Michelo et al v. National Collegiate Student Loan Trust 2007-2 et al

Filing 254

ORDER terminating (200) Motion to Seal; terminating (220) Motion to Seal; terminating (223) Motion to Seal in case 1:18-cv-01781-PGG-BCM; terminating (137) Motion to Seal; terminating (151) Motion to Seal; terminating (154) Motion to Seal in case 1:18-cv-07692-PGG-BCM. Here, Judge Moses properly concluded that the discovery sought is relevant to the issues in this case. As discussed above, the Employee personally signed what is alleged to be a fraudulent affidavit. This alleged con duct is central to the claims in this case. Moreover, Movants have not demonstrated that the Employee's testimony would be cumulative or duplicative, given the Employee's personal involvement in the preparation of what is alleged to be a fraudulent affidavit. See In re Garlock, 463 F. Supp. 2d 478, 481 (S.D.N.Y. 2006) ("An order barring a litigant from taking a deposition is most extraordinary relief. It is the party seeking such an order that bears the burden of prov ing that the proposed deponent has nothing to contribute." (citation omitted)). Movants have likewise not shown that a deposition given the accommodations prescribed by Judge Moses threatens the Employee's health. The conclusory state ments made by the Employee's physician are not sufficient to justify additional accommodations. See Qube Films Ltd. v. Padell, No. 13-CV-8405 AJN, 2015 WL 109628, at *2 (S.D.N.Y. Jan. 5, 2015). As Judge Moses concludes, Movants have demo nstrated merely that "harm to [the Employee] from a deposition is of potential concern"; they have not shown that this concern "rise[s] to the level of a clearly defined and serious injury." Id. In sum, Movants have not m et their heavy burden to demonstrate that Judge Moses's ruling was clearly erroneous or contrary to law. Their objections (Dkt. No. 201) will therefore be overruled. As further set forth in this Order. Given these circumstances, the parties are directed to redact the Employee's name and any other identifying information from the publicly filed copies of Movants' objections (Dkt. No. 201) and reply brief (Dkt. No. 224), and from Plaintiffs' opposition brief (Dkt. No. 2 21). See United States v. King, No. 10 Cr. 122 (JGK), 2012 WL 2196674, at *3 (S.D.N.Y. June 15, 2012) (redacting submissions that included medical information of third parties). The Clerk of Court is directed to terminate Dkt. Nos. 200, 220, and 223. SO ORDERED.. (Signed by Judge Paul G. Gardephe on 2/15/2021) Filed In Associated Cases: 1:18-cv-01781-PGG-BCM, 1:18-cv-07692-PGG-BCM (ks)

Case 1:18-cv-01781-PGG-BCM Document 254 Filed 02/16/21 Page 1 of 8

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
MUTINTA MICHELO, KATHERINE
SEAMAN, MARY RE SEAMAN, and
SANDRA TABAR, individually and on
behalf of all others similarly situated,
Plaintiffs,
- against -

NATIONAL COLLEGIATE STUDENT
LOAN TRUST 2007-2, NATIONAL
COLLEGIATE STUDENT LOAN TRUST
2007-3, TRANSWORLD SYSTEMS, INC.,
in its own right and as successor to NCO
FINANCIAL SYSTEMS, INC.; EGS
FINANCIAL CARE INC., formerly known
as NCO FINANCIAL SYSTEMS, INC.; and
FORSTER & GARBUS LLP,
Defendants.
____________________________________

CHRISTINA BIFULCO, FRANCIS
BUTRY, and CORI FRAUENHOFER,
individually and on behalf of all others
similarly situated,
Plaintiffs,
-against-

NATIONAL COLLEGIATE STUDENT
LOAN TRUST 2004-2, NATIONAL
COLLEGIATE STUDENT LOAN TRUST
2006-4, TRANSWORLD SYSTEMS, INC.,
in its own right and as successor to NCO
FINANCIAL SYSTEMS, INC.; EGS
FINANCIAL CARE INC., formerly known
as NCO FINANCIAL SYSTEMS, INC.; and
FORSTER & GARBUS LLP,
Defendants.

