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REPLY to Response to Motion re 278 MOTION for Reconsideration [UNREDACTED Copy re ECF… — Bofa Ca Unemployment (Dkt. 300)
Summary
Plaintiffs' reply in support of their objections to and motion to reverse in part the magistrate judge's discovery order at ECF 268, dated April 24, 2024, in In re Bank of America California Unemployment Benefits Litigation, Case No. 3:21-md-02992-GPC-MSB, in the U.S. District Court for the Southern District of California. Co-lead counsel Cotchett, Pitre & McCarthy, LLP and Altshuler Berzon LLP dated it June 7, 2024, for a hearing before Hon. Gonzalo P. Curiel on July 19, 2024. The reply argues that Judge Berg applied the apex-deposition standard instead of the Rule 26(b)(1) relevance and proportionality test in denying the motion to compel documents from two executives, including the Bank's CEO. It contends their files bear on EFTA treble damages under 15 U.S.C. §1693f(e)(2) and punitive damages under Cal. Civ. Code §3294(b) tied to the Claim Fraud Filter.
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1 JOSEPH W. COTCHETT (SBN 36324) MICHAEL RUBIN (SBN 80618)
2
jcotchett@cpmlegal.com mrubin@altber.com
BRIAN DANITZ (SBN 247403) STACEY M. LEYTON (SBN 203827)
3 bdanitz@cpmlegal.com sleyton@altber.com
4 KARIN B. SWOPE (Pro Hac Vice) CONNIE K. CHAN (SBN 284230)
kswope@cpmlegal.com cchan@altber.com
5 ANDREW F. KIRTLEY (SBN 328023) COLIN C. JONES (SBN 354301)
6 akirtley@cpmlegal.com cjones@altber.com
COTCHETT, PITRE & McCARTHY, LLP ALTSHULER BERZON LLP
7 840 Malcolm Road, Suite 200 177 Post Street, Suite 300
8 Burlingame, CA 94010 San Francisco, CA 94108
Telephone: (650) 697-6000 Telephone: (415) 421-7151
9 Fax: (650) 697-0577 Fax: (415) 362-8064
10
Co-Lead Counsel for Plaintiffs and the Proposed Class
11
12 UNITED STATES DISTRICT COURT
13 SOUTHERN DISTRICT OF CALIFORNIA
14
IN RE BANK OF AMERICA Case No. 3:21-md-02992-GPC-MSB
15
CALIFORNIA UNEMPLOYMENT
16 BENEFITS LITIGATION REPLY IN SUPPORT OF
PLAINTIFFS’ OBJECTIONS TO
17
AND MOTION TO REVERSE IN
18 PART MAGISTRATE JUDGE’S
APRIL 24, 2024 DISCOVERY ORDER
19
[ECF 268]
20
This Document Relates to All Actions Judge: Hon. Gonzalo P. Curiel
21
Date: July 19, 2024
22 Time: 1:30 PM
Ctrm: 2D (2nd floor)
23
24 UNREDACTED VERSION FILED
UNDER SEAL
25
26
27
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REPLY ISO PLS.’ OBJECTIONS TO & MOTION TO REVERSE IN PART Case No. 3:21-md-02992-GPC-MSB
MAGISTRATE JUDGE’S APRIL 24, 2024 DISCOVERY ORDER
1 TABLE OF CONTENTS
2
TABLE OF AUTHORITIES .................................................................................... ii
3
4
I. INTRODUCTION .......................................................................................... 1
5 II. ARGUMENT .................................................................................................. 2
6 A. The Discovery Order Fails to Apply or Misapplies Rule 26. .................... 2
7 B. The Portion of the Discovery Order Denying Plaintiffs’ Motion to
8 Compel Moynihan’s and Montag’s Documents Must Be Reversed. ........ 4
9 1. Moynihan and Montag Are Key Decision-Makers Likely to
10 Have Highly Relevant and Unique Documents Bearing on
the Bank’s Reasons for Implementing the Claim Fraud Filter. ....... 4
11
2. The Maximal Relevance of Moynihan’s and Montag’s
12
Documents to the Central Issues in the Case Far
13 Outweighs the Minimal Burden of Producing Their
Non-Duplicative Documents. .......................................................... 7
14
15 III. CONCLUSION ............................................................................................. 10
16
17
18
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REPLY ISO PLS.’ OBJECTIONS TO & MOTION TO REVERSE IN PART Case No.: 3:21-md-02992-GPC-MSB
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1 TABLE OF AUTHORITIES
2 Page(s)
3
Federal Cases
4
Apple Inc. v. Samsung Elecs. Co.,
