Uehara v. TD Bank, National Association, et al
Filing
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ORDER. IT IS ORDERED that 28 Defendant SLS's Motion to Stay Discovery is DENIED. IT IS FURTHER ORDERED that the parties must meet and confer and file a stipulated discovery plan within 21 days from the date of this order. Signed by Magistrate Judge Carl W. Hoffman on 11/15/2017. (Copies have been distributed pursuant to the NEF - MR)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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RUSSELL K. UEHARA,
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Plaintiff,
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vs.
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TD BANK, et al.,
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Defendants.
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__________________________________________)
Case No. 2:17-cv-00190-GMN-CWH
ORDER
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Presently before the Court is Defendant Specialized Loan Servicing’s (“SLS”) Emergency
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Motion to Stay Discovery (ECF No. 28), filed on April 13, 2017. The Court determined that it
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would not be considered on an emergency basis, and ordered responses and replies in the ordinary
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course, but also ordered that discovery be stayed as to all parties pending the court ruling on the
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motion. (Min. Order (ECF No. 29).) Plaintiff Russell Uehara filed a response (ECF No. 41) on
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April 27, 2017. Defendant filed a reply (ECF No. 46) on May 11, 2017, along with a supplemental
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supporting declaration (ECF No. 47).
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I.
BACKGROUND
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This Fair Credit Reporting Act (“FCRA”) action arises from a dispute regarding whether
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SLS inaccurately reported Uehara’s debts. (Am. Compl. (ECF No. 4.) Defendant SLS moved to
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dismiss, arguing Plaintiff has failed to allege facts sufficient to state valid state or federal claims.
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(Mot. to Dismiss (ECF No. 23) at 2.) Specifically, SLS argues that Plaintiff fails to adequately
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allege two critical elements: (1) that SLS reported an inaccurate current or past due balance for the
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debt or failed to report Plaintiff’s discharge and (2) that Plaintiff suffered any concrete injury as a
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proximate result of any of Plaintiff’s alleged reporting of the debt. (Id.) Defendant SLS moves to
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stay discovery pending the outcome of the motion to dismiss, arguing that the motion is case-
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dispositive and that discovery is therefore unnecessary.
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Plaintiff responds that SLS failed to meet and confer in good faith, that the motion to
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dismiss will be denied, that the motion to dismiss will not effectively resolve the entire case, and
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that Plaintiff will need to conduct discovery before addressing the motion to dismiss. Defendant
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SLS replies and disputes Plaintiff’s arguments.
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II.
ANALYSIS
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Courts have broad discretionary power to control discovery, including the decision to stay
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discovery. See e.g., Little v. City of Seattle, 863 F.2d 681, 685 (9th Cir. 1988). When evaluating
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whether to stay discovery, the court considers the goal of Rule 1 of the Federal Rules of Civil
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Procedure, which directs that the rule must be “construed and administered to secure the just,
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speedy, and inexpensive determination of every action.” Tradebay, LLC v. eBay, Inc., 278 F.R.D.
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597, 602 (D. Nev. 2011) (citation omitted). But the Rules do not provide for an automatic stay of
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discovery when a potentially dispositive motion is pending. Id. at 600–01. Thus, a pending
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dispositive motion “is not ordinarily a situation that in and of itself would warrant a stay of
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discovery.” Turner Broad. Sys., Inc. v. Tracinda Corp., 175 F.R.D. 554, 556 (D. Nev. 1997)
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(quotation omitted). Nor does the fact that “discovery may involve some inconvenience and
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expense” automatically warrant a stay of discovery. Id.
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In determining whether to stay discovery, the court considers whether (1) the pending
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motion is potentially dispositive of the entire case, or at least of the issue on which discovery is
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sought; and (2) the potentially dispositive motion can be decided without additional discovery.
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Ministerio Roca Solida v. U.S. Dep’t of Fish & Wildlife, 288 F.R.D. 500, 506 (D. Nev. 2013). This
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analysis requires the court to take a “preliminary peek” at the potentially dispositive motion.
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Tradebay, 278 F.R.D. at 603. This assessment is meant not to prejudge a motion’s outcome but,
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rather, to accomplish the cost- and time-saving objectives of Rule 1 by evaluating the justice of
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either permitting or delaying discovery. Id. A court may stay discovery when it is convinced that
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the plaintiff will be unable to state a claim for relief. Turner, 175 F.R.D. at 555. Ultimately, the
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party seeking the stay “carries the heavy burden of making a ‘strong showing’ why discovery
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should be denied.” Id. at 556 (quotation omitted).
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The court now takes a “preliminary peek” at the merits of Defendant’s motion to dismiss to
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determine whether it is potentially dispositive of the entire case and whether the motion to dismiss
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can be decided without additional discovery.
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A.
