Brownstein v. Shelton et al
RULING: denying, without prejudice to renew in the future, as appropriate 39 Motion to Compel. Signed by Judge Joan G. Margolis on 3/18/2014. (Rodko, B.)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF CONNECTICUT
ADAM SHELTON ET AL.
3:13 CV 493 (CSH)
DATE: MARCH 18, 2014
RULING ON PLAINTIFF'S MOTION TO COMPEL
On April 10, 2013, plaintiff filed this lawsuit against Attorney Adam J. Shelton
["defendant Shelton"] and Equity Recovery Service, LLC ["defendant Equity"], pursuant to the
Fair Debt Collection Practices Act ["FDCPA"], 15 U.S.C. § 1692, the Connecticut Unfair Trade
Practices Act ["CUTPA"], CONN. GEN. STAT. § 42-110g, and the common law of unjust
enrichment and conversion, and plaintiff seeks treble damages under CONN. GEN. STAT. § 52564. (Dkt. #1, ¶ 1). In her complaint, plaintiff alleges that defendants have filed at least
eighty collection cases in the Connecticut small claims court and have obtained judgments
thereon. (Id. ¶ 11). Plaintiff alleges that in 2002, defendants obtained a small claims
judgment against her for credit card debt in the amount of $3,615.01, on which she has been
paying, but despite no interest having been awarded, defendants have been collecting eight
percent interest under CONN. GEN. STAT. § 37-1, with balance due of $366.67 as of April 2013.
(Id. ¶¶ 12-17).
Plaintiff alleges that defendants "had a pattern and practice of self-
adjudicating interest despite the prohibition of [CONN. GEN. STAT.] § 37-3 and longstanding
and consistent case law to the contrary." (Id. ¶ 18). On March 14, 2014, plaintiff filed an
Amended Complaint, which added a third defendant, New England Adjustment Services, Inc.
(Dkt. #62; see Dkts. ##38, 60-61).1
Under the present Electronic Scheduling Order, filed on July 16, 2013 by Senior U.S.
District Judge Charles S. Haight, Jr., all discovery is to be completed on or before April 30,
2014. (Dkt. #24).
On November 4, 2013, plaintiff filed the pending Motion to Compel and brief in
support (Dkt. #39),2 as to which defendant Shelton filed his brief in opposition on November
25, 2013 (Dkt. #40)3 and defendant Equity filed its brief in opposition the next day. (Dkt.
#41).4 On December 3, 2013, plaintiff filed her two reply briefs. (Dkts. ##42-43). On March
12, 2014, Judge Haight referred this motion to this Magistrate Judge. (Dkt. #60).
For the reasons stated below, plaintiff's Motion to Compel (Dkt. #39) is denied
without prejudice to renew at a later time.
Plaintiff's motion concerns her Interrogatory No. 3, Production Requests Nos. 8-11,
and Admission Request No. 4, all of which address the number of judgments obtained by
defendant Equity on which defendants sought to collect eight percent interest where the
Both original defendants have filed Motions to Dismiss, which are pending before the
Court. (See Dkts. ##26, 35-36; see also Dkts. ##27, 34, 37). Plaintiff also has filed a Motion for
Summary Judgment, with respect to liability only. (Dkts. ##44-45; see Dkts. ##50-52; see also
Dkts. ##46-48, 53-61).
The following documents are attached to plaintiff's motion: copy of Defendant Equity's
Response to Plaintiff's First Set of Interrogatories, dated September 16, 2013; copy of Defendant
Equity's Response to Plaintiff's First Set of Document Requests, also dated September 16, 2013;
copy of Defendant Shelton's Amended Objections and Response to Plaintiff's First Set of
Interrogatories, dated October 25, 2013; and copy of Defendant Shelton's Amended Objections
and Responses to Plaintiff's First Set of Document Requests, also dated October 25, 2013.
The followiing nine exhibits were attached: copy of Plaintiff's Initial Disclosures (Exh. A);
additional copies of Defendant Shelton's Amended Objections and Responses (Exh. B; see note 2
supra); and copies of case law (Exhs. C-I).
Attached is another copy of Defendant Equity's Response. (See note 2 supra).
judgments awarded a lesser amount of interest, copies of these judgments, all accounting
records of same (including payments accrued, received and remitted), and whether defendant
Shelton has filed at least eighty judgment in small claims courts on behalf of defendant Equity
and obtained judgments thereon. (Dkt. #39, Brief, at 1-3 & Exhs.; Dkt. #40, at 3-4 & Exh.