ORDER
18 Civ. 1781 (PGG)
18 Civ. 7692 (PGG)

Case 1:18-cv-01781-PGG-BCM Document 254 Filed 02/16/21 Page 2 of 8

PAUL G. GARDEPHE, U.S.D.J.:
In these consolidated putative class actions, Plaintiffs allege that Defendants have
orchestrated a scheme to fraudulently obtain default judgments against them in state court, and
that Defendants have carried out this scheme by, inter alia, “submitting false or deceptive
affidavits” in those state proceedings. (Consol. Cmplt. (Dkt. No. 124) ¶¶ 1-3, 12)1 As relevant
here, Plaintiffs allege that employees of Defendant Transworld Systems, Inc. (“TSI”) “have
falsely attested to personal knowledge” of the information contained in those affidavits. (Id.
¶ 13)
On March 19, 2020, this Court entered a Consolidated Amended Civil Case
Management Plan and Scheduling Order (Dkt. No. 138), and on April 28, 2020, the Court
referred this case to Magistrate Judge Barbara C. Moses for general pretrial supervision. (Dkt.
No. 144)
In a July 17, 2020 order, Judge Moses denied a motion to quash submitted by
Defendant TSI and a non-party TSI employee (“Movants”). (July 17, 2020 Mem. Order (Dkt.
No. 195))
On July 31, 2020, Movants filed objections to Judge Moses’s July 17, 2020
decision. (Movants Objections (Dkt. No. 201)) TSI requested to file the objections under seal.
(TSI Ltr. (Dkt. No. 200)) This Order addresses Movants’ objections and TSI’s sealing
application.
I.

MOTION TO QUASH
Plaintiffs seek to depose a TSI employee (the “Employee”) who signed an

affidavit that Defendants submitted in support of an application for a default judgment against a
1

All docket citations are to the docket in Michelo et al. v. National Collegiate Student Loan
Trust 2007-2, et al., 18 Civ. 1781 (PGG).
2

Case 1:18-cv-01781-PGG-BCM Document 254 Filed 02/16/21 Page 3 of 8

named Plaintiff. (Pltf. Opp. (Dkt. No. 177) at 2)2 On May 22, 2020, Movants moved to quash
the deposition subpoena served on the Employee, arguing that the Employee suffers from stressinduced epilepsy, and that the stress of a deposition could trigger a seizure. (Movants Br. (Dkt.
No. 172) at 2) As an alternative to a deposition, Movants proposed that Plaintiffs be required to
submit written questions to the Employee. (Id. at 9)
Plaintiffs argued that the motion to quash should be denied because Movants had
not provided sufficient information concerning the Employee’s epilepsy condition. (Pltf. Opp.
(Dkt. No. 177) at 2)
In a July 17, 2020 order, Judge Moses concludes that Movants have not “show[n]
‘that a clearly defined, specific and serious injury’ will occur in the absence of” a protective
order preventing the deposition. (July 17, 2020 Mem. Order (Dkt. No. 195) at 6 (citation
omitted)) “[N]otwithstanding [Judge Moses’s] express directive, [Movants] did not submit any
medical records (much less properly authenticated records) evidencing that the Employee
currently suffers from stress-induced epilepsy, or that his current medical condition ‘prohibits
him from sitting for a (remote) deposition.” (Id. at 7 (emphasis in original)) Rather, “Movants
rely upon a conclusory two-sentence note, scrawled on a prescription pad more than a year and a
half ago, stating vaguely that the Employee should avoid ‘duress’ or ‘significant stress.’” (Id.)
Judge Moses further notes that the Employee’s affidavit does not provide any more detailed
information regarding Employee’s condition, treatment, and previous experiences testifying in
depositions. (Id. at 8)
Although Judge Moses finds that Movants have not submitted evidence
“sufficient to justify an order prohibiting plaintiffs from taking the employee’s oral deposition,”
The page numbers in this Order correspond to the page numbers designated by this District’s
Electronic Case Files (“ECF”) system.
2

