Opinion
1:08-cv-00759-MMB-BAM
01-31-2022
EFRAIN MUNOZ, individually and on behalf of all others similarly situated, et al., Plaintiffs, v. PHH MORTGAGE CORPORATION, et al., Defendants.
ORDER DENYING MOTION TO MODIFY PRETRIAL ORDER, DENYING MOTION TO STRIKE AS MOOT, AND DENYING MOTION TO DECERTIFY WITHOUT PREJUDICE
M. MILLER BAKER, JUDGE
Defendants move to decertify the class, ECF 462, and Plaintiffs oppose, ECF 467. As part of their response, Plaintiffs filed-without seeking leave- the expert report of Professor Robert E. Hoyt (Hoyt Report) (ECF 467-3) and a joint report to Congress in 1972 by the Veterans Administration and the Department of Housing and Urban Development (Joint Report) (ECF 467-2). As these submissions do not satisfy the final pretrial order's strict criteria for late witness and exhibit disclosures, see ECF 456, the court construes them as a de facto motion under Federal Rule of Civil Procedure 16(e) to modify the final pretrial order to include (i) Professor Hoyt among Plaintiffs' trial witnesses and (ii) the Joint Report among Plaintiffs' trial exhibits. For the reasons explained below, the court DENIES Plaintiffs' de facto motion to so modify the pretrial order, consequently DENIES as moot Defendants' motion to strike the Hoyt Report and the Joint Report, and further DENIES without prejudice Defendants' motion to decertify the class.
Background
Plaintiffs commenced this action on June 2, 2008. ECF 1. Plaintiffs' first amended complaint, brought on behalf of a class of similarly situated homeowners, alleges that Defendants, various affiliated mortgage lenders (collectively PHH) and their captive reinsurer (Atrium), violated the Real Estate Settlement Procedures Act of 1974 (RESPA), 12 U.S.C. § 2601 et seq., by receiving kickbacks from private mortgage insurers to which PHH referred Plaintiffs' business. See ECF 96, ¶¶ 1-7. The court certified the class on June 11, 2015. ECF 288.
In the meantime, one week after fact discovery closed on May 9, 2016, ECF 330, and more than two months before expert discovery closed on August 6, 2016, id., the Supreme Court in Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) (Spokeo I), abrogated Ninth Circuit precedent holding that insofar as “RESPA gives [a] [p]laintiff a cause of action, ” such a plaintiff “has standing to pursue her claims.” Edwards v. First Am. Corp., 610 F.3d 514, 517 (9th Cir. 2010).
In Spokeo I, the Supreme Court held that a plaintiff “cannot satisfy the demands of Article III by alleging a bare procedural violation, ” because such a violation “may result in no harm.” 578 U.S. at 342. “Article III standing requires a concrete injury even in the context of a statutory violation.” Id. at 341. In so holding, the Court vacated the decision below, which in turn relied on Edwards. See id. at 336 & n.5 (characterizing the decision below as “relying on” Edwards).
Three years later, in Frank v. Gaos, the Supreme Court characterized Spokeo I as “reject[ing] the premise, relied on in the decision then under review and in Edwards, that ‘a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.' ” 139 S.Ct. 1041, 1045 (2019) (quoting Spokeo I, 578 U.S. at 341).
The Supreme Court acknowledged that “ ‘[c]oncrete' is not, however, necessarily synonymous with ‘tangible.' ” Id. at 340. This meant that “the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact. In other words, a plaintiff in such a case need not allege any additional harm beyond the one Congress has identified.” Id. at 342 (emphasis in original) (citing Fed. Election Comm'n v. Akins, 524 U.S. 11, 20- 25 (1998), and Pub. Citizen v. Dep't of Justice, 491 U.S. 440, 449 (1989)). The Court accordingly remanded the case to the Ninth Circuit because its “standing analysis was incomplete.” Id. at 342. The Supreme Court instructed the court of appeals to determine whether the alleged procedural violations of the Fair Credit Reporting Act (FCRA) met “the concreteness requirement.” Id. at 343.
