I have not had a response to my July 23, 2024 email following up our conversation seeking a concurrence in motion to compel Interrogatory No. 6, which goes to the identification of the putative subclass. As we discussed IQ did not respond to the substance of the Interrogatory. This was raised with the Court in oral arguments on the second motion to compel, but was inadvertently omitted in the motion itself.

Given that I have not had any response, and allowing ample time for you to confer with IQ, I reached out [to] the Court's case manager this morning to schedule a conference with the Court to discuss filing a motion to compel Interrogatory No. 6.

Id., PageID.952. Warner asked Gamboa to respond with his availability on three dates the Court had provided for a status conference. Id.

Gamboa responded three days later, on August 5, 2024, stating that he was stretched thin and would respond within a few days. Id., PageID.581. But in line with his custom and practice, Gamboa did not respond to Warner. So on Friday, August 16, 2024, Warner emailed the Court's case manager asking for a status conference because he had not heard from Gamboa since August 5. Id., PageID.950-951. Warner emailed the Court again the next Monday, emphasizing that he could not reach Gamboa or Wolf, and asking permission to file move to compel an answer to Interrogatory No. 6. Id., PageID.950.

The Court thus held another status conference on August 21, 2024. As confirmed in the Court's notes, the parties discussed Interrogatory No. 6, with Gamboa protesting that I.Q. Data would need to perform a file-by-file review of over 3,000 electronic accounts to look for attached PDF documents. Warner questioned why I.Q. Data would not have a code for records, like other debt collections systems, that would allow I.Q. Data to easily search for accounts with a written dispute of the debt. I.Q. Data had in fact submitted no evidence that it could not conduct such a search with relative ease using its “cutting edge technology.”[3] The Court and parties thus agreed that Warner could question I.Q. Data's deposition witness under Federal Rule of Civil Procedure 30(b)(6) before September 23, 2024, the next status conference date. The Court emphasized that, although I.Q. Data had waived any objection about the burden of searching its files, the parties could explore ways to minimize the burden. And the Court warned Gamboa that sanctions would be more significant if violations continued.

Emails between Warner and Gamboa confirm that I.Q. Data provided the putative class lists at the end of August 2024, but that cities were omitted from the addresses. ECF No. 57-1, PageID.935-937. And claiming that I.Q. Data had “real concerns” about disclosing its net worth, Gamboa said that Nelson either had to agree to a confidentiality order or that I.Q. Data would stipulate to the statutory maximum of $500,000 to “take the net worth issue out of contention.” Id.

*6 Warner responded that the class list failed to identify the city of each class member, and that it did not identify under which count each putative class member would fall. Id., PageID.936-937. Nor did I.Q. Data identify the subclass of consumers who disputed their debt in writing. Id. Warner was also still waiting for Gamboa to provide a date for its witnesses' depositions. Id.

Gamboa provided no substantive responses to Warner for more than two weeks and not until the day before the September 23 status conference. In Gamboa's email, he said that he had re-run the class lists in a way that identified which consumers belonged to the putative classes under Counts I and II, respectively. Id., PageID.935. But in response to Warner's demand for a subclass list of the consumers who disputed their debt in writing, as requested in Interrogatory No. 6, Gamboa wrote that I.Q. Data “do[es] not have that information.” Id. And despite the intention for the Rule 30(b)(6) deposition to be complete by the September 23 status conference, Gamboa now proposed a date in late October. Id.

D. Current Motion to Compel and for Sanctions

The Court learned at the September 23 status conference that the parties had made no progress and were still arguing about the same issues. The Court thus granted Nelson's request to again move to compel discovery and scheduled a hearing for October 25, 2024. ECF No. 55. In its new motion, Nelson highlighted Interrogatory Nos. 6 and 7, and RFPs 12 to 14. ECF No. 56.

Nelson submitted an apparently computer-generated “Print Debtor Work Card” showing that Nelson had disputed her debt in writing, causing a change in status from “PNC to CHL.”

ECF No. 56-2, PageID.896. Nelson believed that status change to CHL was I.Q. Data's way of indicating that she was challenging her debt. ECF No. 56, pp. 8-9. Nelson also noted that I.Q. Data voluntarily disclosed in a Western District of Texas case its January 2018 Consumer Dispute Policy for investigating disputes submitted to it within its validation period. Id.; ECF No. 56-3; Reed v. I.Q. Data Int'l, Inc., No. SA-22-CV-00068-FB, 2023 WL 5246356, at *1 (W.D. Tex. Aug. 14, 2023), adopted, No. CV SA-22-CA-68-FB, 2023 WL 5814388 (W.D. Tex. Sept. 7, 2023) (denying summary judgment on plaintiff's claims that I.Q. Data reported to a credit reporting agency debt that she did not owe and that she had disputed in writing). Under I.Q. Data's policy, accounts with written disputes submitted during the validation period must be “marked as disputed.” ECF No. 56-3. This marking is required because the FDCPA mandates that a collection agency cease communication with a consumer who has disputed a debt in writing. Id.; 15 U.S.C. § 1692c(c). This evidence undermined Gamboa's claim that I.Q. Data did not “have the information” about the accounts with a written dispute of the debt. ECF No. 57-1, PageID.935.

