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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 09-MD-02036-JLK
IN RE: CHECKING ACCOUNT
OVERDRAFT LITIGATION
MDL No. 2036
THIS DOCUMENT RELATES TO:
Larsen v. Union Bank, N.A.
S.D. Fla. Case No. 1:09-cv-23235-JLK
N.D. Cal. Case No. 4:09-cv-3250
PLAINTIFFS’ OPPOSITION TO DEFENDANT UNION BANK’S MOTION FOR A
PROTECTIVE ORDER TO VACATE DEPOSITION NOTICES AND PLAINTIFFS’
CROSS-MOTION TO COMPEL DEPOSITION TESTIMONY
I. INTRODUCTION
Defendant Union Bank, N.A. (“Union Bank”) moves to prevent the depositions of Rule
30(b)(6) witnesses noticed by Plaintiffs over six months ago, subject to protracted negotiations
including multiple in-person conferences with counsel, and for which Union Bank had at one
time agreed to produce responsive witnesses. See Motion for a Protective Order to Vacate
Deposition Notices (Dk. #1169). Despite the elongated history concerning these depositions of
persons knowledgeable at Union Bank about issues central to this litigation (such as the bank’s
posting order, its disclosures about its posting order, and its overdraft revenue), Union Bank, and
Union Bank alone, claims it is “scrambl[ing]” to prepare its witnesses and is concerned that it
will not be able to abide by the “tight discovery timeline.” To the contrary, the parties have
already agreed upon the scope of the Rule 30(b)(6) topics 2-13 depositions (Def. Mot. at Ex. C
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(Dk.# 1169-3)), and Union Bank has already begun preparing its witnesses on those topics (Def.
Mot. at 3). Accordingly, there is no reason these depositions should not go forward immediately.
Union Bank complains that it should not have to prepare these individuals for deposition
before the Court rules on whether Plaintiffs may amend their complaint to add a RICO claim
because such claim purportedly “adds entirely new issues.” However, the practices and conduct
that give rise to the RICO claim are the same practices and conduct that gave rise to the initiation
of this lawsuit. As alleged in the proposed Third Amended Complaint, the RICO claim arises
from the very same misrepresentations and omissions that form the basis for the state law claims.
Union Bank itself concedes that “Plaintiffs are using Union Bank’s alleged state law violations
as a basis for their claim that Union Bank has violated RICO.” Def. Mot. at 5. Accordingly,
Union Bank does not and cannot particularize any injury or harm, as is required to justify the
granting of a protective order.
Because any further obstruction by Union Bank in producing its corporate designees for
deposition will severely prejudice Plaintiffs, Plaintiffs hereby cross-move to compel those
depositions. Plaintiffs are entitled to the noticed deposition testimony to not only gather
additional evidence to support their class certification motion, due to be filed on April 25, 2011,
but also to authenticate documents that will show that Union Bank uniformly and systematically
breached its contractual duties and defrauded class members by, inter alia, not telling them
Union Bank always reordered debits from high to low and that they had instant access to
accurate account balances. Thus, Plaintiffs respectfully request this Court deny Union Bank’s
motion and compel Union Bank to make available the Rule 30(b)(6) witnesses immediately, and
to make available the individual witnesses within 10 days after the Court rules on Plaintiffs’
pending motion for leave to amend.
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II. BACKGROUND
On August 3, 2010, Plaintiffs served a 30(b)(6) deposition notice on Union Bank. See
Ex. A. On September 15, 2010, the parties met in-person for several hours in San Francisco for
the purpose of “meeting and conferring” along with other First Tranche defendants, specifically
about the Plaintiffs’ pending Rule 30(b)(6) deposition notices. Subsequent to that meeting, the
parties exchanged correspondence memorializing some of the progress made during negotiations
and identifying areas of continued dispute. (See, e.g., Ex. B (10/5/10 letter from Barry
Davidson) and Ex. C (10/12/10 letter from Robert Gilbert)). On November 19, 2010, the parties
held another such day-long in-person session to discuss pending discovery issues including the
Rule 30(b)(6) depositions of Union Bank.
