A Magistrate Judge in Colorado has largely denied a nonparty property asset manager’s motion to quash a deposition subpoena in a Fair Credit Reporting Act and Fair Debt Collection Practices Act lawsuit, ruling that a company’s claim to have no records mentioning the plaintiffs does not excuse it from producing a corporate witness when other testimony ties it to the erroneous collection account at the center of the case.
The background: The plaintiffs rented a unit at an apartment complex for a little over a year and did not owe anything when they moved out. They actually received a refund on their way out the door.
- Roughly a year after leaving, the plaintiffs reviewed their credit reports and found a $1,782 collection account from a collection agency, with the apartment complex listed as the original creditor.
- The complex told them it had accidentally sent accounts belonging to thousands of current and former tenants to collections by mistake and was working to fix the problem. The plaintiffs said the tradeline made it “practically impossible” for them to rent another apartment.
- The plaintiffs sued a credit reporting agency and the collection agency under the FCRA and the FDCPA. A second credit reporting agency was originally a defendant but settled.
- Last November, the plaintiffs served a subpoena on the asset management company that oversees the complex, seeking seven categories of documents and a corporate representative’s testimony on 10 topics, including the relationship between the asset manager and the complex, communications with the collection agency, and any accounts sent to collections in 2023 and 2024 where no debt was owed.
- The asset manager moved to quash the deposition portion. Its litigation director submitted an affidavit stating the company is not the custodian of individual tenant accounts, that a different property management firm ran the complex during the relevant period, and that a search of its records turned up nothing.
The ruling: Judge Susan Prose of the District Court for the District of Colorado granted the motion only to the extent of trimming the deposition topics from 10 to seven, and denied it in every other respect.
- Judge Prose noted the affidavit had a hole in it. The company searched its records only for the plaintiffs’ names, even though several subpoena categories, such as internal discussions of accounts erroneously sent to collections, would not necessarily mention any tenant by name.
- The asset manager argued the deposition testimony from the other witnesses was speculative and secondhand. The judge was unmoved: “contesting the strength and implications of the evidence is the raison d’être of the litigation process.”
- The absence of paperwork is no shield. A witness must review everything known or reasonably available to the company, which “includes the nature and results of its investigatory efforts.” Even with no documents to review, “there will be [company] employees to interview from whom information can be gleaned.”
- The judge acknowledged nonparty status weighs against disclosure and cut topics touching the asset manager’s general business operations and collection practices, but held that “[t]he court will not deny discovery simply because complying with a subpoena inconveniences a nonparty or subjects it to some expense.”
