Court filing
Letter dated March 4, 2024 by Prestamos CDFI, LLC — Marshall v. Prestamos CDFI, LLC (Dkt. 98, E.D. Pa. No. 5:21-cv-04337)
Filed March 4, 2024 in Marshall v. Prestamos CDFI, LLC; one of 344 filings from this case.
Record facts
| Court | U.S. District Court for the Eastern District of Pennsylvania |
|---|---|
| Filed | 2024-03-04 |
U.S. District Court for the Eastern District of Pennsylvania · No. 5:21-cv-04337-JMG · Doc. 98 · 2024-03-04 · Docket on CourtListener
Full text
Timothy D. Katsiff
Tel: 215.864.8301
Fax: 215.864.8999
katsifft@ballardspahr.com
March 4, 2024
By Electronic Filing
The Hon. John M. Gallagher
United States District Court for the Eastern District of Pennsylvania
Edward N. Cahn Courthouse & Federal Building
504 W. Hamilton Street
Allentown, PA 18101
Re:
Marshall v. Prestamos CDFI, LLC, No. 5:21-cv-04337-JMG (E.D. Pa.)
Judge Gallagher:
We write on behalf of Defendant Prestamos CDFI, LLC (“Prestamos”) pursuant to
Section II.C.2. of this Court’s Policies and Procedures to request a conference regarding a
discovery dispute. Plaintiffs in this matter allege, on behalf of themselves and a proposed
class of thousands, that Prestamos breached contracts to fund Paycheck Protection Program
(“PPP”) loans for businesses that they allege they owned, and that they suffered hundreds of
millions of dollars of damages as a result. Prestamos served discovery requests seeking the
production of documents Plaintiffs would need to support their breach of contract claim and
that could potentially support Prestamos’s defenses. Despite a lengthy back and forth with
Plaintiffs regarding their deficient responses to Prestamos’s discovery requests, Plaintiffs’
responses remain deficient.
BACKGROUND
Prestamos served its First Requests for Production of Documents (“Prestamos’s
RFPs”) and First Interrogatories (“Prestamos’s Interrogatories”) on Plaintiffs on July 21,
2023. Plaintiffs served responses and objections to Prestamos’s RFPs on August 21, 2023
(“Plaintiffs’ RFP Responses”), and served responses and objections to Prestamos’s
Interrogatories on August 28, 2023 (“Plaintiffs’ Interrogatory Responses”).
On October 27, 2023, Prestamos sent Plaintiffs a letter identifying the deficiencies in
Plaintiffs’ RFP Responses and Plaintiffs’ Interrogatory Responses (the “October 27 Letter”).
Plaintiffs produced documents in response to Prestamos’s RFPs on October 31, 2023.
Regrettably, Plaintiffs produced only 133 total documents.
On November 8, 2023, Prestamos sent Plaintiffs a second letter regarding
deficiencies in Plaintiffs’ discovery responses (the “November 8 Letter”). The November 8
Case 5:21-cv-04337-JMG Document 98 Filed 03/04/24 Page 1 of 7
The Hon. John M. Gallagher
March 4, 2024
Page 2
Letter noted that Plaintiffs did not produce any documents responsive to thirty RFPs and
provided an incomplete production of documents (i.e., did not provide documents for all
named plaintiffs) in response to at least nine RFPs. In addition, Prestamos noted that the
documents that were produced did not conform to the ESI Protocol agreed to by all parties
and approved by this Court. See ECF 80. On November 9, 2023, Plaintiffs and Prestamos
held their first telephonic meet and confer regarding Plaintiffs’ responses to Prestamos’s
discovery requests.
On November 17, 2023, Plaintiffs responded to the October 27 Letter and November
8 Letter (the “November 17 Letter”). The November 17 Letter provided limited information
regarding Plaintiffs’ intent to supplement their responses to Prestamos’s Interrogatories and
provide additional documents responsive to Prestamos’s RFPs.
Prestamos wrote Plaintiffs on November 28, 2023 (the “November 28 Letter”),
noting that the November 17 Letter failed to respond to numerous issues identified in
Prestamos’s previous correspondence, and requesting that Plaintiffs “confirm, by specific
RFP, whether Plaintiffs will be searching for responsive documents.”
On December 5, 2023, Plaintiffs responded to the November 28 Letter (the
“December 5 Letter”). The December 5 Letter largely ignored the substance of the
November 28 Letter and did not identify the RFPs for which Plaintiffs intended to produce
documents. In the December 5 Letter, Plaintiffs informed Prestamos that they would
produce additional information responsive to the discovery requests on January 5, 2024.
The next day, December 6, 2023, Prestamos replied to the December 5 Letter (the
“December 6 Letter”), and, in a good faith effort to resolve the discovery issues (despite
Plaintiffs’ continued failure to adequately respond to Prestamos’s RFPs and Prestamos’s
Interrogatories) requested a second meet and confer.
