It is common knowledge that class action lawsuits are expensive. And we know that many consumer class action lawsuits are filed without a proper class representative or with a class that is otherwise ill-defined, legally deficient, or unascertainable. Other purported Telephone Consumer Protection Act class action lawsuits present potentially dispositive issues from the outset, such as whether the calls the named plaintiff received were subject to the TCPA in the first place.
Defendants hit with TCPA suits are often in the difficult position of having to spend substantial amounts of time and money on discovery, only to prevail on claims that lacked merit from the outset, particularly in cases that involve millions of call records that contain sensitive confidential information.
When faced with the prospect of expensive class discovery even though the named plaintiff’s individual claim is weak, defendants should consider moving to bifurcate discovery. See Dennis v. Amerigroup Washington, Inc., No. 3:19-cv-05165 (W.D. Wash.) (limiting discovery to issues relating to the plaintiff’s individual claims and suspending class discovery after a ruling on any dispositive motion the defendant files with respect to the plaintiff’s individual claims).
One court has seen this problem and addressed it head-on. In Boehm v. Pure Debt Solutions Corp., No. 8:19-cv-00117, 2019 U.S. Dist. LEXIS 177676 (D. Neb. Oct. 11, 2019), a TCPA class action concerning automated and/or prerecorded calls to a plaintiff’s cell phone, the Court bifurcated merits and class certification discovery by way of an initial progression order.
Interestingly, the Boehm Court recently followed up on the progression order by ordering the plaintiff to serve a preservation order to the major wireless carriers, including AT&T Mobility, Sprint/Nextel Communications, T-Mobile USA, Cellco Partnership d/b/a Verizon Wireless, U.S. Cellular, and MetroPCS. The order instructs the wireless carriers to preserve their business records concerning all calls from the defendant’s outbound dialed phone numbers.
Though the Court is requiring these third parties to comply with what essentially amounts to a litigation hold, the order is clear that no production is being compelled from them at this time.
The follow-on of a preservation order is a nice compromise that addresses plaintiffs’ concerns with discovery bifurcation. It assures a plaintiff that no data will go missing and that the claims of class members will not be prejudiced by the Court’s decision to delay class discovery. Also, by having the plaintiff serve the order on the non-party carriers, it empowers the Court to later penalize the non-party carriers for non-compliance, thereby alleviating some of the pressure on the defendant who is not otherwise able to control the acts of the carriers.
The approach also ensures that the expense of compilation and production of massive amounts of sensitive financial or consumer data is not undertaken until the plaintiff can identify a class or otherwise overcome a dispositive issue – a positive step in terms of judicial economy.
Given that Rule 26 is meant to assure that discovery is proportionate to the needs of the case, TCPA class actions should rarely merit the production of the massive amounts of consumer data class counsel often seek. Since the discovery that takes place in TCPA cases is almost always asymmetrical, it seems best to decide the big issues first and to determine whether there is a case at all rather than engage in potentially ruinous discovery.
The lesson here is that bifurcation is a powerful discovery tool. When coupled with a preservation order to overcome the often-used prejudicial effect objection employed by plaintiffs, it can reduce costs and is well worth the ask.