VENNEMAN v. BMW FINANCIAL SERVICES NA, LLC

Filing 132

OPINION AND ORDER DENYING Plaintiff's 113 Motion for Protective Order. Signed by Magistrate Judge Steven C. Mannion on 6/20/13. (gmd, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
DRAFT NOT FOR PUBLICATION
W. DANA VENNEMAN, et al.,

Civil Action No.

Plaintiff,

2:09-CV-5672-ES-SCM

v.

OPINION AND ORDER ON
PLAINTIFF’S MOTION FOR A
PROTECTIVE ORDER FROM A
VERBAL ORDER BY A PREVIOUSLY
ASSIGNED JUDGE

BMW FINANCIAL SERVICES NA,
LLC, et al.,
Defendants.

I.

[D.E. 113]

INTRODUCTION
Pending before this Court is a dispute concerning discovery

of the respective income and allowances plaintiffs received
before, during, and after mobilization into active military
service.

The genesis of this discovery dispute was initially

heard by the Honorable Ester Salas as a U.S. Magistrate Judge.
The parties subsequently submitted a stipulation which, inter
alia, addressed the scope of the at-issue discovery.

That

stipulation was endorsed and filed by the Honorable Joseph A.
Dickson, U.S.M.J.

The Honorable Cathy L. Waldor, U.S.M.J. was

assigned to this matter after Judge Salas was elevated to U.S.
District Judge.

Judge Waldor issued a verbal order expanding

the scope of discovery during an unrecorded telephone

1

conference.

As a result, plaintiffs sought and received leave

from Judge Salas to make this motion for a protective order.
The Court has considered the parties’ submissions and oral
argument, pursuant to Federal Rule of Civil Procedure 78(b), and
for the reasons set forth below the Court denies the motion for
a protective order because the underlying verbal order is
arguably unenforceable because it was not reduced to writing.

II.

BACKGROUND1

This action concerns capitalized cost reduction payments in
the context of automobile leases and whether such “payments
constitute rent paid in advance for the purposes of the
Servicemembers Civil Relief Act, 50 U.S.C. App. § 501 et seq.
(the “Act”).” (Docket Entry (“D.E.”) 1).

Plaintiffs are

military service members who were mobilized for deployment.
They contend that capitalized cost reduction payments constitute
rent paid in advance under the Act and are subject to pro-rata
reimbursement under the terms of the Act.

Defendant BMW

Financial Services NA, LLC disputes plaintiffs’ claims and moved
for summary judgment, arguing that the Act does not require
reimbursement of capitalized cost reduction payments. (D.E. 59).

1

At this stage of the proceedings we are required to accept the
facts alleged in the Amended Complaint as true.
2

That motion is pending before the Honorable Ester Salas,
U.S.D.J.
III. RELEVANT PROCEDURAL HISTORY
On May 12, 2011, then-United States Magistrate Judge Salas
held a status conference and oral argument on a number of
discovery disputes. (D.E. 48, Transcript of 5/12/2011 status
conference).

Among the disputes was the production of

plaintiffs Venneman and Collins’ respective military leave and
earnings statements, i.e., pay stubs.
21).

(D.E. 48, T at 23.20 –

Defense counsel argued that the pay stubs show total

compensation, not just base pay, and are relevant to defendant’s
equitable defense that some or all of the plaintiffs’
compensation during mobilization was actually higher than prior
to mobilization. (D.E. 48, T at 24.1 to 25.12).

Plaintiffs’

counsel argued that the equitable defense was waived under §
535(g) because defendant failed to timely move before a court
prior to “the effective date of the [lease] termination[s]….”
(D.E. 48, T at 28.1 – 12).
Judge Salas verbally ruled that the paystubs were
“relevant…”, [D.E. 48, T at 28.22 – 24] and determined that
“yearly earnings” should be produced. (D.E. 48, T at 29.6).
record is silent on whether counsel ever requested that the
ruling be memorialized in writing.

3

Nonetheless, the parties

The

subsequently stipulated that “Plaintiff Venneman shall produce
his complete federal tax returns and his leave and earnings
statements indicating total leaving and earning compensation for
the period of tax years 2005 through 2007.” (D.E. 51 at ¶ 4a).
It was further stipulated that “Plaintiff Collins shall produce
his complete federal tax returns and his leave and earnings
statements indicating total leaving and earning compensation for
the period of tax years 2004 and 2005.” (Id.).