Both Akins and Public Citizen involved plaintiffs alleging informational injury based on failures by government agencies to disclose information as required by statute.
On remand the next year, the Ninth Circuit read Spokeo I as holding that “even when a statute has allegedly been violated, Article III requires such violation to have caused some real-as opposed to purely legal-harm to the plaintiff.” Robins v. Spokeo, Inc., 867 F.3d 1108, 1112 (9th Cir. 2017) (Spokeo II) (emphasis added). From that principle, the court of appeals held that standing to assert a statutory violation requires a plaintiff to establish (1) that “the statutory provision[ ] at issue [was] established to protect [the plaintiff's] concrete interests (as opposed to purely procedural rights), and if so, (2) [that] the specific procedural violation[ ] alleged . . . actually harm[s], or present a material risk of harm to, such interests.” Id. at 1113. Applying that test in the case before it, the court found that the FCRA procedures at issue “were crafted to protect consumers' (like Robins's) concrete interest in accurate credit reporting about themselves, ” id. at 1115, and that the alleged violation-publication on the Internet of inaccurate information relevant to potential employers- harmed that concrete interest. Id. at 1115-17.
Meanwhile, in 2020 the court in this case granted partial summary judgment for Plaintiffs and denied Defendants' cross-motion for summary judgment (based in part on Spokeo I) and Defendants' motion to decertify. See Munoz v. PHH Mortg. Corp., 478 F.Supp.3d 945 (E.D. Cal. 2020) (ECF 417). Addressing Plaintiffs' standing, the court determined that even in the wake of Spokeo I and Frank, Plaintiffs
have alleged that they were actually and personally harmed when defendants “purposefully provided neither a meaningful disclosure nor a meaningful choice to [their] borrowers regarding [their] captive reinsurance arrangements, ” directly implicating one of the harms identified by and targeted for elimination by Congress.Id. at 983 (quoting ECF 96, ¶ 59, and citing 12 U.S.C. §§ 2603, 2604, and 2607(c)) (ECF 417, at 44).
On May 24, 2021, the court completed its pretrial conference. ECF 450. On June 11, 2021, the court issued a final pretrial order. ECF 456. Among other things, the final pretrial order set a trial date of February 15, 2022, id. at 13, and identified each side's trial witnesses and exhibits, id. at 15 (Plaintiffs' witnesses), 17 (Defendants' witnesses), 19 (Plaintiffs' exhibits), 35 (Defendants' exhibits). Plaintiffs' witnesses did not include Professor Hoyt, nor did their exhibits include the Joint Report.
Two weeks after entry of the final pretrial order, the Supreme Court decided TransUnion LLC v. Ramirez, 141 S.Ct. 2190 (2021). As relevant here, the Court in TransUnion reiterated Spokeo I's principle that “[o]nly those plaintiffs who have been concretely harmed by a defendant's statutory violation may sue that private defendant over that violation in federal court.” Id. at 2205 (emphasis in original). Applying that principle in the context of asserted informational injury, the Court held that a plaintiff class lacked standing to recover for violation of the FCRA's disclosure requirements, because at trial the plaintiffs adduced no evidence of downstream harm caused by the violations. Id. at 2213-14.
As examples of such “downstream consequences, ” the Court in TransUnion observed that the plaintiffs failed to put forth any evidence that they would have tried to correct their credit reports had the defendant made the required disclosures. Id. Nor did plaintiffs present evidence “that the alleged information deficit hindered their ability to correct erroneous information before it was later sent to third parties.” Id. at 2214. The Court held that “[a]n asserted informational injury that causes no adverse effects cannot satisfy Article III.” Id. (cleaned up).
