Fox et al v. Transam Leasing, Inc. et al

Filing 115

MEMORANDUM AND ORDER regarding 108 Motion for Discovery. The Court orders Defendants to serve answers and responses to Plaintiffs' interrogatories and requests for production within ten days. Plaintiffs' request for fees and expenses is denied. See Memorandum and Order for additional information. Signed by Magistrate Judge Gerald L. Rushfelt on 10/30/2014. (gc)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

)
)
)
Plaintiffs,
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)
v.
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)
TRANSAM LEASING, INC., et. al,
)
)
Defendants.
)
__________________________________________)
CANDACE FOX, et. al,

Case No. 12-2706-CM-GLR

MEMORANDUM AND ORDER
This matter is before the Court for resolution of the parties’ discovery dispute regarding
Interrogatories 4 and 6, and Requests for Production Nos. 2, 4, 6, 8, 9 and 10, sought pursuant to
Plaintiffs’ Second Set of Interrogatories and Request for Production. At the request of the parties
the Court held a status conference on October 7, 2014, to address the issue. The Court heard
arguments of counsel and ordered additional briefing by the parties. The matter is now fully
briefed and the Court is prepared to rule.
I.

Background
Named plaintiffs Candace Fox, Anthony Gillespie, and Charles Schreckenbach,

individually and on behalf of others similarly situated, filed their original 15-count Class Action
Complaint on November 1, 2012, against Defendants TransAm Trucking, Inc. and TransAm
Leasing, Inc.1 Plaintiffs and the putative class are independent truck drivers who own or lease

1

Doc. 1.

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motor vehicle equipment, namely semi-trucks, to Defendant TransAm Trucking. Defendant
TransAm Leasing is a separate entity that leases semi-trucks to independent contractors who, in
turn, lease those trucks and driving services to TransAm Trucking or some other motor carrier.
Plaintiffs allege that the putative class members signed substantially identical Independent
Contractor Agreements (“ICA”) with TransAm Trucking. The ICAs are considered leases under
federal truth-in-leasing regulations because the contractor is considered to be leasing the truck
and driving services to a motor carrier.
Plaintiffs sought class certification on Counts I, II and III only.2 The District Court
denied class certification for Counts I and II, and granted class certification on Count III.3 In
Count III, Plaintiffs allege that Defendants violated 49 C.F.R. § 376.12(I), which provides that:
The lease shall specify that the lessor is not required to purchase or
rent any products, equipment, or services from the authorized
carrier as a condition of entering into the lease arrangement.4
Plaintiffs allege that Defendants violated the provision by requiring Plaintiffs pursuant to the ICA
to pay a satellite communications system usage fee of fifteen dollars per week.5 Defendants
counter that the fee is not a forced purchase but is instead a specifically authorized charge-back.
Defendants assert that TransAm Trucking must pay a service provider for its satellite
communications system, and it charges back the cost of that to its drivers, as specifically

2

Doc. 69 at 2.

3

Doc. 80.

4

49 C.F.R. § 376.12(i).

5

Doc. 90 at 28.

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authorized by 49 C.F.R. § 376.12(h).6
The District Court certified a class on Count III, and subsequently Plaintiffs’ sought leave
to amend the complaint to extend by one year the class period in Count III. The Court granted
the motion to amend and therefore redefined the class as follows:
All persons, including entities, who operated under an Independent
Contractor Agreement that included a satellite communications
system usage fee with TransAm Trucking, Inc. between
November 2, 2008, through the present.7
Plaintiffs served discovery seeking, among other things, the following: the identity of any
documents provided to class members to permit them to determine the validity of the satellite
communications fees (Interrogatory No. 4); whether or not Defendants informed class members
of the terms of any agreement permitting the satellite fee deductions (Interrogatory No. 6), and all
writings provided to class members to validate the charges, or reflecting any communications
between Defendants and a satellite vendor concerning the satellite equipment or fees (Requests
for Production Nos. 2, 4, 6, 8, 9 and 10). In response, Defendants objected to the interrogatories:
TransAm Trucking objects because this interrogatory seeks
information outside the scope of discovery defined by Federal Rule
of Civil Procedure 26(b)(1). The interrogatory asks for
information about class members in connection with what the
Plaintiffs assert is a legal duty under 49 C.F.R. § 376.12(h) to
provide certain documents to independent contractor drivers. But
the only count for which a class was certified in this case, Count 3,
does not assert a claim under this provision. In fact, none of the 15
counts in the Complaint assert such a claim.8
Defendants likewise objected to the requests for production as seeking information outside the
6

Doc. 74 at 20.

7

ECF 89 at 3.

8

See Doc. 107–1 at 3–4.

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scope of discovery defined by Fed. R. Civ. P. 26(b)(1).
II.

Discussion
The parties dispute whether the discovery at issue is relevant pursuant to Fed. R. Civ.