That stipulation

was endorsed by the Honorable Joseph A. Dickson, U.S.M.J. and
filed on August 2, 2011. (D.E. 52).
One year later, on August 22, 2012, Judge Waldor held a
telephone status conference.

The parties agree that Judge

Waldor issued a verbal ruling that expanded the scope of
discovery.

The ruling was not recorded and what was ordered is

debatable.

The Judge’s notes indicate that plaintiff Collins

was `to provide his 2003 through 2005 taxes and leave and
earnings statement….’

The parties, however, appear to agree

that Judge Waldor ordered plaintiff Collins to produce weekly
paystubs for 2003 through 2005. (D.E. 118, Plaintiffs’ Reply
Brief at 16; D.E. 116, Defendants’ Opposition Brief at 1, 5).
Either way, Plaintiffs sought, and the Honorable Ester Salas,
U.S.D.J. granted, “leave to bring a Motion for a Protective
Order regarding Defendants' use of the Plaintiffs' income and
financial information” on August 28, 2012. (D.E. 110).
4

The instant motion was filed on September 5, 2012. (D.E.
113).

Defendant filed opposition, [D.E. 116] and Plaintiffs

replied. (D.E. 118).

The motion was reassigned to the

undersigned on December 10, 2012.

Oral argument was heard on

June 14, 2013.

IV.

DISCUSSION

Plaintiffs seek a Protective Order “(1) precluding
Defendants from introducing evidence of or testimony regarding
any putative class member’s income, earnings or benefit; (2)
precluding Defendants from making any argument that they are
retroactively excused from complying with the refund obligations
found in 50 U.S.C. App § 535 (f) based upon any income or
equitable related principal; and (3) barring the further
production of any Plaintiff or putative class members’ wage,
income, or benefit related testimony or similar evidence.
Plaintiffs cite 50 U.S.C.A. § 535(g) as the basis for this
Order.” (D.E. 113-1 at 5).
Defendants oppose the motion. (D.E. 116).

They “intend to

argue that to the extent certain class members, perhaps even the
named Plaintiffs, actually made more during the course of their
deployment to active duty, Defendants could petition the Court
for equitable relief under the SCRA from having to return pro

5

rata refunds sought by Plaintiffs.” (D.E. 116, Defendants’ Brief
at 4).
The relief requested by plaintiffs would bar the
introduction of evidence at trial, i.e., as an in limine motion. 2
They also seek relief precluding defendants from making any
argument that they are retroactively excused from complying with
the refund obligations found in 50 U.S.C. App § 535 (f) based
upon any income or equitable related principal.

That relief,

however, is dispositive in nature and outside the jurisdiction
of a magistrate judge.

a. Motion for a Protective Order
A court may issue a protective order pursuant to Federal
Rule of Civil Procedure 26(c) to regulate the terms, conditions,
time or place of discovery.

Plaintiffs, as the moving parties,

bear the burden of showing good cause for the issuance of a
protective order "by demonstrating a particular need for
protection [and] [b]road allegations of harm, unsubstantiated by
specific examples or articulated reasoning, do not satisfy the
Rule 26(c) test." Cipollone v. Liggett Group, Inc., 785 F.2d

2

The Court of Appeals for the Third Circuit has stated that a
motion in limine is designed to narrow the evidentiary issues
for trial and to eliminate unnecessary trial interruptions.”
Bradley v. Pittsburg Bd. of Educ., 913 F.2d 1064, 1069 (3d Cir.
1990).
6

1108, 1121 (3d Cir. 1986) (citing United States v. Garrett, 571
F.2d 1323, 1326, n. 3 (5th Cir. 1978).
Plaintiffs essentially argue that the discovery sought is
not relevant to any viable defense and is therefore burdensome
to produce.

Federal Rule of Civil Procedure 26(b)(1) provides

that “[f]or good cause, the court may order discovery of any
matter relevant to the subject matter involved in the action.”
Stated otherwise, discovery is limited to any matter relevant to
a party’s claims, defenses, or the subject matter involved in
the litigation upon a finding of good cause.

Fed.R.Civ.P.

26(b)(1). That is because the sole purpose of discovery is to
add flesh for trial on the parties’ respective claims and
defenses in the given action.

Discovery is not a fishing

expedition for potential claims or defenses.
Relevant information need not be admissible at trial to be
discoverable, but the party seeking discovery must “show that
the information sought is relevant to the subject matter of the
action and may lead to admissible evidence.”

Caver v. City of

Trenton, 192 F.R.D. 154, 159 (D.N.J. 2000).
Defendants contend that Plaintiffs’ motion is actually
seeking reconsideration of the prior verbal rulings of Judge
Salas and Judge Waldor.

