FTC v. Am. Future Sys., Inc.
FTC v. Am. Future Sys., Inc.
2022 WL 1437562 (E.D. Pa. 2022)
April 8, 2022
Rohn, James J., Special Master
Summary
The Plaintiffs requested testimony from AFS regarding its organizational structure, activities, and documents related to its telemarketing practices. The court ordered AFS to search the documents of Kamil Yakubov, a custodian, in accordance with AFS's ESI search. The Plaintiffs also provided evidence of AFS's employee file for Crystal Cashwell, which is an example of ESI. The court noted the importance of ESI in this case, as it is likely to yield or lead to the discovery of admissible information.
Additional Decisions
FEDERAL TRADE COMMISSION, et al., Plaintiffs,
v.
AMERICAN FUTURE SYSTEMS, INC., et al., Defendants
v.
AMERICAN FUTURE SYSTEMS, INC., et al., Defendants
CIVIL ACTION NO. 2:20-cv-02266
United States District Court, E.D. Pennsylvania
Filed April 08, 2022
Counsel
Christian M. Capece, Derek E. Diaz, Harris A. Senturia, Maris Snell, Amy C. Hocevar, Fil Maria Debanate, U.S. Federal Trade Commission, Cleveland, OH, for Plaintiff Federal Trade Commission.John Abel, PA Office of Attorney General Bureau of Consumer Protection, Harrisburg, PA, Sarah Anne Ellis Frasch, PA Office of Attorney General, Philadelphia, PA, Derek E. Diaz, Federal Trade Commission, Cleveland, OH, for Plaintiff Commonwealth of Pennsylvania.
Ilana H. Eisenstein, DLA Piper LLP, Philadelphia, PA, David H. Marion, Morgan S. Birch, White and Williams LLP, Philadelphia, PA, Casey A. Coyle, Mark S. Stewart, Eckert Seamans Cherrin & Mellott LLC, Harrisburg, PA, for Defendants American Future Systems, Inc., Progressive Business Publications of New Jersey, Inc., Edward M. Satell.
Stephen M. Hladik, Eric J. Phillips, Pamela L. Cunningham, Hladik Onorato & Federman, LLP, North Wales, PA, for Defendants International Credit Recovery, Inc., Richard Diorio, Jr., Cynthia Powell.
Rohn, James J., Special Master
REPORT AND RECOMMENDATION OF SPECIAL MASTER JAMES J. ROHN RELATING TO DISPUTED TOPICS OF TESTIMONY UNDER FED. R. CIV. P. 30(b)(6)
I. Introduction
*1 This Report and Recommendation concerns the Joint Motion of Plaintiffs Federal Trade Commission and the Commonwealth of Pennsylvania to Compel Defendant American Future Systems Inc. to Designate a Corporate Representative under Rule 30(b)(6) on Various Deposition Topics (hereinafter “Pls.’ Mot. to Compel”) (December 16, 2021) (Doc. 137).
The movants, Plaintiffs Federal Trade Commission (“FTC”) and the Commonwealth of Pennsylvania (the “Commonwealth”) (collectively “Plaintiffs”) ask the Court to overrule the objections defendants American Future Systems, Inc., Progressive Business Publications of New Jersey, Inc., and Edward M. Satell (collectively “AFS”) and order AFS to designative representatives to testify about 12 disputed topics at a deposition noticed under Fed. R. Civ. P. 30(b)(6). The disputed topics mainly concern Plaintiffs’ allegations that AFS engaged in deceptive telemarketing practices in violation of state and federal consumer protection laws.
II. Legal Standards Relating to Rule 30(b)(6) and Deposition Topics
The drafters of Rule 30(b)(6) explained that they intended the rule to serve three purposes. First, the Rule was designed to simplify problems lawyers seeking corporate testimony faced due to the difficulty of figuring out whether a corporate agent qualified as a “managing agent” qualified to testify for the organization. Under prior practice, only corporate officers, directors, or managing agents could testify for a company, and courts often had to decide whether a witness qualified as a “managing agent.”[1]
Second, the Rule purported to curb the practice of “bandying,” a tactic by which corporate executives tried to avoid revealing damaging evidence by giving vague or contradictory testimony. Rule 30(b)(6) addressed this problem by requiring the company to choose witnesses with knowledge whose testimony would be considered binding upon the organization.
The third purpose of Rule 30(b)(6) was to promote efficient discovery by eliminating the need for lawyers to waste time and money deposing multiple corporate employees to find the ones with pertinent information by making the company responsible for identifying identifying witnesses with knowledge of the relevant subject matter.[2]
*2 Rule 30(b)(6) requires the party seeking discovery to inform the organization to be deposed about the subject matter of the deposition testimony beforehand. The Rule states that the party noticing the deposition “must describe with reasonable particularity the matters for examination.” Id.
The main purpose of the “reasonable particularity” requirement is inform the company, the witness selected to testify, and counsel of “the level of specificity required to ... identify the outer limits of areas of inquiry” at deposition. J.C. Wang, D. Lambrinos, M.L. Murphy, Speak for Yourself: The 30(b)(6) Deposition (Sept. 19, 2016)[3] (citing Tri-State Hosp. Supply Corp. v. United States, 226 F.R.D. 118, 125 (D.D.C. 2005) (“Where ... the defendant cannot identify the outer limits of the areas of inquiry noticed, compliant designation is not feasible.”))[4]
No judicial consensus exists concerning what “reasonable particularity” means, and decisions vary widely about the level of specificity the test requires. In general, topics that clearly define the subject matter and temporal scope of the testimony satisfy the rule. Proposed topics displaying the following drafting errors are often stricken for failing to satisfy the “reasonable particularity” standard.
Proposed topics that lump together unrelated or marginally related subject matter[5] often fail the “reasonable particularity test,” as do those that would require a witness to master an unreasonably large body of knowledge,[6] or leave a witness in doubt about the metes and bounds of the subject matter concerning which he or she must testify on pain of sanctions.
Topics that include phrases such as “including but not limited to,” “all information related to,” “all facts supporting,” and other similarly expansive language are “red flags” of overbreadth because they by their nature blur the boundaries of a witness's testimony.[7]
*3 Courts also take a dim view of topics that would require a corporate representative to devote unreasonable time to preparation,[8] to master detailed data-based subject matter,[9] or testify about all of an organization's answers to one or more sets of discovery covering varied subject matter. Topics of the latter type often not only fail to meet Rule 30(b)(6)’s “reasonable particularity” requirement, but also violate the prohibition of Rule 26 against cumulative and duplicative discovery.[10]
III. The Special Master's Analyses and Recommendations
A. The Disputed Topics
Plaintiff's and AFS were not able to reach an agreement on the following 12 of 28 proposed topics of testimony to be provided by an AFS corporate representative at a Rule 30(b)(6) deposition: 1, 2, 3, 5, 16, 17, 23, 24, 25, 26, 27, and 28. Memorandum in Support of Joint Motion of Plaintiffs Federal Trade Commission and Commonwealth of Pennsylvania a to Compel Defendant American Future Systems, Inc. to Designate a Corporate Representative Under Uder Rule 30(b)(6) on Various Deposition Topics 1 n.1 (hereinafter “Pls. Mem. in Supp.”) (Dec. 16, 2021) (Doc. No. 137-2.)
This Report and Recommendation will address the topics in dispute in numerical order, except when multiple topics involve the same or similar issues and may be addressed in a single analysis.
Each of the 12 sections of the Report and Recommendation will begin by quoting the disputed topic, followed by the Special Master's legal analysis of, and close with the Special Master's recommendation to the Court as to whether Plaintiff's motion should be granted or denied.
On March 10, 2022, Plaintiffs served a letter brief and appendix attaching discovery recently received from AFS that had a bearing on several of the disputed topics. The letter brief and appendix were not filed electronically on the Pacer system, and the “cc” list on the signature page does not indicate that the Court received a copy. The March 10 letter brief and appendix (hereafter “Pls.’ March 10 Letter Br.”) is attached as Exhibit A.*
At points, the Special Master offers for the Court's considerations revisions to the proposed topic's language with the understanding that Court has total discretion to accept, reject, or change the modification as it sees fit. Such modifications were intended to serve the following purposes:
(a) to clarify the topic of testimony, correct errors, or restructure the topic to put the language of clauses of the subsections in parallel form;
*4 (b) to present the subject matter of the proposed topic more clearly deleting cluttering language better suited to be included in separate “Definitions or “Instructions” sections preceding the topic list;
(c) to limit the temporal scope of the proposed topic to the period of July 1, 2015 to the present which the Court established by prior Order;
(d) to delete from an otherwise appropriate topic language that the Master believed to be inappropriate.
At several points, the recommendation noted recurring problems (for example, a party's apparent failure to make full discovery disclosures) which the Special Master believes could delay discovery and the ultimate resolution of the case.
The Disputed Topics of Rule 30(b)(6) Testimony
A. Proposed Topics 1 and 2
Proposed Topic 1
The organizational structure of BPB, including its divisions, subdivisions, its divisions, subdivisions, branches, managers, supervisors, and leaders or directors for purposes of Exhibit A, “PBP” and “AFS” are used interchangeably to refer to Defendant American Future Systems, Inc., also d/b/a Progressive Business Publications, Progressive Business Publication, Inc. and Center for Education & Employment Law.
Proposed Topic 2:
PBP's organizational charts produced at PBP000216 and AFS0000213, including descriptions of the scope of work of the various areas shown on the charts, duties of managers at different levels, and any changes in organization since January 1, 2015.
The Special Master's Analysis of Proposed Topics 1 and 2
Plaintiff's proposed Topic 1 and 2 both seek the appointment of a corporate designee to testify concerning PBP's (and AFS's) organizational structure. In their opening brief, Plaintiffs argue that that organizational information could reveal whether AFS has made any structural changes in the wake of the FTC's investigation of the company's alleged deceptive telemarketing practices to conceal those practices from scrutiny during these proceedings. Any such organizational changes, Plaintiffs contend, would make it harder for Plaintiffs’ to locate evidence to prove that AFS's deceptive conduct would likely continue unless the Court grants the injunctive relief Plaintiffs seek in First Amended Complaint (“Am. Comp.”) Pls.’ Mem. in Supp. 6-8.