On December 15, 2023, the parties held a second telephonic meet and confer, and on
December 18, 2023, Prestamos sent Plaintiffs a letter confirming the parties’ discussion (the
“December 18 Letter”). This included Plaintiffs’ agreement to supplement specific
interrogatory responses, and an agreement to perform additional searches and produce
documents responsive to specific RFPs. Moreover, Plaintiffs agreed to clearly indicate
whether they would produce documents in response to each RFP.
On January 3, 2024, Plaintiffs requested until January 19, 2024, to supplement their
responses to Prestamos’s discovery requests, and Prestamos agreed. On January 19, 2024,
Plaintiffs unilaterally extended that deadline to February 2, 2024. And on February 2, 2024,
Plaintiffs served only 99 additional documents that relate to only five of the eleven named
plaintiffs in this matter, and also served a supplemental response to Prestamos’s
Interrogatories (“Plaintiffs’ Supplemental Interrogatory Responses”). Plaintiffs did not
provide any supplemental response to Prestamos’s RFPs with any clear indication of their
intent to respond (or not), despite having promised to do so at the December meet and
confer. And even after supplementing their responses, Plaintiffs have failed to provide a
sufficient response to any single interrogatory.
Case 5:21-cv-04337-JMG Document 98 Filed 03/04/24 Page 2 of 7
The Hon. John M. Gallagher
March 4, 2024
Page 3
PLAINTIFFS’ DEFICIENT DISCOVERY RESPONSES
Despite Prestamos’s good faith efforts to resolve the discovery disputes in this
matter, Plaintiffs’ continued failure to comply with the federal rules and provide sufficient
responses to Prestamos’s RFPs and Prestamos’s Interrogatories has forced Prestamos to seek
assistance from this Court.1 Prestamos’s written discovery seeks information highly relevant
to its defenses to Plaintiffs’ claims. The issues covered by Prestamos’s RFPs and
Prestamos’s Interrogatories include, but are not limited to: whether the Plaintiffs were
lawfully entitled to PPP loans in the first instance; whether Plaintiffs provided the requisite
information and filled out the relevant applications properly; whether Plaintiffs responded to
information requests from Prestamos; Blueacorn’s role in the PPP loan process and any
related issues; Plaintiffs’ contractual release of Prestamos related to Plaintiffs’ claims; issues
with and/or rejection of funds by Plaintiffs’ financial institutions; and Plaintiffs’ alleged
damages.
The continued deficiencies in Plaintiffs’ responses to Prestamos’s written discovery
include, but are not limited to:
Neither Plaintiffs’ Interrogatory Responses nor Plaintiffs’ Supplemental
Interrogatory Responses are verified, and thus do not comply with Rule
33(b)(5) of the Federal Rules of Civil Procedure. The Court should order
Plaintiffs to verify their interrogatory responses.
Plaintiffs have declined to answer 16 interrogatories, promising instead to
produce business records with a cursory reference to Rule 33(d) of the
Federal Rules of Civil Procedure and then failing even to produce the records
as required by the Rule. Specifically, Plaintiffs state in response to
Interrogatory Nos. 1–7 and 10–18 that they will “respond pursuant to Fed. R.
Civ. P. 33(d) via the production of business records[.]” But Plaintiffs have
not asserted that the “burden of deriving or ascertaining the answer [to these
interrogatories] will be substantially the same for either party,” nor have
Plaintiffs “specif[ied] the records that must be reviewed, in sufficient detail to
enable the interrogating party to locate and identify them as readily as the
1
The same attorneys are counsel of record for Drevnak v. Prestamos CDFI, LLC, No.
2:23-cv-02777-JMG (E.D. Pa.)¸which is also before this this Court. Prestamos has
served what are substantially the same Requests for Production of Documents and
Interrogatories on the Drevnak plaintiffs. In spite of Prestamos’s five letters identifying
the deficiencies of Plaintiffs’ discovery responses and two meet and confers in
Marshall, the Drevnak plaintiffs have responded to Prestamos’s discovery with many of
the same responses and objections that gave rise to the instant letter.
Case 5:21-cv-04337-JMG Document 98 Filed 03/04/24 Page 3 of 7
The Hon. John M. Gallagher
March 4, 2024
Page 4
responding party could.” See Fed. R. Civ. P. 33(d)(1); see also Parks LLC v.
Tyson Foods, Inc., 2015 U.S. Dist. LEXIS 112861, at *12 (E.D. Pa. Aug. 25,
2015) (a party relying on Rule 33(d) must specify the responsive records in
sufficient detail within thirty days after being served with the interrogatory).
Perhaps most egregiously, Plaintiffs have failed to answer Interrogatory No.
3, which seeks information going to the heart of the case:
For each year from 2019 through 2022, state the amount of
the following attributable solely to Your Business: (a)
payroll costs; (b) rent or mortgage interest; (c) covered
operations expenditures; (d) covered property damage; (e)
covered supplier costs; (f) covered worker protection
expenditures; and (g) other expenditures that served as the
basis for Your application for a PPP loan.
