The United State District Court for the Northern District of Georgia recently dismissed some of the Consumer Financial Protection Bureau’s (“CFPB”) claims against debt collectors because of the CFPB’s willful violations of the Court’s discovery orders. See Consumer Fin. Prot. Bureau v. Universal Debt Sols., LLC, 2017 WL 3887187 (N.D. Ga. Aug. 25, 2017). The CFPB brought an action against a number of debt collectors for a “massive debt-collection scheme” through which the defendants “allegedly used the telephone broadcast services of [one defendant] to broadcast millions of threatening and false statements to consumers in telephone calls and messages.” During the action, the defendants served the CFPB with Rule 30(b)(6) deposition notices. The CFPB moved for a protective order, but the Court ordered the depositions to proceed. After the first deposition, the defendants scheduled a call with the Court to discuss their objections with the CFPB’s non-responsive answers and privilege objections during the deposition, and the Court ordered the CFPB to provide more responsive answers in the remaining depositions. After the CFPB engaged in similar conduct in the remaining depositions, the defendants moved to strike portions of the CFPB’s pleadings as a sanction. The Court granted the motions.
First, the Court found that the CFPB’s witnesses used “memory aids” during their depositions, which essentially were scripts from which the witnesses read prepared responses that sometimes exceeded forty minutes. Second, the witnesses were not prepared to respond to any follow-up questions. Specifically, the witnesses testified that they had not found a single piece of exculpatory evidence for any of the defendants during their investigation. “Surely, in the mass of evidence in this case, the CFPB could find some exculpatory evidence. Its insistence that it could not reflects an unwillingness to comply with the Court’s instructions and a bad faith attempt to frustrate the purpose of Defendants’ depositions.” (Emphasis in original). Finally, the Court found that the CFPB refused to answer questions regarding the factual bases of its claims based on a claim of work product despite the fact that the Court had expressly ordered the CFPB to answer these questions during its conference call. “That blatant disregard for the Court’s instruction is reflective of a larger problem. . . . [and] demonstrate[s] a willful disregard of the Court’s instructions.” The Court then held that reopening the depositions would not be fruitful and dismissed the relevant counts of the CFPB’s complaint.