AFS opposes the proposed topic on the ground that AFS has “multiple streams of business unrelated to the claims brought by Plaintiffs ...” and that what those businesses did is beyond the pale of relevant discovery. AFS's Memorandum of Law in Opposition to Plaintiffs’ Joint Motion to Compel Defendant American Future Systems, Inc. to Designate a Corporate Representative Under Rule 30(B)(6) on Various Deposition Topics 7 (hereinafter “AFS's Mem. in Opp.”) (December 31, 2021) (Doc. No. 146).
AFS's brief also argues here, and at several other points, that the company shut down its telemarketing operation in the fall of 2021, and so the Plaintiffs’ have no legitimate interest in AFS's other businesses unrelated to the activity that caused Plaintiffs’ to investigate its business practices and to file this suit. Id. at 5, 8-9, 14.
On March 10, 2022, Plaintiffs sent the Special Master the March 10 Letter Brief which relies heavily on audiotapes AFS recently produced in discovery. Those tapes, Plaintiffs argue, call AFS's claim that the company has abandoned telemarketing into question. According to Plaintiffs, AFS never stopped telemarketing, but just moved its telemarketing operations to an entity named “SuccessFuel,” a fictitious name entity created by AFS in September 2021.
*5 The tapes contain recorded conversations of what sound like promotional calls to businesses on behalf of newsletters such as CFO Daily and HR Morning, are which affilliated with SuccessFuel. Pls.’ March 10 Letter Brief App. 10.
The audiotapes provided with Plaintiff's March 10 Letter Brief captured the telemarketers in telephone conversations with corporate managers on September 21, October 14, and November 4, 2021, all dates after AFS claimed to have closed its telemarketing operation on September 3, 2021. Id. at 2. During the conversations, the phone sales staff used tactics that resembled those Plaintiffs described in Amended Complaint, but for business publications not mentioned in that pleading.
The Amended Complaint focused on sales practices AFS and its co-defendants had used to sell subscriptions to business publications under the trade names “Progressive Business Publications” or the “Center for Education and Employment Law.” See generally Am. Comp. ¶¶ 17-31.
The audiotapes recorded in 2021 provided with Plaintiffs’ March 10 Letter Brief record the telemarketers obtaining the email addresses of the employees with whom they are speaking. They do not, however, mention subscriptions.
The techniques the telemarketers used to interest customers in the various newsletters at points resembled those which Plaintiffs described in the Amended Complaint. For example, some telemarketers told receptionists that the calls concerned “your company's account with our company,” leaving the impression that the two companies had a business relationship, even though that did not appear to be true. The Amended Complaint avers that AFS telemarketers were trained to use such tactics to disguise the fact that they were making a sales call. See Am. Compl. ¶ 21.
In its reply, AFS claims that the audiotapes Plaintiffs cited in the Letter Brief did not involve telemarketing, were produced by mistake, and that the calls were not made on behalf of AFS. Response to Plaintiffs’ March 10, 1022 Supplemental Letter December 16, 2021 Joint Motion 2. (hereinafter “AFS's Resp. to Pls.’ March 10 Br.”) (Doc. No. 161) (March 17, 2022).
AFS also urges the Court to not be swayed by Plaintiffs’ arguments because the callers were not really telemarketers since SuccesssFuel is “non-publication, non-subscription” division of AFS. Id. at 2. AFS provided no evidence to support either of the company's explanations.
AFS's reply also attempts to refute Plaintiffs’ May 10 submission arguing that SuccessFuel, the company responsible for most of the newsletters, “does not engage in outbound telemarketing calls for AFS.” Id. (Emphasis in original).
AFS's objection on this point has no merit. Legally, AFS is SuccessFuel. Pennsylvania Department of State records identify only one company named SuccessFuel, which was registered as a fictitious name for AFS on September 20, Exhibit A at App. 3. SuccessFuel consequently is a name under which AFS does business, and has no independent corporate existence. See 54 Pa. C.S. § 332 (registration under the Fictitious Names Act “imparts no right to the registering entity other than that of conducting business by it under a fictitious name....”)
In other words, any marketing calls SuccessFuel made between September 20, 2021 to the present was a telemarketing call made by AFS doing business as its registered fictitious name. “The use of a fictitious name does not create a separate legal entity, but is merely descriptive of a person or corporation who does business under another name.” Burlington Coat Factory of Pennsylvania, LLC v. Grace Const. Management Co., LLC, 2015 PA Super 227, 126 A.3d 1010, 1024 (2015). If so, AFS's claim to have abandoned the telemarketing business after September 20, 2021 is arguably untrue.
*6 The Special Master agrees that Plaintiffs’ March 10 brief and the recorded calls from AFS marketers attached provided with that submission do not, without more, refute AFS's contention that AFS because the company stopped making telemarketing calls in September 2021, as it has claimed. Currently, there no facts of record concerning the nature of SuccessFuel's business. Nor is it clear that the purpose of the recorded calls that were the subject of Plaintiffs’ letter brief was to sell subscriptions, although the nature of the calls may suggest that they were part of a telemarketing effort to sell something.
The Special Master concludes that documents and audiotapes Plaintiffs’ provided on March 10 has raised an issue of disputed fact concerning whether AFS actually ceased its telemarketing operations on September 3, 2021, or carried them on under a new name, SuccessFuel. This existence of this dispute weighs in favor of granting Plaintiff ‘s motion to compel AFS to identify a corporate witness to testify concerning AFS's corporate structure.
The Special Master further finds that the subject matter of the proposed topic of is reasonably particularized, and, for reasons discussed above, is calculated to result in the discovery of material facts known to the corporation. Such a deposition will lead to the discovery of potentially relevant evidence concerning whether SuccessFuel, or any other AFS division or fictitiously named entity doing business on AFS's behalf, is engaged, or planning to be engaged, in telemarketing marketing and sales.
Testimony concerning AFS's business structure will also lead to the discovery of evidence relevant to Plaintiffs’ request for injunctive relief. Evidence from the deposition that supports Plaintiffs’ thesis that AFS's reorganization was a ruse designed to perpetuate the company's deceptive telemarketing practices under a different corporate moniker would be pertinent to the Court's decision as to whether to grant injunctive relief. In re Sanctuary Belize, 482 F. Supp. 3d 373, 467398 (D. Md. 2020) (court considering injunctive relief “may consider ... the degree of transferability of the unlawful behavior to other products”); SEC v. Dubovoy, Civil Action No. 15-6076, 2021 U.S. Dist. LEXIS 117006, at *9 (D.N.J. June 23, 2021) (identifying probability of recurring misconduct as factor favoring injunctive relief).
Finally, the Special Master finds the subject matter that organizational discovery would not impose an undue burden on AFS. Although AFS has not to date claimed that discovery of its corporate structure would result in the disclosure of trade secrets or proprietary information, any concerns on that score AFS has could be addressed by the Stipulated Confidentiality Order the Court has entered. (Doc. 5) (Feb. 11, 2021).
The Special Master's Recommendation on Proposed Topics 1 and 2
The Special Master recommends that Plaintiffs’ motion to compel AFS to identify a corporate designee to testify concerning the matters described in Proposed Topic 1 be granted as modified below:
Topic 1
The organizational structure of AFS, PBP and its other divisions, subdivisions, branches, mangers supervisors, and leaders or directors for each division and subdivision from July 1, 2015, to the present.
The revised topic eliminates Topic 2 as superfluous because the topic merely identifies organizational charts pertinent to subject matter of Topic 1. A party designating a Rule 30(b)(6) witness to testify has a duty to prepare the witness to testify by reviewing documents relevant to the topic that will be the subject of testimony beforehand. See, e.g., Miles v. Elliot, No. 94-4669, 2011 U.S. Dist. Lexis 25143 at *24-25 (E.D. Pa. Mar. 10, 2011) (O'Neill, J.) (imposing sanctions upon party for failing adequately to prepare Rule 30(b)(6) witness because it did not “require them to review pertinent documents, or at least have more extensive meetings with counsel” before the deposition).[11]
B. Plaintiffs’ Proposed Topics 3 and 26
*7 Proposed Topic 3:
Factual statements contained in:
a) PBP's written responses to the Federal Trade Commission's Civil Investigative Demand bates-labeled FTC-00020298-20348; FTC-00020360-20367; FTC-00020396-20404; FTC-00020417-20421; FTC-00020427-20448; FTC-00020462-20470; FTC 00020474-20475; FTC-00020490-20491 (discussion of Susan Grabert's documents only); and FTC-00020505-20506;
b) PBP's written responses to the FTC's First and Second Sets of Interrogatories to Defendant American Future Systems, Inc., and
c) PBP's written response to the Commonwealth's First Set of Interrogatories to Defendant American Future Systems, Inc.
Proposed Topic 26
Accounts associated with the individuals or entities listed united with the individuals or entities listed in Request 60 of the Plaintiff Federal Trade Commission's Second Requests for Production of Documents to Defendant American Future Systems, Inc., Request 61 of Plaintiff Commonwealth of Pennsylvania's First Requests for Production of Documents to Defendant American Future Systems, Inc. and Request 1 of the Plaintiff Federal Trade Commission's and Commonwealth of Pennsylvania's First Joint Requests for Production of Documents to Defendant American Future Systems, Inc., including 1) the date and substance of all telephonic or written communications with the individuals or entities since July 1, 2015; 2) what AFS knew as of July 1, 2015 or after as to the individual or entities authority to enter into subscriptions and any requests to not be contacted by AFS; 3) AFS's sending of publications or invoices to the individuals or entities since July 1, 2015; 4) information that existed in AFS's subscriber database at or after July 1, 2015, regarding the individuals or entities., 5) AFS's treatment of any request since July 1, 2015 by the individual or entity to cancel; 6) communications with any debt collector since July 1, 2015 regarding the collection of any account associated with the individuals or entities; 7) attempts by AFS to pursue payment since July 1, 2015 on any account associated with the individuals or entities; and 8) 2015 regarding a Complaint pertaining to any account associated with the individuals or entities.