5 282 F.R.D. 259 (N.D. Cal. 2012) ......................................................................... 3
6
Blankenship v. Fox News Network, LLC,
7 No. 2:19-CV-00236, 2021 WL 2345972 (S.D. W. Va. June 8, 2021)................. 3
8
Blankenship v. Hearst Corp.,
9 519 F.2d 418 (9th Cir. 1975) ........................................................................... 2, 5
10 Cohen v. Trump,
11 Nos. 13-cv-2519-GPC-WVG, 10-cv-0940-GPC-WVG, 2015 WL
3966140 (S.D. Cal. June 30, 2015) .................................................................. 2, 4
12
Dang v. Cross,
13
422 F.3d 800 (9th Cir. 2005) ............................................................................... 8
14
Goro v. Flowers Foods Inc.,
15 334 F.R.D. 275 (S.D. Cal. 2018) ......................................................................... 5
16
Harris v. Union Pac. R.R. Co.,
17 No. 8:16-cv-381, 2018 WL 2729131 (D. Neb. June 6, 2018) ............................. 3
18 Laryngeal Mask Co. Ltd. v. Ambu A/S,
19 No. 3:07-cv-01988 DMS-NLS, (S.D. Cal. July 17, 2009)............................. 5, 10
20 Lutzeier v. Citigroup Inc.,
No. 14-cv-00183-RLW, 2015 WL 430196 (E.D. Mo. Feb. 2, 2015) .................. 3
21
22 Oxbow Carbon & Minerals LLC v. Union Pac. R.R. Co.,
322 F.R.D. 1 (D.D.C. 2017) ....................................................................... 8, 9, 10
23
Shenwick v. Twitter,
24
No. 16-cv-05214, 2018 WL 833085 (N.D. Cal. Feb. 7, 2018) ............................ 6
25
Six West Retail Acquisition, Inc. v. Sony Theatre Mgmt. Corp.,
26 203 F.R.D. 98 (S.D.N.Y. 2001) ........................................................................... 5
27
28
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1 SPS Techs., LLC v. Briles Aerospace, Inc.,
2
No. 18-cv-9536-MWF, 2019 WL 13108021 (C.D. Cal. June 25,
2019) .................................................................................................................... 9
3
Williams v. Apple, Inc.,
4 No. 19-cv-04700-LHK-VKD, 2020 WL 5107639 (N.D. Cal. Aug.
5 31, 2020) .............................................................................................................. 9
6 Federal Statutes
7
15 U.S.C.
8 §1693f(e)(2) ..................................................................................................... 1, 9
9 California Statutes
10
Cal. Civ. Code
11 §3294(b) ........................................................................................................... 1, 9
12 Rules
13
Fed. R. Civ. P.
14 Rule 26 ........................................................................................................ passim
Rule 26(b)(1) .................................................................................................... 1, 2
15
2015 Cmte. Notes................................................................................................. 2
16
17
18
19
20
21
22
23
24
25
26
27
28
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1 I. INTRODUCTION
2 This dispute over two ESI custodians, Moynihan and Montag (“Custodians”), is
3 governed by Rule 26(b)(1)’s dual requirements of relevance and proportionality. Judge
4 Berg found that these Custodians likely possess relevant documents. But then, instead
5 of conducting the required proportionality analysis, he turned to the irrelevant issue of
6 whether there was sufficient evidence that the Custodians possess “‘uniquely relevant
7 information that is not available from the sources already designated.’” ECF 268 at 8-9.
8 That is the “apex” standard for determining whether to compel an executive’s
9 deposition; it has no application to the far less burdensome task of collecting relevant
10 documents in response to a request for production. Because Judge Berg failed to
11 conduct the required Rule 26 analysis, and because the Custodians’ documents are not
12 just proportional but critical to the needs of the case, the Discovery Order should be
13 reversed and the Bank should be ordered to produce the Custodians’ ESI.