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Local Rule 26-7 requires that the parties meet and confer telephonically, or in person,
Failure to Meet and Confer
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regarding discovery disputes. Defendant SLS provides a declaration indicating that counsel for
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SLS and Plaintiff conferred via telephone during the Fed. R. Civ. P:. 26(f) conference and Plaintiff
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indicated it would not consent to stay discovery. (Decl. (ECF No. 47) at 2.) Although the Court is
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unable to assess the extent to which the parties attempted to resolve this dispute, the Court accepts
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the representation that the matter was discussed and no agreement was reached. Accordingly, the
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Court finds that the meet and confer was adequate.
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B.
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To survive a 12(b)(6) motion to dismiss, a plaintiff must allege enough facts to state a claim
Likelihood of Dismissal
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that is “plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). “The
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plausibility standard . . . asks for more than a sheer possibility that a defendant has acted
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unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). When pleading facts that do no more
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than infer the possibility of misconduct, a complaint has alleged, but not shown, that the plaintiff is
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entitled to relief. Id. at 679. Properly pled allegations contain “more than labels and conclusions.”
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Twombly, 550 U.S. at 555. While courts must accept as true all factual allegations in a complaint,
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legal conclusions do not receive the same treatment, even if couched as factual allegations. Iqbal,
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556 U.S. at 678.
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To state an FCRA claim here, Plaintiff must plead facts establishing that (1) SLS provided
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inaccurate information to the credit reporting agency (“CRA”); (2) the CRAs notified SLS of the
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dispute; and (3) SLS “failed to conduct a reasonable investigation into the accuracy of the disputed
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information, in light of the information provided to it by the CRA.” See Benfield v. Bryco Funding,
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Inc., C 14-1459 PJH, 2014 WL 2604363, at *5 (N.D. Cal. June 10, 2014) (citing Gorman v.
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Wolpoff & Abramson, LLP, 584 F.3d 1147, 1154 (9th Cir. 2009)); see also Hernandez v. Wells
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Fargo Fin. Nat’l Bank, 2014 U.S. Dist. 51854 (D. Nev. 2014) (holding that a debt that has been
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charged off by a creditor does not support a finding of inaccuracy). Plaintiff must also allege that
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he was injured because of the failure to conduct the reasonable investigation. Reagan v. American
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Home Mortg. Servs., Inc., No. C 11–00704 WHA, 2011 WL 2149100, at *2 (N.D. Cal. May 31,
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2011) (to recoup damages under 15 U.S.C. § 1681 s-2(b), plaintiff must be injured because of
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defendant’s failure to perform its statutory duty of investigation).
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Plaintiff’s complaint alleges that a consumer disclosure misreported that after his
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bankruptcy was completed, SLS reported the pendency of a “balloon payment of $38,964 due Apr
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2036 ” and that the debt had been “transferred to recovery.” (Am. Compl. (ECF No. 4) at ¶¶ 69,
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70.) Defendant alleges that the motion to dismiss must be granted because, citing Abeyta v. Bank
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of Am., Nat’l Ass’n., et al., 2016 WL 1298109 at *2 (D. Nev. March 31, 2016), Plaintiff failed to
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sufficiently allege in the complaint that SLS claimed the balloon payment was an owed balance on
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the loan or that SLS had not reported Plaintiff’s bankruptcy discharge. The critical issue is whether
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an historical “due date” and a present “owed balance” are interchangeable terms. See id. Plaintiff
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responds that the continued reporting of information after the bankruptcy discharge was inaccurate
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because the discharge relieves the consumer of any otherwise legal repayment obligations. See
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Riekke v. Bank of America, N.A. 2:15-cv-02312-GMN-VCF, ECF No. 57 at 4, 2016 WL 8737439
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at *2.
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Assessing these arguments, the Court is not persuaded that the Plaintiff will be unable to
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state a claim for relief, and so a stay of discovery is not appropriate. Furthermore, it is important to
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note that, even if Defendant’s motion to dismiss is granted, Plaintiff is likely to be given leave to
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file an amended complaint to cure the defects in his initial pleading. The standard required to stay
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discovery is a stringent one. Discovery would be unnecessarily delayed in too many cases if courts
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applied a lenient standard in staying all discovery while awaiting resolution of pending motions.
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Grand Canyon Skywalk Dev. LLC v. Steele, No. 2:13-cv-00596-JAD-GWF, 2014 WL 60216 at *3.
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The court must be convinced that Defendant’s motion to dismiss will succeed, and the court is not
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convinced in this case. The court therefore will deny Defendant’s motion to stay discovery.
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III.
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CONCLUSION
IT IS THEREFORE ORDERED that Defendant SLS’s Motion to Stay Discovery (ECF No.
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IT IS FURTHER ORDERED that the parties must meet and confer and file a stipulated
discovery plan within 21 days from the date of this order.
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DATED: November 15, 2017
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______________________________________
C.W. Hoffman, Jr.
United States Magistrate Judge
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