This Topic, as with all other Topics, specifically excludes any attorney-client and/or work product protected communications.
Special Master's Analysis of Proposed Topics 3 and 26
Proposed topics 3 and 26 are “list” topics which string together discovery responses, requests for information about individual accounts and potentially hundreds of unrelated subjects and facts. For example, Request 26 consists of approximately 10 subparts. Two of those subparts would require AFS's corporate designee to have command of all information in the company's possession concerning::
(4) information that existed in AFS's subscriber database at or after July 1 2015, regarding the individuals or entities” [The terms “individuals” and “entities” are not defined].
(7) “attempts by AFS to pursue payment since July 1, 2015 on any account associated with the individuals or entities.”
*8 AFS estimates that Topic 26, broken down by subparts covers “in total 200 topics of testimony ....” AFS Mem. In Opp. 13-14 (delineating topics) (emphasis in original).
Proposed Topics 3 and 26 do not satisfy the reasonable particularity requirement of Rule 30(b)(6), and are overbroad, unduly burdensome, and cumulative and duplicative of other discovery. These multiple subparts of Proposed Topic 26 place no limitation on the nature of the information about which the corporate witness would have to testify, and would require AFS to prepare a witness to testify to a hodgepodge of unrelated topics.
The most diligent corporate witness would find it difficult, if not impossible, to recall the “information that existed in the AFS subscriber database on or after July 1, 2015, regarding the individuals of entities” identified in three of the FTC's requests for production of documents. Proposed Topic 26, subpart 4.
Topic 3 asks the corporate designee to testify concerning, among other things, 62 pages that defendant Progressive Business Publication provided in response to the FTC's Civil Investigative Demand, plus PBP's answers to three sets of interrogatories.
Courts sometimes permit testimony seeking supplemental information about a party's responses to discovery requests that concern the same subject. On the other hand, judges tend to strike blunderbuss “topics” that would require the corporate witness to testify about the answers in multiple sets of discovery because they do not satisfy the “reasonable particularity” requirement. Wash. St. Tammany Elec. Coop., Inc. v. La. Generating, L.L.C., No. 17-405-JWD-RLB, 2019 U.S. Dist. LEXIS 69489, at *34 (M.D. La. Apr. 24, 2019) (denying plaintiff ‘s request for Rule 30(b)(6) testimony concerning party's first set of interrogatories and document requests on ground proposed topic was insufficiently particularized and cumulative of other discovery).[12]
Plaintiffs rely upon dicta from Nippo Corp./Int'l Bridge Corp. v. AMEC Earth & Envtl., Inc., No. 09-cv-0956, 2010 U.S. Dist. LEXIS 13709 (E.D. Pa. Feb. 12, 2010) (Rufe, J.) in support of Topic 3 and another proposed topic (No. 23). The Nippo court observed that, “The ‘reasonable particularity’ requirement in Rule 30(b)(6) merely requires that the requesting party describe topics with enough specificity to enable the responding party to designate and prepare one or more deponents.” Id. at *5.
*9 Plaintiffs appear to have misconstrued this short passage from the Court's opinion to mean that a proposed topic that lumps together multiple subjects of testimony passes the “reasonable particularity” test so long as the topic specifically identifies the documents that the topic is to cover. Stated differently, Plaintiffs have conflated the terms “topic” and “documents,” and concluded that a proposed topic can cover an unlimited array of subject matter so long as the documents that are to be the subject of testimony are specifically identified.
It is instructive to compare the topics at issue in Nippo with the topics Plaintiff drafted citing that case as authority.
The Nippo court analyzed whether the following three topics satisfied the “reasonable particularity” requirement and held that they did. The court quoted each proposed topic of testimony as follows:
Topic 11 requests the Defendants explain their “bases for amending and/or waiving the specifications related to hot mix asphalt to obtain approval from the Air Force for the hot mix asphalt job mix that was ultimately used on the Project;”
Topic 17 asked for the “reasons, according to [Defendant] why [Defendant and others] ... were unable to develop a HMA job mix formula that met the original [Project specifications];”
Topic 19 asked Defendant to describe Defendant's “direction to [Plaintiff] regarding spall repair, hand-finishing, excess paste, and rain damage.”
Id. at *4-*5.
The Rule 30(b)(6) topics quoted above concern subjects relevant to the suit that are narrowly focused, not to explain written answers to discovery requests.
The topics are written in concise, understandable language that describes subjects whose boundaries are clear. One topic asks for information about a discrete event; the second asks for the reasons why defendant could not do something; the third for more specific information about directions the defendant gave. The corporate designee who read the topics in Nippo likely understood immediately what types of questions he or she would be asked, and understood their evidentiary significance.
The word “particularity” connotes a focus on the specific, rather than the general. See Oxford English Dictionary (3d ed. 2010) (definition of “particularity” 3.a.) “The fact or quality of being particular as opposed to general or universal; the fact of being or relating to one or some, but not all, of a class; relation to an individual thing....” Proposed topics 3 and 26 do not relate to any particular subject matter, but range over a multitude of different topics, few of which may be discerned from the text. The corporate witness facing topics 3 and 26 could not find the boundaries of his or her potential testimony with binoculars.
The Special Master's Recommendation on Proposed Topics 3 and 26
The Special Master recommends that the Court deny Plaintiff's motion to require ASF to designate a Rule 30(b)(6) witness to testify concerning Proposed Topics 3 and 26 because the topics do not satisfy the reasonable particularity requirement of Rule 30(b)(6), are unduly burdensome, involve unrelated subject matter, and duplicate discovery already conducted.[13]
C. Proposed Topic 5
With respect to the following law enforcement actions, lawsuits, legal proceedings, or investigations (“actions”) in which PBP was a party or subject of investigation and the following entities were either the opposing party or investigator
a. The United States Postal Service;
b. The Wisconsin Attorney General;
c. The Better Business Bureau;
d. The Commonwealth of Pennsylvania, Office of the Attorney General; or
*10 e. One of the “other state attorneys general” referred to in paragraph 1.p of ECF No. 19,
this Topic seeks testimony on the allegations of the actions, the course of the actions, AFS's understanding of the resolution of the actions, whether Edward Satell “was made aware of” any of the actions, and any changes to AFS's policies, procedures, or business activities as a result of any of the actions.
This Topic also seeks testimony on these actions as they relate to AFS's defenses, including equitable estoppel, unclean hands and the FTC and the BBB individually and collectively have fabricated the customers experiences with AFS.” (See, e.g., ECF 91, 11107, 110, 114.)
This Topic, as with all other Topics, specifically excludes any attorney-client and/or work product protected
Special Master's Analysis of Proposed Topic 5
(A) Plaintiffs’ Request for Pre-Discovery Period Evidence.
This proposed topic seeks testimony concerning what AFS knew about five inquiries, investigations, or reports relating to allegations in the Amended Complaint that the company had used deceptive telemarketing tactics to dupe companies and organizations into paying for subscriptions the had never agreed to purchase. The list is followed by an “addendum” that expands, modifies, and explains the information sought by the proposed topic.
The five subtopics listed in Proposed Topic relate to allegations in the Amended Complaint which would ordinarily be appropriate for a Rule 30(b)(6) depositions because they relate to facts or events relating to the parties’ claims. lawsuits, government actions or investigations, and complaints compiled by a consumer organization, all relating to AFS's alleged deceptive marketing practices.
The difficulty with the Proposed Topic stems from the fact that certain specific events listed in subparts (a)-(e) occurred many years before the starting date of the discovery period (July 15, 2015) the Court established by its prior orders.[14]
For example, the litigation between AFS and the U.S. Postal Service that is the subject of subpart (a) of the proposed topic settled in 1995, 20 years before the commencement of the discovery period. See Am. Compl. ¶ 31. The Amended Complete also describes a dispute between the Better Business Bureau (“Better Business Bureau” or “BBB”) that began in 1998 and culminated in an unsuccessful lawsuit filed against the BBB that ended in 2004, 11 years before the discovery period began. See id. ¶ 27.
Plaintiff's brief explains that Plaintiffs “oppose any imposition of [the Court's] temporal limitation with respect to Topic 5,” and therefore ask the Court to lift the time restriction on discovery for the purposes of this deposition topic only. Pls.’ Rep. Br. 3-4 (emphasis in original). Plaintiffs argue that the Court should lift the limitation, first, because evidence concerning the earlier events inform some of AFS's defenses; and second, because what AFS CEO Edward Satell's knew about these events “should have shaped AFS's sales practices from July 2015 forward.” Pls.’ Mem. in Supp. 5. AFS objects to lifting the time limit on the ground that events that occurred 20 or more years ago are not relevant to this suit. AFS. Mem. in Opp. 6
*11 The Special Master agrees that whatever slight relevance the events that occurred 20 or more years ago might have in this case does not warrant the time and effort that the discovery would require. Plaintiffs’ have not clearly explained how or why events that occurred in the 1990s and 2000s “shaped” AFS's sales practices from 2015 to the present.
The events about which Plaintiffs seek pre-discovery period information are a lawsuit against the U.S. Postal Services filed against AFS in the mid-1990s and AFS's dispute with the Better Business Bureau stemming from alerts the BBB published about BBB business practices based upon consumer complaints. The Postal Service lawsuit ended in a 1995 settlement, and the dispute with the BBB culminated in a defamation action AFS filed against the BBB that AFS lost.
At most, these events show there has been a long history of complaints about AFS's business practices. Because neither event resulted in an adjudication that AFS engaged in deceptive business practices, it seems unlikely that either event would unearth much information that is not already public. Whatever benefit Plaintiffs derive from these events to support their request for injunctive relief on the ground that AFS is a habitual violator of consumer protection laws could be gleaned from facts of record.
The Special Master therefore concludes that whatever evidentiary benefit that Plaintiffs might derive from further discovery concerning pre-2015 would be outweighed by the time and expense discovery concerning events that occurred 20 years ago would require.
Moreover, the Amended Complaint does allege that the Better Business Bureau has continued to receive and publicize complaints about alleged deceptive marketing practice by the AFS after 2015, and that state attorneys general have complaints to AFS that they have received from consumers after 2015. See, e.g., Am. Comp. ¶ 28 (AFS knew “at least as early as 2016 that the BBB had received thousands of complaints against PBP.”)
