Schellenger v. Credit Control, LLC et al

Filing 87

ORDER re 84 Discovery Dispute Conference. Action due by 12/10/2019. Signed by Magistrate Judge Reona J. Daly on 12/3/2019. (nmf)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
JEAN SCHELLENGER, on behalf of herself )
and the class members described herein,
)
)
Plaintiff,
)
)
v.
)
)
CREDIT CONTROL, LLC, BUREAUS INC., )
and BUREAUS INVESTMENT GROUP
)
PORTFOLIO NO. 15 LLC,
)
)
Defendants.
)

Case No. 17-cv-1108-SMY

ORDER
DALY, Magistrate Judge:
This matter has been referred to the undersigned to address a discovery dispute that has
arisen between Plaintiff and Defendants The Bureaus Inc. (“TBI”) and Bureaus Investment Group
Portfolio No. 15 LLC (“BIG 15”). Plaintiff seeks the contract between TBI and BIG 15, per
request for production of documents number 6 propounded on BIG 15. Plaintiff contends
production of the contract is warranted as it is relevant to questions of whether BIG 15 is a debt
collector under the Fair Debt Collection Practices Act (“FDCPA”) and whether it can be held
vicariously liable for the unlawful debt collection practices of Defendants TBI and Credit Control,
LLC. BIG 15 contends Plaintiff’s argument is undercut insofar as she has failed to plead or allege
agency or vicarious liability. BIG 15 also asserts that Plaintiff relies on authority that does not
represent the factual scenario in this case. More specifically, BIG 15 explains that the case law
cited by Plaintiff addresses the status and liability of entities that directly contract with, retain, and
refer out to collection agencies certain accounts for recovery on certain terms. BIG 15 contends it
has no agreement with Credit Control (which sent the letter to Plaintiff at issue), did not hire Credit
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Control, and has no knowledge, interaction, or control over Credit Control’s attempts to recover.
BIG 15 relies primarily on the decision in Aker v. Bureaus Investment Group Portfolio No. 15,
LLC, No. 12-C-03633, 2014 WL 4815366 (Sept. 29, 2014 N.D. Ill.), wherein the court granted
defendants’ motion to dismiss finding there was no allegation that the defendant (BIG 15) made
any representation to that plaintiff that could have been covered by the FDCPA. The court noted
there is nothing in the FDCPA that extends liability to the third-party creditor on whose behalf
collection takes place.
While mindful of this decision, the Court finds that the request for production of the
contract between BIG 15 and TBI to be relevant to the issues in this lawsuit. The undersigned is
not considering a motion to dismiss as was the Court in Aker. Here, the Court is guided by
Federal Rule of Civil Procedure 26(b)(1). The current language of the Rule provides:
Unless otherwise limited by court order, the scope of discovery is as follows:
Parties may obtain discovery regarding any nonprivileged matter that is
relevant to any party’s claim or defense and proportional to the needs of the
case, considering the importance of the issues at stake in the action, the amount
in controversy, the parties’ relative access to relevant information, the parties’
resources, the importance of the discovery in resolving the issues, and whether
the burden or expense of the proposed discovery outweighs its likely benefit.
Information within this scope of discovery need not be admissible in evidence
to be discoverable.
The Supreme Court has cautioned that the requirement under Rule 26(b)(1) that the material
sought in discovery be “relevant” should be firmly applied, and the district courts should not
neglect their power to restrict discovery where necessary. Herbert v. Lando, 441 U.S. 153, 177
(1979); see also Balderston v. Fairbanks Morse Engine Div. of Coltec Indus., 328 F.3d 309, 320
(7th Cir. 2003). However, “relevancy” for discovery purposes is construed broadly to encompass
matters that bear on, or reasonably could lead to other matters that could bear on, any issue in the
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case. Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978) (citing Hickman v. Taylor,
329 U.S. 495, 501 (1947)). “Relevance is not inherent in any item of evidence, but exists only as
a relation between an item of evidence and the matter properly provable in the case.” Miller UK
Ltd. v. Caterpillar, Inc., 17 F.Supp.3d 711, 722 (N.D. Ill. Jan. 6, 2014) (citation omitted).
In this instance, the contract between TBI and BIG 15 is relevant to the issue of whether
BIG 15 violated the FDCPA, and certainly proportional to the needs of this case. The Court also
notes the Seventh Circuit’s opinion in Janetos v. Fulton Friedman & Gullace, LLP, wherein the
Court remarked “[a] debt collector should not be able to avoid liability for unlawful debt collection
practices simply by contracting with another company to do what the law does not allow it to do
itself,” finding it to be “fair and consistent with the Act to require a debt collector who is
independently obliged to comply with the Act to monitor the actions of those it enlists to collect
debts on its behalf.” 825 F.3d 317, 325 (7th Cir. 2016). The Court recognizes BIG 15’s
argument that it is more removed from Credit Control than the entity at issue in Janetos; however,
in light of the relationship between TBI and Credit Control, Plaintiff must be allowed to ascertain
more information about the relationship between TBI and BIG 15 under the dictates of Rule 26 at
this juncture.
BIG 15 shall produce the contract between itself and TBI by December 10, 2019.
IT IS SO ORDERED.
DATED: December 3, 2019
s/ Reona J. Daly
Hon. Reona J. Daly
United States Magistrate Judge
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