14 The Bank’s factual exegesis entirely ignores why the Custodians’ documents are
15 likely to prove critical—a key consideration in assessing proportionality. At this point
16 in the case, following the Preliminary Injunction and the Bank’s payment of restitution
17 under the Remediation Plan, many of the basic facts and the Bank’s EFTA liability are
18 not seriously in dispute. The real question now is whether the Bank is subject to
19 hundreds of millions of dollars in treble damages under EFTA—a valuation the Bank
20 does not dispute—and potentially even more in punitive damages under several other
21 claims. Because one basis for EFTA treble damages turns on whether the Bank’s
22 conduct was knowing and willful, 15 U.S.C. §1693f(e)(2), and because punitive
23 damages turn on the motives and intent of an “officer, director, or managing agent,”
24 Cal. Civ. Code §3294(b), evidence showing what the Custodians knew about the Claim
25 Fraud Filter (“CFF”) and its actual and foreseeable impacts on legitimate EDD
26 cardholders, and which of the challenged Bank policies they directed, authorized, or
27 ratified and why, are critical to that inquiry. That is why documents they prepared,
28
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REPLY ISO PLS.’ OBJECTIONS TO & MOTION TO REVERSE IN PART Case No.: 3:21-md-02992-GPC-MSB
MAGISTRATE JUDGE’S APRIL 24, 2024 DISCOVERY ORDER
1 reviewed, and approved are not just proportionate, but essential to the needs of the
2 case. Those needs dwarf the Bank’s minimal incremental costs of production, which
3 the Bank now admits are likely only 25% of what it estimated to Judge Berg.
4 II. ARGUMENT
5 A. The Discovery Order Fails to Apply or Misapplies Rule 26.
6 The Bank now concedes that Rule 26 sets forth the applicable standard (Opp. 12),
7 despite having previously advocated for a heightened “key decision maker” standard
8 for executive custodians (ECF 209 at 3-4). Because the Discovery Order failed to apply
9 or misapplied Rule 26 to Plaintiffs’ motion to compel, it is “contrary to law” and must
10 be reviewed de novo. See Mot. 12:27-18:1; Cohen v. Trump, Nos. 13-cv-2519-GPC-
11 WVG, 10-cv-0940-GPC-WVG, 2015 WL 3966140, at *7 (S.D. Cal. June 30, 2015)
12 (reversing magistrate judge discovery order as contrary to law).
13 The Bank tries to avoid de novo review by asserting that the Order actually
14 applied the relevance-and-proportionality standard rather than the heightened apex-
15 deposition standard. That assertion is easily refuted. Under Rule 26, once the moving
16 party shows that the requested discovery is “relevant to any party’s claim or defense,”
17 Fed. R. Civ. P. 26(b)(1), the “heavy burden” shifts to the resisting party to show that
18 the requested discovery is disproportionate or unduly burdensome under the Rule
19 26(b)(1) factors. Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975).1
20 In stark contrast to Rule 26’s allocation of burdens, the Order imposes a
21 heightened burden on the moving party at step 1 of the analysis, stating: “First, the
22 party seeking designation of additional custodians must show ‘that the disputed
23 custodians possess uniquely relevant information that is not available from the sources
24 already designated.’” ECF 268 at 7:6-8 (emphases added; citations omitted). Only
25
26
1
When the 2015 amendments to the Federal Rules reincorporated a proportionality
27 requirement into Rule 26, the Committee Notes made clear the change “does not place
on the party seeking discovery the burden of addressing all proportionality
28 considerations.” Fed. R. Civ. P. 26, 2015 Cmte. Notes.
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1 then does the burden shift to the resisting party to substantiate its objections. In all but
2 name, this is the apex doctrine that all parties now agree is inapposite. A distinctive
3 feature of the apex doctrine is that it places a heightened burden on the party seeking
4 discovery to show that the requested deponent has “unique first-hand, non-repetitive
5 knowledge of the facts at issue,” not obtainable from other sources. Apple Inc. v.
6 Samsung Elecs. Co., 282 F.R.D. 259, 263 (N.D. Cal. 2012) (emphases added). That is
7 the precise burden the Order imposes on Plaintiffs. See ECF 268 at 7-9. An “argument
8 that a party’s senior executives are protected from being designated as custodians
9 unless the party seeking such designation shows they possess unique, personal
10 knowledge … appears to call for application of the so-called ‘apex doctrine.’”