In his recommendation below, the Special Master has offered for the Court's consideration a modified topic 5 which would permit Plaintiffs’ to question AFS's corporate representative about that company's knowledge of lawsuits, investigations, or complaints that have occurred during the discovery period. This would ensure that Plaintiffs could obtain evidence known to the company about post 2015 events relevant to their request for injunctive relief.
(B) Plaintiff ‘s Request for 30(b)(6) Testimony Concerning Edward Satell's and AFS's Awareness of Complaints Against AFS.
In the latter portion of Proposed Topic 5, Plaintiffs state that that they propose to question AFS's corporate representative about whether CEO Edward Satell “was made aware of” facts relating to the pre-2015 events, as well as more recent criticisms of AFS's marketing practices. The Special Master concludes that such testimony should not be allowed for events predating the Court's discovery period for the reasons stated in the preceding section.
The Special Master also concludes that Rule 30(b)(6) testimony about Mr. Satell's “awareness of” any of the events that occurred during the discovery period would be inappropriate. Plaintiffs apparently want to obtain testimony about Mr. Satell's “awareness” of complaints about AFS's business practices because they have deposed Mr. Satell on this subject some and found his answers to be “self-serving and potentially flawed.” See Pls.’ Rep. Br. at 3. Plaintiff apparently hope that AFS's representative will disclose facts that contradict Mr. Satell's “flawed” testimony about what he knew.
*12 Plaintiffs have cited, and the Special Master's own research has not found, authority supporting Plaintiff ‘s request to conduct a “deposition by proxy” of a corporate representative to ascertain what and when Mr. Satell knew about the events described in subsections (a)-(e) of Proposed Topic 5.
To the contrary, the text of the Rule states that a corporate representative “must testify about information known or available to the organization.” Fed. R. Civ. P. 30(b)(6) (emphasis provided.) Rule 30(b)(6) was intended to be a discovery tool that enabled parties to obtain accurate information about information concerning known to the company, not individual officers and employees who may be subpoenaed in their personal capacity. Accord United States v. Taylor, 166 F.R.D. 356, 361 (M.D.N.C. 1996) (“The testimony elicited at the Rule 30(b)(6) deposition represents the knowledge of the corporation, not of the individual deponents.”)
Topic 5 does not limit the requested testimony to facts known to the corporation, but seeks testimony as to when Mr. Satell “was made aware” of certain events. A 30(b)(6) witness's views about the state of another person's awareness does not come within the Rule.
Refusing to include questions about Mr. Satell's “awareness” of complaints as a Rule 30(b)(6) topic would not prevent Plaintiffs from asking a 30(b)(6) witness whether he or she had informed Mr. Satell about objections to AFS's sales practices, or knew if others had done so. Courts in the Third Circuit have followed the majority position that a Rule 30(b)(6) witness may be questioned about matters beyond the scope of the topic list, and the witness must answer the question if he or she knows the answer. See, e.g., Brand Energy & Infrastructure Servs. v. Irex Corp., No. 16-2499, 2017 U.S. Dist. LEXIS 210357, at *15 (E.D. Pa. Dec. 21, 2017) (Hey, J.) (Rule 30(b)(6) does not condone questioning about personal, as opposed to corporate information).
C. Inaccurate or Prejudicial Language in the Proposed Topic
The Special Master also finds that the wording of proposed Topic 5 incorrectly suggests that AFS has been the subject of multiple lawsuits involving alleged deceptive sales practices relating to the events listed I subparts (a)-(e). AFS collectively refers to those five events as “actions,” which, in the context of litigation, connotes a legal proceeding. See Oxford English Dictionary (3d ed. 2010) (defining “action” in the legal context as “A legal process, a lawsuit.”)
The only event listed subparts (a)-(e) that involved a lawsuit is subsection (a), relating to the suited the U.S. Postal Service filed against AFS which ended in settlement in the 1990s. The suit did not result in a determination that AFS had engaged in wrongful conduct. As far as subparts (a)-(e) imply that AFS has been the subject of multiple formal actions of wrongdoing is inaccurate, and the word “action” should be stricken.
Finally, the Special Master proposes to strike the last two paragraphs of Proposed Topic 5. The penultimate paragraph is extraneous because it explains the rationale for the topic, but does not concern the subject matter or scope of the testimony. The final paragraph explains that the topic does not seek privileged communications, and should be included in the “Instructions” section of the deposition notice.
*13 The Special Master's Recommendation on Proposed Topic 5
For the reasons discussed in the analysis, the Special Master recommends that Plaintiffs’ motion to require ASF to designate a corporate witness concerning Proposed Topic 5 be granted in part and denied in part for the reasons discussed above, and that the Court order ASF to designate a witness to testify at a Rule 30(b) (6) deposition concerning the following subject matter:
Topic 5: Events after July 1, 2015 concerning
(1) lawsuits, investigations, or other official proceedings commenced by a federal or state agency; or
(2) complaints received, or reports published by the Better Business Bureau; which related to allegations that PBP had engaged in deceptive sales, marketing or billing practices.
For the reasons discussed in the analysis, the modification topic permits Plaintiffs to question the corporate representative about the subject matter of the proposed Topic 5 to the extent they occurred during the discovery period established by the Court; prohibits questioning of the witness as corporate witness about Edward Satell's personal state of “awareness” about the topics at issue, and deletes terminology that connoted wrongful conduct by AFS.
D. Proposed Topics 16 and 17
Proposed Topic 16
The creation, revision, approval, and usage of each Subject Script as defined in the Plaintiff Federal Trade Commission's First Set of Interrogatories to Defendant American Future Systems, Inc., and of each Referenced Script as defined in the Plaintiff Federal Trade Commission's Second Set of Interrogatories and Third Set of Document Requests to Defendant American Future Systems, Inc.
Proposed Topic 17
The creation, revision, approval, and usage of each Regional Sales Tool as defined in the Plaintiff Federal Trade Commission's Second Set of Interrogatories and Third Set of Document Requests to Defendant American Future Systems, Inc.
The Special Master's Analysis of Proposed Topics 16 and 17
A. The Topics Seek Testimony About AFS's Alleged Telemarketing Techniques
Proposed Topics 16 and 17 ask the Court to Order AFS to appoint a 30(b)(6) witness to testify about allegations in the Amended Complaint that AFS used deceptive marketing techniques to dupe companies and organizations into paying for expensive business publications the companies never agreed to buy. AFS claims that AFS telemarketers followed scripts (Topic 16) and deceptive techniques (Topic 17) to lure targeted employees to accept samples publications at no risk.” Plaintiffs allege that AFS would later claim that by accepting the sample the employee had bound the company to pay for expensive subscriptions.
The Amended Complaint alleges that PBS telemarketers were trained to mischaracterize the purpose of their calls to get past operators and receptionists trained to screen out sales so that their calls would be forwarded to target employees authorized to purchase subscriptions. See Complaint ¶ 20. When they reached the target employee, the telemarketer offered to send Id. ¶
*14 The Amended Complaint alleges that the offer to send the companies sample publications “at no risk” was a ruse. AFS never made the promised follow-up call, but began billing the company for the periodicals as if it had already agreed to subscribe. During the initial “free offer” call, AFS's telemarketers allegedly elicited some personal information to prove later on that AFS and its affiliates had spoken with an employee who had authority to subscribe. Id.
AFS allegedly ignored cancellation notices, and referred companies who refused to pay the invoices for the unwanted subscriptions to a collection agency, usually co-defendant Credit Recovery, Inc. (“ICR”). See Am. Comp. ¶¶ 32-37. Plaintiffs allege that ICR, whose principals allegedly knew about the scheme, threatened companies that refused to pay with reports to agencies and collections actions. Id. ¶¶ 37-38.
The Special Master concludes that Topics 16 and 17 seek testimony relevant to allegations in the Amended Complaint AFS telemarketers, at AFS's direction. Specifically, the topics seek testimony about whether AFS tricked companies into “subscribing” to they did not want by agreeing to review sample copies “at no risk.” Topic 17 requests testimony about training materials that allegedly taught telemarketers how to disguise the purpose of their calls to reach targeted employees. Am. Comp. ¶¶ 27-28;
The Special Master finds that the testimony sought by Topics 16 and 17 will possibly yield probative evidence in this case. The testimony, coupled with copies of the scripts and instructional materials, will elicit evidence that shows whether or not AFS telemarketer were instructed by AFS to falsify the purpose of their calls and to use deceptive techniques that enabled AFS to bill the companies for subscriptions they never agreed to purchase.
AFS's primarily objects to these topics on the grounds that they seek “redundant testimony on information already provided in written discovery in litigation.” AFS's Mem. in Opp. 16. This objection lacks merit. The mere text of AFS's (incomplete) production of scripts and instructional material, unsupported by testimony, would have little evidentiary value. The language of the scripts, standing alone, would shed no light on the motives of the AFS employees who wrote the scripts and trained telemarketers to use them. Only testimony concerning the purpose of the written materials can establish whether they were created and used for the purpose of making sales by deceit.
B. AFS's Failure to Produce Relevant Documents Relating to Topics 16 and 17.
Notably, much of the parties’ briefing does not focus on the relevancy of materials but on the paucity of AFS's production. AFS acknowledges that it has not produced more than 100 subject scrips that would otherwise be available for use as exhibits at the deposition. AFS. Mem. in Opp. 11. The failure to produce these documents concerns the Special Master because the lack of all potentially pertinent exhibits will frustrate the purpose of the Rule 30(b)(6) deposition, and could result in further delays of discovery and the ultimate disposition of this case.
AFS seems to blame its failure to make full discover of the scripts in part on the limitations of the company's document management system. By way of explaining its failure to produce documents responsive to Topic 16, AFS states:
Plaintiffs seeks specific testimony on [over 100] specific scripts ... which AFS is unable to provide due to the very nature these scripts are created, maintained, and utilized in the ordinary course of business. AFS does not maintain in the ordinary course of business the date each script was created, who created it, when it was revised, and the dates in which it was in use. AFS cannot be compelled to present testimony it does not have, cannot reasonably ascertain, or solicit from its employees.
