KELLEY v. ENHANCED RECOVERY COMPANY, LLC et al

Filing 36

OPINION. Signed by Magistrate Judge Mark Falk on 10/7/2016. (seb)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

CHRISTOPHER KELLEY, on behalf of
himself and all others similarly situated,

Civil Action No. 15-6527 (CCC)

Plaintiff,
v.
ENHANCED RECOVERY COMPANY,
LLC, et al.,

OPINION

Defendants.

Falk, U.S.M.J.
This matter comes before the Court upon the informal application of nonparty
Cellco Partnership d/b/a/ Verizon Wireless (“Verizon”) to quash a deposition subpoena
served by Plaintiff Christopher Kelley. (CM/ECF No. 31.) The application is opposed.
(CM/ECF No. 32.) The application is decided on the papers. Fed. R. Civ. P. 78(b). For
the reasons set forth below, Verizon’s application is granted.

BACKGROUND

A. Factual Background
This is a putative class action brought under the Fair Debt Collection Practices
Act, 15 U.S.C. § 1692 et seq. (“FDCPA”). Defendant Enhanced Recovery Company,

LLC (“ERC”) is a “debt collector” and Plaintiff Christopher Kelley (“Plaintiff”) is a
“consumer” as defined by the FDCPA. (Compl. ¶¶ 14, 15.) According to Plaintiff, ERC
sent him a letter on March 13, 2015, attempting to collect on an amount due to Verizon.
(Id. at ¶19.) The letter allegedly stated that Plaintiff owed $1,455.98, of which $120.21
was a “collection fee.” (Id. at ¶¶ 20-21.) Plaintiff claims that he did not owe Verizon a
collection fee nor had ERC charged or billed Verizon for such a collection fee. (Id. at ¶¶
23-24.) Plaintiff also asserts that ERC sent similar letters to more than 50 consumers in
New Jersey demanding collection fees that had not yet been charged to or paid by Verizon
as of the time the letters were sent. (Id. at ¶19.)
On August 31, 2015, Plaintiff filed suit on behalf of himself and all others
similarly situated against ERC alleging that it violated the FDCPA in connection with its
attempts to collect a debt owed to nonparty Verizon. Specifically, Plaintiff alleges that
the sum sought to be collected included an amount for collection fees which violated the
FDCPA. On October 14, 2015, ERC filed an Answer denying any liability contending
that the amounts sought to be collected were expressly authorized by Plaintiff’s contract
with Verizon pursuant to 15 U.S.C. § 1692(f)(1). (CM/ECF No. 4.)
According to Verizon, on December 18, 2015, it was served by Plaintiff with a
subpoena to produce documents (“Document Subpoena”) seeking: (1) all contracts
between Verizon and ERC since August 31, 2014; (2) all documents supplied to ERC
with respect to Plaintiff’s account; (3) Verizon’s complete file for Plaintiff; (4) all
documents related to the placement for collection of Plaintiff’s account with ERC; (5) a
2

list of payments made to Verizon by ERC relating to the collection of Plaintiff’s account;
(6) a list of payments made to ERC by Verizon relating to the collection of Plaintiff’s
account, and (7) a list of all New Jersey accounts placed with or referred to ERC for
collections since August 31, 2015. (Verizon’s Letter Brief in Support (“Verizon Br.”) at
3-4.) According to Verizon, the vast majority of the documents sought were already or
could have been produced by ERC. The parties agreed to a narrower scope and on March
3, 2016, Verizon produced all responsive documents in its possession. (Verizon Br. at 4.)
Then, in April 2016, at the request of ERC, Verizon provided a declaration of Renada
Lewis, Senior Analyst in Customer Service at Verizon based in New York (“Lewis
Declaration”) which identified the dates on which Plaintiff’s telephone numbers were
activated and became inactive, and the version of Verizon’s customer contract that was in
effect when Plaintiff’s phone number became inactive. (Verizon Br. at 4.)
On May 17, 2016, Plaintiff served a Deposition Subpoena demanding that Verizon
produce a corporate representative to testify as to the documents already produced by
Verizon pursuant to the Document Subpoena, and also seeking testimony regarding “[a]ll
documents . . . created, drafted or signed by Renada Lewis” relative to Plaintiff. (Verizon
Br. at 5, Ex. A.) Following a meet and confer by the parties, Plaintiff agreed to forego
some of the discovery sought but still insisted that Verizon produce a representative
regarding (1) how Verizon calculated the collection fee it charged Plaintiff and (2) how
the Lewis Declaration “came about.” (Verizon Br. at 5-6.) Verizon objected to the
Deposition Subpoena maintaining that the information was disclosed already in the
documents produced, is readily available from ERC, or is entirely irrelevant. (Id. at 6.)
3

