Wilcox v. Lloyds TSB Bank, PLC et al

Filing 471

ORDER DENYING DEFENDANT'S MOTION TO COMPEL PLAINTIFFS TO PRESENT A TRIAL PLAN re 444 - Signed by JUDGE ALAN C KAY on 8/15/2016. (emt, )CERTIFICATE OF SERVICEParticipants registered to receive e lectronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
___________________________________
)
BRADLEY WILLCOX, FRANK DOMINICK,
)
and MICHELE SHERIE DOMINICK,
)
)
Plaintiffs,
)
)
v.
) Civ. No. 13-00508 ACK-RLP
)
LLOYDS TSB BANK, PLC and DOES
)
1-15,
)
)
Defendants.
)
___________________________________)
ORDER DENYING DEFENDANT’S MOTION TO COMPEL PLAINTIFFS TO PRESENT
A TRIAL PLAN
For the reasons set forth below, the Court DENIES
Defendant Lloyds TSB Bank plc’s (now known as Lloyds Bank plc)
(“Lloyds” or “Defendant”) Motion to Compel Plaintiffs to Present
a Trial Plan (“Motion”).

ECF No. 444.
BACKGROUND

The instant case involves the issuance by Lloyds of
certain dual currency loans, also referred to as International
Mortgage System (“IMS”) loans.

The Court and the parties are

familiar with the extensive factual and procedural history of
this case, and the Court will not repeat it here except as
necessary.
On March 27, 2015, Plaintiffs filed the operative
Third Amended Complaint (“TAC”).

ECF No. 100.

The TAC names

Frank Dominick, Michele Sherie Dominick, and Bradley Willcox
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(collectively, “Plaintiffs”) as class representatives and brings
claims against Lloyds for Breach of Contract (Count I) and
Breach of an Implied Term Limiting Lloyds’ Discretion to Change
the Interest Rate (Count II).

Id. ¶¶ 6-8, 55-72.

Trial in this case is set to commence on October 18,
2016, with jury selection to be held on October 13, 2016.

ECF

No. 438.
I.

Class Certification and Rule 23(f) Petition

On July 15, 2015, Plaintiffs filed a Motion for Class
Certification pursuant to Federal Rule of Civil Procedure 23.
ECF No. 156.

After briefing and oral argument from the parties,

Magistrate Judge Puglisi issued his Findings and Recommendation
to Grant in Part and Deny in Part Plaintiffs’ Motion for Class
Certification (“F&R”) on November 12, 2015.

ECF No. 317.

The

F&R recommended: (1) certifying the instant case as a class
action; (2) appointing Willcox (but not the Dominicks) as class
representative; (3) appointing Alston Hunt Floyd & Ing and
Steptoe & Johnson LLP as class counsel; (4) directing the
parties to meet and confer regarding notice to class members;
(5) denying any remaining relief requested in Plaintiffs’ class
certification motion; and (6) defining the certified class as:
All persons and entities who entered prior
to August 2009 into an IMS loan with Lloyds
that contained a Hong Kong choice-of-law
provision and an interest rate provision
based upon Cost of Funds and who are, or
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were at any time during entering into such
an IMS loan, residents or citizens of the
State of Hawaii, or owners of property in
Hawaii that was mortgaged to secure any such
IMS loan.
Id. at 31-32.

Lloyds filed objections to the F&R on November

25, 2015, ECF No. 332, to which Plaintiffs filed a Response on
December 9, 2015, ECF No. 335.

The parties also submitted

supplemental Reply and Sur-Reply briefs on December 17, 2015 and
December 28, 2015, respectively.

ECF Nos. 337, 340.

On January 8, 2016, the Court issued an Order Adopting
in Part, Rejecting in Part, and Modifying in Part the Findings
and Recommendations to Grant in Part and Deny in Part
Plaintiffs’ Motion for Class Certification (“Class Certification
Order”).

ECF No. 366.

For the reasons explained therein, the

Court adopted the F&R over Lloyds’ objections, except as to the
class definition, which the Court modified to include only
plaintiffs of United States and Canadian citizenship.
On January 22, 2016, pursuant to Federal Rule of Civil
Procedure 23(f), Lloyds filed with the Ninth Circuit a Petition
for Permission to Appeal the Class Certification Order (“Rule
23(f) Petition”).

ECF No. 397.

Plaintiffs filed an Opposition

to the Rule 23(f) Petition on February 1, 2016.
16-80009, ECF No. 4.

9th Cir., No.

On May 16, 2016, the Ninth Circuit issued

its Order denying the Rule 23(f) Petition.

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ECF No. 430.

II.