On October 20, 2021, Defendants in this case moved to decertify the class based on TransUnion. ECF 462. Plaintiffs' response to this motion on November 17, 2021, included the Hoyt Report. See ECF 467, at 17 (describing Professor Hoyt's qualifications and stating that he would opine “that the captive reinsurance agreements utilized by Defendants-which do not involve a real risk transfer-increased transaction costs and in turn increased the premiums paid for primary mortgage insurance by Class Members”); see also ECF 467-3 (Hoyt Report). Plaintiffs also submitted the Joint Report. See ECF 467, at 15-16 & n.13 (describing the Joint Report and its conclusion that settlement kickbacks result in unnecessarily higher costs to home purchasers); see also ECF 467-2 (Joint Report). Plaintiffs made no effort to justify these submissions, either under the final pretrial order's late disclosure provisions or otherwise.
Defendants moved to strike both the Hoyt Report and the Joint Report. ECF 475. Plaintiffs opposed, ECF 499, and Defendants replied, ECF 503.
Discussion
I.
The final pretrial order prohibits the use at trial of “undisclosed witnesses” and “undisclosed exhibits” “for any purpose, including impeachment or rebuttal , ” unless the undisclosed witness or exhibit qualifies under either of two separate pathways. See ECF 456, at 10 (witnesses), 11 (exhibits) (emphasis and double emphasis in original). The court considers each of these pathways in turn.
A.
The first pathway for a party proffering an undisclosed witness is to “demonstrate[ ] that the” witness “is for the purpose of rebutting evidence that could not be reasonably anticipated at the pretrial conference.” ECF 456, at 10. The standard is materially the same for late-disclosed exhibits. See id. at 11.
Plaintiffs argue that at the time of the pretrial conference, they could not have reasonably anticipated any need to rebut the deposition testimony of their own experts that Plaintiffs suffered no economic injury from captive reinsurance agreements. See ECF 499, at 9 & n.6. This is because, according to Plaintiffs, “[p]rior to TransUnion, Plaintiffs were not required to make a showing of such harm but instead could rely on the statutory violation to establish injury and standing in cases such as this.” Id. at 9 (citing Munoz v. PHH Corp., 659 F.Supp.2d 1094, 1102 (E.D. Cal. 2009) (ECF 60); Alston v. Countrywide Fin. Corp., 585 F.3d 753 (3d Cir. 2009); and the Ninth Circuit's 2009 decision in Edwards). TransUnion, Plaintiffs argue, suddenly changed everything for standing purposes by making economic harm relevant for the first time in the litigation.
But Plaintiffs' first amended complaint alleges that they suffered economic harm. See ECF 96, ¶ 94 (alleging that Plaintiffs were “overcharged for mortgage insurance. Kickbacks and unearned fees unnecessarily and artificially inflate settlement service charges.”). By injecting that issue at the outset, Plaintiffs opened the door for Defendants' introduction of rebuttal evidence. Thus, throughout this litigation, Plaintiffs should have reasonably anticipated the need to disclose witnesses and exhibits pertaining to economic harm.
Still, even if Plaintiffs' own allegations were not dispositive as to what evidence they should have reasonably anticipated needing to rebut, to determine whether TransUnion changed the relevant law the court must carefully parse Plaintiffs' claims. It has long been established that “standing is not dispensed in gross.” Lewis v. Casey, 518 U.S. 343, 358 n.6 (1996). This means that “a plaintiff who has been subject to injurious conduct of one kind” does not “possess by virtue of that injury the necessary stake in litigating conduct of another kind, although similar, to which he has not been subject.” Id. (quoting Blum v. Yaretsky, 457 U.S. 991, 999 (1982)). Thus, “a plaintiff must demonstrate standing for each claim he seeks to press.” DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006); see also Allen v. Wright, 468 U.S. 737, 752 (1984) (“[T]he standing inquiry requires careful judicial examination of a complaint's allegations to ascertain whether the particular plaintiff is entitled to an adjudication of the particular claims asserted.”), abrogated on other grounds by Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014).
Here, Plaintiffs' first amended complaint effectively alleges two related, but distinct, RESPA violations (and corresponding injuries) under 12 U.S.C. § 2607.