B; Dkt. #41, at 2, 4, 6, 8, 10 & Exh.). Plaintiff argues that defendant Equity's boilerplate and
unsubstantiated objections are invalid, and that such discovery is permissible under FDCPA,
CUTPA, and Connecticut common law, particularly where punitive damages are sought. (Dkt.
#39, at 3-7; see also Dkts. ##42-43).
Defendant Shelton argues that plaintiff did not seek punitive damages either in her
Complaint or in her Rule 26(a)(1) Initial Disclosures (Dkt. #40, at 1-2, 13-16 & Exh. A); that
the discovery sought is irrelevant under the FDCPA, CUTPA or the statutory theft claim (id.
at 4-13); and that even if plaintiff is asserting a claim for punitive damages, this discovery
is not appropriate (id. at 16-17). Defendant Equity similarly argues that this discovery is not
permissible under plaintiff's FDCPA, CUTPA, statutory theft, or common unjust enrichment
claims. (Dkt. #41, at 2-12).
15 U.S.C. § 1692k(b) provides that the district court is to take the following factors
into account "[i]n determining the amount of liability" under the FDCPA:
(1) in any individual action under subsection (a)(2)(A) of this section,
the frequency and persistence of noncompliance by the debt collector, the
nature of such noncompliance, and the extent to which such noncompliance
was intentional; or
(2) in any class action under subsection (a)(2)(B) of this section, the
frequency and persistence of noncompliance by the debt collector, the nature
of such noncompliance, the number of persons adversely affected, and the
extent to which such noncompliance was intentional.
Plaintiff has cited Riveria v. MAB Collections, Inc., 682 F. Supp. 174, 179 (W.D.N.Y.
1988), where, upon ruling on cross-motions for summary judgment, the District Judge
awarded plaintiff the maximum statutory damages of $1,000, relying upon the factors in §
1692k, particularly because "[t]he validation clause in question appears on every debt
collection letter sent out by [defendant], as these are computer generated forms." Similarly,
plaintiff cites Masuda v. Thomas Richards & Co., 759 F. Supp. 1456, 1467 (C.D. Cal. 1991),
in which the District Judge granted summary judgment for plaintiff in a case where the
defendant debt collector sent form letters with an attorney's signature, without his
participation in the decision when such a letter should be sent. Id. at 1458-62. Under these
circumstances, the District Judge awarded plaintiff the statutory maximum of $1,000, taking
into account the factors listed in § 1692k(b)(1), and reserved judgment until a further hearing
on the amount of actual damages, if any. Id. at 1467.5
As of this point, the allegations appear different from those in Riveria and Masuda,
which involved computer-generated forms without any individualization, which does not
appear to be the situation here. Defendants instead rightfully cite to Dewey v. Associated
Collectors, Inc., 927 F. Supp. 1172, 1175-76 (W.D. Wis. 1996), where the defendant
acknowledged that the collection letter it sent to plaintiff violated FDCPA, and plaintiff moved
for summary judgment on the issue of damages. Id. at 1173, 1176. The District Judge
Plaintiff is correct that the Ninth Circuit relied upon § 1692k(b)(1) in upholding a jury trial
for plaintiff in a FDCPA lawsuit for $1,000 in statutory damages, $250,000 for emotional distress,
and $60,000 in punitive damages, where the defendant debt collection law firm had sued plaintiff
on a debt for which the statute of limitations had run years before. McCollough v. Johnson,
Rodenburg & Lauinger, LLC, 637 F.3d 939, 944-47 (9th Cir. 2011). Among the witnesses were two
consumers who had similar experiences with defendant, a legal aid attorney specializing in
consumer law who testified about defendant's role "in the rapid growth of debt-collection lawsuits
in Montana[,]" for which defendant usually obtained default judgment against pro se litigants, and
a collection attorney, who criticized defendant's "'factory' approach of 'mass producing default
judgments[.]'" Id. at 947. Among the many issues raised on appeal, defendant objected to the
testimony of the two other consumers; the Ninth Circuit held that this testimony was appropriate in
order to prove intention under § 1692k(b)(1). Intention, however, is not a critical issue in this
juxtaposed the language of §§ 1692k(b)(1) and (2) and held that "the number of person
adversely affected" only applies to class action under § 1692k(b)(2), and not to individual
actions under § 1692k(b)(1). Id. at 1175-76. While recognizing that the "[c]ase law on this
issue is spare and divided[,]" the District Judge agreed with an earlier ruling that "the
defendant's actions with respect to other consumers had no relevance in an individual action
in which the amount of liability was to be determined in accordance with § 1692k(b)(1)." Id.
at 1176 (citation omitted).
