California Federal Court Upholds Pre-Certification Discovery of Defendant’s “Outbound Dial List” in TCPA Class Action

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A California federal district court recently ordered a debt collector to produce an “outbound dial list” that identified all telephone numbers it had called using an ATDS over a one-year period. See Webb v. Healthcare Revenue Recovery Grp. LLC, No. C. 13-00737 RS, 2014 WL 325132 (N.D. Cal. Jan. 29, 2014). The ruling highlights the potential conflict between the discovery objectives of putative class counsel on the one hand, and the privacy rights of putative class members on the other.

In Webb, the plaintiff alleged that the defendant, a debt collector, had used an ATDS to make unauthorized calls to her cell phone. She claimed damages for herself and on behalf of a putative nationwide class under the TCPA, and sought pre-certification discovery of “outbound dial lists of all telephone numbers called by [defendant] using autodial” over a four-year period.

Over the defendant’s objections, a magistrate judge ordered production of the autodial records, although limited the scope to one year. The magistrate reasoned that the outbound dial lists were relevant to Rule 23’s requirements for class certification, including whether a class is ascertainable, whether the plaintiff’s claims were typical of the class, and whether there were common questions of fact. Id. at *2.

On review of the magistrate’s ruling, the district court affirmed based on the summary conclusion that the outbound dial lists “would likely bear on the commonality inquiry.” Ibid. The district court then held the magistrate’s order was not “clearly erroneous” or “contrary to law.” Id. at *2-3 (applying standard of review for non-dispositive rulings).

The district court rejected the defendant’s assertion that the underlying motive for requesting the outbound dial list was to identify additional putative class members and solicit new clients. The court reasoned that “a purported ‘class list’ is still discoverable if it bears relevance to issues of class certification.” Id. at *3, citing Knutson v. Schwan’s Home Serv., Inc., 3:12-CV-0964-GPC-DHB, 2013 WL 3746118, at *4 (S.D. Cal. July 15, 2013) (finding “a list of phone numbers may very well bear direct relevance to a violation of the TCPA concerning the dialing of the very phone numbers listed”). But it simultaneously acknowledged that “courts sometimes refuse to allow discovery of putative class members’ identities at the pre-certification stage.” Webb, 2014 WL 325132 at *3, citing Dziennik v. Sealift, Inc., No. 05-CV-4659 (DLI)(MDG), 2006 WL 1455464 (E.D.N.Y. May 23, 2006). In an apparent attempt to find some middle ground, the district court ordered the plaintiff’s counsel “not to contact any telephone numbers on [defendant’s] outbound dial list” prior to class certification. Webb, 2014 WL 325132 at *3. If the class were later certified, the court noted it would require the plaintiff to seek leave of court before using the call list to contact any class members. Ibid.

The Webb and Knutson decisions illustrate the difficulty courts face in balancing pre-certification discovery against the privacy rights of putative class members. In light of these concerns, courts often decline to permit discovery of putative class members’ identities until after a class has been certified. See, e.g., Hatch v. Reliance Ins. Co., 758 F.2d 409, 416 (9th Cir. 1985) (upholding denial of motion to compel pre-certification production of the names of similarly situated investors); Charles v. Nationwide Mut. Ins. Co., No. 09 CV 94 ARR, 2010 WL 7132173, at *8 (E.D.N.Y. May 27, 2010) (denying pre-certification discovery of names and contact information of putative class members). Indeed, the district court judge in Webb previously had rejected such discovery in a non-TCPA case on privacy grounds. See Palmer v. Stassinos, No. 05-3026, 2005 U.S. Dist. LEXIS 41270, at *10 (N.D. Cal. May 18, 2005) (denying pre-certification discovery of “specific information about the identity of class members” because such information was “not relevant” and “may be protected by consumers’ rights to privacy”).

Outside the narrow context of debt collectors, there are several compelling reasons why defendants may not be permitted to disclose a “class list” or otherwise respond to discovery seeking the personally identifiable information of putative class members. For example, established federal privacy protections might apply, prohibiting any such disclosures. See, e.g., 47 U.S.C. § 551(c) (generally prohibiting disclosure by cable operators of “personally identifiable information concerning any subscriber” without subscriber’s prior written consent).

Analogous state statutes may also limit pre-certification discovery of putative class members’ identifying information. See, e.g., Cal. Pub. Util. Code § 2891(a) (limiting disclosure of subscriber’s personal information, absent subscriber’s written consent). Indeed, California has long recognized a constitutional right to privacy (see Cal. Const. Art. I, § 1), which the state Supreme Court has applied in the context of pre-certification discovery. See, e.g., Pioneer Electronics (USA), Inc. v. Superior Court, 150 P.3d 198, 201, 205 (2007) (upholding order precluding defendant from disclosing names and addresses of putative class members without first (a) informing putative class members of the plaintiff’s request for such identifying information and (b) providing putative class members a reasonable opportunity to object).

In addition to these statutory and constitutional prohibitions, the defendants may owe contractual obligations to customers that prohibit disclosure of personally identifiable information.

It appears these privacy issues were not directly raised in Webb, and that the decision may not have implications outside its narrow facts. Indeed, any broader reading of the case would appear to be at odds with the policy underlying the TCPA, which by definition aims to protect subscriber privacy in the first instance. See 47 U.S.C. § 227(c)(1) (referencing the “need to protect residential telephone subscribers’ privacy rights to avoid receiving telephone solicitations to which they object”). The disclosure of telephone numbers without consent might create additional risk for the defendants, while at the same time potentially subjecting consumers to unauthorized contact from putative class counsel. These unintended consequences of “class list” discovery in TCPA cases would be regrettable, particularly given the animating purpose of the statute.