First, Plaintiffs allege that “PHH's captive reinsurance agreements were and are sham transactions for collecting illegal kickbacks in return for referring private mortgage business to certain insurers.” ECF 96, ¶ 69. If Plaintiffs prove that allegation at trial, they will establish a violation of 12 U.S.C. § 2607(a), because Defendants' captive reinsurance agreements will fall outside the safe harbor provided by 12 U.S.C. § 2607(c)(2). Plaintiffs allege that their injury traceable to this violation was “overcharge[s] for mortgage insurance. Kickbacks and unearned fees unnecessarily and artificially inflate settlement service charges.” ECF 96, ¶ 94.
“No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.” 12 U.S.C. § 2607(a).
This provision shelters from § 2607(a) liability “the payment to any person of a bona fide salary or compensation or other payment for goods or facilities actually furnished or for services actually performed.” 12 U.S.C. § 2607(c)(2).
Second, Plaintiffs also allege that Defendants “purposely provided neither a meaningful disclosure nor a meaningful choice to [their] borrowers regarding [their] captive reinsurance arrangements.” ECF 96, ¶ 59. As the court recognized in its summary judgment ruling, see Munoz, 478 F.Supp.3d at 983 (ECF 417, at 44), this alleges a violation of 12 U.S.C. § 2607(c)(4)'s disclosure requirements. Plaintiffs allege that the injury traceable to this violation is informational: they were not provided a meaningful choice whether or not to use the private mortgage insurers referred by PHH. ECF 96, ¶ 59.
This provision permits “affiliated business arrangements so long as, ” inter alia, “(A) a disclosure is made of the existence of such an arrangement to the person being referred, ” “(B) such person is not required to use any particular provider of settlement services, ” and “(C) the only thing of value that is received from the arrangement, other than the payments permitted under this subsection, is a return on the ownership interest or franchise relationship.” 12 U.S.C. § 2607(c)(4) (emphasis added). The court expresses no view on whether Plaintiffs' disclosure allegation, if proven, states a viable claim for relief under § 2607.
Thus, Plaintiffs have the burden of proving the alleged injury that is traceable to each alleged violation-the economic injury traceable to the alleged sham transaction violation of § 2607(c)(2) and the informational injury traceable to the alleged disclosure violation of § 2607(c)(4). DaimlerChrysler, 547 U.S. at 352; see also Spokeo I, 578 U.S. at 338 (to have standing, “[t]he plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision”) (emphasis added).
As to Plaintiffs' disclosure claim, TransUnion clarified the law by making clear that asserted informational injury from breach of a statutory duty requires downstream adverse effects to constitute concrete injury for Article III standing purposes. See 141 S.Ct. at 2213-14. But Plaintiffs do not proffer Professor Hoyt and the Joint Report to supply evidence of downstream effects of their asserted informational injury-the Hoyt Report does not opine, for example, that Plaintiffs would have selected different private mortgage insurance providers had PHH provided adequate disclosures. Cf. id. (observing that the TransUnion plaintiffs failed to put forth any evidence that they would have tried to correct their credit reports had the defendant made the required disclosures, or “that the alleged information deficit hindered their ability to correct erroneous information before it was later sent to third parties”).
In the court's view, TransUnion clarified, rather than changed, the law on informational injury. In Spokeo I, the Supreme Court cited the informational injury cases of Federal Election Commission v. Akins, 524 U.S. 11 (1998), and Public Citizen v. Department of Justice, 491 U.S. 440 (1989), as examples of cases involving intangible yet concrete harm. In TransUnion, the Supreme Court endorsed the reasoning of Trichell v. Midland Credit Management, Inc., 964 F.3d 990 (11th Cir. 2020), which explained that
the plaintiffs in Public Citizen and Akins identified consequential harms from the failure to disclose the contested information. The advocacy organizations in Public Citizen alleged that they needed the information to ‘participate more effectively in the judicial selection process.' 491 U.S. at 449. And the voters in Akins alleged that the information ‘would help them (and others to whom they would communicate it) to evaluate candidates for public office.' 524 U.S. at 21. Trichell and Cooper have identified no comparable downstream consequences from their receipt of allegedly misleading communications that failed to mislead. Absent any such concrete impact, they can complain only about receiving information that had no impact on them.Id. at 1004 (emphasis in original); see also TransUnion, 141 S.Ct. at 2214 (applying Trichell's analysis).