Motion to Compel Trial Plan

On July 13, 2016, Lloyds filed the instant Motion
asking the Court to issue an order requiring Plaintiffs “to
present a trial plan illustrating the expected course of
proceedings at trial and showing that the requirements for
maintaining this case as a class action under Rule 23 are met.”
Motion at 2.
Plaintiffs filed a Memorandum in Opposition to Lloyds’
Motion (“Opposition”) on July 29, 2016, ECF No. 455, and Lloyds
filed a Reply in support of its Motion on August 5, 2016, ECF
No. 465.
DISCUSSION
In its Motion, Lloyds requests this Court to enter an
order requiring Plaintiffs to submit a trial plan identifying,
inter alia:
(1)
the
proposed
structure
of
trial
[]including but not limited to the witnesses
Plaintiffs intend to call (and whether they
will be called live or via deposition
testimony), the number of hours each witness
is estimated to testify, and other evidence
Plaintiffs intend to rely upon in their
case-in-chief; (2) the proposed methodology
for proving both liability and damages on a
classwide basis; and (3) whether or not the
Dominicks
intend
to
proceed
on
their
individual claims, and whether Plaintiffs
intend to bifurcate the Dominicks’ claims
from those of the class.
Motion at 6-7.

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Lloyds draws support for its request from a 2003
Advisory Committee Note to Federal Rule of Civil Procedure 23,
which states, “A critical need is to determine how the case will
be tried.

An increasing number of courts require a party

requesting class certification to present a ‘trial plan’ that
describes the issues likely to be presented at trial and tests
whether they are susceptible of class-wide proof.”

Fed. R. Civ.

P. 23 advisory committee’s note to 2003 amendment.

However, the

Ninth Circuit has stated that “[n]othing in the Advisory
Committee Notes suggests grafting a requirement for a trial plan
onto [Rule 23].”

Chamberlan v. Ford Motor Co., 402 F.3d 952,

961 n.4 (9th Cir. 2005).
As the text of the Advisory Committee Note suggests,
the need for a trial plan often comes up in the context of class
certification.

Perhaps it is for this reason that the majority

of the cases in this circuit that the Court has identified that
make reference to trial plans do so when a court is faced with a
motion for class certification.

In this case, the Court

certified the Plaintiff class on January 8, 2016 when it issued
its Class Certification Order.

See ECF No. 366.

Nevertheless, Lloyds argues that “trial plans are
useful beyond attempting to demonstrate that criteria for class
certification are met in a pre-certification phase,” and that
ordering a trial plan at this stage in the litigation “is within
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the Court’s inherent authority to continuously manage this class
action.”

Reply at 2-3.

Lloyds points to a Seventh Circuit case

where the district court instructed plaintiffs to submit a trial
plan after the court had certified the class, and later
decertified the class because the plaintiffs’ trial plan was
“infeasible.”

See Espenscheid v. DirectSat USA, LLC, 705 F.3d

770, 773, 775 (7th Cir. 2013).

In that case, the class

consisted of 2,341 members; Defendant had allegedly committed
multiple types of violations under both federal and state laws,
requiring the court to divide the class into at least three
subclasses; and the complexity and variance in damages across
class members required bifurcation of liability and damages
issues.

Id. at 775.

It was after the judge had proposed

bifurcating the trial and dividing the class into subclasses
that she then requested plaintiffs to submit a trial plan
detailing how they would try the case within the framework she
had established.

Id.

As Plaintiffs in the instant action argue, however,
this case involves only two claims and no subclasses, and proof
of liability and damages is straightforward and achievable
through common evidence.

Opposition at 10.

In other words,

this case does not involve the level of complexity that required
the district court in Espenscheid to call for a trial plan at a
later stage in the proceedings, after the class had been
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certified.

Here, the Court has determined that the class

members have loans with the same interest rate definition; that
Lloyds calculated the Cost of Funds in the same manner for all
class members; and that no issue exists with regard to what oral
representations Lloyds may have made to individual borrowers
regarding the loan documents.1

The Court has also found that the

“key legal issue” – whether Lloyds permissibly passed on the
“liquidity transfer pricing” (“LTP”) charge to borrowers by
including it in the Cost of Funds – is common to all class
members.

Class Certification Order at 14.

Thus, the Court can

identify no problems with individualized proof that would
require a trial plan at this stage in the litigation.
Furthermore, the information Lloyds seeks to elicit
from Plaintiffs’ trial plan is already subject to disclosure
pursuant to this Court’s Scheduling Order and the district’s
Local Rules.

With respect to witnesses, the Scheduling Order

requires each party to submit a “comprehensive witness list
indicating the identity of each witness that the party will call
at trial and describing concisely the substance of the testimony
to be given and the estimated time required for the testimony of
1

See Order Denying Plaintiffs’ Motion for Partial Summary
Judgment on Their and the Putative Class’s Claim for Breach of
Contract on Count I, Denying Plaintiffs’ Request for Declaratory
Relief, Granting in Part and Denying in Part Defendant’s Motion
for Summary Judgment, and Sua Sponte Granting Partial Summary
Judgment to Plaintiffs on Count II at 14 n.7, ECF No. 419; Class
Certification Order at 14, 17.
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the witness on direct examination.”

Fifth Am. Rule 16

Scheduling Order (“Scheduling Order”) ¶ 21, ECF No. 441; see
also L.R. 16.6(i) (requiring the parties to submit pretrial
statements containing “[a] list of all witnesses likely to be
called at trial, except for impeachment or rebuttal, together
with a brief statement following each name describing the
substance of the testimony to be given”); L.R. 16.6(t)
(requiring the parties to provide “[a]n estimate of the number
of court days expected to be required for the presentation of
each party’s case”).