After months of negotiation with the First Tranche banks, including Union Bank, on
January 19, 2011, Plaintiffs served an amended 30(b)(6) deposition notice on Union Bank. (Dk
# 1169-1). The amended notice significantly narrowed the thirteen topics Plaintiffs seek to have
deponents testimony about. On January 26, 2011, Plaintiffs requested the depositions of six
current individual Union Bank employees and notified Union Bank that they intended to
subpoena two former employees. (Dk # 1169-2). In early February 2011, Union Bank’s counsel
raised concerns about going forward with the planned depositions based on the filing of
Plaintiffs’ motion for leave to add a RICO claim. (Dk # 1169-3). Considering Union Bank’s
concerns, Plaintiffs proposed that if Union Bank went forward with producing its Rule 30(b)(6)
designee(s) on topics 2-13 – which was based on an agreement reached following nearly six
months of extensive negotiations with all of the First Tranche banks (except Citibank) –
Plaintiffs would agree to temporarily defer taking the depositions of Union Bank’s individual
witnesses while the motion to amend was pending. (Dk # 1169-3). A few days later, Union
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Bank’s counsel advised Plaintiffs that their proposal was not acceptable and that Union Bank
would have to consider its options. Thereafter, Union Bank filed its motion for protective order.
III. ARGUMENT
A. Union Bank Does Not Meet its Heavy Burden to Demonstrate Good Cause
for a Protective Order.
Union Bank seeks a blanket protective order enabling it to avoid producing any Rule
30(b)(6) or individual witnesses until the Court rules on the pending motion for leave to amend.
And, if the motion to amend is granted, Union Bank wants even more time until after the Court
rules on its promised motion to dismiss the proposed Third Amended Complaint. Def. Mot. at
2.1 In seeking to deny discovery through an open-ended protective order, particularly when
Plaintiffs’ class certification deadline is around the corner, Union Bank bears a heavy burden.
See DHL Express (USA), Inc. v. Express Save Indus. Inc., No. 09-60276-CIV, 2009 WL
3418148, at *1 n.3 (S.D. Fla. Oct. 19, 2009). A protective order can only be issued for “good
cause.” McCarthy v. Barnett Bank of Polk County, 876 F.2d 89, 91 (11th Cir. 1989). To show
good cause, the party must demonstrate “a clearly defined and very serious injury.” Empire of
Carolina, Inc. v. Mackle, 108 F.R.D. 323, 326 (S.D. Fla. 1985). “[C]onclusory or speculative
statements about the need for a protective order” are insufficient. Baratta v. Homeland
Housewares, LLC, 242 F.R.D. 641, 642 (S.D. Fla. 2007). In particular, protective orders
prohibiting depositions are “rarely granted.” Id. (citations omitted); see also Baron Fin. Corp. v.
1 To support its arguments, Union Bank cites Salter v. Upjohn Co., 593 F.2d 649 (5th Cir. 1979) and Scorggins v.
Air Cargo, Inc., 534 F.2d 1124 (5th Cir. 1976). These cases are readily distinguishable. In Salter, the court vacated
the plaintiff’s notice to depose the defendant, required the plaintiff to depose other employees first and then, if
needed, the plaintiff could depose the defendant. 593 F.2d at 651. Here, Union Bank refuses to allow Plaintiffs to
depose any witnesses, including for the Topic 2-13 Rule 30(b)(6) depositions for which the parties have already
agreed on the scope. Def. Mot. at 5. In Scroggins, the court of appeals affirmed the lower court’s decision to limit
discovery to issues related to a pending motion for summary judgment but noted that such a stay would be improper
“if plaintiff had been denied discovery which related to the summary judgment motion.” 534 F.2d at 1133. The
court of appeals’ observation applies here as the depositions are needed to support Plaintiffs’ class certification
motion.
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Natanzon, 240 F.R.D. 200, 201 (D. Md. 2006) (denying protective order staying depositions)
(quoting 10 Fed. Proc., L.Ed. § 26:191 (an “order to vacate a notice of taking a deposition is
generally regarded by the courts as both unusual and unfavored”)). With its conclusory and
speculative statements regarding purported harm, Union Bank falls far short of meeting its heavy
burden. Union Bank has only itself to blame for any “scrambl[ing]” it may have to do to prepare
witnesses at this stage.
The three arguments that Union Bank makes to support its motion all lack merit, and the
bank completely fails to demonstrate “good cause” for issuing the protective order it requests.