Instead, Plaintiffs proffer Professor Hoyt and the Joint Report to establish the alleged economic harm traceable to the alleged sham transaction violation of § 2607(c)(2). But as to that claim, it has been manifest in this circuit since Spokeo II in 2017 that Plaintiffs' burden is to show some concrete injury beyond the bare procedural violation of § 2607(c)(2). As the Ninth Circuit put it then: “[E]ven when a statute has allegedly been violated, Article III requires such violation to have caused some real-as opposed to purely legal-harm to the plaintiff.” Spokeo II, 867 F.3d at 1112 (emphasis added). Since 2017 Plaintiffs have been required to show that (1) § 2607(c)(2) was “established to protect [their] concrete interests (as opposed to purely procedural rights), and if so, ” that (2) “the specific procedural violation[ ] alleged . . . actually harm[s], or present[s] a material risk of harm to, such interests.” Id. at 1113.
After Spokeo II, Plaintiffs should have moved to reopen discovery as necessary so that they could proffer evidence to demonstrate economic or other harm to their concrete interests stemming from Defendants' alleged violation of § 2607(c)(2). Spokeo II-not TransUnion-was the change in the law that made it pellucid that Plaintiffs needed to establish harm to their concrete interests to establish standing as to that claim. Because Plaintiffs should have reasonably anticipated the need for evidence of such harm some four years before the pretrial conference, the first pathway under the pretrial order for admitting late witnesses and exhibits is now barred to them.
Putting aside that Plaintiffs' first amended complaint injected the issue of economic harm into the case at the outset, after the Supreme Court issued Spokeo I on May 16, 2016, prudence dictated retaining the necessary experts to establish Plaintiffs' concrete injury traceable to the alleged violation of § 2607(c)(2) before the expert discovery deadline of August 6, 2016. Nevertheless, because Spokeo I remanded the case to the Ninth Circuit, and giving them the benefit of the doubt, Plaintiffs were arguably entitled to wait until the court of appeals announced its interpretation of the new standard. When that happened in Spokeo II, Plaintiffs should have acted promptly to reopen discovery as to their alleged economic injury stemming from the alleged § 2607(c)(2) violation.
Plaintiffs' argument that at the time of the 2021 final pretrial conference they could rely on pre-Spokeo I authority such as Edwards for the proposition that they “were not required to make a showing of such harm but instead could rely on the statutory violation to establish injury and standing, ” ECF 499, at 9, is less than weak. As noted above, Spokeo I abrogated Edwards in 2016, a point that Frank stated explicitly in 2019. See Frank, 139 S.Ct. at 1046 (“Our decision in Spokeo abrogated the ruling in Edwards that the violation of a statutory right automatically satisfies the injury-in-fact requirement whenever a statute authorizes a person to sue to vindicate that right.”).
B.
The second pathway under the final pretrial order for proffering late witnesses or exhibits provides that if the undisclosed witness or exhibit “was discovered after” the “pretrial conference” (for witnesses) and “the issuance of this order” (for exhibits), ECF 456, at 10 (witnesses), 11 (exhibits), the proponent “shall promptly inform the court and opposing parties of the existence” of the “unlisted witnesses” and “exhibits” so “the court may consider” whether the witnesses “shall be permitted to testify” and whether the exhibits will be admissible “at trial.” ECF 456, at 10 (witnesses), 11 (exhibits) (emphasis added). The proponent must also show satisfaction of certain criteria.
As relevant here, the proffering party must show that the witness or exhibit could not reasonably have been discovered “prior to the discovery cutoff” for witnesses, id. at 10, and “earlier” for exhibits, id. at 11. In any event, the proffering party must also show that they “promptly notified” the “court and opposing parties” of discovery of the witness or exhibit. Id. at 10-11.
