Consumer Finance Insights
June 23, 2023

Eleventh Circuit Reprimands CFPB for Discovery Abuses During Rule 30(b)(6) Depositions

On June 12, 2023, an Eleventh Circuit panel issued an opinion affirming a sanctions order against the Consumer Financial Protection Bureau (CFPB) premised on the CFPB’s “derail[ment]” of multiple depositions in contravention of the district court’s instructions.  See Consumer Financial Protection Bureau v. Brown, Case 21-14468 (11th Cir. June 12, 2023) (the “Opinion”).  The panel specifically affirmed the “severe sanction of dismissal” of the CFPB’s claims, declining to second-guess the district court’s conclusion that “reopening discovery would not be fruitful” in light of the CFPB’s prior pattern of conduct.

In 2015, CFPB initiated litigation against eighteen defendants for engaging in an fraudulent robo-call debt collection operation that targeted millions of consumers.  The CFPB alleged that, as part of the unlawful scheme, consumers were tricked into believing that the collectors were legitimate because the collectors verified consumers’ personal information, including social security numbers, birth dates, and employment information.

During discovery, the CFPB objected to Rule 30(b)(6) deposition notices, arguing that (i) it had already provided the information to defendants in interrogatory responses, (ii) the topics covered information within the law enforcement and deliberative process privileges, and (iii) the depositions were an “improper attempt to question” CFPB counsel regarding their mental impressions and analyses.  Opinion at 5.  The district court overruled the CFPB’s objections on the basis that Rule 30(b)(6) “applies with equal force to government agencies and ‘factual matters are subject to inquiry even if those matters have been disclosed in interrogatory responses.’” Id.  The CFPB continued to attempt to avoid providing a Rule 30(b)(6) representative by moving for protective orders that would limit significantly the scope of questioning.  In response, the district court granted the CFPB’s motions in part, limiting the scope of Rule 30(b)(6) testimony to “exculpatory facts” and prohibiting questions that would “delve into [the CFPB’s] trial strategy.” Id. at 6.

According to the Eleventh Circuit panel, and despite the district court’s orders regarding the permissible scope of the Rule 30(b)(6) deposition, the CFPB avoided answering questions during the first Rule 30(b)(6) deposition.  Specifically, the CFPB lodged over 70 work product objections, including to fact-based questions that it had been instructed to answer by the district court, spent a significant portion of the deposition reading from memory aids, and repeatedly stated that it had not “identified any exculpatory facts in the entire record.” Id. 6-7. The parties attended a telephonic hearing with the district court to discuss the CFPB’s behavior during the first Rule 30(b)(6) deposition. The district court again held during that hearing that the CFPB’s witness must answer fact-based questions without simply reading hundreds of pages of memory aids, and that the defendants were entitled to question the CFPB regarding exculpatory facts.

During the remaining Rule 30(b)(6) depositions, the CFPB again objected repeatedly on work product grounds to fact-based questions and relied heavily on memory aids.  The defendants moved for sanctions.  The district court found that, by reading extensively from reading aids, asserting meritless privilege objections, and effectively failing to appear due to being unable to answer questions without memory aids and refusing to answer questions regarding exculpatory facts, Rule 37 sanctions were warranted.  The district court granted defendants’ motions by dismissing all of the CFPB’s claims against five of the defendants.

On appeal, the panel affirmed the district court’s dismissal of the five defendants after finding that the CFPB violated both Rule 37(b), for failure to obey a court order to provide or permit discovery, and Rule 37(d), for the witness’s failure to appear at a Rule 30(b)(6) deposition. Id. at 17. The panel noted that the district court’s instructions, delivered repeatedly to the parties, were clear in mandating that “the CFPB had to sit for depositions during which defendants were ‘entitled to question the CFPB about the factual underpinnings of its allegations against them.” Id. at 19. The panel held that the CFPB “did not misunderstand” those orders, but instead “disagreed” with and “ignored” them by continuing to lodge improper work product objections, read extensively from memory aids rather than “offering organic answers with a ‘human touch,’” and took the “incredible position that exculpatory facts did not exist as to any defendant.” Id. at 18-21.

Additionally, the panel held that the “severe” sanction of dismissal was appropriate. Id. at 22. The panel stated that the district court had not abused its discretion, and declined to second-guess the conclusion that reopening discovery would be fruitful. Id. at 23. The panel also held that, contrary to the CFPB’s assertion that the appellees were not prejudiced by its conduct during depositions, “the record (as reiterated throughout this opinion) speaks for itself in refuting contention.” Id.

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