The Scheduling Order further requires a

party to give to the opposing party the names of witnesses who
will be called to testify the following day at trial.
Scheduling Order ¶ 23.
The Scheduling Order also instructs the parties to
file trial briefs “on all significant disputed issues of law,
including foreseeable procedural and evidentiary issues, setting
forth briefly the party’s position and the supporting arguments
and authorities.”

Id. ¶ 29.

Additionally, the parties are

required to provide in their pretrial statements “[a] list of
all documents and other items to be offered as exhibits at the
trial, except for impeachment or rebuttal, with a brief
statement following each, describing its substance or purpose
and the identity of the sponsoring witness.”

L.R. 16.6(j).

Such information will enable Lloyds to discern the “other
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evidence Plaintiffs intend to rely upon in their case-in-chief,”
as well as “the proposed methodology for proving both liability
and damages on a classwide basis.”

See Motion at 7.

Plaintiffs also contend that Lloyds is already aware
of the methodology Plaintiffs’ damages expert, Michael Petley,
will use to calculate class damages, as this information was
disclosed to Lloyds last year in an expert report.

Opposition

at 3; see also Ex. A to Decl. of Michael Petley (“Petley
Report”) at 37-40, ECF No. 329.

Plaintiffs state that Mr.

Petley will use the same methodology to calculate damages for
each loan in the class, meaning that there will be no problems
with individualized proof of damages.

Id.

For its part, Lloyds

contests that it was made fully or properly aware of this
methodology and disagrees that Plaintiffs are entitled to
present such expert testimony or calculations at trial.
at 6 n.2.

Reply

Indeed, Lloyds alludes to the possibility that it may

file a Daubert motion prior to trial.

Id.

However, Plaintiffs’ disclosure of the evidence they
intend to use to prove liability and damages on a classwide
basis and Defendant’s objections to such use are two separate
matters.

While Defendant is correct that it may contest the

admissibility of the Petley Report, the issue presently before
the Court concerns what information Plaintiff should be required
to disclose to Lloyds prior to trial.
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Lloyds’ Motion requests a

“proposed methodology for proving . . . damages on a classwide
basis.”

Motion at 7.

The report specifically lists all of the

information Mr. Petley will require in order to compute damages
and provides a detailed explanation of how Mr. Petley will use
this information in his damages calculations.2
38-40.

Petley Report at

Because this information adequately addresses Lloyds’

request, the Court will not require Plaintiffs to provide any
additional information addressing this point in a trial plan.3
Finally, Lloyds expresses a concern that if the
Dominicks are permitted to participate as members of the class
in the instant litigation, Lloyds will be entitled to introduce
evidence regarding certain “unique defenses which disqualified
the Dominicks from representing the Class in the first place.”
Reply at 4-5.

Lloyds maintains that this situation creates an

obvious conflict that has the potential to both prejudice the
class claims and threaten Lloyds’ due process rights.

Id. at 5.

In order to address this issue, the Court has contemporaneously
2

The Petley Report also states that it includes as an attachment
an Excel spreadsheet that uses information obtained about the
Willcox loans in order to provide an example of how Mr. Petley
intends to calculate damages for each of the loans in the class.
Petley Report at 39-40. The Excel spreadsheet does not appear
to have been filed with the Court, however.
3

The Court notes that in a Minute Order filed contemporaneously
with the instant Order, it has instructed Plaintiffs to file a
supplemental expert witness report detailing how Mr. Petley
intends to calculate damages for each member of the class, using
the methodology outlined in his initial report dated May 20,
2015. See ECF No. 472; see also Petley Report at 37-40.
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filed a Minute Order bifurcating (1) all issues and defenses
common to all class members, and (2) any claims or defenses
involving individual class members that are not common to the
class, including the “unique defenses” Lloyds intends to raise
against the Dominicks.

See ECF No. 472.

Any remaining questions Lloyds has with regards to how
the Dominicks will be participating in the class action will be
addressed by the materials that are yet to be filed in this
case.

The witness disclosures Plaintiffs will be required to

make pursuant to the Scheduling Order will contain a summary of
the substance of the Dominicks’ testimony, and Plaintiffs’ trial
brief will address any “foreseeable procedural and evidentiary
issues,” including any irregularities that may arise as a result
of Lloyds’ “unique defenses” against the Dominicks.

The Court

therefore declines to require Plaintiffs to provide further
information in a trial plan regarding the Dominicks’ role in the
class or at trial.
CONCLUSION
For the foregoing reasons, the Court DENIES Lloyds’
Motion to Compel Plaintiffs to Present a Trial Plan.

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IT IS SO ORDERED.
DATED:

Honolulu, Hawai’i, August 15, 2016.

________________________________
Alan C. Kay
Sr. United States District Judge

Willcox v. Lloyds TSB Bank, plc, et al., Civ. No. 13-00508 ACK-RLP, Order
Denying Defendant’s Motion to Compel Plaintiffs to Present a Trial Plan.

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