In opposing Defendants' motion to strike, Plaintiffs contend that neither their new expert nor their new exhibit could “reasonably have been discovered” before the expert discovery cutoff of August 16, 2016 (for Professor Hoyt) or earlier (in the case of the Joint Report) because TransUnion changed the applicable standing law in June 2021. As noted above, however, Plaintiffs' first amended complaint put economic injury at issue, meaning that Plaintiffs could have and should have reasonably discovered both Professor Hoyt and the Joint Report early in the litigation.
Even assuming, however, that a change in applicable standing law determines when Plaintiffs could have reasonably made these discoveries, that change occurred at the very latest with the Ninth Circuit's decision in Spokeo II in 2017. Yet Plaintiffs did not “promptly inform the court and opposing parties” of the existence of the unlisted witnesses and exhibits until over four years later, on November 17, 2021. And even under Plaintiffs' theory that applicable standing law did not change until TransUnion was decided on June 25, 2021, Plaintiffs did nothing for almost five months, even though the final pretrial order set a trial date of February 15, 2022. Instead, Plaintiffs waited until November 17, 2021-just three months before trial, as parties accelerated their preparation-to disclose their new witness and exhibit. Even then, Plaintiffs disclosed this new evidence only in the context of opposing a motion to decertify.
If TransUnion were truly a sea change in the relevant standing law, as Plaintiffs now contend, then they should have disclosed their new expert and exhibit within sixty days of that decision (that is, by August 23, 2021) at the very latest. Then, if the court had agreed with Plaintiffs' reading of TransUnion, the court might have briefly reopened expert and fact discovery to address economic injury.
But Plaintiffs chose to wait almost five months. The court finds that Plaintiffs' unreasonable delay in notifying the court and Defendants means that their disclosure was not “prompt.” This is an independent ground for concluding that the second pathway for late disclosure provided by the final pretrial order is also now barred for Plaintiffs.
II.
Thus, Plaintiffs' proffering of Professor Hoyt and the Joint Report disregards the final pretrial order. But that's not the end of the discussion, because the court may modify the final pretrial order to “prevent manifest injustice.” Fed.R.Civ.P. 16(e). Although Plaintiffs have not invoked this provision, the court construes their submission of the Hoyt Report and the Joint Report as a motion seeking Rule 16(e) relief. Cf. Chaudhry v. Angell, No. 1:16-cv-01243-SAB, 2021 WL 4461667, at *6 (E.D. Cal. Sept. 29, 2021) (construing a late-filed notice designating deposition testimony for trial as a motion to modify the pre-trial order).
District courts in this circuit weigh four factors when considering Rule 16(e) motions to modify a final pretrial order:
(1) the degree of prejudice or surprise to the defendants if the order is modified; (2) the ability of the defendants to cure the prejudice; (3) any impact of modification on the orderly and efficient conduct of the trial; and (4) any willfulness or bad faith by the party seeking modification.Galdamez v. Potter, 415 F.3d 1015, 1020 (9th Cir. 2005) (citing Byrd v. Guess, 137 F.3d 1126, 1132 (9th Cir. 1998)). “It is the moving party's burden to show that a review of these factors warrants a conclusion that manifest injustice would result if the pretrial order is not modified.” Byrd, 137 F.3d at 1132.
Defendants argue, persuasively, that if the court were to permit Professor Hoyt to testify and the Joint Report to be admitted, Defendants would need to retain their own expert or experts, requiring additional depositions. ECF 475, at 12. Fairness would also require the reopening of fact discovery so that Defendants could explore various issues implicated by Plaintiffs' claim of economic injury. Id. at 12 & n.7. That discovery in turn would justify more motion practice, such as a renewed motion for summary judgment previously sought by Defendants on the standing issue. Such new discovery and motion practice would require adjourning a trial date for a four-week trial that has been set since the entry of the final pretrial order on June 11, 2019. The parties, the court, and around twenty witnesses have structured their schedules in reliance on the existing schedule. Defendants could not mitigate this prejudice they would suffer by alteration of the schedule.
