Name of Assigned Judge Blanche M. Manning Sitting Judge if Other or Magistrate Judge than Assigned Judge
The defendants' objection [#64] to Magistrate Judge Key's R&R [#58] is overruled. Accordingly, by 9/30/2010, the defendants must prepare and serve a revised motion for summary judgment and related filings as detailed in this order. The plaintiff shall serve her response by 10/28/2010, the defendants shall file their reply by 11/11/2010, and the parties shall file their respective documents by 11/12/2010.
#[ For further details see text below.]
Plaintiff Natalie Van Straaten seeks to represent a class of consumers who allegedly received credit card receipts with improperly truncated credit card numbers, in violation of the Fair and Accurate Credit Transactions Act ("FACTA"), 15 U.S.C. § 1681c(g). One of the issues in this case is whether the defendants acted willfully. Before Magistrate Judge Keys, the defendants specifically stated that they did not intend to invoke an advice of counsel defense. Discovery proceeded accordingly.
Following the close of discovery, the defendants served a motion for summary judgment containing what they now characterize as "an advice of counsel-type defense." Dkt. 70 at 1. The defendants assert that they believed this was acceptable because they thought that discovery would be reopened if necessary based on the content of their motion for summary judgment. They also represent that they are willing to allow "full discovery relating to the attorney-client communications at issue." Id.
Contending that the defendants had asserted an advice of counsel defense in their motion for summary judgment after declining to do so while discovery was open, Ms. Van Straaten filed a motion to strike "all references to advice or consultation between Defendants and their counsel regarding compliance with FACTA and/or any state trunction statute." Magistrate Judge Keys issued a report and recommendation ("R&R"). In sum, he found that the defendants had asserted the attorney-client privilege throughout discovery and during a deposition of one of the defendants' witnesses and then raised an advice of counsel defense after discovery closed, thereby precluding Ms. Van Straaten from pursuing discovery relating to the attorney-client communications at issue. Characterizing this strategy as "questionable," he recommended that this court grant Ms. Van Straaten's motion to strike.
The parties disagree regarding the standard of review applicable to the defendants' objections. The court will not address this issue as the result is the same whether the court reviews the R&R for abuse of discretion or de novo.
The advice-of-counsel defense requires a defendant to establish the following elements:
(1) before taking action, (2) he in good faith sought the advice of an attorney whom he considered competent, (3) for the purpose of securing advice on the lawfulness of his possible future conduct, (4) and made a full and accurate report to his attorney of all material facts which the defendant knew, (5) and acted ...