11 Blankenship v. Fox News Network, LLC, No. 2:19-CV-00236, 2021 WL 2345972, at
12 *3 n.5 (S.D. W. Va. June 8, 2021).
13 While the Order does recognize that requiring Plaintiffs to show the Custodians’
14 files include uniquely relevant documents not available from other sources is akin to
15 the apex deposition standard and nominally rejects that standard, the Order then
16 applies it anyway. Specifically, the Order nominally rejects the Bank’s reliance on
17 Lutzeier and Harris, finding them “generally inapplicable because they relied on the
18 ‘apex deposition doctrine,’ whereas the instant dispute concerns document discovery.”
19 ECF 268 at 5 n.3; cf. Lutzeier v. Citigroup Inc., No. 14-cv-00183-RLW, 2015 WL
20 430196, at *7 (E.D. Mo. Feb. 2, 2015) (denying request to add executives as ESI
21 custodians where movant did not show executives had “unique or personal knowledge
22 of the subject matter”); Harris v. Union Pac. R.R. Co., No. 8:16-cv-381, 2018 WL
23 2729131, at *4 (D. Neb. June 6, 2018) (same). Despite this, the Order then applies a
24 standard that is indistinguishable from those applied in Lutzeier and Harris.
25 The Bank contends that it was appropriate for the Order to inject proportionality
26 considerations in assessing Plaintiffs’ “initial burden.” Opp. 13:1-14. But, in addition
27 to being wrong as a matter of law, this argument ignores that “proportionality” analysis
28 under Rule 26 requires far more than what occurred here. Plaintiffs addressed all the
3
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MAGISTRATE JUDGE’S APRIL 24, 2024 DISCOVERY ORDER
1 proportionality factors in its prior briefing, while the Bank ignored them. See ECF 209,
2 212 at 7:19-8:22. The Order does not address Rule 26’s proportionality factors either.
3 See ECF 268. For these reasons, the Order’s reliance on an incorrect legal standard
4 requires de novo review. See Cohen, 2015 WL 3966140, at *7.
5
B. The Portion of the Discovery Order Denying Plaintiffs’ Motion to
6 Compel Moynihan’s and Montag’s Documents Must Be Reversed.
7 Even without de novo review, reversal would be required because it is clear
8 “that a mistake has been made.” Id. at *1. This mistake is highlighted by the significant
9 additional evidence buried in the Bank’s voluminous eleventh-hour production that
10 Judge Berg declined to consider. This Court should either consider that evidence itself,
11 or remand for Judge Berg to review upon reconsideration. See Mot. 2:21-28, 12:6-24.
12 1. Moynihan and Montag Are Key Decision-Makers Likely to Have
Highly Relevant and Unique Documents Bearing on the Bank’s
13 Reasons for Implementing the Claim Fraud Filter.
14 There is no dispute the Custodians have relevant documents. See ECF 268 at 8-
15 9. Beyond this, Plaintiffs presented compelling evidence that both Custodians had
16 personal knowledge and were directly involved in directing subordinates to develop
17 an aggressive claim-denial strategy that prioritized the Bank’s economic self-interest
18 over the needs of EDD cardholders—i.e., the CFF policies. See Mot. 17-23; Chan Decl.
19 Exs. 1-24 (ECF 212-2 to -25); Supp. Chan Decl. Exs. 25-36 (ECF 279 to 279-14).
20 Moynihan. The evidence demonstrates that CEO Brian Moynihan played a
21 hands-on role in the Bank’s development and implementation of the CFF, “a less
22 conservative screen” than the Bank had previously used. See Exs. 24, 27-33. That
23 lower-level employees prepared materials to “present to Brian M” regarding such
24 aggressive strategies to stem the Bank’s growing EFTA-related losses establishes his
25 knowledge and participation and reinforces the likelihood that his files contain
26 additional relevant documents. Responsive documents reviewed and prepared by
27 Moynihan, even if also seen by others, are not unreasonably cumulative or duplicative,
28 because they uniquely show what the Bank’s CEO himself knew and did, which is
4
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1 critical to the punitive damages inquiry. See Mot. 7:10-9:4, 18:18-22. Cf. Laryngeal
2 Mask Co. Ltd. v. Ambu A/S, No. 3:07-cv-01988-DMS-NLS, 2009 WL 10672436, at *4
3 (S.D. Cal. July 17, 2009) (court will not limit discovery under Rule 26(b)(2) because
4 it is “somewhat” cumulative and duplicative, only if it is “unreasonably” so).
