A federal district court judge in Atlanta has granted five defendants’ motions for terminating sanctions against the Consumer Financial Protection Bureau for the agency’s conduct in connection with its Rule 30(b)(6) depositions. Venable attorneys represented one of those defendants, and were the principal authors of the briefs leading to the sanctions.
The court agreed with the defendants’ arguments that the claims pleaded against them must be dismissed because of the CFPB’s refusal to produce a knowledgeable and non-evasive Rule 30(b)(6) witness. The court described the refusal as a “pattern of conduct” that “demonstrate[d] a willful disregard of the Court’s instructions.” The court agreed with the defendants that the CFPB’s misconduct warranted striking all counts pleaded against them.
The case, styled as Consumer Financial Protection Bureau v. Universal Debt Solutions, LLC, et al., No. 15-cv-859 (N.D. Ga), was filed in April 2015 against defendants that the CFPB claimed were engaged in a debt-collection scheme to collect “phantom debts” – i.e., consumer debts that were not actually owed. The CFPB sought to hold liable not only the debt collectors that allegedly perpetrated the scheme, but also various service providers such as payment processors, independent sales organizations, and a phone service provider. The CFPB alleged that the service providers were liable for knowingly or recklessly disregarding the debt collectors’ illegal activity. Further discussion of the case is available on Venable’s blog, All About Advertising Law.
The Venable litigation team included Doug Baldridge, Len Gordon, Dave Feinberg, and Ben Horowitz. The team turned to colleagues in its advertising, consumer finance, and regulatory groups, including Jeff Knowles, Ellen Berge, Andrew Bigart, and Mike Bresnick, for strategic guidance and support. This group is part of Venable’s cross-office, cross-practice team focused on protecting the interests of companies in the consumer finance and payments industry. Venable has represented a number of banks, credit card issuers, credit reporting agencies, debt agencies, and payment processors in connection with U.S. Department of Justice, FTC, CFPB, and other federal and state agency actions.