B. Present Application
On August 3, 2016, Verizon moved to quash the Deposition Subpoena arguing that
it mirrors items 1 through 4 of the Document Subpoena and seeks duplicative and
irrelevant information. Verizon contends that Plaintiff presently possesses all of the
information regarding the collection fee Verizon charged Plaintiff. (Verizon Br. at 9.)
Pointing to the fact that it has already been subjected to discovery in this case, Verizon
maintained that it made two document productions that encompassed all responsive and
relevant documents within its possession, produced a sworn declaration providing
additional information about Plaintiff’s account, and therefore has disclosed any and all
relevant facts within its knowledge. (Verizon Br. at 1.)
Arguing that discovery of how the Lewis Declaration “came about” is irrelevant to
any claim or defense in this case, Verizon contends that because ERC obtained the
declaration from Verizon and produced it to Plaintiff, it can provide the information
Plaintiff seeks. Verizon asserts that the deposition of Lewis would not produce any
information that hasn’t already been provided as the facts contained in her declaration are
based on Verizon’s business records and not subject to any credible challenge. (Verizon
Br. 12.) Finally, Verizon maintains that how or why Verizon calculates a fee and whether
the customer contract permitted Verizon to charge the fee are irrelevant because
Verizon’s charges are not at issue here. (Id. at 10.)
Plaintiff opposes the application contending that it seeks to learn, among other
things, how the fee was charged, when it was charged, who authorizes it, and what law
permits the charging of the fee. Rejecting Verizon’s characterization of the Deposition
4

Subpoena as a fishing expedition, Plaintiff argues that it should be permitted to depose a
Verizon representative to address these fundamental issues. Noting that Verizon
“volunteered” to provide ERC with the Lewis Declaration, Plaintiff maintains that it also
should be permitted to depose Ms. Lewis as to the statements in her declaration.
(Plaintiff’s Brief (“Pl.’s Br.”) at 1-2.)
DISCUSSION
A. Relevant Law
The scope of discovery while broad, is not limitless. Rule 26(b)(2)(C) specifically
requires courts to limit discovery where “the discovery sought is unreasonably cumulative
or duplicative, or can be obtained from some other source that is more convenient, less
burdensome , or less expensive” and where “the burden or expense of the proposed
discovery outweighs its likely benefit . . . .” Rule 26(b)(2)(C).

Discovery sought by a

subpoena issued pursuant to Rule 45 must fall within the scope of discovery permissible
under Rule 26(b). OMS Investments, Inc. v. Lebanon Seaboard Corp., 2008 WL
4952445, at *2 (D.N.J. Nov. 18, 2008).
Rule 45 provides that the court “must quash or modify a subpoena that . . . subjects
a person to undue burden.” Fed. R. Civ. P. 45(d)(3)(A)(iv). “A subpoena is considered
unduly burdensome when it ‘is unreasonable or oppressive’” Schmulovich v. 1161 Rt. 9
LLC, 2007 WL 2362598, *4 (D.N.J. Aug. 15, 2007) (quotations omitted). A nonparty to
an action “is afforded greater protection from discovery than a normal party.” Chazanow
v. Sussex Bank, 2014 WL 2965697, at *3 (D.N.J. July 1, 2014) (granting nonparty’s
motion to quash subpoena); see also Stamy v. Packer, 138 F.R.D. 412, 419 (D.N.J. 1990)
5

(“the standards for nonparty discovery require a stronger showing of relevance than for
simple party discovery”). Discovery from a nonparty is unduly burdensome where the
information sought has already been, or can be obtained from other means. See In re
Centrix Financial, LLC, 2012 WL 6625920, at *6 (D.N.J. Dec. 18, 2012) (quashing
subpoenas to nonparties in part because information was already available to defendants
and thus would be duplicative).
B. Decision
(1) Deposition Subpoena Regarding the Collection Fee
First, the crux of Plaintiff’s complaint is that the collection fees were not permitted
by the FDCPA. ERC’s Answer states that the contract with Verizon expressly authorized
the collection of collection fees. (CM/ECF No. 4.) The assessment and the amount of the
fee is disclosed in the documents already produced by Verizon. For this reason, the
questions Plaintiff apparently wants answered–how is the fee charged? what applicable
law permits the charging of such a fee? in the event ERC settles for less than the total
amount of the debt, does ERC still receive the fee?– are of questionable relevance and in
any event, are more appropriately directed to ERC.
Second, the assessment and amount of the fee has been disclosed in the documents
already produced by Verizon. These show that Verizon charges the fee pursuant to its
customer contract with Plaintiff. The Lewis Declaration identifies the specific version of
Verizon’s customer contract that bound Plaintiff. (Verizon’s Br., Ex. D at ¶ 6, and Ex.1.)
The customer contract provided: “If you fail to pay on time and Verizon Wireless refers
your account(s) to a third party for collection, a collection fee will be assessed and . . .
6