In its response brief, I.Q. Data accused Nelson of demanding that it “perform a file-by-file review of 3,782 individual consumer accounts to identify who may have disputed its collection attempts in writing.” ECF No. 57, PageID.930. But I.Q. Data did not dispute that its Debtor Work Cards were coded to show when consumers disputed the debt, and I.Q. Data included no evidence that an onerous file-by-file review would be necessary to generate a list of those consumers. Id.

*7 In Interrogatory No. 7, Nelson asked I.Q. Data to identify the class members who “made a payment in an amount above the principal amount” and “state the total amount of payments on interest made.” ECF No. 56, p. 12. I.Q. Data objected to being asked to create a class list but, “[s]ubject to and without waiving said objection,” stated that the “total amount of interest paid by such persons is $23,952.55.” Id. (citing ECF No. 42-5, PageID.485-486). Nelson asserted in its motion, “Since IQ can identify the amount the putative subclass members paid from its Electronically Stored Information, it likely follows that IQ too can provide the number of such persons, their names and addresses, in an Excel spreadsheet separate from the putative class list it provided.” Id. I.Q. Data's response brief offered no rebuttal to Nelson's argument that it could provide the information requested in Interrogatory No. 7.

But referring to both Interrogatory Nos. 6 and 7, I.Q. Data stated in its response brief that it complied with the Court's July 16 order that required it to “provide the names and addresses of the putative class members.” ECF No. 57, PageID.930-931; ECF No. 53, PageID.869. It is true that Nelson's June 2024 supplemental brief did not highlight Interrogatory Nos. 6 and 7 in her long list of deficiencies. ECF No. 50. Thus, the July 2024 order did not specify that I.Q. Data had to identify the putative subclass members as requested in those interrogatories. ECF No. 53. But as detailed above, in the days before and after the July 16 hearing, Warner notified Gamboa that the amended response to Interrogatory No. 6 was non-responsive. ECF No. 58-2, PageID.959-961. And Interrogatory No. 6 was a central point of discussions during the August and September status conferences during which the Court had emphasized that I.Q. Data had waived its objections to fully answering Nelson's discovery requests.

Nelson noted that Federal Rule of Civil Procedure 23(c) permits classes to be “divided into subclasses that are each treated as a class under this rule,” and she argued that interpreting the July 16 order in a way that permits I.Q. Data to avoid identifying subclass members would be illogical. ECF No. 58, pp. 4-5. Nelson argued, “IQ is attempting to avoid the certification of a subclass of persons whom have actual monetary damages proximately caused by I.Q. by not providing the number of, and the names and addresses of the identifiable putative subclass members.” ECF No. 56, pp. 6-7. This argument has merit.

And while the July 16 order addressed specific discovery deficiencies that Nelson had raised in her June 2024 supplemental brief, that order overrode neither the April 10 order requiring I.Q. Data to “provide complete responses to plaintiff's discovery requests” nor the June 12 order emphasizing that I.Q. Data's “objections to fully answer[ing] the discovery requests are WAIVED.” ECF No. 37, PageID.382; Nelson, 2024 WL 2963790 at *1 (emphasis in original).

Turning to I.Q. Data's failure to answer discovery about its net worth, Nelson noted in her supplemental brief that “[t]his Court has been very clear with IQ that all objections to it responding to Ms. Nelson's Interrogatories and requests to produce documents have been waived and furthermore it is too late for IQ to seek any type of protective order for the documents it has been required to produce.” ECF No. 56, pp. 13-14 (citing ECF No. 53, PageID.868). And Nelson pointed out that, on top of the statutory maximum of “the lesser of $500,000 or 1 per centum of the net worth of the debt collector,” each named plaintiff may recover “any actual damages sustained by such person.” 15 U.S.C. § 1692k(a). I.Q. Data contended in its response brief that it was “more than passing strange” that Nelson continued to seek discovery about its net worth after it offered to stipulate to the statutory maximum of $500,000 in damage. ECF No. 57, PageID.931-932. But I.Q. Data provided no legal analysis disputing Nelson's assertion that § 1692k(a) permits the recovery of actual damages on top of the maximum statutory damages. And as Nelson argued, I.Q. Data did not “cite any case law that would permit a party, under a court order, to unilaterally attempt to circumvent an order by offering a stipulation to something else.” ECF No. 58, p. 6. The Court agrees.

*8 Four days before the scheduled October 25 hearing, the parties jointly moved to stay the hearing so that they could participate “in voluntary facilitative mediation.” ECF No. 59, PageID.966. The Court granted the stay and rescheduled the hearing for December 12, 2024. ECF No. 60; ECF No. 61. But when the Court inquired by email on December 9, 2024 about whether the hearing would go forward, Warner sent a response stating, “Yes, we need to move forward with the motion as Counsel for IQ did not provide any dates in which his client would be available to proceed to mediation.” Three minutes after Warner sent his email, Gamboa emailed him detailing two facilitators' available dates, with most not being until March and April 2025.