Plaintiffs respond that they have

already produced the discovery required by Judge Salas’ May 2012
ruling and the parties’ stipulation. (D.E. 118, Reply Brief at
7

11- 12).

That is, plaintiff Collins’ yearly income totals for

2004 and 2005. (Id. citing D.E. 52 at ¶ 4(a)).

Plaintiffs

assert that Defendants sought to expand the scope of discovery
before Judge Waldor to include income from 2003 through 2010 as
well as for weekly paystubs. (D.E. 118, Plaintiffs’ Reply Brief
at 13).
At oral argument, Defendants did not dispute that
Plaintiffs have complied with the stipulation entered by Judge
Dickson.

Therefore, it appears there is no controversy

concerning the stipulation and if there were such a dispute it
would be subject to the law of the case doctrine.3

3

The law of the case doctrine “directs courts to refrain
from re-deciding issues that were resolved in an earlier stage
of litigation,” absent a showing of a compelling reason to do
so. Pub. Interest Research Group of N.J., Inc. v. Magnesium
Elektron, Inc., 123 F.3d 111, 116 (3d Cir. 1997). The doctrine
applies when a court is considering the same issue raised
earlier or applying the same rule of law earlier determined.
See Feesers, Inc. v. Michael Foods, Inc., 591 F.3d 191, 207 (3d
Cir. 2010). It should be noted that the law of the case
doctrine does not limit a federal court’s power; rather, it
directs the court’s exercise of discretion. Pub. Interest
Research Group of N.J., Inc., 123 F.3d at 116 (citing Arizona v.
California, 460 U.S. 605, 619 (1983); Messinger v. Anderson, 225
U.S. 436, 444 (1912)).
As noted in Wright & Miller, 18B Fed. Prac. & Proc. Juris.
§ 4478, Law of the Case, “courts are understandably reluctant to
reopen a ruling once made,” but this reluctance is not
tantamount to a lack of authority. Rather, the primary
constraint faced by courts is a matter of discretion. See id.
Only after a court has been appealed to a higher court do
principles of authority bind a lower court on remand to the law
of the case established on appeal. Id.
8

As for Judge Waldor’s verbal ruling, plaintiffs could have
addressed their concerns with Judge Waldor on a motion for
reconsideration.

That did not happen.

Conversely, defendants

could have requested that Judge Waldor memorialize her ruling in
writing, but that did not happen either.
The Federal Rules of Civil Procedure provide that the
jurisdiction of magistrate judges include non-dispositive
matters. Fed.R.Civ.P. 72(a).

Rule 72(a) states as follows:

(a) Nondispositive Matters. When a pretrial matter
not dispositive of a party's claim or defense is
referred to a magistrate judge to hear and decide,
the magistrate judge must promptly conduct the
required proceedings and, when appropriate, issue a
written order stating the decision. A party may
serve and file objections to the order within 14
days after being served with a copy. A party may
not assign as error a defect in the order not
timely objected to. The district judge in the case
must consider timely objections and modify or set
aside any part of the order that is clearly
erroneous or is contrary to law.
Plaintiffs seek protection from Judge Waldor’s verbal
ruling.

The Court, however, declines to either enforce or

provide protection from that verbal ruling, because, as stated
The Third Circuit has recognized several “extraordinary
circumstances” that warrant a court’s reconsideration of an
issue decided earlier in the course of litigation. They include
situations where: (1) new evidence is available; (2) a
supervening new law has been announced; or (3) the earlier
decision was clearly erroneous and would create a manifest
injustice. See Bridge v. U.S. Parole Commission, 981 F.2d 97,
103 (3d Cir. 1992); Hayman Cash Register Co. v. Sarokin, 669
F.2d 162, 169-70 (3d Cir. 1982). None of these factors have
been met with regard to the stipulation.
9

in Esterquest v. Booz-Allen & Hamilton, Inc., 2003 W.L. 2167360
at 2 (S.D.N.Y. 2003), “it is not clear to the Court what the
terms of the ruling were.”

Moreover, as the Esterquest Court

stated, “it is debatable whether under Federal Rule of Civil
procedure 72(a) such oral orders are enforceable.” Id.
Accordingly, the motion for a protective order is denied.
V.

CONCLUSION
For the foregoing reasons, and good cause shown,
IT IS on this 20th day of June, 2013,
ORDERED that Plaintiffs’ motion for a protective order is

denied.

6/20/2013 1:17:44 PM

10