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she “order[s] ‘certain accommodations to be implemented in the taking of his deposition.’” (Id.
at 9 (citations omitted)) Those accommodations include that (1) the deposition will proceed
remotely; (2) the deposition will be limited to four hours; and (3) the Employee will be permitted
to take breaks “to address any stress caused by the deposition.” (Id.)
On July 31, 2020, Movants filed objections to Judge Moses’s order. Movants
complain that Judge Moses (1) “[d]id not appropriately balance the burden to [the Employee] where
his testimony in this case is entirely cumulative and duplicative of testimony either already obtained,
or that plaintiffs can obtain from the four other TSI employees that plaintiffs have issued subpoenas
to and will depose in the case”; and (2) “[d]id not adequately take into account the defined, specific,
and serious medical condition and potentially irreparable harm” the Employee would experience if
deposed, especially in light of the absence of contradictory evidence from Plaintiffs. (Movants
Objections (Dkt. No. 201) at 1-2)
Plaintiffs counter that the Employee’s testimony would not be cumulative or
duplicative because the Employee has “unique personal knowledge” of the affidavit he signed to
support a Bronx County Civil Court case filed against Plaintiff Sandra Tabar. According to
Plaintiffs, the Employee’s affidavit was signed “without the requisite personal knowledge and review
of proof of indebtedness, rendering the affidavit[] false and deceptive [and] in violation of the law.”
(Pltf. Opp. (Dkt. No. 221) at 2-3) According to Plaintiffs, Tabar’s claim is somewhat different from
that of the other named Plaintiffs because the case against her was restored after the default judgment
was vacated. Defendants voluntarily dismissed only after Tabar sought discovery. (Consol. Cmplt.
(Dkt. No. 124) ¶¶ 139-59) Finally, Plaintiffs argue that Movants have still not provided evidence of
the Employee’s medical condition. (Pltf. Opp. (Dkt. No. 221) at 8)
Under Rule 72 of the Federal Rules of Civil Procedure, “[w]hen a pretrial matter not
dispositive of a party’s claim or defense is referred to a magistrate judge to hear and decide,” the

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district judge “must consider timely objections and modify or set aside any part of the order that is
clearly erroneous or is contrary to law.” Fed. R. Civ. P. 72(a). “A finding is ‘clearly erroneous’ if
the reviewing court is left with the definite and firm conviction that a mistake has been committed.”
R.F.M.A.S., Inc. v. So, 748 F. Supp. 2d 244, 248 (S.D.N.Y. 2010) (citation omitted). “Similarly, a
finding is contrary to law when it fails to apply or misapplies relevant statutes, case law, or rules of
procedure.” Id. “This is a highly deferential standard, and the objector thus carries a heavy burden.”
Khaldei v. Kaspiev, 961 F. Supp. 2d 572, 575 (S.D.N.Y. 2013). Moreover, “[a] magistrate judge
possesses wide discretion in handling discovery disputes.” Misas v. N.-Shore Long Island Jewish
Health Sys., No. 14-CV-8787 (ALC) (DJF), 2016 WL 4082718, at *3 (S.D.N.Y. July 25, 2016); see
also, e.g., U2 Home Entm’t, Inc. v. Hong Wei Int’l Trading Inc., No. 04 Civ. 6189 (JFK), 2007 WL
2327068, at *1 (S.D.N.Y. Aug. 13, 2007) (“A magistrate judge is best qualified to judge the entire
atmosphere of the discovery process. . . . Therefore, [her] rulings on discovery matters are entitled to
substantial deference.” (internal quotation marks omitted)).
Here, Judge Moses properly concluded that the discovery sought is relevant to the
issues in this case. As discussed above, the Employee personally signed what is alleged to be a
fraudulent affidavit. This alleged conduct is central to the claims in this case. Moreover, Movants
have not demonstrated that the Employee’s testimony would be cumulative or duplicative, given the
Employee’s personal involvement in the preparation of what is alleged to be a fraudulent affidavit.
See In re Garlock, 463 F. Supp. 2d 478, 481 (S.D.N.Y. 2006) (“An order barring a litigant from
taking a deposition is most extraordinary relief. It is the party seeking such an order that bears the
burden of proving that the proposed deponent has nothing to contribute.” (citation omitted)).
Movants have likewise not shown that a deposition – given the accommodations
prescribed by Judge Moses – threatens the Employee’s health. The conclusory statements made by
the Employee’s physician are not sufficient to justify additional accommodations. See Qube Films
Ltd. v. Padell, No. 13-CV-8405 AJN, 2015 WL 109628, at *2 (S.D.N.Y. Jan. 5, 2015). As Judge