First, Union Bank argues that it requires a protective order because “the scope of the
pleadings against it is unsettled.” Def. Mot. at 3. That is largely, if not completely, false. While
the Court has not yet ruled on whether Plaintiffs may amend their complaint to add a RICO
claim, this Court has already denied Union Bank’s motion to dismiss the state law claims. As
Plaintiffs seek only to amend their complaint to add a RICO claim and propose no amendments
to their state law claims, those claims plainly remain at issue and there is nothing unsettled about
them. Moreover, as set forth below, Plaintiffs’ proposed RICO claim is based on the same
underlying practices as their state law claim. Importantly, the parties have already reached an
agreement on the scope of the Rule 30(b)(6) topics 2-13 depositions and Union Bank has begun
preparing its witnesses on those topics. Def. Mot. at 3. Those depositions should go forward
regardless of whether Plaintiffs are permitted to pursue their RICO claim at this time. See, e.g.,
Feldman v. Flood, 176 F.R.D. 651,652 (M.D.Fla.1997) (delaying discovery pending resolution
of a motion that will not dispose of the entire case is rarely appropriate); see also Simpson v.
Speciality Retail Concepts, Inc., 121 F.R.D. 261, 263 (M.D.N.C. 1988) (in denying a protective
order quashing a deposition and staying discovery, the court held that a protective order “is
rarely appropriate where resolution of the [pending] motion will not dispose of the entire case”).
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Further, the dispute over the timing of the recently noticed individual depositions may be soon
resolved as the motion to amend has been fully briefed and the parties are simply waiting for the
Court’s ruling.
Second, Union Bank argues that it should not be made to prepare its witnesses to testify
about a RICO claim that is not yet at issue and that it should not have to “scramble” to defend
against an “entirely new substantive claim.” Def. Mot. at 3. In making this argument, Union
Bank ignores the significant overlap between the RICO and state law claims, all of which arise
out of the same “common nucleus of facts” that creates a cohesive class – the “common practice
by Defendants, to enter charges debiting Plaintiffs’ accounts from the ‘largest to the smallest’
thus maximizing the overdraft fee revenue for themselves.” DE # 1016 at 2. The success of the
unlawful scheme carried out by the unlawful enterprise between Union Bank and Cast
Management depended on the very misrepresentations and omissions to customers which are
also at issue in Plaintiffs’ state law claims, including: (1) concealing from customers that the
bank always posted debit transactions from high to low; (2) telling customers they had access to
accurate account balance information (even though the bank’s post hoc reordering meant the
information available to customers at any given moment was often inaccurate); and (3) failing to
alert customers at the point of sale that a debit transaction would result in a $35 fee. Indeed,
Plaintiffs discovered the RICO enterprise in the very documents Union Bank produced in
response to written discovery requests Plaintiffs propounded in connection with their state law
claims. As Union Bank itself puts it, “Plaintiffs are using Union Bank’s alleged state law
violations as a basis for their claim that Union Bank has violated RICO.” Def. Mot. at 5. Where,
as here, significant overlap exists between the pending claims, discovery should proceed even
where there are pending motions that may affect some claims. See, e.g., Smith v. Waverly
Partners, LLC, No. 3:10CV28-RLV-DSC, 2010 WL 3943933, at *1 (W.D.N.C. Oct. 6, 2010) (in
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denying a Rule 26(c) motion staying Rule 30(b)(6) depositions, the court found that “[b]ecause
the actions of [defendant] are central to all the claims in the case, including the ones not subject
to the motions to dismiss, the deposition will be necessary regardless of the outcome of the
motions”) (emphasis added)).
Third, Union Bank argues that it may have to produce certain individuals as many as four
times. Def. Mot. at 5. That is nonsense. Because the RICO claim is based on the same
underlying practices that give rise to Plaintiffs’ state law claims, there will not be unnecessary
duplicative depositions. Nonetheless, Plaintiffs offered to defer the individual – i.e., Rule
30(b)(1) – depositions until after the Court rules on their motion for leave to amend. Union Bank
declined Plaintiffs’ offer, demonstrating that this justification for Union Bank requesting a
protective order is manufactured. Def. Mot. at Ex. C (Dk. #1169-3). That a witness may need to
be deposed in both her individual capacity and as a corporate designee, pursuant to Plaintiffs’
Rule 30(b)(6) deposition notice, is far from unusual in complex litigation and is by no means
grounds for a protective order. See Rodriguez v. Niagara Cleaning Services, Inc., No. 09-22645-
CIV, 2010 WL 2573974, at *8 (S.D. Fla. June 24, 2010) (denied protective order seeking to
disallow a second deposition of the same deponent because the depositions were distinct as one
was an individual deposition and the other was in the witness’ capacity as a corporate designee).
