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Searcy v. eFunds Corp.

March 5, 2009


The opinion of the court was delivered by: Charles P. Kocoras, District Judge


This matter comes before the court on the motion of Defendants eFunds Corporation and Deposit Payment Protection Services Inc. (collectively referred to as "eFunds") to compel and for sanctions against Plaintiff Gladys Searcy ("Searcy") pursuant to Federal Rule of Civil Procedure 37. For the reasons set forth below, the motion to compel is denied in part and entered and continued in part. The surviving portion of the motion will be recommended for referral to Magistrate Judge Cox for consideration and resolution. No sanctions will be imposed on either party.


eFunds engages in payment processing and risk assessment to assist businesses and merchants in deciding whether to accept personal checks from consumers at the point of sale. To receive these services, businesses and merchants become members of eFunds' "SCAN" database and "SCAN Online" service. Both SCAN and SCAN Online provide check verification services by keeping files on consumers' check-writing histories and other financial information.

The Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq., requires consumer reporting agencies to disclose information in the files they keep on specific consumers to the consumer upon request. According to the complaint, Searcy requested that eFunds disclose the contents of her file to her in September 2005 and again in October 2006. The complaint asserts that the disclosures eFunds sent did not contain all of the information in Searcy's file at the time of the request as required by 15 U.S.C. §1681g(a)(1), the sources of the information in her file as required by 15 U.S.C. §1681g(a)(2), or the names of the persons who procured consumer reports from eFunds regarding Searcy during the one-year period preceding her requests for a disclosure as required by 15 U.S.C. § 1681g(a)(3).

Prior to the filing of this action, Searcy's counsel represented plaintiffs Kimberly Sammons and Cheryl Beaudry in a nearly identical suit in the Middle District of Tennessee. That case was also a putative class action, but it was voluntarily dismissed by the individual plaintiffs before the issue of class certification was addressed. Prior to the dismissal, eFunds produced a list of approximately 130,000 names and addresses of consumers who were sent file disclosures. After receiving this information, counsel for Sammons and Beaudry sent a form letter and questionnaire to approximately 2,500 of those consumers. The form letter informed recipients that counsel was in the process of bringing a class action against eFunds. The letter further explained that the suit had been filed on behalf of consumers who requested file information from SCAN between July 2005 and January 2008 and that the recipient was believed to have requested file information during that period. The letter then asked recipients to complete and return the accompanying questionnaire and provided counsel's contact information.

The one-page questionnaire asked recipients to provide a name, address, home and cellular telephone numbers, and email address. It then provided a blank area for respondents to describe their experience with SCAN and requested that they attach any written documentation in their possession related to experiences they had had with SCAN. Shortly after the letters were sent, the Tennessee action was dismissed and Searcy filed the instant suit, represented by the same counsel who had represented Sammons and Beaudry. eFunds has served Searcy with discovery requests seeking production of several types of documents. First, eFunds asked for all of Searcy's checking account records from January 1, 2005, through the date the request was made. Second, it requested additional identifying information, such as addresses, for the 2,500 people who were sent the form letter and questionnaire. Lastly, eFunds requested documents relating to all communications between Searcy or her counsel and any member of the prospective class. Though Searcy has produced some responsive documents for each of these requests, eFunds contends that the production is incomplete or otherwise lacking and now seeks to compel production pursuant to Fed. R. Civ. P. 37.


Under Fed. R. Civ. P. 37(a)(3)(B)(iv), a party can move to compel discovery when an opponent fails to comply with a discovery request made pursuant to Fed. R. Civ. P. 34. Rule 34(a)(1) permits one party to serve another with a request to produce documents that are "in the responding party's possession, custody or control." Fed. R. Civ. P. 26(b)(1) allows discovery of "any matter, not privileged, that is relevant to the claim or defense of any party." According to Fed. R. Civ. P. 26(b)(5)(A), a party claiming that otherwise discoverable information is privileged or subject to protection must expressly make that claim and describe the nature of unproduced materials in a manner that, without revealing the privileged or protected information itself, will enable others to assess the claim. Questions of privilege that arise in the course of the adjudication of federal rights are governed by federal common law principles. Fed. R. Evid. 501; see also U.S. v. Zolin, 491 U.S. 554, 562, 109 S.Ct. 2619, 2625 (1989).

With these considerations in mind, we turn to the present motion.


I. Motion to Compel

In its initial form, eFunds' motion to compel sought production of three categories of documents and information: all documents related to Searcy's check-writing since January 1, 2005, that are in her possession or that she has a legal right to obtain; a complete list of potential class members who received the form letter and questionnaire sent out in the Tennessee case, including addresses and other identifying information; and all completed questionnaires and other written communications received in response to that mailing. Over the course of the briefing of the instant motion, the parties resolved their dispute with regard to the first two categories. Accordingly, we confine our analysis to the issues surrounding production of the ...

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