P. 26(b)(1). Rule 26(b)(1) provides that “[p]arties may obtain discovery regarding any matter,
not privileged, that is relevant to the claim or defense of any party . . . .”9 In addition, “[f]or good
cause, the court may order discovery of any matter relevant to the subject matter involved in the
action.”10 The Court must determine “whether the discovery is relevant to the claims or defenses
and, if not, whether good cause exists for authorizing it so long as it is relevant to the subject
matter of the action.”11 The good-cause standard is intended to be flexible and the court “has
discretion in determining what the scope of discovery should be.”12
Relevancy is broader than admissibility at trial, and for purposes of discovery, “[r]elevant
information need not be admissible at trial if the discovery appears reasonably calculated to lead
to the discovery of admissible evidence.”13 Relevancy is “broadly construed,” and a discovery
request “should be considered relevant if there is ‘any possibility’ that the information sought
may be relevant to the claim or defense of any party.”14 “When the discovery sought appears
relevant, the party resisting the discovery must show that it (1) does not come within the scope of

9

Fed. R. Civ. P. 269b)(1).

10

Fed. R. Civ. P. 26(b)(1).

11

In re Cooper Tire & Rubber Co., 568 F.3d 1180, 1188–89 (10th Cir. 2009) (citing Fed. R. Civ. P. 26
advisory committee’s note (2000)).
12

Id. at 1189.

13

Id. (citing Fed. R. Civ. P. 26(b)(1)).

14

Ice Corp. v. Hamilton Sundstrand Corp., No. 05-4135-JAR, 2007 WL 1742163, *4 (D. Kan. May 24,
2007) (quoting Hammond v. Lowe’s Home Ctrs., Inc., 216 F.R.D. 666, 670 (D. Kan. 2003)).

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relevance as defined under Fed. R. Civ. P. 26(b)(1), or (2) is of such marginal relevance that the
potential harm occasioned by discovery would outweigh the ordinary presumption in favor of
broad discovery.”15 The party seeking the discovery has the burden of showing the relevancy
when relevancy is not readily apparent.16
Plaintiffs allege that the requested discovery is relevant to Defendants’ charge-back
defense, while Defendants argue that the document requirement in the second part of § 376.12(h)
does not impact their charge-back defense authorized in the first part of the regulation. The
charge-back regulation provides that:
(h) Charge-back items. The lease shall clearly specify all items that
may be initially paid for by the authorized carrier, but ultimately
deducted from the lessor’s compensation at the time of payment or
settlement, together with a recitation as to how the amount of each
item is to be computed. The lessor shall be afforded copies of
those documents which are necessary to determine the validity of
the charge.17
Defendants argue that there is no case law holding that a charge cannot qualify as a charge-back
unless the afforded documents clause was satisfied. Defendants acknowledge that the discovery
requests at issue would be appropriate if the Plaintiffs had initially pled a claim under
§ 376.12(h) and succeeded in certifying that claim for class action status. Defendants argue that
the discovery at issue was propounded in an effort to broaden the class-action claims in this case
after the Court has already decided certification.
Neither party cited Tenth Circuit law regarding the interplay between the disclosure and

15

Id. (quoting Gen. Elec. Capital Corp. v. Lear Corp., 215 F.R.D. 637, 640 (D. Kan. 2004)).

16

Id. (citation omitted).

17

49 C.F.R. § 376.12(h).

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documentation provisions of § 376.12(h). Neither the issue of whether Plaintiffs can assert a
non-disclosure cause of action under (h) nor the issue of admissibility of evidence relating to
non-disclosure is before the Court. The issue before the Court is whether the disputed discovery
sought could lead to relevant evidence as to the claims or defenses of the parties. The Court
finds that at this stage in discovery, Plaintiffs have demonstrated that the interrogatories and
requests for production appear reasonably calculated to lead to the discovery of admissible
evidence. It orders Defendants, therefore, to serve answers and responses to them within ten
days. This ruling does not purport, however, to alter or affect the Court’s ruling on class
certification. This order relates only to the permissible scope of discovery.
Plaintiffs also seek reasonable attorneys’ fees and expenses under Fed. R. Civ.
P. 37(a)(5)(A), which provides that if a motion to compel is granted, the court must require the
payment of movant’s reasonable expenses, unless “the opposing party’s nondisclosure , response,
or objection was substantially justified; or . . . other circumstances make an award of expenses
unjust.”18 Although the dispute in this case was not presented to the Court pursuant to a motion
to compel, the Court would nevertheless find an award of expenses unjust pursuant to Rule 37.
In addition, the Court cannot find that Defendants’ objection to discovery was not substantially
justified. Plaintiffs’ request for fees and expenses in denied.
IT IS SO ORDERED.
Dated this 30th day of October, 2014.
S/Gerald L. Rushfelt
Gerald L. Rushfelt
U. S. Magistrate Judge

18

Fed. R. Civ. P. 37(a)(5)(A)(ii) and (iii).

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