In February 2021, Defendants moved to reopen law and motion practice on standing. ECF 437. In successfully opposing the motion, Plaintiffs argued, inter alia, that Defendants were not diligent in bringing the motion, and that “all of the facts or evidence that Defendants needed to bring such a motion were in the record.” ECF 439, at 1.
Finally, the court finds that although Plaintiffs have not acted in bad faith, they have certainly acted willfully by not promptly seeking relief within, at the very latest, sixty days of the Supreme Court's decision in TransUnion. Although the court disagrees with Plaintiffs' reading of TransUnion, if it represented the change in the applicable law that Plaintiffs say it did, they should have promptly sought relief soon afterwards, because Plaintiffs have the affirmative burden of demonstrating standing at all stages of the litigation. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992). Plaintiffs' failure to seek relief until almost five months after TransUnion, and their blasé failure to even attempt to justify the late disclosure of Professor Hoyt and the Joint Report under the final pretrial order, or to (alternatively) seek modification of the pretrial order under Rule 16(e), cf. Byrd, 137 F.3d at 1132 (affirming trial court's denial of modification of pretrial order in part because the moving party made no effort to explain whether its request “passed the four-part test governing modifications of pretrial orders”), reveals an indifference to the norms of ordinary court procedures that amounts to willfulness.
The court therefore denies Plaintiffs' motion (so construed) to amend the final pretrial order to add Professor Hoyt and the Joint Report to the lists of Plaintiffs' disclosed witnesses and exhibits. Correspondingly, in view of this disposition, Defendants' motion to strike (ECF 475) is denied as moot.
III.
Invoking TransUnion, Defendants move to decertify the class. ECF 462. Defendants first argue that Plaintiffs suffered no informational injury. Id. at 11-15. Defendants further argue that as to such alleged informational injury, individualized standing inquiries will predominate in violation of Federal Rule of Civil Procedure 23(b)(3). Id. at 20-24. Defendants finally argue that even if some members of the class can show downstream adverse effects from informational injury, the named plaintiffs cannot, and therefore the named plaintiffs' claims are not typical of the class, as required by Rule 23(a)(3). Id. at 25- 26.
Defendants' invocation of TransUnion suffers from the same analytical flaw as Plaintiffs': it impermissibly mixes and matches the standing requirements for the separate 12 U.S.C. § 2607(c) violations (and claims) alleged by Plaintiffs. Cf. Int'l Primate Prot. League v. Adm'rs of Tulane Educ. Fund, 500 U.S. 72, 77 (1991) (“Standing does not refer simply to a party's capacity to appear in court. Rather, standing is gauged by the specific common-law, statu-tory[, ] or constitutional claims that a party presents.”).
The informational injury Plaintiffs contend is traceable to the alleged § 2607(c)(4) disclosure violation does not provide standing for their § 2607(c)(2) sham transaction claim, because such injury is not traceable to the alleged § 2607(c)(2) violation. Thus, the serious standing questions raised by Defendants as to the alleged disclosure violation (including predominance and typicality) based on TransUnion have no bearing on whether the class should be decertified as to the alleged sham transaction violation.
Defendants present no argument why the class should be decertified as to the sham transaction claim.
At this late hour of the case, it is unclear to the court whether Plaintiffs even intend to prosecute their disclosure violation claim, as their trial brief does not mention it. See ECF 525. Accordingly, the certification issues raised by Defendants as to that claim appear to be academic. Thus, the court denies Defendants' motion for decertification. The court does so without prejudice; Defendants may renew their motion based on the evidence (and claim(s)) presented at trial.
Conclusion and Order
For the reasons provided above, it is hereby ORDERED that: Plaintiffs' motion to modify the final pretrial order (so construed) in their response (ECF 467) to Defendants' motion to decertify the class (ECF 462) is DENIED;
Defendants' motion to strike (ECF 475) is DENIED AS MOOT; and Defendants' motion to decertify the class (ECF 462) is DENIED WITHOUT PREJUDICE. 21