5 Moynihan was also likely involved in the Bank’s decision to freeze the cards
6 and accounts of EDD benefits recipients whose claims triggered the CFF. See Ex. 7.
7 While the Bank suggests that Plaintiffs, to gain access to his documents, must
8 conclusively demonstrate that Moynihan made the ultimate decision, that would turn
9 the discovery process upside down, requiring proof of what the evidence will show
10 before allowing discovery into its existence. See Blankenship, 519 F.2d at 429
11 (vacating protective order because plaintiff’s “suggesti[on]” of “possible information
12 that [executive] might have” defeated argument that everything from the executive
13 “would be repetitious with what plaintiff had learned from other sources”); Six West
14 Retail Acquisition, Inc. v. Sony Theatre Mgmt. Corp., 203 F.R.D. 98, 102-06 (S.D.N.Y.
15 2001) (CEO deposition allowed where one could “infer” his unique knowledge).
16 The evidence also shows that Moynihan “prepared memoranda and presented
17 on key issues at Board meetings.” ECF 268 at 8; see Exs. 10-12. The Bank asserts that
18 Plaintiffs are entitled to nothing more, because “the relevant board materials … plainly
19 reflect ‘what was told to the Board’ about the issues Plaintiffs are concerned about.”
20 Opp. 18:21-22. That assertion is contrary to common sense and case law. There is no
21 basis for assuming that every relevant document in Moynihan’s possession was
22 translated into board materials—and the Bank provides no evidence of such. See Goro
23 v. Flowers Foods Inc., 334 F.R.D. 275, 286 (S.D. Cal. 2018) (overruling defendants’
24 objection where they “fail[ed] to attach the referenced document or explain why this
25 document would provide Plaintiffs with the information they seek”). In any event, that
26 “responsive documents will necessarily be found in other custodians' records is not
27 sufficient to defeat a search of [a CEO’s] files.” Shenwick v. Twitter, Inc., No. 16-cv-
28
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REPLY ISO PLS.’ OBJECTIONS TO & MOTION TO REVERSE IN PART Case No. 3:21-md-02992-GPC-MSB
MAGISTRATE JUDGE’S APRIL 24, 2024 DISCOVERY ORDER
1 05214, 2018 WL 833085, at *1 (N.D. Cal. Feb. 7, 2018); see also Mot. 18:24-28 (citing
2 cases).
3 Montag. The evidence shows that Montag likewise has critically important
4 documents. In addition to being COO, Montag led the Bank’s Global Banking and
5 Markets (GBAM) division, which operated the EDD card program, conceived of and
6 implemented the CFF policy, and set customer service staffing levels. He played an
7 active role in these issues, personally directing subordinates to develop strategies to
8 stem the Bank’s losses from paying EFTA-required credits, which resulted in creation
9 of the CFF and the policy of subjecting EDD cardholder claims to “GBAM/systemic
10 denials.” See Mot. 22:1-23:23; Ex. 25. He communicated with “[a] lot of people,”
11 including Moynihan, about UI prepaid fraud claims and the Bank’s strategies to
12 mitigate the Bank’s EFTA-related losses. See Exs. 3, 14, 26, 28. He was also a member
13 of the management committees that approved the CFF policy and were tasked with
14 monitoring its “effectiveness” and impact on “additional losses.” Exs. 29-35. The
15 Bank’s assertion that Montag “only had ‘basic’ or ‘general awareness’ of the prepaid
16 card program and [was] not [a] decision maker[] on key issues related to the program”
17 (Opp. 15:7-9) is contrary to the evidence.2
18 Resorting to ad hominem attacks, the Bank charges that Plaintiffs’ counsel
19 designated the Custodians only to “harass” the Bank’s “top two” executives. Opp. 1.