*15 AFS. Mem. in Opp. at 11(emphasis supplied). The Special Master finds this explanation difficult to understand. AFS does not seem to deny that scripts exist somewhere on its word processing system, but that they cannot be found “in the ordinary course of business” because they are not arranged by date, author, and other search methods. This explanation is perplexing because AFS managers surely needed to find these materials periodically, but no one knows what AFS's usual practices for filing the documents were.
This Special Master finds AFS's incomplete production and accompanying explanations fall short of the mark. AFS's brief declared that providing a complete set of scripts and training materials was impossible, but provided no explanation why this so. AFS's position that the scripts and training materials are unfindable, that no one at the company can explain why, and so scheduling a deposition would be a futile exercise strains credulity.
Moreover, despite repeated requests by Plaintiffs, AFS refused to allow its in-house IT supervisor William Townsend to attend meetings between the parties to resolve discovery disputes. In correspondence with counsel for AFS, FTC's counsel noted that AFS's counsel had told her “that Mr. Townsend is uncomfortable with the proposal citing previous interactions with the FTC,” even though to the FTC's knowledge Mr. Townsend had not met with anyone from the agency. August 18, 2020, letter from Amy Hocevar to Morgan Birch at 2 n.1. (See Plaintiffs’ Appendix to its Memorandum in Support at App. 073). Plaintiffs asked several times to speak with Mr. Townsend or to allow him to attend “meet and confer” discussions, but AFS refused. Id. at 43-48, 56.
Finally, in its brief AFS maintains that it has done everything required to satisfy its discovery obligations because the company has produced documents as AFS maintained them in the “ordinary course of business” in accordance with See Fed. R. Civ. P. 34(b) (2)(E)(1). The Special Master cannot evaluate this explanation because AFS has not explained what the company actually did to locate responsive documents.
Courts addressing the issue have consistently held that parties who claim to have produced documents as kept in the “ordinary course of business” must do more than merely represent to the court” that they have done so. Ill. Nat'l Ins. Co. v. Cornett, 1:20-cv-00008, 2021 U.S. Dist. LEXIS 70294, at *4-5 (D.V.I. Apr. 12, 2021). The must also provide an “explanation’ ... [of] how its documents are organized in the ordinary course of business and what steps the party took to search and produce the documents” in conformity with Rule 34. Id. at *4 (citing, among other cases, Mamakos v. United Airlines, Inc., No. CV 14-7294, 2018 U.S. Dist. LEXIS 168803, at *8-9 (E.D.N.Y. Sep. 28, 2018) (“[t]he most obvious means of complying with the requirement of Rule 34(b) to produce documents as they are kept in the usual course of business is to permit the requesting party to inspect the documents where they are maintained, and in the manner in which they are organized by the producing party.”)) AFS has provided no such explanation.
Additionally, AFS has consistently refused to allow its IT supervisor to attend and participate in meetings called to resolve discovery issues and avoid motion practice. While acknowledging it has not fully complied with its discovery obligations, AFS contends that it is required to do no more because it has satisfied Rule 34(b)’s requirement of producing documents maintained as in the ordinary course of business, although it has not explained what it has done to satisfy that requirements.
*16 These issues inform the Special Master's suggestion to the Court summarized in Topic 24, which also concerns the subject of alleged non-production of documents.
The Special Master's Recommendation on Topics 16 and 17
The Special Master recommends that the Court grant Plaintiffs’ motion to compel AFS to designate a witness to testify on behalf of the corporation on the proposed Topics 16 and 17, modified as follows:
Topic 16
The creation, revision, approval, and usage, and amendment of each Subject Script as defined above.
Topic 17
The creation, revision, approval, and usage, and amendment of each Regional Sales Tools, as defined above.
As discussed in the analysis, the Special Master believes that legitimate questions exist about the completeness of the discovery record in this case and that AFS has not adequately explained the reasons why the company cannot locate and retrieve responsive documents. Without full and complete discovery disclosures, a productive Rule 30(b)(6) deposition cannot occur. As discussed below in the section on Topic 24, Plaintiffs has alleged that AFS has produced several other types of documents in addition to the documents discussed above.
In light of these concerns, the Special Master has requested that the Court issue an Order which he believes will ensure the production of all responsive, retrievable documents relating to the Rule 30(b)(6) deposition, provide an objective assessment of the adequacy of the document production to date, and end the excessive number of discovery disputes that have impeded the progress of this case.
E. Proposed Topic 23
PBP's actions taken to locate documents responsive to the FTC's and the Commonwealth's Requests for Production of Documents issued in this litigation and to respond to the FTC's First and Second Sets of Interrogatories and to the Commonwealth's First Set of Interrogatories to Defendant American Future Systems, Inc.
The Special Master's Analysis of Topic 23
Plaintiffs ask the Court to order AFS to designate a 30(b)(6) witness to testify concerning the steps that AFS took to find information that responded Plaintiffs’ interrogatories and document requests, Collectively, Plaintiffs served 129 such requests.
The Special Master does not believe that Proposed Topic 23 satisfies the “reasonable particularity” requirement of Rule 30(b)(6) because it would require AFS to prepare a witness to retrace the steps AFS took to locate responsive information without differentiating between discovery responses Plaintiffs found objectionable and responses to which they did not object.
In 2021, Plaintiff filed motions to compel relating to approximately one-third of the 129 individual discovery requests within the scope of Proposed Topic 23. On January 28, 2022, the Court ordered AFS to serve supplemental responses to 29 of Plaintiffs’ requests. (Docket No.155)
The Special Master does not see what purpose would be served by requiring an AFS representative to testify concerning how it located the information the company collected in order to testify concerning how it located responsive information about 100 discovery requests to which Plaintiffs did not object. He also does not believe that, at this juncture, the benefit of such discovery to Plaintiffs would outweigh the burden it would impose upon AFS, particularly if AFS's supplemental production in response to the Court's January 28 Order corrected the deficiencies in AFS's original responses.
*17 The Special Master concludes that Plaintiff ‘s motion relating to proposed Topic 23 should be denied, first, because it is not reasonably particularized because it seeks asks AFS to prepare a representative to testify concerning AFS's efforts to locate information or both objectionable and unobjectionable discovery responses; and second, the topic seeks cumulative, duplicative discovery because the vast majority of the information requested concerns discovery responses that appear to have been sufficient.
The Special Master's Recommendation on Proposed Topic 23
The Special Master recommends that the Court deny Plaintiffs’ motion to compel AFS to designate a corporate witness to explain what steps AFS took to locate information responding to document requests and interrogatories because (1) the topic does not describe the subject of a Rule 30(b)(6) deposition with reasonable specificity, and (2) the information Plaintiff seeks would be duplicative and cumulative of other discovery in this case.
E. Proposed Topic 24
PBPs document retention and storage policies and practices and litigation hold implementation practices since receipt of the FTC's Civil Investigative Demand, including the deletion of Susan Grabert's email; the retention or deletion of replies to automated emails sent to subscribers; the retention or deletion of voicemails from subscribers; the retention or deletion of emails sent to or from PBP's telemarketing branches; the retention or deletion of scripts and regional sales tools; and the handling of returned invoices received by PBP. This Topic, as with all other Topics, specifically excludes any attorney client and/or work product protected communications.
The Special Master's Analysis of Proposed Topic 24
Proposed Topic 24 asks the Court to require AFS to designate a Rule 30(b)(6) witness to testify concerning four problematic areas of discovery relating to AFS's alleged failure fully to comply with Plaintiff's discovery requests.
1. Document Retention Policies and Practices
First, Plaintiffs seek testimony about “AFS's document retention policies and storage practices and litigation hold practices” which they hope will turn up documents AFS has not produced. Pls.” Mem. in Supp. 2.
As Plaintiff points outs, courts often require companies involved in, or facing imminent litigation, to designate a Rule 30(b)(6) witness to describe the company's usual document preservation policies and what additional steps the company took, or failed to take, when litigation was imminent, or after it began. Montgomery v. Wal-Mart Stores, Inc., No. 12-cv-3057, 2015 U.S. Dist. LEXIS 191953, at *6 (S.D. Cal. Sep. 4, 2015) (noting “that party's document retention policies, including its policies as to electronically stored information, may be a fit subject of discovery cannot be gainsaid.”); Erickson v. Biogen, Inc., No. C18-1029, 2019 U.S. Dist. LEXIS 120187, at *8 (W.D. Wash. July 18, 2019) (ordering 30(b)(6) deposition on document retention policy and production of copies of written policy and non-privileged copy of litigation hold letter).
In light of the difficulty Plaintiffs have experienced in obtaining complete discovery relating to documents and information concerning potentially relevant information, such as scripts and training materials, the Special Master finds that the testimony Plaintiff requests is warranted, and could lead to the discovery of relevant evidence that exists but AFS has not been able to locate, has misplaced, or possibly destroyed.
*18 AFS objects to the topic on the ground of relevance because it is wholly unrelated to the claims in the Amended Complaint.” AFS's Mem. in Opp'n4. AFS's relevancy objection is not well taken because the Federal Rules of Civil Procedure specifically authorize “non-merits” discovery if its ultimate purpose is to obtain evidence related to the parties’ claims and defenses, often in cases where questions exist about whether a party has complied fully with its discovery obligations.[15]
2. Susan Grabert's Deleted Documents
Second, Plaintiffs seek Rule 30(b)(6) testimony concerning the deletion of several thousand emails that Susan Grabert, head of AFS's quality control section, deleted on her last day of work while a litigation hold was in place. AFS states that it has recovered 6,000 of these emails, although it is unclear whether this represents all of the deleted emails Ms. Grabert deleted or just a portion of them. AFS states that a review of the recovered emails revealed them to be of a personal nature and therefore nonresponsive.
The deletion of such a large number of emails by an employee who held a responsible position and knowingly destroyed them in spite of a preservation order is a matter of consequence. The Special Master finds that a Rule 30(b)(6) deposition seems appropriate to obtain additional information about the subject matter of the emails.
