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CE Design Ltd. v. Cy's Crabhouse North

June 11, 2010


The opinion of the court was delivered by: Matthew F. Kennelly, District Judge


CE Design LTD. (CE Design) has sued Cy's Crabhouse North, Inc., and Cy's Crabhouse & Seafood Grill, Inc. (collectively, Cy's Crabhouse), alleging violations of the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227(b)(1)(C). Defendant has moved to dismiss pursuant to Federal Rule of Civil Procedure 37(b)(2)(A). For the reasons stated below, the Court denies defendant's motion. Also, Caroline Abraham, a non-party to this suit, has filed a letter with the Court regarding discovery in this case. For the reasons stated below, the Court treats this letter as a motion for protective order, and grants it in part and denies it in part.


The Court takes the following facts from plaintiff's complaint and from the parties' submissions on the motion to dismiss and the motion for protective order.

Business to Business Solutions (B2B), a business based in New York and run by Caroline Abraham (Abraham), worked for Macaw (also known as Maxileads), a Romanian company, to send fax advertisements in the United States. Abraham was B2B's only employee. B2B set up ten to fifty phone lines, received and processed payments, edited proposed advertisements, and maintained some records for Macaw. One of the databases B2B maintained for Macaw was a database named "Fax Clients," in which it recorded information regarding Macaw's clients. According to Abraham, the database records indicate that Cy's Crabhouse purchased two sets of 5,000 fax advertisements for a total of $328 on November 1, 2005. In November 2005, CE Design received an unsolicited fax advertisement for Cy's Crabhouse.

A. Discovery History

The motions at issue in this order involve disputes about CE Design's compliance with the discovery process and with a protective order issued earlier in this case.

In June 2008, Cy's Crabhouse sent CE Design interrogatories and document requests (the "supplemental discovery" requests). One of the interrogatories asked CE Design to "[i]dentify each and every communication between any agent and/or lawyer for Plaintiff and . . . [B2B]." Another interrogatory asked CE Design to "[i]dentify by name, jurisdiction and court number, each and every TCPA lawsuit in which the plaintiff's law firm issued a subpoena to . . . [B2B]." The requests for production included requests to "[p]roduce all documents relating to any communications, subpoenas, phone records, bills, letters, or e-mails with . . . [B2B]" and to "[p]roduce all documents relating to any invoices issued at any time in 2005 by or on behalf of . . . [B2B]." Cy's Crabhouse also requested copies of any subpoenas served on B2B by plaintiff's counsel in any other TCPA lawsuit and any B2B responses to such subpoenas.

On July 2, 2008, the Court entered an agreed protective order in this case. It states:

[A]ny party or third party that submits to the jurisdiction of this Court for adjudication of production and designation disputes who is required to produce documents or disclose information in discovery in this case (the "Producing Person") may designate as "confidential" any non-public material that the producing person believes, in good faith, contains information related to a grade secret, customer lists, non-public pricing information, personal consumer information, including social security numbers or consumer credit report, confidential research or any other information subject to a legally protected right to privacy ("Confidential Information").

Docket no. 81. To designate material confidential, the protective order required the producing person to mark or stamp it "confidential" (in the case of documents) or inform counsel for the parties in writing that it is confidential (for any material not reduced to documentary form).

In August 2008, CE Design responded to the supplemental discovery requests. It raised various objections, including that the requests were overly broad and burdensome and that the information defendants sought was privileged.

CE Design's counsel also represents the plaintiff classes in several other TCPA cases involving B2B, and B2B has been subpoenaed in several of those cases. One such case, G.M. Sign, Inc. v. Finish Thompson, Case No. 07 C 5953, is currently pending before Judge Virginia Kendall of this district. In connection with that case, a judge in the United States District Court for the Eastern District of New York (where Abraham lives) issued a rule to show cause directing Abraham to produce B2B telephone records and the fax numbers of parties that received faxes from Finish Thompson.

On September 16, 2008, Abraham was deposed in this case. She brought documents with her to the deposition, including her responses to subpoenas and discovery requests in other TCPA cases, but on the advice of plaintiff's counsel she did not show these to counsel for Cy's Crabhouse.*fn1

On October 7, 2008, Cy's Crabhouse filed a motion to compel CE Design to comply with its supplemental discovery requests. Docket no. 97. The Court held a hearing on the motion to compel on December 18, 2008. During the hearing, Cy's Crabhouse argued that plaintiff's counsel should be compelled to turn over all materials Abraham had given to him pursuant to subpoenas in other cases. It argued that the materials included information that is relevant to this case, such as the methods B2B used to identify and group fax numbers of advertisement recipients.

CE Design's counsel responded that it had already turned all materials that specifically mentioned Cy's Crabhouse and argued that Cy's Crabhouse was not entitled to see the other materials because they were privileged, or attorney work product, or irrelevant. Cy's Crabhouse replied that relevant information was not limited to that which mentioned Cy's Crabhouse by name, but included information about the structure of B2B's business, its methods for identifying recipients of advertisements, and the like.

The Court admonished CE Design's attorney that because he did not represent Abraham, his claims of privilege were likely unavailing. The Court instructed counsel for CE Design to go through the Abraham materials again and produce any materials that were responsive to the interrogatories and document requests submitted by Cy's Crabhouse, not just those that mentioned Cy's Crabhouse by name. Tr. of Hr'g on Mot. to Compel, Docket no. 215, Ex. E. At a hearing on January 22, 2009, counsel for CE Design told the Court that he had reviewed all the documents and had given Cy's Crabhouse everything that was relevant to the supplemental discovery requests. Based on this representation, the Court terminated the motion to compel as moot. Docket no. 115.

B. Communications between plaintiff's counsel and Abraham

The supplemental discovery requests that were the subject of Cy's Crabhouse's motion to compel focused on the relationship between Abraham and plaintiff's counsel (not CE Design). Plaintiff's counsel represents plaintiffs in several TCPA lawsuits involving B2B and has communicated with Abraham by e-mail about this and other cases. These e-mail communications included requests for production of B2B business records as well as discussions about scheduling depositions of Abraham and her son Joel Abraham (Joel).*fn2 The e-mails did not always distinguish among the cases or say which case was being referred to in a particular message.

In response to repeated requests for documents from plaintiff's counsel, Abraham sent a letter to Ryan Kelly, one of plaintiff's attorneys, on July 30, 2008. In the letter, Abraham told Kelly that she was able to provide "some of the information that [he] requested," but not all of it. She explained that she did not have access to the fax numbers to which the advertisements were sent, because those numbers were controlled by Macaw, the now-defunct Romanian company that actually sent the advertisements. Abraham also explained that she had a hard drive crash a few years before and that some of the information or data counsel sought may have been on the hard drive that ...

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