20 That is both untrue and makes no sense. ESI custodians are rarely involved in the
21 collection or review of their ESI, and the Bank will only be required to produce
22 responsive documents. Executive ESI searches are no different than any other
23
2
For example, the Bank responds to Ex. 26, a document in which senior manager John
24 Lawlor, who had been emailing with Tom Montag the prior day about prepaid fraud
25
losses, stated: “A lot of people are talking to Tom,” by pretending not to know “1) who
‘Tom’ is, 2) who the ‘people’ are that are supposedly talking to ‘Tom,’ or 3) what they
26 are saying.” Opp. 22. In context, “Tom” could only be Tom Montag; the “people”
talking to Tom and the details of what they are saying are precisely what Plaintiffs’
27 RFPs 76-79 seek to establish; and the topic of those discussions is likely the same topic
that was the subject of Lawlor’s and others’ emails during that short time period: the
28 Bank’s losses from paying EFTA-required credits and its efforts to stem those losses.
6
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MAGISTRATE JUDGE’S APRIL 24, 2024 DISCOVERY ORDER
1 custodian’s ESI search. The Bank’s attack also ignores that Montag is not even a
2 current Bank employee, having left the Bank in December 2021, according to his
3 LinkedIn profile.3
4 While the Bank faults Plaintiffs for not seeking to compel CFO Paul Donofrio’s
5 documents (Opp. 20:25-28), it omits that Plaintiffs did initially seek his and Chief Risk
6 Officer Geoffrey Greener’s documents but, in an effort to compromise, later dropped
7 both to focus on those Plaintiffs thought were likely to have the most relevant, non-
8 duplicative documents. Montag was an obvious priority because he was the head of
9 GBAM, the division responsible for the Bank’s EDD card program and for creating
10 and implementing the CFF. See Mot. 22:3-7; Exs. 14-20. So was Moynihan, the only
11 officer who is on the Board of Directors, and who presented to the Board on several
12 key issues. See Mot. 20:12-23; Exs. 10-12. Documents show that both Custodians
13 communicated with other executives (custodians and non-custodians alike) about the
14 EDD card program and the need to curtail the Bank’s losses from paying EFTA-
15 required credits. See Exs. 1, 3, 14, 25-28. Communications between Moynihan or
16 Montag and other non-custodian executives (such as Donofrio and Greener) about the
17 CFF and the Bank’s reasons for implementing it are not obtainable from any existing
18 custodians.
19 2. The Maximal Relevance of Moynihan’s and Montag’s Documents
to the Central Issues in the Case Far Outweighs the Minimal
20 Burden of Producing Their Non-Duplicative Documents.
21 Despite the critical importance of proportionality to the Rule 26 analysis, the
22 Bank devotes a mere half page to the issue. Opp. 24:5-22. Neither that analysis, nor
23 anything in the Discovery Order, addresses how proportionality analysis should be
24 applied in this case, given the core disputes over treble and punitive damages, and the
25 minimal incremental burden of searching for and producing responsive, non-
26 duplicative documents from these two Custodians. See Mot. 23:24-25:21.
27
28 3
https://www.linkedin.com/in/tom-montag-68772b9/.
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1 (a) The importance of the issues at stake and (b) the amount in controversy. The
2 Bank starts with the surprising argument that its damages exposure is minimal because
3 its use of the CFF was “short-lived” and because “[l]ittle [r]emains” of Plaintiffs’
4 claims now that it has reimbursed EDD cardholders for many millions of dollars that
5 it wrongfully withheld from them under its CFF policy. See Opp. 1:17, 6:9-19. This
6 ignores that the only reason the Bank’s CFF policy was “short-lived” is because
7 Plaintiffs obtained a preliminary injunction that enjoined the Bank from using it and
8 required the Bank to reconsider previously denied claims. FAMCC, Ex. A (“PI
9 Order”), Ex. B (“PI”). The Bank also ignores that neither the preliminary injunction
10 nor the CFPB/OCC Consent Decrees (see Mot. 5:17-9:4) preclude Plaintiffs’ claims for
11 treble and punitive damages, which the Bank does not dispute could be in the “hundreds
12 of millions of dollars.” See Mot. 7:10-9:4, 24:3-8; cf. Oxbow Carbon & Minerals LLC
13 v. Union Pac. R.R. Co., 322 F.R.D. 1, 7-8 (D.D.C. 2017) (amount in controversy of
14 over $150 million in treble damages weighed in favor of compelling CEO’s
15 documents). The Order did not address these highly important proportionality factors.