Not only do the arguments Union Bank makes in support of its motion fall short of the
necessary “good cause” showing, they ignore the prejudice to Plaintiffs of further delaying these
depositions. The prejudice is real and substantiated and cannot be ignored. “When evaluating
whether a movant has satisfied his burden of establishing good cause for a protective order
preventing a deposition, a court should balance the non-moving party’s interest in obtaining
discovery and preparing for trial against the moving party’s proffer of harm that would result
from the deposition.” Baratta, 242 F.R.D. at 645. Plaintiffs’ class certification motion is due
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April 25, 2011 – less than two months from now. Plaintiffs require the depositions not just to
gather additional evidence to support their class certification motion, but also to authenticate and
otherwise establish the admissibility of documents that will show Union Bank uniformly and
systematically breached its contractual duties and defrauded class members by, inter alia, not
telling them Union Bank always reorders debits from high to low and that they had instant access
to accurate account balance information. Thus, unless the noticed depositions – in particular, the
long ago noticed Rule 30(b)(6) topics 2-13 depositions – go forward soon, Plaintiffs will be
denied a full opportunity to properly brief class certification.
B. Union Bank Should Be Compelled To Produce All Individual and Rule
30(b)(6) Deposition Witnesses.
Because Union Bank’s blanket refusal to produce any individual or Rule 30(b)(6) topics
2-13 witnesses is extremely prejudicial to Plaintiffs in light of the fast approaching April 25,
2011 class certification deadline, Plaintiffs request the Court compel Union Bank to produce the
Rule 30(b)(6) topics 2-13 witnesses immediately, and the Rule 30(b)(1) deponents no later than
10 days after the Court rules on the pending motion for leave to amend.
A motion to compel discovery pursuant to Rule 37(a) is addressed to the sound discretion
of the trial court. Commercial Union Ins. Co. v. Westrope, 730 F.2d 729, 731 (11th Cir. 1984).
To defeat a motion to compel, the burden is on the party resisting the discovery to specifically
show “how the requested discovery is burdensome, overbroad, or oppressive by submitting
detailed affidavits or other evidence establishing the undue burden.” Belaire at Boca, LLC v.
Ass’ns Ins. Agency, Inc., No. 06-80887-CIV, 2007 WL 1830873, at *1 (S.D. Fla. Jun. 22, 2007).
Union Bank cannot meet its burden with respect to the Rule 30(b)(6) depositions, particularly as
the parties have already reached an agreement as to their scope. As set forth above, Plaintiffs are
willing to delay the 30(b)(1) depositions until after the Court rules on Plaintiffs’ motion to
amend.
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IV. LOCAL RULE 7.1(a)(3) CERTIFICATION
Pursuant to Local Rule 7.1(a)(3), Plaintiffs certify that they conferred with Union
Bank’s counsel in a good faith effort to resolve the need for filing their cross-motion. The
parties were not able to resolve their differences as to the issues raised in this motion.
V. CONCLUSION
Based on the foregoing, Plaintiffs respectfully request the Court deny Union Bank’s
motion for protective order in its entirety. Further, Plaintiffs respectfully request that the Court
enter an order under Fed. R. Civ. P. 26(c) and 37(a) compelling Union Bank to immediately
produce Rule 30(b)(6) topics 2-13 witnesses and produce the individual 30(b)(1) deponents
within 10 days after the Court rules on Plaintiffs’ pending motion for leave to amend.
Dated: February 23, 2011.
Respectfully submitted,
/s/ Aaron S. Podhurst
Aaron S. Podhurst, Esquire
Florida Bar No. 063606
apodhurst@podhurst.com
Robert C. Josefsberg, Esquire
Florida Bar No. 40856
rjosefsberg@podhurst.com
Peter Prieto, Esquire
Florida Bar No. 501492
pprieto@podhurst.com
John Gravante, III, Esquire
Florida Bar No. 617113
jgravante@podhurst.com
PODHURST ORSECK, P.A.
City National Bank Building
25 W. Flagler Street, Suite 800
Miami, FL 33130-1780
Tel: 305-358-2800
Fax: 305-358-2382
/s/ Bruce S. Rogow
Bruce S. Rogow, Esquire
Florida Bar No. 067999
bruce@alterslaw.com
Jeremy W. Alters, Esquire
Florida Bar No. 0111790
jeremy@alterslaw.com
ALTERS LAW FIRM, P.A.