Defendants also have cited to Powell v. Computer Credit, Inc., 975 F. Supp. 1034,
1039 (S.D. Ohio 1997), aff'd mem.,No. 97-3979, 1998 WL 773989 (6th Cir. Oct. 15, 1998),
where on ruling on cross-motions for summary judgment, the District Judge relied upon
Dewey to hold that in the language of § 1692k(b)(1), "Congress meant that the Court should
consider the debt collector's noncompliance as to the individual plaintiff only, and not to
others who may have been subject to the debt collector's noncompliance." Defendants
similarly have cited Richard v. Oak Tree Group Inc., No. 1:06-cv-362, 2008 WL 5060319, at
*8-9 (W.D. Mich. Nov. 21, 2008), where the Magistrate Judge already had found liability
against defendant and was ruling on the issue of damages. Id. at *1. The evidence in
Richard established that although a single letter had been sent to plaintiff, defendant had
sent similar letters on at least one hundred occasions. Id. at *8. The Magistrate Judge
recognized the "conflicting case law" reflected in the Riveria decision, cited by plaintiff here,
and in the Dewey decision and its progeny, cited by defendants. Id. After reviewing these
decisions, the Magistrate Judge found "the reasoning of Dewey . . . persuasive[,]" and thus
concluded that "the 'frequency and persistence of noncompliance' consideration in assessing
statutory damages under § 1692k does not include a debt collector's actions with respect to
non-parties." Id. at *8-9.
The same conclusion was reached in the context of discovery motions, as in this case,
in Cusumano v. NRB, Inc., No. 96 C 6876, 1998 WL 673833, at *2 (N.D. Ill. Sept. 23, 1998),
and in Nicander v. Hecker, No. C07-05838 (JF)(HRL), 2009 WL 5084087, at *2 (N.D. Cal.
Dec. 21, 2009), both cited by defendants. In Cusumano, the District Judge agreed with the
Magistrate Judge's prior ruling that defendant's collection activities with consumers other than
plaintiffs were irrelevant, based, inter alia, upon the Dewey decision. 1998 WL 673833, at *2.
The Magistrate Judge's analysis in Nicander was similar. 2009 WL 5084087, at *2.
In this case, there are dispositive motions pending, filed by both defendants and by
plaintiff herself, on the issue of liability. (Dkts. ##26, 35, 44). If liability is found for plaintiff
on her pending dispositive motion, then some limited discovery will be permitted to determine
whether defendant has created a computer-generated process without any individualization,
as in Riveria and Masuda; under those circumstances, some of plaintiff's discovery requests
may be relevant to the issue of damages under § 1692k. Therefore, the most efficient
manner in which to proceed is to deny plaintiff's pending Motion to Compel (Dkt. #39),
without prejudice to renew in the future, as appropriate.
In light of this conclusion, there is no need to address the multiple other issues raised
in the parties' briefs.
Accordingly, for the reasons stated above, plaintiff's pending Motion to Compel (Dkt.
#39), without prejudice to renew in the future, as appropriate.6
This is not a Recommended Ruling, but a ruling on a non-dispositive motion, the
standard of review of which is specified in 28 U.S.C. § 636; FED. R. CIV. P. 6(a), 6(e) & 72;
If any counsel believes that a settlement conference before this Magistrate Judge would
be productive, he or she should contact Chambers accordingly.
and Rule 72.2 of the Local Rules for United States Magistrate Judges. As such, it is an order
of the Court unless reversed or modified by the District Judge upon timely made objection.
See 28 U.S.C. § 636(b)(written objections to ruling must be filed within
fourteen calendar days after service of same); FED. R. CIV. P. 6(a), 6(e) & 72; Rule
72.2 of the Local Rules for United States Magistrate Judges, United States District Court for
the District of Connecticut; Small v. Secretary, H&HS, 892 F.2d. 15, 16 (2d Cir. 1989)(failure
to file timely objection to Magistrate Judge’s recommended ruling may preclude further
appeal to Second Circuit).
Dated at New Haven, Connecticut, this 18th day of March, 2014.
/s/ Joan G. Margolis, USMJ
Joan Glazer Margolis
United States Magistrate Judge
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