will be calculated at the maximum percentage permitted by applicable law, not to exceed
18 percent.” (Verizon Br., Ex. D at ¶ 6 and Ex. 1, p.5.) Verizon has also produced the
screenshot from its electronic database that demonstrates that Verizon instructed ERC to
collect the fee in addition to the principal amount due. (See Verizon Br. at 9, Ex. E.) That
Verizon instructed ERC to collect the fee is evident from the documents. Those are the
only facts relevant to Plaintiff’s claim against ERC under the FDCPA. Verizon’s internal
practices regarding the collection of fees is irrelevant as Verizon is not a party to this
action. See Pollice v. National Tax Funding, L.P., 225 F.3d 379, 403 (3d Cir. 2000)
(“The FDCPA’s provisions generally apply only to ‘debt collectors’....Creditors – as
opposed to ‘debt collectors’– generally are not subject to the FDCPA.”); see also Lewis v.
ACB Business Services, Inc., 135 F.3d 389, 402 (6th Cir. 1998) (finding that questions of
whether debt collector sent debtor a collection letter pursuant to a contract with the
creditor or whether it acted outside the terms of any contract had “no relevance to whether
[the creditor’s] activities at issue . . . were a violation of the FDCPA.”).
Verizon has represented to the Court that it has produced “all of the information
regarding Verizon’s calculation of the collection fee.” (Verizon Br. at 9.) Plaintiff has
not specified any information that is missing or that needs to be acquired through
deposition. Any information sought by Plaintiff can be obtained by less burdensome
means than the deposition of a Verizon representative. In fact, Verizon had offered to
produce a declaration clarifying any information in the documents already produced to the
extent that is not clear from the face of the documents. (Verizon Br. 9-10.) Therefore,
the discovery sought “can be obtained from some other source that is more convenient,
7

less burdensome, or less expensive.” Fed. R. Civ. R. 26(b)(2)(C). Verizon, a nonparty, is
afforded greater protection than a party to a case. See Chazanow, 2014 WL 2965697, at
*3. Accordingly, the Court grants Verizon’s motion to quash the Deposition Subpoena of
a Verizon corporate representative seeking testimony regarding the collection of fees.
(2) Deposition Subpoena of Ms. Lewis
The Court finds that Plaintiff has failed to demonstrate how testimony regarding
how the Lewis Declaration “came about” has relevance in this case. The Lewis
Declaration identified basic facts about Plaintiff’s account, such as the dates that
Plaintiff’s telephone numbers were activated and became inactive, and the Verizon
customer contract in effect when Plaintiff’s phone numbers became inactive. Plaintiff has
not identified any area of the Lewis Declaration that is incomplete or needs
supplementation. According to Verizon, the facts in the declaration are based on its
business records, and a deposition regarding them would not reveal any other
information. (Verizon Br. at 12.) ERC obtained the Lewis Declaration from Verizon and
produced it to Plaintiff in discovery. Plaintiff has not countered Verizon’s argument that
the information should be sought from ERC. Nor has Verizon challenged Verizon’s
contention that information related directly to Verizon’s internal preparation of the Lewis
Declaration may be privileged given that they were handled by Verizon’s in-house
counsel in connection with this litigation. Finally, although Plaintiff’s counsel and
Verizon’s General Counsel had “amicable discussions” about the possible deposition of
Ms. Lewis, it appears that no agreement was reached and hence Verizon is not precluded
from moving to quash the subpoena. (Pl.’s Br. at 2.)
8

The standard for nonparty discovery requires a stronger showing of relevance
than for simple party discovery. Plaintiff has failed to demonstrate any need for Ms.
Lewis’s deposition. Thus, the Court finds that the benefit, if any, of a deposition of Ms.
Lewis is outweighed by the burden of compelling her to appear for a deposition.
CONCLUSION
For the reasons stated above, Verizon’s application to quash Plaintiff’s deposition
subpoena is granted.

s/Mark Falk
MARK FALK
United States Magistrate Judge

Dated: October 7, 2016

9