The opinion of the court was delivered by: Byron G. Cudmore, U.S. Magistrate Judge:
Monday, 10 January, 2011 12:11:12 PM
Clerk, U.S. District Court, ILCD
This matter comes before the Court on Plaintiffs United States of America (Government) and the States of California, Illinois, North Carolina, and Ohio's (State Plaintiffs) First Motion to Compel Production of Documents and Answers to Interrogatories (d/e 47) (Motion). For the reasons set forth below, the Motion is allowed in part and denied in part.
The Plaintiffs allege that Dish Network, L.L.C., directly and through its authorized dealers and third party telemarketers, engaged in telemarketing that violated the Telemarketing Sales Rule (TSR), the Telephone Consumer Protection Act (TCPA), and relevant state consumer protection statutes in each of the Plaintiff States. Amended Complaint (d/e 5) (Complaint) ¶¶ 4-7; 16 C.F.R. Part 310; 47 U.S.C. § 227(f)(1); California Business & Professions Code §§ 17200 and 17592; 815 ILCS 505/7 & 815 ILCS 305/30(d); N.C. Gen. Stat. § 75-105; Ohio Rev. Code § 1345.01 et seq. A violation of the TSR is considered an unfair or deceptive practice in or affecting commerce, in violation of § 5(a) of the Federal Trade Commission Act (FTC Act). 15 U.S.C. §§ 45(a) & 57a(d)(3); 15 U.S.C. § 6102(c). The Government seeks an injunction and ancillary equitable relief, as well as civil penalties, for violation of the TSR and the FTC Act. Complaint ¶ 4, 21. The State Plaintiffs seek injunctions and statutory treble damages for willful violations under the TCPA and additional remedies under the applicable State statutes. Complaint ¶¶ 5-8.
Since October 17, 2003, the TSR and rules promulgated by the Federal Communications Commission (FCC) under the TCPA have prohibited sellers and telemarketers from calling consumers' telephone numbers registered on the National Do Not Call Registry and State Do Not Call Registries. Complaint ¶¶ 16, 25. In addition, the TSR prohibits sellers and telemarketers from calling consumers and abandoning the call before a live sales person speaks to a consumer who answers the phone (referred to as "abandoning" a call). Complaint ¶¶ 17-19. The TCPA, and the FCC regulations promulgated thereunder, also prohibit sellers, and those acting on their behalf, from calling consumers who have instructed the seller or telemarketer not to call them again, and from using automatic calling systems that use pre-recorded sales pitches rather than a live sales person to speak with the consumer. Complaint ¶¶ 25-28.
The Plaintiffs allege that Dish sells satellite television programming and related goods and services to consumers directly and through authorized dealers and third party telemarketers. The Plaintiffs allege:
36. Since on or about October 17, 2003, DISH Network, directly and through one or more authorized dealers acting on its behalf, has initiated outbound telephone calls to numbers on the National Do Not Call Registry.
37. Defendant DISH Network entered into oral or written contracts with, among others, Vision Quest, a Michigan company, New Edge Satellite, also a Michigan company, Planet Earth Satellite, an Arizona company, Dish TV Now, a North Carolina company, and Star Satellite, a Utah company (the "Marketing Dealers").
The Government alleges that Dish violated the TSR by calling consumers who are on State or National Do Not Call Registries and by calling consumers and then abandoning the calls without speaking to the consumers. Complaint ¶¶ 63 (Count I), 64 (Count II). The Government also alleges that Dish caused Marketing Dealers to violate the TSR. Complaint ¶ 58, 63, 64. The Government alleges that Dish provided substantial assistance to Star Satellite and/or Dish TV Now when Dish knew or consciously avoided knowing that Star Satellite and/or Dish TV Now were violating the TSR. Complaint ¶ 65 (Count III).
The District Court previously addressed the meaning of "cause" under the TSR. The Federal Trade Commission (FTC) promulgated the TSR. This Court must defer to the FTC's interpretation of the meaning of causation in the TSR. Opinion dated November 2, 2009 (d/e 20), at 9-15; Opinion dated February 3, 2010 (d/e 32), at 4-8; see Joseph v. Holder, 579 F.3d 827, 832 (7th Cir. 2009); Clancy v. Office of Foreign Assets Control of United States Dept. of Treasury, 559 F.3d 595, 606 (7th Cir. 2009); Sierra Club v. Franklin County Power of Illinois, LLC, 546 F.3d 918, 931 (7th Cir. 2008). Under the FTC interpretation of the TSR, Dish "'causes' the telemarketing activity of a telemarketer by retaining the telemarketer and authorizing the telemarketer to market the seller's products and services. . . . [T]he seller is liable for the telemarketer's violations of the TSR unless safe harbor provisions apply." Opinion dated November 2, 2009, at 14.
