references [to Special Masters] are made for
especially complicated, burdensome, or highly technical disputes,” none of which are
present here. First, the Court rejects Plaintiff’s contention that courts “typically” reserve
appointment of Masters for such circumstances. The sheer volume of on-going discovery
issues in this case more than meets the criteria for appointment of a Special Master under
Fed. R. Civ. P. 53(a)(1)(C), Plaintiff’s counsel’s apparent inability to appreciate the extent
of the burden on the Court notwithstanding. The Rule means what it says: when a
Magistrate Judge cannot “effectively and timely address” outstanding issues, appointment
of a Master is appropriate. Perhaps Plaintiff’s counsel should reconsider the lengthy list
of discovery and case management issues set forth in the Joint Motion [#158] before
making such a glib argument. Moreover, apportionment of the many outstanding issues
between the Court and the Master is not a viable solution. Instead, doing so would lead
to an unnecessary need for coordination to avoid duplication or inconsistency (at a
minimum), hardly increasing efficiency. This objection lacks merit.
The Plaintiff’s Financial Position
Plaintiff avers that he is financially strapped and that Defendant is not, therefore, the
Court should order that the costs of the Master be paid by Defendant. This suggestion is,
frankly, preposterous. The Master will have the ability to apportion costs as she sees fit
based on her assessment of the parties’ responsibility for her involvement with each
particular issue, while weighing the factors set forth in Rule 53(g). This method encourages
the parties to think about their discovery needs and positions while bearing in mind the
mandates of the Federal Rules of Civil Procedure: that they must confer in an effort to
avoid unnecessary and wasteful disputes; that discovery should be proportionate to the
needs of the case; and that efforts to prolong, complicate, and monetize discovery are
inappropriate and invite imposition of sanctions. To automatically allocate costs to one
party without weighing each party’s responsibility for the discovery dispute is the height of
injustice. This objection lacks merit.
The Public Interest in the Lawsuit Warrants Allocation of the Master’s Costs
Plaintiff asserts that because this a qui tam case in which he seeks an award of
damages for the public, Defendant should pay the Master’s fees. First, Rule 53(g) contains
no language mandating or endorsing this contention. Second, to the extent that the Rule
Committee’s notes to the 2003 amendment to Rule 53 indicate that “parties pursuing
matters of public interest may deserve special protection,” the Master can and will take that
into account when determining awards of fees. Third, it is disingenuous for Plaintiff to
utterly disregard his own interest in the case as the Relator, which could potentially result
in a significant monetary award to him as well. Fourth, it is worth noting that the United
States has declined to pursue Plaintiff’s fraud allegations in this case, under 31 U.S.C. §
3730. Notice of Election by the United States to Decline Intervention [#10]. Finally, there
is no exception to the rule allowing appointment of a Master for cases brought in the public
interest, and such litigation does not create a carte blanche for overwrought, unduly
burdensome, or relatively meaningless discovery. Public interest litigation is not exempt
from the ordinary obligations of litigants and their counsel to carefully consider discovery
needs and to secure the “just, speedy and inexpensive” determination of every action. Fed.
R. Civ. P. 1. This objection lacks merit.
Plaintiff is Comparatively Blameless for the Current Discovery Posture
Plaintiff emphasizes that he has “made a full and complete document production”
and that Defendant has not asserted that his document production is incomplete. Plaintiff
asserts that this supports his request that Defendant be required to pay the Master’s fees.
As made clear above, this overlooks several points, including: (1) Plaintiff admits that
Defendant has produced “almost 25,000 documents between May 26 and 31" and
“thousands of documents well after the May 31 cutoff,” as well as a “567-entry privilege
log,” Joint Motion [#158] at 3-4, (2) the fact that Plaintiff asserts that Defendant’s document
production is incomplete doesn’t make it so; and (3) every one of the outstanding discovery
issues has been brought by Plaintiff, not Defendant. This objection lacks merit.
For the reasons set forth above, Plaintiff’s objections to appointment of a Special
Master are OVERRULED. An Order appointing the Special Master will issue separately.
Dated: October 15, 2020
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