4141 N.E. 2nd Avenue
Suite 201
Miami, FL 33137
Tel: 305-571-8550
Fax: 305-571-8558
Co-Lead Counsel for Plaintiffs
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/s/ Robert C. Gilbert
Robert C. Gilbert, Esquire
Florida Bar No. 561861
rcg@grossmanroth.com
Stuart Z. Grossman, Esquire
Florida Bar No. 156113
szg@grossmanroth.com
GROSSMAN ROTH, P.A.
2525 Ponce de Leon Boulevard
Eleventh Floor
Coral Gables, FL 33134
Tel: 305-442-8666
Fax: 305-779-9596
Coordinating Counsel for Plaintiffs
/s/ E. Adam Webb
E. Adam Webb, Esquire
Georgia Bar No. 743910
Adam@WebbLLC.com
Matthew C. Klase, Esquire
Georgia Bar No. 141903
Matt@WebbLLC.com
G. Franklin Lemond, Jr., Esquire
Georgia Bar No. 141315
FLemond@WebbLLC.com
WEBB, KLASE & LEMOND, L.L.C.
1900 The Exchange, S.E.
Suite 480
Atlanta, GA 30339
Tel: 770-444-9325
Fax: 770-444-0271
/s/ Michael W. Sobol
Michael W. Sobol, Esquire
California Bar No. 194857
msobol@lchb.com
David S. Stellings, Esquire
New York Bar No. 2635282
dstellings@lchb.com
Roger N. Heller, Esquire
California Bar No. 215348
rheller@lchb.com
Jordan Elias, Esquire
California Bar No. 228731
jelias@lchb.com
LIEFF CABRASER HEIMANN &
BERNSTEIN L.L.P.
Embarcadero Center West
275 Battery Street, 30th Floor
San Francisco, CA 94111
Tel: 415-956-1000
Fax: 415-956-1008
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/s/ Russell W. Budd
Russell W. Budd, Esquire
Texas Bar No. 03312400
rbudd@baronbudd.com
Bruce W. Steckler, Esquire
Texas Bar No. 00785039
bsteckler@baronbudd.com
Mazin A. Sbaiti, Esquire
Texas Bar No. 24058096
msbaiti@baronbudd.com
BARON & BUDD, P.C.
3102 Oak Lawn Avenue
Suite 1100
Dallas, TX 75219
Tel: 214-521-3605
Fax: 214-520-1181
/s/ Ted E. Trief
Ted E. Trief, Esquire
New York Bar No. 1476662
ttrief@triefandolk.com
Barbara E. Olk, Esquire
New York Bar No. 1459643
bolk@triefandolk.com
TRIEF & OLK
150 E. 58th Street
34th Floor
New York, NY 10155
Tel: 212-486-6060
Fax: 212-317-2946
/s/ Ruben Honik
Ruben Honik, Esquire
Pennsylvania Bar No. 33109
rhonik@golombhonik.com
Kenneth J. Grunfeld, Esquire
Pennsylvania Bar No. 84121
kgrunfeld@golombhonik.com
GOLOMB & HONIK, P.C.
1515 Market Street
Suite 1100
Philadelphia, PA 19102
Tel: 215-985-9177
Fax: 215-985-4169
Plaintiffs’ Executive Committee
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 09-MD-02036-JLK
IN RE: CHECKING ACCOUNT
OVERDRAFT LITIGATION
MDL No. 2036
CERTIFICATE OF SERVICE
I hereby certify that on February 23, 2011, I electronically filed the foregoing document
with the Clerk of the Court using CM/ECF. I also certify that the foregoing document is being
served this day on all counsel of record or pro se parties identified on the attached Service List in
the manner specified, either via transmission of Notices of Electronic Filing generated by
CM/ECF or in some other authorized manner for those counsel or parties who are not authorized
to receive electronically Notices of Electronic Filing.
/s/ Robert C. Gilbert
Robert C. Gilbert, Esquire
Florida Bar No. 561861
GROSSMAN ROTH, P.A.
2525 Ponce de Leon Boulevard
Eleventh Floor
Coral Gables, FL 33134
Tel: 305-442-8666
Fax: 305-779-9596
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