This request is relevant to both Plaintiffs’ entitlement to PPP loans, as well as
their alleged damages. Plaintiffs agreed, at the December 15, 2023 meet and
confer, to make a good faith effort to respond to this Interrogatory. Yet, in
Plaintiffs’ Supplemental Interrogatory Responses, they did not provide any
additional information or documents in response to Interrogatory No. 3, and
simply cited to Rule 33(d).
The Court should order Plaintiffs to properly respond to Prestamos’s
Interrogatories instead of improperly relying on Rule 33.
Each interrogatory requests information about “You” or “Your,” which is
defined as “each named Plaintiff, as well as and of Your principals, agents,
employees, staff, attorneys, representatives, and any other Persons or entities,
acting or purporting to act on behalf of You, whether past or present, and
without regard to whether their relationship currently exists or has been
terminated.” Despite that, Plaintiffs omit at least one named plaintiff from
every interrogatory response. As such, Plaintiffs have not provided a
complete response to any single interrogatory.
The Court should order Plaintiffs to respond to Prestamos’s Interrogatories.
See Fed. R. Civ. P. 33(b)(3) (“Each interrogatory must, to the extent it is not
objected to, be answered separately and fully in writing under oath.”).
Similarly, Plaintiffs have not produced responsive documents for all named
plaintiffs in response to any of Prestamos’s RFPs. For example, in response
Case 5:21-cv-04337-JMG Document 98 Filed 03/04/24 Page 4 of 7
The Hon. John M. Gallagher
March 4, 2024
Page 5
to RFP No. 3—which seeks federal and state tax returns from 2018 to present,
including Schedule C—Plaintiffs provided the 2019 and 2022 federal and
state tax returns (without Schedule C) for one named plaintiff (Ahmadou).
These documents will show whether the named plaintiffs’ operated their
respective businesses before and after applying for PPP loans, and are
therefore crucial to Prestamos’s defenses in this matter. Yet Plaintiffs have
not provided complete tax information for even a single named plaintiff.
Further, in the November 7 Letter, Plaintiffs promised to clarify the existence,
or non-existence, of responsive Documents with regard to each individual
plaintiff, including specifying the Documents by Bates number. Plaintiffs
have not done so.
The Court should order Plaintiffs to produce documents responsive to
Prestamos’s RFPs or, if no such documents exist, identify the RFPs for which
Plaintiffs do not have responsive documents for certain named plaintiffs.
To date, Plaintiffs have not produced any documents responsive to RFP Nos.
1, 2, 4, 10, 12, 16–31, and 33–39. These requests relate to Plaintiffs’
eligibility for PPP loans, applications for PPP loans (and whether sufficient
information was provided), contractual waiver of the claims set forth in the
Second Amended Complaint, and alleged damages. Similar to Plaintiffs’
promises relating to specific interrogatories, at the December 15, 2023 meet
and confer, Plaintiffs explicitly agreed to respond to RFP Nos. 19 (requesting
documents showing eligibility for a PPP loan) and 21 (requesting documents
relating to the financial operations of Plaintiffs’ businesses). Despite that,
Prestamos has not received any documents responsive to these RFPs.
Many of these document requests are central to determining the legitimacy of
the named plaintiffs’ businesses, including the lawful operation of those
businesses. For example, Plaintiffs have failed to produce any documents in
response to RFP 2 (requesting documents relating to required licenses and/or
permits for the named plaintiffs’ businesses) and RFP 25 (requesting bank
statements showing transaction-level income and expenditures for the named
plaintiffs’ businesses).
The Court should order Plaintiffs to produce documents responsive to
Prestamos’s RFPs.
Neither Plaintiffs’ first production of documents on October 31, 2023, nor its
second production on February 2, 2024, comply with the ESI Protocol agreed
Case 5:21-cv-04337-JMG Document 98 Filed 03/04/24 Page 5 of 7
The Hon. John M. Gallagher
March 4, 2024
Page 6
to by the parties and signed by this Court. Plaintiffs’ productions do not
include the vast majority of the metadata fields required under the ESI
Protocol. Further, many of the documents in both productions appear to be
pictures of documents (via screenshots made using a cellphone) rather than
the documents themselves. As such, they do not contain the metadata
required by the ESI protocol; they are not produced in the format required by
the ESI protocol; and some of the pictures of the documents are cut off—i.e.,
they are not even an accurate record of the document they purport to
represent.
The Court should order Plaintiffs to produce documents in the manner set
forth in the ESI Protocol.
For the foregoing reasons, Prestamos requests that the Court schedule a telephone
conference to address these issues.
Sincerely,
/s/ Timothy D. Katsiff
Timothy D. Katsiff
TDK
Case 5:21-cv-04337-JMG Document 98 Filed 03/04/24 Page 6 of 7
CERTIFICATE OF SERVICE
I, Timothy D. Katsiff, hereby certify that on the 4th day of March 2024, I caused a
true and correct copy of the foregoing letter to be served on counsel of record for all
Plaintiffs via the Court’s ECF System. The letter is available for viewing and downloading
from the ECF System.
/s/ Timothy D. Katsiff
Timothy D. Katsiff
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