The State Plaintiffs allege that Dish, directly or through third parties acting on its behalf, violated the TCPA, and FCC regulations promulgated thereunder, by calling consumers in the Plaintiff States who were on the National Do Not Call Registry and by using prerecorded sales pitches in calls. Complaint ¶¶ 68 (Count IV) and 72 (Count V). The State Plaintiffs allege the violations were willful. Complaint ¶¶ 69, 73.
The District Court determined that third parties, such as dealers or telemarketers, acted on behalf of Dish if the dealers or telemarketers "acted as Dish Network's representatives, or for the benefit of Dish Network, when they conducted the alleged illegal telephone solicitations." Opinion entered November 2, 2009, at 24.
This Court entered the Scheduling Order (d/e 34) on March 15, 2010. On May 5, 2010, the Plaintiffs served Defendant Dish Network, LLC (Dish) with the Plaintiffs' First Set of Interrogatories (Interrogatories) and the Plaintiffs' Second Request for Production Documents (RFP). Motion, Exhibits 1 and 2. Dish responded on July 19, 2010. Dish objected to parts of the Interrogatories and RFP, provided some answers to some of the Interrogatories, but produced no documents at that time. Counsel for the parties contacted each other regarding Dish's response. This Court determined at a telephonic hearing that the parties met the obligation to meet and confer regarding their dispute over Dish's response. Minute Entry entered July 23, 2010; see Fed. R. Civ. P. 37(a)(1). The Plaintiffs then filed this Motion on July 30, 2010.
Dish subsequently produced documents on August 9, 2010, and August 16, 2010. The subsequent production by Dish did not resolve all of the issues raised by the Motion. The Plaintiffs still ask this Court to overrule Dish's objections and compel Dish to make a more complete response to the Interrogatories and a more complete production of documents in response to the RFP.
Federal Rule of Civil Procedure 26(b)(1) allows parties to obtain discovery regarding any matter, not privileged, which is relevant to the claim or defense of any party. Relevant information need not be admissible at trial if the discovery appears to be reasonably calculated to lead to the discovery of admissible evidence. Federal Rule of Civil Procedure 33 allows parties to serve interrogatories inquiring into any matter within the scope of Rule 26(b). Fed. R. Civ. P. 33(a). Similarly, Rule 34 allows a party to serve requests for the production of documents that are within the scope of Rule 26. Fed. R. Civ. P. 34(a). A party may seek an order compelling disclosure when an opposing party fails to respond to discovery requests or has provided evasive or incomplete responses. Fed. R. Civ. P. 37(a)(3)(B)(iii), (iv) & (a)(4). The Court has broad discretion when reviewing a discovery dispute and "should independently determine the proper course of discovery based upon the arguments of the parties." Gile v. United Airlines, Inc., 95 F.3d 492, 496 (7th Cir.1996). With these principles in mind, the Court turns its attention to the contested discovery requests.
The Plaintiffs raise fifteen points in the Motion. The Court will address them in the order raised.
1. Objection Based on Statute of Limitations
The Interrogatories and
the RFP generally sought information and
documents covering the period from October 1, 2003, to the present.
Some of the Interrogatories sought information from 2003 to the
present. Dish objected on the grounds that the Interrogatories and RFP
should be limited to the applicable period of limitations.*fn2
The Court has carefully considered the matter and overrules
the objection. Information regarding practices before the applicable
period of limitations may be relevant to issues such as intent and
knowledge. See United States v. International Ass'n of Bridge,
Structural and Ornamental Iron Workers, Local No. 1, 438
F.2d 679, 683 (7th Cir. 1971).
Dish argues that intent is not an issue in this case. The Court disagrees. Several claims raise issues of knowledge or intent. The Government is seeking civil penalties under FTC Act § 5(m). Complaint, at 24 Prayer for Relief ¶ 2. To recover civil penalties, the United States must prove "actual knowledge or knowledge fairly implied on the basis of objective circumstances that such act is unfair or deceptive and is prohibited by such rule." 15 U.S.C. § 45(m)(1)(A). The Government alleges that Dish provided substantial assistance to Star Satellite and/or Dish TV Now when Dish knew or consciously avoided knowing that Star Satellite and/or Dish TV Now was violating the TSR. Complaint ¶ 65. Finally, the State Plaintiffs are seeking treble damages for knowing violations of the TCPA. Complaint, at 24 Prayer for Relief ¶ 4. Each of these claims puts at issue Dish's knowledge or intent. Evidence of events that occurred before ...