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Moses concludes, Movants have demonstrated merely that “harm to [the Employee] from a
deposition is of potential concern”; they have not shown that this concern “rise[s] to the level of a
clearly defined and serious injury.” Id.
In sum, Movants have not met their heavy burden to demonstrate that Judge Moses’s
ruling was clearly erroneous or contrary to law. Their objections (Dkt. No. 201) will therefore be
overruled.

II.

SEALING MOTION
TSI seeks to file Movants’ objections and reply brief under seal, because these

documents “reference[] the TSI employee’s private medical information.” (TSI Ltr. (Dkt. No.
200) at 2; (Dkt. No. 223) at 1) Although Plaintiffs “dispute that [the Employee’s] purported
condition exists as TSI describes it,” they nonetheless “fil[ed their] responses to TSI’s objections
under seal in light of TSI’s confidentiality assertion.” (Dkt. No. 220) Neither side has offered
any analysis in connection with the sealing request.
The Second Circuit has articulated a three-step process for determining whether
documents should be placed under seal. First, a court must determine whether the presumption
of access attaches. A presumption of access attaches to any document that is a “judicial
document” – i.e., an “item . . . relevant to the performance of the judicial function and useful in
the judicial process.” Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 115 (2d Cir. 2006)
(quoting United States v. Amodeo, 44 F.3d 141, 145 (2d Cir. 1995) (“Amodeo I”) (internal
quotation marks omitted)). “[T]he mere filing of a paper or document with the court is
insufficient to render that paper a judicial document subject to the right of public access.”
Amodeo I, 44 F.3d at 145. Motions concerning evidentiary and discovery matters are, however,
“subject to at least some presumption of public access.” Brown v. Maxwell, 929 F.3d 41, 50 (2d
Cir. 2019).

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Where the document at issue is a “judicial document,” a court must determine the
weight to be given to the presumption of public access. “‘[T]he weight to be given the
presumption of access must be governed by the role of the material at issue in the exercise of
Article III judicial power and the resultant value of such information to those monitoring the
federal courts. Generally, the information will fall somewhere on a continuum from matters that
directly affect an adjudication to matters that come within a court's purview solely to insure their
irrelevance.’” Lugosch, 435 F.3d at 119 (quoting United States v. Amodeo, 71 F.3d 1044, 1049
(2d Cir. 1995) (“Amodeo II”)) (alteration in Lugosch).
After determining the weight of the presumption of access, a court must “‘balance
competing considerations against it.’” Id. at 120 (quoting Amodeo II, 71 F.3d at 1050). “Such
countervailing factors include but are not limited to ‘the danger of impairing law enforcement or
judicial efficiency’ and ‘the privacy interests of those resisting disclosure.’” Id. (quoting
Amodeo II, 71 F.3d at 1050).
Here, Movants’ objections and the briefs submitted by the parties are “judicial
documents,” because they are “documents submitted in connection with, and relevant to, . . .
judicial decision-making.” Brown, 929 F.3d at 50. As such, there is a presumption of public
access. Nevertheless, “[t]he privacy interests of innocent third parties,” such as those of the
Employee here, “should weigh heavily in a court’s balancing equation.” Amodeo II, 71 F.3d at
1050–51 (internal quotation omitted) (alteration in Amodeo II).
Given these circumstances, the parties are directed to redact the Employee’s name
and any other identifying information from the publicly filed copies of Movants’ objections (Dkt.
No. 201) and reply brief (Dkt. No. 224), and from Plaintiffs’ opposition brief (Dkt. No. 221). See

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United States v. King, No. 10 Cr. 122 (JGK), 2012 WL 2196674, at *3 (S.D.N.Y. June 15, 2012)
(redacting submissions that included medical information of third parties).
The Clerk of Court is directed to terminate Dkt. Nos. 200, 220, and 223.
Dated: New York, New York
February 15, 2021

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