Ciesniewski v. Aries Capital Partners, Inc.

          ORDER ON PLAINTIFF'S MOTIONS TO COMPEL AND TO STRIKE

          Tim A. Baker United States Magistrate Judge

         I. Introduction

         In the underlying action, Plaintiff James Ciesniewski alleges that Defendants Aries Capital Partners, Inc. and the Palisades Defendants^[1] enforce and/or attempt to enforce judgments without a legal basis. Ciesniewski claims that the Palisades Defendants acquire judgments from businesses and employ Aries to service the judgments, and that Aries engages lawyers and law firms to collect the judgments. But according to Ciesniewski, some of these collections efforts run afoul of the Fair Debt Collection Practices Act because of a lack of a valid assignment from the original business who won the judgments and because the businesses had dissolved. Ciesniewski calls the dissolved businesses “dead companies.” A discovery dispute resulted concerning the actions to enforce dead companies' judgments and the lawyers and law firms involved.

         After trying to resolve this discovery dispute via phone calls and email, as well as a conference with the Magistrate Judge, the parties felt motions practice was necessary. Ciesniewski filed the instant motion to compel. Aries and the Palisades Defendants filed separate responses. In responding to the motion and with the Court's leave, the Palisades Defendants filed a surreply, but Ciesniewski filed a motion to strike it.^[2] The Court now considers both motions together, denies Ciesniewski's motion to strike [Filing No. 142], and grants in part and denies in part Ciesniewski's motion to compel. [Filing No. 119.] Defendants shall have until July 16, 2019, to provide any responsive documents. Ciesniewski's request for his attorney's fees is denied.

         II. Motion to Strike

         Ciesniewski's motion to strike argues the Court should strike the Palisades Defendants' surreply because it relies on new and improper evidence. The surreply includes a declaration from the Palisades Defendants' vice president of business development. [Filing No. 140.] Ciesniewski argues the Court did not grant the Palisades Defendants leave to file the supporting declaration, and regardless, the declaration attempts to improperly present legal interpretations and conclusions as evidence. [Filing No. 142, at ECF pp. 1-2 (citing Good Shepard Manor Found. v. City of Momence, 323 F.3d 557, 564 (7th Cir. 2003)).]

         Ciesniewski's arguments are unpersuasive. First, Ciesniewski argues that “the proper purpose of a [sur]reply brief is to reply, not to present new evidence, ” which is ironic given that the Court permitted the surreply because Ciesniewski included a new argument in his reply. [Id. at ECF p. 2.] The declaration evidence is responsive to Ciesniewski's new argument concerning agency and sub-agency, and there is nothing inherently improper about including it. Second, though Ciesniewski asserts that the declaration presents a legal argument, Ciesniewski fails to point to supposed offending language. The declaration does not cite legal standards, and contrary to Ciesniewski's contention, the declaration does not claim there is no agent or subagent relationship. Rather, it properly provides testimonial evidence that may support that position. [Filing No. 140, at ECF pp. 1-2.] Third, the bulk of the motion to strike presents counter arguments to those in the Palisades Defendants' surreply, meaning most of Ciesniewski's motion to strike is really a sur-surreply. [Filing No. 142, at ECF pp. 2-3, ¶¶3-6.] And unfortunately, much of the Palisades Defendants' response to the motion to strike is largely a sur-sur-surreply. [Filing No. 143, at ECF p. 1.] Enough is enough. The motion to strike is denied.

         III. Motion to Compel

         The motion to compel concerns Ciesniewski's efforts to certify a nationwide class. Ciesniewski seeks “all documents responsive to [Ciesniewski's] First Set of Discovery Requests that relate to the issues of class size and the network of attorneys retained to enforce judgments on behalf of dead companies.” [Filing No. 119, at ECF p. 6.] Ciesniewski points to cases in which courts have permitted similar pre-certification discovery into the size of the potential class. [Filing No. 119, at ECF p. 6 (citing Muha v. Encore Receivable Management, Inc., 236 F.R.D. 429, 430 (E.D. Wis. 2006); Lucas v. G.C. Serv's, LP, 226 F.R.D. 328 (N.D. Ind. 2004); Gray v. First Winthrop Corp., 133 F.R.D. 39 (C.D.Cal. 1990); Zahorik v. Cornell Univ., 98 F.R.D. 27 (N.D.N.Y. 1983); Walker v. World Tire Corp., Inc., 563 F.2d 918, 921 (8th Cir. 1977); McCray v. Standard Oil Co., 76 F.R.D. 490, 500 (N.D. Ill. 1976)).] Aries argues in response that the request for class size data is premature, the motion is untimely, and the discovery is not proportional to the needs of the case. [Filing No. 120.] The Palisades Defendants separately respond that the requested documents are not in its control. [Filing No. 121.]

