Searcy v. eFunds Corporation et al

Filing 368

ORDER signed by the Honorable Charles P. Kocoras on 9/16/2011.Mailed notice(sct, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
GLADYS SEARCY, individually, and
ELIZABETH KRECH and RUSSELL
HORNBECK, individually and on behalf
of all others similarly situated,
Plaintiffs,
vs.
eFUNDS CORPORATION, et al.,
Defendants.

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08 C 985

ORDER
CHARLES P. KOCORAS, District Judge:
This case comes before the Court on the motion of Plaintiffs Gladys Searcy,
Elizabeth Krech, and Russell Hornbeck (collectively, “Plaintiffs”) to exclude the use
of certain evidence by Defendants eFunds Corporation, d/b/a Deposit Payment
Protection Services, Inc. and Deposit Payment Protection Services, Inc. (collectively,
“Defendants”). Alternatively, Plaintiffs seek to extend the merits discovery deadline.
For the reasons stated below, the motion is denied in part and granted in part.
On February 15, 2008, Plaintiff Searcy filed a class action against the Defendants
for violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681. The Court
initially set a discovery deadline of March 19, 2009. In March 2009, Plaintiffs
successfully sought to strike the March 19, 2009 discovery deadline. A new discovery

deadline was not set and the parties continued with no deadline for approximately two
years. On March 22, 2011, the Court set a discovery deadline of June 22, 2011. The
Court subsequently granted Defendants’ motion to extend the discovery deadline to
August 22, 2011, to address supplemental disclosures made by Defendants on April 29,
2011, as well as forthcoming supplemental disclosures.
Before Defendants requested an extension of the discovery deadline, on April 29,
2011, Defendants had disclosed the identity of one additional witness, Kristopher
Galvin. After the Court extended the discovery deadline and beginning on May 26,
2011, Defendants produced documents which revealed prior events not previously
disclosed, including an internal FCRA audit conducted in 2007 and a 1995-1997
investigation of SCAN (a database used by Defendants) by the Federal Trade
Commission (“FTC”). Defendants also produced documents relating to a previously
disclosed external audit, referred to as the RSM McGladrey audit. Finally, Defendants
identified two more witnesses, Kay Nichols and Dennis Ambach. Defendants provided
all supplemental disclosures before the close of fact discovery.
Plaintiffs now move to exclude Defendants’ use of the following: (1) documents,
information, and testimony regarding the internal 2007 FCRA audit conducted by
Defendants; (2) recently produced documents relating to the RSM McGladrey audit;
(3) documents, information, and testimony regarding the 1995-1997 FTC investigation;

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and (4) testimony from Kristopher Galvin, Kay Nichols, and Dennis Ambach.
Alternatively, Plaintiffs ask the Court to extend the merits discovery deadline by ninety
days to address Defendants’ supplemental disclosures.
Under Federal Rule of Civil Procedure 26(e)(1)(A), a party must supplement or
correct disclosures or discovery responses in a timely manner if the party learns that the
disclosures or responses are incomplete or incorrect and the information has not
otherwise been made known to the other parties during the discovery process. If a party
fails to provide information or identify a witness as required by Federal Rules of Civil
Procedure 26(a) and 26(e), the party is not allowed to use that information or witness
to supply evidence on a motion, at a hearing, or at a trial, unless the failure was
substantially justified or is harmless. Fed. R. Civ. P. 37(c)(1).
According to the plain language of Rule 26(e), the Defendants’ duty to
supplement arose once they learned of the additional documents and witnesses.
Defendants specifically state that they did not discover any of the information in the
supplemental disclosures until after the Court set a discovery deadline on March 22,
2011.

Based on Defendants’ representations, Defendants provided supplemental

disclosures shortly after becoming aware of the existence of the documents and
witnesses. Plaintiffs emphasize the fact that Defendants should have known of certain
documents and witnesses much earlier and, thus, should have long ago produced the

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documents and identified the witnesses. The Court understands Plaintiffs’ frustration
and while Defendants provide no reason for not discovering the documents or witnesses
sooner, Defendants’ duty to supplement only arose once Defendants learned of such
documents or witnesses. See Fed. R. Civ. P. 26(e)(1)(A).
Moreover, Defendants provided the supplemental disclosures before the deadline
for fact discovery. Plaintiffs rely on cases in which a party provided supplemental
disclosures after the close of fact discovery and usually on the eve of trial. Plaintiffs
cite no case in which a court held that supplemental disclosures were untimely where
the disclosures were made before the close of fact discovery. Accordingly, Defendants’
supplemental disclosures, made before the discovery deadline and not on the eve of
trial, were timely.
For the foregoing reasons, the Court denies Plaintiffs’ motion to exclude
Defendants’ use of certain evidence. To ensure that Plaintiffs have sufficient time to
explore and rebut Defendants’ supplemental disclosures and responses, the Court grants
Plaintiffs’ alternative motion to extend the discovery deadline and gives the parties
ninety days from the date of this order to complete fact discovery related to the
supplemental disclosures. Further, while Defendants disclosed the identity of additional

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witnesses, Defendants must also supplement their discovery responses to the extent the
witnesses are relevant to prior discovery requests.

Charles P. Kocoras
United States District Judge
Dated: September 16, 2011

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