16 (c) The importance of the discovery in resolving the issues. Documentary
17 evidence establishing the Custodians’ knowledge, participation, and approval of the
18 Bank’s challenged conduct goes to the heart of Plaintiffs’ punitive and treble damages
19 claims. See Mot. 7:10-9:4. The Bank’s principal objection to producing the
20 Custodians’ documents is that Plaintiffs already have evidence about the Bank’s CFF
21 policy from lower-level custodians. It is true Plaintiffs already have considerable
22 evidence establishing what the Bank did in hastily designing and implementing the
23 CFF’s crude and untested indicators, and then using the CFF for nine months until the
24 June 2021 preliminary injunction as the sole basis for automatically: (1) denying every
25 claim of an unauthorized ATM withdrawal, (2) freezing the account of any EDD
26 cardholder who submitted such a claim, and (3) rescinding permanent credits the Bank
27 had previously issued. See Mot. 4:18-5:16. But Moynihan and Montag’s documents
28 are uniquely relevant, non-cumulative, and non-duplicative because they will show
8
REPLY ISO PLS.’ OBJECTIONS TO & MOTION TO REVERSE IN PART Case No. 3:21-md-02992-GPC-MSB
MAGISTRATE JUDGE’S APRIL 24, 2024 DISCOVERY ORDER
1 why the Bank’s decision-makers directed their subordinates to develop and implement
2 the CFF policy, and whether they did so in reckless disregard of the known or
3 foreseeable harms it would have on tens of thousands of innocent Californians who
4 relied on their UI benefits. See Dang v. Cross, 422 F.3d 800, 809-10 (9th Cir. 2005);
5 Cal. Civ. Code §3294(b). Such documents are critical to resolving whether the Bank’s
6 challenged conduct was “knowing[] and willful[],” thus triggering EFTA treble
7 damages, 15 U.S.C. §1693f(e)(2), and sufficiently egregious to trigger punitive
8 damages under Plaintiffs’ due process and common law claims. See Mot. 7:10-9:4.
9 (d) The parties’ relative access to relevant information and (e) the parties’
10 resources. These factors, too, weigh in Plaintiffs’ favor, and are not disputed by the
11 Bank. See Mot. 24:26-25:21; see generally Opp.
12 (f) Whether the burden or expense of the proposed discovery outweighs its likely
13 benefit. The incremental burden to the Bank of producing documents from these two
14 custodians—which the Bank now admits will cost a small fraction of what it told Judge
15 Berg—is minimal in relation to Plaintiffs’ established need. Compare ECF 209-2 ¶9
16 (estimating “$290,000 per additional custodian collected and reviewed”), with ECF
17 287-2 ¶12 (estimating combined cost for Moynihan and Montag of “between $135,000
18 and $170,000”).4 The Bank’s ability to de-duplicate any copies of documents already
19 produced from existing custodians will further reduce the cost burden (and defeats the
20 Bank’s argument that the requested discovery is “unreasonably cumulative or
21 duplicative” (see, e.g., Opp. 2:26)). See Williams v. Apple, Inc., No. 19-cv-04700-
22 LHK-VKD, 2020 WL 5107639, at *2 (N.D. Cal. Aug. 31, 2020); SPS Techs., LLC v.
23 Briles Aerospace, Inc., No. 18-cv-9536-MWF, 2019 WL 13108021, at *1 (C.D. Cal.
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The Bank’s principal burden argument that it already incurred substantial costs in
producing other documents (Opp. 1:15-16) is not compelling. Plaintiffs should not be
26 penalized simply because the Bank failed to respond to its prior discovery obligations
in a cost-effective manner. Compare id. at 7:27-8:7 (claiming Bank spent “more than
27 $7 million” to review and produce approximately 275,000 documents from 20
custodians), with Oxbow Carbon, 322 F.R.D. at 9 (party spent $1.391 million to review
28 and produce approximately 584,000 documents from 19 custodians).