In the alternative, if AFS can provide a declaration stating that it has recovered all emails Ms. Grabert deleted, the better solution might be to provide copies of the emails to the Special Master for in camera review to confirm that they contain no responsive information.
The Special Master therefore recommends that Plaintiffs’ motion be granted to obtain testimony about the circumstances surrounding Ms. Grabert's vioalation of the litigation hold and whether any of the deleted emails contained information potentially relevant to this lawsuit.
3. Missing Responsive Documents and Information
Third, Topic 24 requests testimony concerning four categories of responsive documents Plaintiffs’ contend that AFS has failed to produce, or produced only in part. They include:
a. “The retention or deletion of replies to automated emails sent to subscribers.” This refers to emails AFS received that Plaintiffs claim show that customers often misunderstood the terms of sale for the subscriptions. See Amended Complaint ¶¶ 26, 30,
b. “[T]he retention or deletion of voicemails from subscribers.” This discovery sought recorded voicemails from customers who may have called AFS's customer service lines to complain about bills they received for subscriptions they had not agreed to purchase. Id.
c. “[T]he retention or deletion of emails sent to or from PBP's marketing branches....” Plaintiffs complain that they have not been provided with email communications between ASF's various telemarketing branches, which may contain “ “information as to how scripts are transmitted [and] discussed” ....” Pls.’ Mem. in Supp. App. 081.
*19 d. “[T]he retention or deletion of scripts and regional sales tools ... by PBP.” The scripts and regional sales tools contain information concerning what AFS instructed its telemarketers to say during sales calls to sell subscriptions. See discussion of relevance of scripts and tools in analysis of Topics 16 and 17.
Testimony concerning each of the four categories of allegedly missing documents could lead to the discovery of potentially relevant evidence concerning whether AFS knowingly implemented a scheme to profit by using deceptive sales practices to force companies to pay for subscriptions they had not agreed to purchase.
D. Modified Invoices Returned by Customers
Finally, Plaintiffs allege that “[a] substantial number of the invoices appear to have been modified by AFS upon their receipt as the handwritten consumer notes are cut off and/or there is no indication why the invoice was returned.” Pls.’ Mem. in Supp. 4. (See examples in the at Appendix to Pls. Mem. in Supp. App. 099-111).
The examples Plaintiffs have provided do appear to be portions of larger documents that have been cut or truncated to render handwritten notes by subscribers illegible.
Some of the notes appear to have been cancellation notices, or messages denying that the company had subscribed to the publication. See, e.g., Pls.’ Mem. in Opp. App. 103 (invoice with what appears to be the first four letters of the word “cancel” appearing, at the top). The messages potentially relate to Plaintiffs; allegations that AFS ignored cancellation notices, or made cancellation difficult. Am. Comp. ¶¶ 26, 62.
AFS objects to Topic 24 on the ground that the returned invoices tare unrelated to the claims and defenses in this action, without explaining the basis for the objection. Pls.’ Mem in Supp. 19 (chart summarizing AFS's position on disputed topics).
The Special Master concludes that Plaintiffs’ motion to require AFS to designate a Rule 30(b)(6) testimony concerning the truncated invoices returned by customers should be granted. The testimony Plaintiffs seek could lead to the discovery of evidence relating to allegations in the Amended Complaint that AFS ignored company's attempts to cancel subscriptions and withheld information about cancellation procedures, and generally made cancellation difficult. Am. Comp. ¶¶ 21-22, 26.
Taken as a whole, Topic 24 concerns one main subject: AFS's alleged failures to comply with its discovery obligations under the discovery rules. The topic is reasonably particularized because each subpart addresses specific alleged violations of the discovery rules, some of them serious in nature. The Special Master finds that Topic 2 satisfies the basic requirements of Rule 30(b)(6), and that such a deposition could result in the discovery of relevant evidence.
The Special Master's Recommendation
The Special Master recommends that the Court grant Plaintiffs’ Proposed Topic 24 modified as shown below:
Topic 24:
(a) PBP's document retention, litigation hold, and storage policies and practices since the receipt of the Civil Investigation Demand in 2017.
(b) The facts and circumstances surrounding the deletion of Susan Grabert's emails and the potential relevance of any of those emails to this lawsuit.
(c) AFS's efforts to preserve the following categories of documents and information; the location of the documents and information, if known; AFS's knowledge as to whether any categories of information has been lost or destroyed; and the extent to which responsive documents may be preserved on AFS's database but have not been produced because AFS contends the company cannot retrieve them.
*20 1. automated emails sent PBP's to subscribers;
2. voicemails from subscribers to any publication at issue in this lawsuit;
3. emails sent to or from AFS's telemarketing branches; telemarketing scripts and regional sales tools.
(d) AFS's policies relating to invoices returned by customers, and the reasons why notations on some invoices were modified or removed.
The Special Master's Request for an Order Requiring A Forensic Search for Responsive Documents
In order to address whatever possible omissions from the discovery record exist in this case and to expedite the progress of the litigation, the Special Master respectfully asks the Court to enter an order requiring AFS to submit to an audit to locate information relevant to Topics 16, 17, and 24(c)(1-4).
Subject to the Court's approval, the examination of AFS's databases could likely be planned and implemented most economically by FTC forensic examiners acting with the collaboration of AFS Data Director William Townsend. The examiners would act under the supervision of the Special Master. After receiving the Court's authorization to proceed, the Special Master would confer with counsel and the examiners about the procedures and timing of the examination, and draft a schedule and protocol for the examination to be submitted to the Court for its approval. The Special Master would periodically inform the Court of the status of the project.
F. Proposed Topic 25
Changes to, and the reasons for the changes to, PBP's practices and procedures for telemarketing, sales, billing, cancelling or suppressing accounts or orders, responding to Complaints, and referral of its customer accounts to collections for its newsletter or book subscriptions since PBP responded to the FTC's Civil Investigative Demand. This Topic, as with all other Topics, specifically excludes any attorney client and/or work product protected communications.
The Special Master's Analysis of Proposed Topic 25
Plaintiff ‘s proposed Topic 25 asks the Court to order AFS to identify a Rule 30(b)(6) witness to testify about any modifications defendant PBP made to its telemarketing business procedures since the company responded to the FTC's Civil Investigation demand in 2017.
The Master concludes that testimony from a corporate designee could result in the potential discovery of relevant evidence in this suit. As the Special Master noted in considering an objection to a similar request by defendant ICR: “Responsive discovery may shed light on when and if ICR ‘s conduct changed over the years, and if so, may provide an explanation as to why. Or, it may shed light on the opposite.... These requests are relevant to the FTC's claims and relevant to seeking injunctive relief.” Special Master's Report and Recommendation of Nov. 5, 2021, at 6-7. (Doc. 129). The same is true with respect to PBP.
The Special Master finds that the proposed topic defines the scope of the testimony requested with sufficient particularity, that the likelihood that the topic will lead to the discovery of potentially relevant evidence outweighs any burden it will impose on AFS. The he fact that this litigation and the foregoing FTC investigation may have influenced AFS's decision to make organizational changes in 2021 also favors allowing discovery. See also the Special Master's discussion of Plaintiff's May 10 Letter Brief in Section A, concerning Plaintiff's request for testimony about AFS's corporate structure.
*21 The Special Master's Recommendation: on Proposed Topic 25
The Special Master recommends that the Court grant Plaintiffs’ motion to compel AFS to designate a witness pursuant to Rule 30(b)(6) to testify concerning various changes in BPB's practices and procedures implemented since BPB responded to the FTC's Civil Investigative Demand.
H. Proposed Topic 27
On an annual basis, the total amounts received, the amounts of refunds, and the amounts received of chargebacks that comprise the Revenue amounts requested in Interrogatory Numbers 1-6 of the Commonwealth's First Set of Interrogatories to American Future Systems, Inc.
The Special Master's Analysis of Proposed Topic 27
Proposed Topic 27 concerns six interrogatories that were the subject of a motion to compel that was resolved on January 28, 2022, when the Court accepted the Master's recommendation and granted Plaintiff ‘s motion to compel AFS to answer Interrogatories 1-6 of the Commonwealth's first set.
Assuming AFS’ supplemental answers to the six interrogatories provided the information Plaintiff ‘s requested in Topic 27, requiring a corporate representative to testify to the answers would be unnecessarily cumulative and duplicative of discovery previously provided. See, e.g., Sandoval v. Midland Funding, LLC, Civil Action No. 18-09396, 2021 U.S. Dist. LEXIS 25793, at 15-16 (affirming magistrate's decision denying request for supplemental Rule 30(b)(6) deposition which would duplicate information previously provided in prior discovery.)
The Special Master's Recommendation on Proposed Topic 27
The Special Master recommends that the Court deny Plaintiff's motion for a Rule 30(b)(6) deposition for Proposed Topic 27.
I. Proposed Topic 28
Activities of PBP that involve making of telephone calls to individuals or entities from January 1, 2021, to present in order a) for PBP or others to attempt to sell or advertise for goods or services to the individual or entity; or b) to obtain information to assist PBP or others in attempting to sell or advertise for goods or services to the individual or entity at a later date. This Topic expressly includes telephone calls for the purpose of lead generation.
The Special Master's Analysis of Proposed Topic 28
Proposed Topic 28 seeks testimony about AFS's telemarketing practices which relate to the deceptive sales techniques Plaintiffs alleged in the Amended Complaint. This topic is narrower than other topics relating to defendants’ alleged deceptive sales and marketing conduct because the topic limits the scope of the testimony to events from January 1, 2021 to the present.
The topic is broader than other topics because it seeks potentially relevant evidence relating AFS, BPB, acting jointly or in concert with unidentified “other” parties to engage in telemarketing, either currently or in the future. Plaintiffs’ May 10 letter brief makes clear that they hope to use the deposition to explore the relationship between SuccessFuel and AFS and to find out whether telemarketing plays a role in it.
*22 Proposed Topic 28 seeks testimony relevant to Plaintiff ‘s claim for injunctive relief. Plaintiffs contend they should be allowed to seek potential evidence concerning any deceptive telemarketing in which Plaintiff is now engaged, or is planning to undertake. In re Sanctuary Belize, 482 F. Supp. 3d at 398 (injunction appropriate when defendant's misconduct was “recurrent [and] ... defendant is positioned to commit future violations”).
