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Ad Astra Recovery Services, Inc. v. Heath

United States District Court, D. Kansas

November 8, 2019

AD ASTRA RECOVERY SERVICES, INC., Plaintiff,
v.
JOHN CLIFFORD HEATH, ESQ., et al., Defendants.

          MEMORANDUM AND ORDER

          Angel D. Mitchell U.S. Magistrate Judge

         This matter comes before the court on Plaintiff's Motion to Compel the Production of Additional Audio Recordings by Defendants (ECF No. 75). Plaintiff Ad Astra Recovery Services, Inc. (“Ad Astra”) is a debt collector that alleges defendants ran a fraudulent credit repair scheme that bombarded Ad Astra with false credit dispute letters. Ad Astra previously moved to compel Defendant Lexington Law Firm (“Lexington Law”) to produce audio recordings between it and 100 of its consumer clients to determine, among other things, whether the clients directed Lexington Law to dispute their debts with Ad Astra. In determining whether the requested discovery was proportional, the court found that it lacked the information necessary to evaluate the relevance of the material because it was largely unknown what would be revealed via the recordings. The court limited the request to a sample of recordings involving ten of Lexington Law's consumer clients of Ad Astra's choosing and, once Ad Astra had a chance to evaluate those, granted leave for Ad Astra to move to seek additional recordings. See Ad Astra Recovery Servs., Inc. v. Heath, No. 18-1145-JWB-ADM, 2019 WL 4466903, at *5 (D. Kan. Sept. 18, 2019).

         Ad Astra now requests a second production of recordings involving 25 consumer clients. Ad Astra argues that the first production contains highly relevant information and that Ad Astra requires more. Lexington Law largely disputes Ad Astra's stated reasons for relevance and contends the discovery is disproportional to the needs of the case. For the reasons stated below, Ad Astra has established that the recordings are important to resolving the issues at stake, and Lexington Law has not offered specific or reliable support for its contention that the burden of producing the material would outweigh its likely benefit. The motion is therefore granted.

         I.BACKGROUND

         Ad Astra is a debt collector and credit agency that alleges the “defendants engaged in a fraudulent credit-repair scheme designed to bombard debt collectors with false credit dispute letters with the intention of deceiving debt collectors . . . and frustrating their efforts to collect legitimate debts.” (Compl. ¶ 3 (ECF No. 1).) Ad Astra asserts mail fraud, wire fraud, and conspiracy claims under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§1962(c) and (d). Ad Astra also asserts Kansas common law claims for fraud and tortious interference with existing contractual relationships. The defendants are John C. Heath, Attorney at Law, PLLC, doing business as Lexington Law Firm; Lexington Consumer Advocacy, LLC; John Clifford Heath, Kevin Jones, Adam C. Fullman; and Progrexion Teleservices, Inc. and Progrexion Holdings, Inc. The individual defendants are attorneys with Lexington Law. The Progrexion defendants are the law firm's printer and mass mailer.

         The court previously outlined the circumstances giving rise to this discovery dispute in its prior Memorandum and Order and will only briefly summarize them here. See Ad Astra Recovery Servs, 2019 WL 4466903, at *1-*2. Ad Astra's Request for Production (“RFP”) No. 89 seeks “[c]all recordings between Lexington Law Firm and consumers that hired Lexington Law Firm to address debts Ad Astra was attempting to collect.” (ECF No. 34-2, at 30.) Lexington Law responded by asserting multiple objections, including that “the burden of responding was not proportional to the issues in the present action.” (Id.) Ad Astra previously moved to compel production of recordings involving 100 of Lexington Law's consumer clients. Lexington Law argued that the audio recordings were duplicative of documentary evidence already produced- specifically, notes in the client files memorializing the substance of the calls. Lexington Law also argued that production of the recordings was not proportional to the needs of the case. The court determined that, because what was on the recordings was entirely unknown, it lacked the information needed to evaluate the proportionality of the requested discovery. So, the court ordered a limited production of recordings from ten consumer clients and granted Ad Astra leave to seek additional recordings if Ad Astra could show that the recordings are sufficiently important to resolving the issues at stake and are not unreasonably cumulative or duplicative of documentary evidence already produced.

         According to Ad Astra's motion, Lexington Law produced 580 recordings associated with the ten consumer clients identified by Ad Astra. (ECF No. 76, at 3.) Of those, 243 were duplicate copies, leaving 337 non-duplicate copies of recordings ranging from five minutes to an hour. Ad Astra argues that those recordings contain evidence that is highly relevant to the issues in this case and is not contained in the documentary evidence already produced. Ad Astra requests that Lexington Law produce additional recordings from 25 consumer clients. Lexington Law disputes the relevance of the requested material and still rests on its previous proportionality objection.

         II. LEGAL STANDARD

         “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” Fed.R.Civ.P. 26(b)(1). In other words, considerations of both relevance and proportionality now expressly govern the scope of discovery. Fed.R.Civ.P. 26(b)(1) advisory committee's note to the 2015 amendment. When evaluating proportionality, the court considers “the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed.R.Civ.P. 26(b)(1). The party resisting discovery on proportionality grounds still bears the burden to support its objections. Fed.R.Civ.P. 26(b)(1) advisory committee's note to the 2015 amendment (“Restoring the proportionality calculation to Rule 26(b)(1) does not change the existing responsibilities of the court and the parties . . . .”); Nat'l R.R. Passenger Corp. v. Cimarron Crossing Feeders, LLC, No. 16-CV-1094-JTM-TJJ, 2017 WL 4770702, at *4 (D. Kan. Oct. 19, 2017) (“The party resisting discovery bears the burden to support its objections based upon proportionality[.]”). The practical effect of the rule is that both parties must typically provide information pertinent to the proportionality analysis. See In re Bard IVC Filters Prod. Liab. Litig., 317 F.R.D. 562, 565 (D. Ariz 2016); Fed.R.Civ.P. 26(b)(1) advisory committee's note to the 2015 amendment (“The parties and the court have a collective responsibility to consider the proportionality of all discovery and consider it in resolving discovery disputes.”). This is because

[a] party claiming undue burden or expense ordinarily has far better information - perhaps the only information - with respect to that part of the determination. A party claiming that a request is important to resolve the issues should be able to explain the ways in which the underlying information bears on the issues as that party understands them. The court's responsibility, using all the information provided by the parties, is to consider these and all the other factors in reaching a case-specific determination of the appropriate scope of discovery.

         Fed. R. Civ. P. 26(b)(1) advisory committee's note to the 2015 amendment. “No single factor is designed to outweigh the other factors in determining whether the discovery sought is proportional, and all proportionality determinations must be made on a case-by-case basis.” Oxbow Carbon & Minerals LLC v. Union Pac. R.R. Co., 322 F.R.D. 1, 6 (D.D.C. 2017). The court retains an independent ongoing obligation to assess proportionality. See Fed. R. Civ. P. 26(b)(2)(C) (providing that, on a motion or on its own, the court must limit the frequency and extent of disproportional discovery); see also Fed. R. Civ. P. 26 advisory committee's notes to the 2015 amendment (stating the court has a “responsibility to consider the proportionality of all discovery and consider it in resolving discovery disputes”).

         III.ANALYSIS

         The parties focus on two of the proportionality considerations: (1) the importance of the discovery in resolving the issues and (2) whether its burden or expense outweighs its likely benefit. The court will do the same, starting first with Ad Astra's argument that the recordings contain highly relevant material unavailable in documentary evidence already produced.

         A. Importance of the ...


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