At the December 12 hearing, Warner reported that, in October 2024, he forwarded a list of neutrals from JAMS in Chicago, including Judges Andersen and Holderman, but that Gamboa made no response until his December 9th email. ECF No. 62, PageID.983-984. Gamboa did not appear at the hearing; Wolf said that Gamboa was at a deposition that a judge had ordered to continue into that day. Id., PageID.985. Addressing the delay in seeking dates for mediation, Wolf claimed that I.Q. Data was waiting on an order in a state case to determine the settlement value of this case. Id., PageID.986-987. As of the hearing, I.Q. Data had given no authority for settlement “other than a nuisance value sort of thing.” Id., PageID.987. But I.Q. Data had to know that Nelson did not view this as a nuisance case, and Warner reported that Judge Andersen charged $25,000. Id., PageID.1006. I.Q. Data's belief that this case has only nuisance value is incongruent with its representation that it intended to engage in expensive facilitative mediation. So I.Q. Data had no realistic expectation that the parties could have a meaningful settlement discussion, and the Court finds that I.Q. Data's push to adjourn the hearing was “a mere stalling tactic.” Id., PageID.987-991.

The rest of the December 12th hearing cast more doubt on the credibility of I.Q. Data's counsel. First, Wolf said that I.Q. Data regarded the issue about its net-worth discovery “as moot” because it offered to “streamline all of this” and stipulate to the $500,000 statutory maximum. Id., PageID.995-996. The Court agreed that “maybe we wouldn't be here if there was a stipulation.” Id., PageID.994-995. But I.Q. Data had not secured a stipulation, and the Court saw no evidence that I.Q. Data put in effort to lock down an agreement. Indeed, Wolf made the perplexing suggestion during the hearing that the ball was in Warner's court to secure the stipulation that I.Q. Data sought: “Your Honor, we've never received a stipulation from Mr. Warner to that end.” ECF No. 62, PageID.994-995. And because the July 16 order required I.Q. Data to provide the “discovery about its net worth” by August 30, 2024, ECF No. 53, PageID.869, the Court found Wolf's claim that the net-worth issue was moot “one of the craziest things I've ever heard an attorney say on the record,” ECF No. 62, PageID.996.

Wolf also said that there is no subclass and that the $500,000 statutory maximum applied equally to all class members. Id. But he offered only evasions in response to Warner's argument that class members who paid interest or expenses disputing the debts may be entitled to a refund on top of statutory damages under § 1692k(a). Id., PageID.997-1000.

Turning to Interrogatory No. 6, Wolf argued, “[W]e have already answered in discovery...we have no records of anyone who disputed the debt.” ECF No. 62, PageID.1000. That was false. As the Court noted in response, I.Q. Data's nonresponsive answer to Interrogatory No. 6 was that no one had objected to its right to collect interest. Id. The Court then asked Wolf, “Have you identified in response to [the] interrogatory the subclass members who disputed the debt in writing.” Id., PageID.1000-1001. Wolf responded that it was his understanding that “we cannot do that.” Id. Pressed for clarification, he said, “We cannot reproduce any records to the extent they exist.” Id., PageID.1001. But in response to more questions, Wolf equivocated on his claim that I.Q. Data could not identify the subclass members who disputed the debt:

*9 THE COURT: I'm asking you as an officer of the court who has a duty of candor, I.Q. Data cannot identify consumers who dispute their debt in writing?

MR. WOLF: I believe that's the case, your Honor. That's true, yes.

THE COURT: So what happens? What is the procedure if a consumer sends in a written dispute of the debt?

MR. WOLF: Your Honor, as I sit here today, I cannot answer the question. I don't know the entire process.... The only way to look and see whether such information would exist would be to go through each one of the files on a file-by-file review....

THE COURT: Okay. So for clarification, you're saying that I.Q. has refused to comply with the order because it thinks that it's just too much work to look at the individual files?

MR. WOLF: Your Honor, I have to look back at the order.

....

THE COURT:.... Is it true that you're saying that you could determine who disputed the debt in writing by looking file by file?....

MR. WOLF: We may be able to do so. Any information, to the extent that it exists, should be there.

THE COURT: And so what you're saying is that I.Q. has declined to do the file-by-file review.

1) whether the disobedient party acted in willful bad faith;

2) whether the opposing party suffered prejudice;

3) whether the court warned the disobedient party that failure to cooperate could result in a default judgment; and

1. I.Q. Data's answer should be stricken and a default should be entered. If a class is certified, damages can then be assessed for entry of a default judgment.

2. I.Q. Data should be compelled to answer Interrogatory Nos. 6 and 7 with the threat of and order of contempt.

3. I.Q. Data should be ordered to either (1) submit a proposed order stipulating not to dispute that its 1% of its net worth is $500,000 or more, or (2) fully answer the discovery requests about its net worth. Failure to do at least one of those options should be treated as contempt of court.

4. And I.Q. Data and its attorneys should be ordered to pay Nelson's attorney's fees and costs.