AFS's objections objects to Proposed Topic 28 on two main grounds. First, AFS claims Plaintiffs are “seeking testimony unrelated to AFS's telemarketing business about which Plaintiffs make (false) claims of violations of the law.” AFS's Mem. in Opp. 10. This objection does not bear scrutiny.
While the proposed topic does not use the word “telemarketing,” it seeks testimony about activities of ASF or BPB “that involve making of telephone calls....”in order to sell goods or services; that is, about possibly deceptive telemarketing practices.
Second, AFS urges the Court to disregard the audiotapes AFS claims to have produced by mistake which Plaintiffs, in their March 10 Letter Brief, allege show AFS is still an active telemarketer although the company claimed to have closed that component of its business in September 2021. Plaintiffs allege that audiotapes produced in discovery show AFS representatives making telemarketing sales calls on September 23, October 19, and November 3, 2021. If those dates are correct, the calls all occurred after AFS claimed closed its telemarketing operation on September 3, 2021.
AFS's counsel contends that all the calls were really made well before September 3, and were not sales, but calls but calls made to generate leads for clients of Successfuel, an AFS affiliate, and that the tapes were produced by mistake. AFS's Resp. to Pls.’ March 10 Br. Resp. 3.
The Special Master concludes that Plaintiffs should be permitted to question an AFS corporate representative to determine whether AFS is still in the telemarketing business, although working through SuccessFuel, a new AFS affiliate. Because documents of record produced by AFS are at the center of it, the dispute concerning whether AFS continues to engage in telemarketing is not likely be resolved by the assertions of counsel. The deposition could also lead to the discovery of relevant information relating to Plaintiff's request for an injunction.
The scope of the subject matter and temporal boundaries of the testimony at issue are well-defined; the matters at issue concern information in the possession of AFS; and the nature and subject matter of the discovery is in accord with the purposes for which Rule 30(b)(6) was created.
The Special Master's Recommendation on Proposed Topic 28
The Special Master recommends that the Court grant Plaintiffs’ motion to compel AFS to designate a representative to testify concerning the subject matter of Topic 28.
Exhibit A
March 10, 2022
Via email to jrohn@rohnkurland.com
James Rohn, Esq.
Rohn Kurland, P.C.
1700 Market Street, Suite 1005
Philadelphia, PA 19103
Dear Mr. Rohn:
Plaintiffs write regarding documents and recordings recently produced by Defendants, which further support Plaintiffs’ positions on the following issues presented in pending Motions:
1) Testimony by AFS regarding its Organization and Scope of its Ongoing Telephone Activities
Plaintiffs submitted to the Special Master on December 16, 2021 their Joint Motion to Compel Defendant American Future Systems, Inc. to Designate a Corporate Representative Under Rule 30(b)(6) on Various Deposition Topics. [ECF 137] Briefing was completed on that Motion on January 14, 2022. In the last few weeks, however, Defendants have produced documents (which were first requested in 2020) that further support Plaintiffs’ positions with respect to three Topics that are the subject of the Motion – Topics 1, 2, and 28.
*23 Those Topics request basic testimony from AFS on its organization, including changes since July 1, 2015, and testimony on AFS's recent telephone-based lines of business.[1] [ECF 137-2, p. 10-12[2].] AFS seeks to cabin Topics 1 and 2 to the portion of the organization that involves “the telemarketing sales practices at issue in this litigation.” [ECF 137-3, p. 26; ECF 146, p. 14.] AFS objects to Topic 28 as unrelated to the claims and defenses in this litigation. [ECF 137-3, p. 29.]
Recordings provided by AFS on February 17, 2022 reveal that AFS's telemarketers have recently begun operating under new names. For instance, in a July 29, 2020 call to the Wisconsin Supreme Court (that AFS identifies as a call in which an order was placed), the telemarketer is calling on behalf of both Center for Education and Employment Law and Better Buys for HR [Recording 1304754721, 0:14 (Center for Education and Employment Law); 04:15 (Better Buys for HR)].
Recordings recently produced by AFS also call into question AFS's prior representation that AFS ceased “outbound telemarketing publication sales” on September 3, 2021. [See 9.28.21 letter to Plaintiffs’ counsel copying Special Master] For example, AFS produced a recording with a date of 11/4/2021 in which the caller claims to be from CFO Daily News sending publications and stating that someone from Avalara will call them tomorrow. [Recording 1897970943 at 0:43 (CFO Daily News); 3:03 (Avalara).] AFS produced another recording from 10/19/21 of Mary Foley[3] calling regarding a “company's account with us,” claiming to be from HR Morning and referring to publications from sister company Better Buys for HR. [Recording 1282329847 at 0:50 (HR Morning); 0:58 (company's account with us); and 2:58 (Better Buys for HR)]. In another recording produced by AFS, on September 21, 2021, Crystal Cashwell[4] also claimed to be calling from HR Morning about the callee's accounts with “us.” [Recording 1880181735; 01:08 (Crystal Cashwell); 02:27 (HR Morning); 02:40 (company's account with us).]
*24 It also appears that AFS employees have changed their email addresses to identify themselves as being affiliated with a different company, Successfuel, a fictious business name registered by AFS on September 20, 2021. [App 3.] Defendant ICR produced recent communications with AFS that include individuals who previously communicated using PBP email addresses (ending in @pbp.com), now having email addresses that end in @successfuel.com. For instance, Kamil Yakubov[5] emailed ICR on October 22, 2021 from kyakubov@successfuel.com (who previously communicated with ICR from kyakubov@pbp.com) requesting an update on ICR's collections for PBP for the month of October 2021. (Compare App 5 to App 6.) Additionally, Successfuel's website indicates that AFS is still engaged in outbound telemarketing by conducting “campaign[s]” on behalf of clients. [App 7.] (“We distribute your campaign content asset to thousands of prospects ... via high velocity phone conversations.”).
All of the recently produced documents discussed herein highlight why it is essential that Plaintiffs be permitted to seek testimony regarding AFS's corporate structure and current telephonic practices. In addition to the reasons previously set forth in Plaintiffs’ Motion as to why AFS should be required to testify regarding Topics 1, 2, and 28, Plaintiffs should be permitted to ask AFS basic questions that would bear on whether any of the conduct is still occurring with respect to the publications at issue in the First Amended Complaint, Defendants’ ability to restart the conduct, and the degree of transferability to any other good or service.
These lines of questioning relate directly to allegations in the First Amended Complaint[6] and to the appropriate scope of injunctive relief. As set forth in Plaintiffs’ reply brief in support of the Motion to Compel, courts may engage in “fencing in” to ensure that injunctive relief is framed “broadly enough to prevent [defendants] from engaging in similarly illegal practices in future advertisements.” FTC v. Colgate-Palmolive Co., 380 U.S. 374, 395 (1965). “Factors that courts may consider in determining whether fencing-in relief is justified in light of a defendant's violation of the FTC Act include: any history of prior violations, the deliberateness and seriousness of the violation, and the degree of transferability of the unlawful behavior to other products.” In re Sanctuary Belize Litig., 482 F. Supp. 3d 373, 467 (D. Md. 2020) (quoting FTC v. Direct Mktg. Concepts, Inc., 648 F. Supp. 2d 202, 213 (D. Mass. 2009)) (emphasis added). AFS's organization and management, and changes thereto, and ongoing telephone-based lines of business, such as selling products or services for third-party clients, are certainly relevant to the degree of transferability of the unlawful conduct.
2. The “BBB” Disputed Search Term
The Special Master requested supplemental briefing, which the Court ordered, on remaining search terms and custodians that were in dispute for the search of electronically stored information of defendant American Future Systems, Inc. [ECF 155.] Plaintiffs submitted supplemental briefing on February 10. AFS did not submit supplemental briefing.
*25 One keyword – BBB* - was objected to by AFS as overbroad, contending that it “encompasses documents and information relevant to a separate line of AFS's business called Better Buys for Business, which is referred to internally as BBB.”[7] [ECF 158-2, p. 006] In addition to explaining why the search term BBB was necessary (even if Better Buys for Business was a “separate line” of business), Plaintiffs submitted evidence available at the time that put into serious question AFS's suggestion of the irrelevance of Better Buys for Business. [ECF 158-1, p. 5, fn 6.]
Since the submission of that briefing on February 10, Plaintiffs received additional information further undermining AFS's argument that the “BBB” search term should not be applied because of the possibility of collecting documents regarding Better Buys for Business. On February 17, AFS provided links to recordings demonstrating that AFS cold-called people to sell the AFS publications at issue in this litigation and at the end of the call the same telemarketer mentions sending publications from its “sister company,” referred to as “Better Buys” for HR. [See Section 1, supra.] Job postings for “Outbound Call Center Representative” for “Better Buys for Business” are at the same locations as AFS's telemarketing branches. (e.g., [ECF 158-2, pp. 039-40]) Better Buys for Business is registered as a fictitious business name of AFS that publishes office equipment buying guides. [App. 12.]
As set forth in Section 1, the degree of transferability of AFS's conduct to other goods or services is relevant to fencing-in injunctive relief. Thus, the potential collection of documents related to Better Buys of Business through the application of the keyword “BBB,” which is a pivotal keyword for the reasons described in Plaintiffs’ previous briefing, should not undermine the use of the “BBB” search term.
Sincerely,
Counsel for Plaintiff Federal Trade Commission
Counsel for Plaintiff Commonwealth of Pennsylvania
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF PENNSYLVANIA
(SUBMITTED TO THE SPECIAL MASTER VIA EMAIL)
FEDERAL TRADE COMMISSION, et al., Plaintiffs,
v.
AMERICAN FUTURE SYSTEMS, INC., et al., Defendants.