         a. Aries' Response

         Aries does not meet its burden in opposing the motion to compel. See Belcastro v. United Airlines, Inc., 17 C 1682, 2019 WL 1651709, at *4 (N.D. Ill. Apr. 17, 2019) (objecting party “bears the burden of showing why the request is improper”). Aries cites Swelnis v. Universal Fidelity L.P., No. 2:13-cv-104-PRC, 2014 U.S. Dist. LEXIS 53058, at *8 (N.D. Ind. Apr. 17, 2014), arguing that discovery into a putative nationwide class is premature because Aries concedes that there are 63 putative class members in Indiana, which should be sufficient to satisfy the numerosity requirement to certify an Indiana class. [Filing No. 120, at ECF pp. 3-4.] While Swelnis supports the position that discovery into class size is not necessary when the parties already have a good estimate, nothing in the case supports Aries' position that it can cut off discovery into the size of a putative nationwide class because the numerosity requirement has likely been met for a statewide class. See Swelnis, 2014 U.S. Dist. LEXIS 53058, at *8. While there may be some wisdom in testing the waters by attempting to certify an Indiana class before expanding nationwide, Aries provides no authority suggesting it can force Ciesniewski to take this route.

         Aries next argues that the motion is untimely. As Ciesniewski explains, however, the delay was largely beyond his control. Ciesniewski filed the motion to compel a month before the close of discovery. As Aries points out, Seventh Circuit courts have found motions to compel filed near the discovery deadline to be untimely. See, e.g. Wilbur v. County of Waukesha, No. 14-cv-0046-PP, 2016 U.S. Dist. LEXIS 99835, at *8 (E.D. Wis. July 28, 2016); Ridge Chrysler Jeep, L.L.C. v. Daimler Chrysler Servs. N. Am., L.L.C., No. 03 C 760, 2004 U.S. Dist. LEXIS 26861, at *4 (N.D. Ill.Dec. 29, 2004). However, Ciesniewski persuasively explains that he raised the issue well before the deadline, but the required process to bring a motion to compel ran up to the deadline.^[3] [Filing No. 119, at ECF pp. 2-4.] Ciesniewski broached the issue with the Palisades Defendants on January 31, 2019, and with Aries on February 14. The parties discussed the issue in calls on February 19 and March 1 but did not reach an agreement. The parties promptly requested the required Local Rule 37-1 conference with the Magistrate Judge. At that March 15 conference, Ciesniewski was ordered to produce examples of alleged improper collections occurring outside Indiana, and Ciesniewski produced the examples on April 1. Defendants responded on April 24, indicating their continued objection to the discovery, and Ciesniewski filed his motion on May 14. Nothing in this scenario suggests Ciesniewski lacked diligence, and the Court will not deny the motion as untimely.

         Finally, Aries argues the discovery is not proportional to the needs of the case, as required by Rule 26(b)(1). In determining whether discovery is proportional, 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). Aries argues that the discovery would be exceptionally time consuming and difficult because it would have to scour dockets all across the country, looking for enforcement actions brought in the name of the dead companies and checking individual docket entries. Aries points out that this is the exact same process that Ciesniewski argues would be overly burdensome for him to have to do. However, Ciesniewski replies that Aries retained the lawyers and law firms who filed the enforcement actions, so there is no reason Aries could not obtain the information from its lawyers. The amount in controversy in this potential nationwide class is significant, and Aries is in the best position to access this information. Thus, the Court is not convinced that the discovery of this relevant information would be disproportionate to the needs of the case, and the Court grants Ciesniewski's motion with respect to Aries.

         b. The Palisades ...