9
REPLY ISO PLS.’ OBJECTIONS TO & MOTION TO REVERSE IN PART Case No. 3:21-md-02992-GPC-MSB
MAGISTRATE JUDGE’S APRIL 24, 2024 DISCOVERY ORDER
1 June 25, 2019). In the context of this case, the incremental cost of reviewing these two
2 custodians’ documents is not disproportionate. See Oxbow Carbon, 322 F.R.D. at 9
3 (estimated cost of $142,000 to produce CEO’s estimated 65,000 documents—“a
4 fraction of the cost of discovery to date”—not unduly burdensome or disproportionate,
5 especially considering amount in controversy was “tens of millions of dollars”).5
6 The Bank insists Moynihan and Montag are unlikely to have many responsive,
7 non-duplicative documents. If that proves to be true, the burden on the Bank will be
8 even less. But if even a handful of responsive documents demonstrate that Moynihan
9 or Montag knew, for example, that the CFF would have a significant false positive rate
10 and wrongfully deprive legitimate EDD cardholders of access to desperately needed
11 funds, they would be hugely significant to Plaintiffs’ treble and punitive damages
12 claims. To deprive Plaintiffs of those documents would be unduly prejudicial and a
13 miscarriage of justice for the tens of thousands of Californians who “depend[ed] on
14 unemployment benefits to get through the pandemic” and to “feed their families and
15 keep a roof over their heads,” PI Order at 2, whose benefits the Bank withheld for
16 weeks and months without reasonable basis.
17 III. CONCLUSION
18 For all these reasons and those stated in the opening brief, Plaintiffs respectfully
19 request the Court modify the Discovery Order and compel the Bank to add Moynihan
20 and Montag as ESI custodians, or alternatively, to remand to Judge Berg for
21 reconsideration under the correct Rule 26 legal standard and in light of Plaintiffs’
22 supplemental evidence.
23 / / /
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The Bank tries to defend Judge Berg’s order by invoking Rule 26(b)(2)(C)(i), but as
26 the Bank acknowledges, Rule 26(b)(2) also “requires that the court apply a benefits
versus burden approach” in ensuring discovery is not “unreasonably cumulative or
27 duplicative.” Laryngeal Mask Co., 2009 WL 10672436, at *4; see Opp. 11:24-12:1.
Neither the Bank nor the Discovery Order makes any attempt to engage in a balancing
28 of the benefits versus burdens of compelling the Custodians’ documents.
10
REPLY ISO PLS.’ OBJECTIONS TO & MOTION TO REVERSE IN PART Case No. 3:21-md-02992-GPC-MSB
MAGISTRATE JUDGE’S APRIL 24, 2024 DISCOVERY ORDER
1 Respectfully submitted,
2 Dated: June 7, 2024 COTCHETT, PITRE & McCARTHY, LLP
3
By: /s/ Brian Danitz
4 JOSEPH W. COTCHETT
5 BRIAN DANITZ
KARIN B. SWOPE
6 ANDREW F. KIRTLEY
7
8 Dated: June 7, 2024 ALTSHULER BERZON LLP
9 By: /s/ Connie K. Chan
10 MICHAEL RUBIN
STACEY M. LEYTON
11 CONNIE K. CHAN
12 COLIN CLEMENTE JONES
13 Co-Lead Counsel for Plaintiffs and the
14 Proposed Class
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REPLY ISO PLS.’ OBJECTIONS TO & MOTION TO REVERSE IN PART Case No. 3:21-md-02992-GPC-MSB
MAGISTRATE JUDGE’S APRIL 24, 2024 DISCOVERY ORDER
1 SIGNATURE CERTIFICATION
2 Pursuant to Section 2(f)(4) of this Court’s Electronic Case Filing Administrative
3 Policies and Procedures Manual, I, Connie K. Chan, hereby certify that the content of
4 this document is acceptable to all the signatories herein and that I have obtained
5 counsel’s authorization to affix their electronic signatures to this document.
6 /s/ Connie K. Chan
7
CONNIE K. CHAN
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REPLY ISO PLS.’ OBJECTIONS TO & MOTION TO REVERSE IN PART Case No. 3:21-md-02992-GPC-MSB
MAGISTRATE JUDGE’S APRIL 24, 2024 DISCOVERY ORDER
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