Case No. 2:20-cv-02266
APPENDIX IN SUPPORT OF PLAINTIFFS’ SUPPLEMENTAL LETTER TO SPECIAL MASTER REGARDING 1) PLAINTIFFS’ JOINT MOTION TO COMPEL DEFENDANT AMERICAN FUTURE SYSTEMS, INC. TO DESIGNATE A CORPORATE REPRESENTATIVE UNDER RULE 30(B)(6) [ECF 137]; AND 2) SUPPLEMENTAL BRIEFING ON DISPUTED SEARCH TERMS [ECF 158]
Table of Contents
I. SuccessFuel Fictitious Name Registration...––––
II. Email to ICR from Kamil Yakubov at kyaktibov@pbp.com...––––
III. Email to ICR from Kamil Yakubov at kyakubov@successfuel.com...––––
IV. SuccessFuel website excerpt...––––
V. Better Buys for Business Fictitious Name Registration...––––
Footnotes
The Special Master will follow the practice of Plaintiffs in the proposed deposition topics of using the terms “AFS” and “PBP” interchangeably. By way of clarifying the players and their roles: Plaintiffs Amended Complaint (“Am. Compl.”) allege that AFS and PBP formed a “common enterprise” directed largely by AFS's CEO Edward Satell. Am. Compl. ¶ 3. Plaintiffs allege that PBP, the AFS affiliate engaged in telemarketing sales, used deceptive sales practices designed to pressure companies to pay for subscriptions they did not intend to purchase. In this motion, Plaintiffs ask the Court to direct AFS to designate a corporate representatives to testify pursuant to Rule 30(b)(6) about various subjects relating to allegations in the Amended Complaint. The Motion names AFS, whom Plaintiffs’ view as the architect and prime mover behind the scheme, as respondent.
Available at //www.americanbar.org/groups/tort_trial_insurance_practice/publications /the brief /2018-19/summer/speak-yourself-30b6-deposition/#ref27
Accord S. Bos. Mgmt. Corp. v. BP Prods. N. Am., 2006 U.S. Dist. LEXIS 2282, at *3 (S.D.N.Y. Jan. 19, 2006) (“The purpose of this rule is to avoid the difficulties encountered by both sides when the party to be examined is unable to determine who within the corporation would be best able to provide the information sought.”); Sionyx, LLC v. Hamamatsu Photonics K.K., No. 1:15-13488, 2017 U.S. Dist. LEXIS 219490, at *5 (D. Mass. Oct. 13, 2017) (“If the topic was badly drafted or loosely drawn, the responding party is subject to an impossible task.”)
Ungicker v. A.W. Chesterston Co., No. MDL-875, 2012 U.S. Dist. LEXIS 76492, at *23 (E.D. Pa. May 31, 2012) (Strawbridge, U.S. Mag. J) (quashing topic lists that requested testimony on disparate topics including multiple products manufactured by GE between 1950 and 1983).
Thurmon v. A.W. Chesterton, Inc., (No. IV), 2012 U.S. Dist. LEXIS 106515, at *10 (E.D. Pa. July 30, 2012) (Angell, J.)(“Noticing a 30(b)(6) deposition to obtain testimony from a defendant identifying all asbestos products it supplied, sold or distributed over a sixty plus year period is not proper.”); Michilin Prosperity Co., Ltd. v. Fellowes Mfg. Co., Civil Action, No. 04-1025, 2006 U.S. Dist. LEXIS 32064, at *5 (D.D.C. May 23, 2006) (“The deponent(s) will be examined with respect to the approximately 2,000 pages of documents ...”).
State Farm Mut. Auto. Ins. Co. v. New Horizont, Inc., 254 F.R.D. 227, 233 n.3 (E.D. Pa. 2008) (Robreno, J.) (disallowing 30(b)(6) topic seeking testimony on “on matters unrelated to this litigation” as vague and overbroad); Parks, LLC v. Tyson Foods, Inc., No. 5:15-cv-00946, 2015 U.S. Dist. LEXIS 171420, at *21-23 (E.D. Pa. Dec. 23, 2015) (Leeson, J.) (disallowing topics that sought testimony concerning “[a]ny marketing analysis ... concerning any Hillshire Product., rather than analyses relating to products at issue in the litigation”).
Michilin Prosperity Co., Ltd. v. Fellowes Mfg. Co., Civil Action No. 04-1025, 2006 U.S. Dist. LEXIS 32064, at *5 (denying motion for Rule 30(b)(6) deposition that would require witness to review approximately 2,000 pages of documents).
W Holding Co. v. Chartis Ins. Co., 300 F.R.D. 43, 46 (D.P.R. 2014) (striking topics “so broad as to be meaningless,” such as “the FDIC's data relating to the financial situation of the banks in Puerto Rico”).
Sandoval v. Midland Funding LLC, Civil Action No. 18-09396, 2021 U.S. Dist. LEXIS 25793, at *15 (D.N.J. Feb. 9, 2021) (affirming magistrates decision denying request for supplemental Rule 30(b)(6) deposition which would duplicate information previously provided in interrogatory answers and other discovery); State Farm Mut. Auto. Ins. Co. v. New Horizont, Inc., 250 F.R.D. at 207-08 (Rule 30(b)(6) witness need not provide information that prior discovery has already covered).
The Special Master directs Plaintiffs’ to file a complete copy of the March 10 filing with the Court within three business days of April 8, 2022.
Accord U.S. v. Hovnanian, No. 18-cv-15099, 2022 U.S. Dist. LEXIS 16699, at *19-20 (D.N.J. Jan. 31, 2022) (failure to prepare 30(b)(6) witness “through investigation, document review and interviews of those with contemporaneous knowledge” warranted imposition of sanction of refusing to allow party to introduce additional evidence on four deposition topics).
Accord Acosta v. Med. Staffing of Am., LLC, No. 18-226, 2019 U.S. Dist. LEXIS 31649 at *2-*3 (E.D. Va. Feb. 20, 2019) (finding overly broad and not reasonably particular Rule 30(b)(6) deposition topic on “[t]he subjects addressed in Plaintiff's Interrogatories, Requests for Admissions and Requests for Production of Documents”); accord Scioneaux v. Elevating Boats, LLC, No.10-0133, 2010 U.S. Dist. LEXIS 120825, 2010 WL 4366417, at *3 (E.D. La. Oct. 20, 2010) (“[S]tating that the topics of discussion will correlate with the document requests is too broad, vague, and ambiguous to properly comply with Rule 30(b)(6).”); Smithkline Beecham Corp. v. Apotex Corp., No. 98-3952, 2000 U.S. Dist. LEXIS 667, at *26-*27 (N.D. Ill. Jan. 24, 2000) (denying motion to compel Rule 30(b)(6) deposition on “[Plaintiffs] responses to Defendants’ Interrogatories and requests for production, along with the subjects identified therein” as compliance would be overly burdensome).
Fed. R. Civ. P 26(b)(1) advisory committee note to the 2000 amendments (observing that a “variety of types of information not directly pertinent to the incident in suit could be relevant to the claims or defenses in a given action “[I]nformation about organizational arrangements or filing systems of a party could be discoverable if likely to yield or lead to the discovery of admissible information”)(emphasis supplied). See also In re Urethane Antitrust Litig., No. 2:08-5169, 2016 U.S. Dist. LEXIS 15137, at *14 (D.N.J. Feb. 8, 2016) (Rule 30(b)(6) deposition on corporate document retention policies admitted in case where company failed to produce notes made by whistleblower concerning price-fixing).
Topic 1 requests testimony on “The organizational structure of PBP, including its divisions, subdivisions, branches, managers, supervisors, and leaders or directors responsible for each division, subdivision, and branch from July 1, 2015, to present. For purposes of Exhibit A, “PBP” and “AFS” are used interchangeably to refer to Defendant American Future Systems, Inc., also d/b/a Progressive Business Publications, Progressive Business Publication, Inc., and Center for Education & Employment law.” [ECF 137-3, p. 16.]
Topic 2 requests testimony on “PBP's organizational charts produced at PBP000216 and AFS0000213, including descriptions of the scope of work of the various areas shown on the charts, duties of managers at different levels, and any changes in organization since July 1, 2015.” [ECF 137-3, p. 16.]
Topic 28 requests testimony on “Activities of PBP that involve making telephone calls to individuals or entities from January 1, 2021, to present in order a) for PBP or others to attempt to sell or advertise for goods or services to the individual or entity; or b) to obtain information to assist PBP or others in attempting to sell or advertise for goods or services to the individual or entity at a later date. This Topic expressly includes telephone calls for the purpose of lead generation.” [ECF 137-3, p. 20.]
In citing to particular pages of electronic filings, we are using the ECF pagination rather than the conventional page numbering in the document itself. We cite ECF pagination throughout.
Mary Foley was telemarketing the publications at issue in this litigation as of June 29, 2021 [See Recording for purported order at 1839774369 at 1:10.] As this letter is already accompanied by a substantial number of exhibits, the Plaintiffs are not attaching as an Exhibit each and every document or recording referenced herein. Should AFS dispute the characterization of any document not attached, or should the Special Master or Court wish to view any document that is cited, but not attached, Plaintiffs will provide the documents right away.
The employment file of Crystal Cashwell produced by AFS (AFS0012728-12757) identifies Ms. Cashwell as a manager of AFS's Warren telemarketing office until its closure at the end of 2017. It then lists her as Branch Manager of Boardman-Call Center as of 2/25/19 (AFS0012757) and as a call center rep at “KOP-call center” as of 9/6/21 (the very next business day after AFS claims to have ceased outbound telemarketing publication sales) (AFS0012756).
Per the Court's January 28, 2022 Order, Kamil Yakubov is a custodian whose documents are to be searched in accordance with AFS's ESI search. [ECF 155, p. 7.]
For example, the Complaint includes allegations that Defendants did not clearly, affirmatively and expressly state the identify of the seller, that the purpose of the call is to sell goods or services, or the nature of the goods or services; that Defendants engaged in fraudulent or deceptive conduct which creates a likelihood of confusion or misunderstanding; and Defendants caused a likelihood of confusion or of misunderstanding as to affiliation, connection or association with, or certification by another. [ECF 43, p. 18-19] The Complaint also alleges that the Defendants sent goods that were not ordered. [Id. at 16-17.]
Notably, AFS does not identify the scope of what Better Buys for Business did or does.