Hicks v. Houston Baptist University

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NORTH CAROLINA

WESTERN DIVISION

No. 5:17-CV-629-FL

DEANNA HICKS, on behalf of herself and )

all others similarly situated, )

)

Plaintiff, )

) ORDER

v. )

)

HOUSTON BAPTIST UNIVERSITY, )

)

Defendant. )

)

This matter comes before the court on defendant’s motion for reconsideration pursuant to

28 U.S.C. § 636(b)(1)(A) and Federal Rule of Civil Procedure 72(a). (DE 54). The issues raised

have been fully briefed by the parties, and in this posture are ripe for ruling. For the reasons that

follow, defendant’s motion is denied.

BACKGROUND

Plaintiff initiated this case on December 20, 2017, alleging violations of the Telephone

Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. Plaintiff, on behalf of herself and those

similarly situated, claims that defendant used an autodialer to place phone calls to her cell phone

without her prior express written consent. She seeks to certify the following class:

All persons in the United States from four years prior to the filing of this action

through the present who (1) Defendant (or a third person acting on behalf of

Defendant) called, (2) on the person’s cellular telephone, (3) using an autodialer,

and (4) for whom Defendant claims it obtained prior express written consent in the

same manner as Defendant claims it supposedly obtained prior express written

consent to call the Plaintiff.

(Compl. ¶ 33).1 After its address of Upon decision on After determining that the court has personal

jurisdiction over defendant, the case proceeded to discovery. (DE 37).

On March 25, 2019, plaintiff filed the instant motion to compel, seeking defendant’s

responses to requests for production nos. 2–7, 17–19, 21–23, 25, 27–28, 30–32, 36–37, 43–44;

defendant’s responses to interrogatories nos. 1–4, 7–13; third-party Educate Online’s responses to

document requests nos. 2, 4, 5, 7–20; and Educate Online’s responses Rule 30(b)(6) deposition

topics nos. 2, 5–12.2 (See Discovery Requests and Responses (DE 42-1)). Plaintiff argues that

the proposed discovery addresses is directly relevant to the class claims in this case, which may

include students other than those at Austin Community College whose contact information was

obtained through public records requests made pursuant to the Federal Educational Rights and

Privacy Act (“FERPA”).

In opposition, defendant argued that plaintiff’s motion exceeds the scope of discovery and

is unduly burdensome. Defendant contended that the class definition proposed by plaintiff could

never include individuals other than those at Austin Community College. Defendant relies upon

deposition testimony from Linda Terry (“Terry”), an employee of Austin Community College that

handles public information requests for directory information under FERPA.

On November 12, 2019, the magistrate judge issued his order granting the motion to

compel. The magistrate judge reasoned that, while differences in disclosure processes among

schools may ultimately result in some call recipients falling outside of plaintiff’s proposed classes,

such differences do not justify shielding information regarding students at other schools from

1 Plaintiff voluntarily dismissed her individual and class claims for receiving calls after being placed on the

national do not call registry.

2 Educate Online, defendant’s marketing agent, is also known as Meteor Learning, Inc.

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discovery. Along similar lines, the magistrate judge held that it would be improper to define the

meaning of “in the same manner” and limit class discovery at this juncture. Finally, the magistrate

judge concluded that the discovery sought was proportional to the needs of the case.

Shortly thereafter, defendant filed the instant motion for reconsideration. On November

26, 2019, the court stayed case activities pending its ruling on the instant motion.

DISCUSSION

A. Standard of Review

A district court may designate a magistrate judge to hear and decide any “pretrial matter

not dispositive of a party’s claim or defense.” Fed. R. Civ. P. 72(a); see also 28 U.S.C. §

636(b)(1)(A). Upon timely objection by a party, the court must modify or set aside any part of a

magistrate judge’s order that is “clearly erroneous” or “contrary to law.” Fed. R. Civ. P. 72(a);

see also Local Civil Rule 72.4(a). “A factual finding is clearly erroneous when [the court is] ‘left

with the definite and firm conviction that a mistake has been committed.’” TFWS, Inc. v.

Franchot, 572 F.3d 186, 196 (4th Cir.2009) (quoting Anderson v. Bessemer City, 470 U.S. 564,

573 (1985)). Although the “contrary to law” standard permits plenary review of legal conclusions,

see PowerShare, Inc. v. Syntel, Inc., 597 F.3d 10, 15 (1st Cir. 2010), decisions related to discovery

disputes and scheduling are accorded greater deference. See, e.g., In re Outsidewall Tire Lit., 267

F.R.D. 466, 470 (E.D. Va. 2010).

B. Analysis

“Parties may obtain discovery regarding any nonprivileged matter that is relevant to any

party’s claim or defense and proportional to the needs of the case.” Fed. R. Civ. P. 26(b)(1).

Defendant does not argue that the information sought from it and Educate Online is privileged.

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Rather, it argues that the information sought is not relevant and not proportional to the needs of

the case. The court turns its attention first to the question of relevance, then to the question of

proportionality and undue burden.

1. Relevance

“A discovery request is relevant if there is any possibility that the information sought might

be relevant to the subject matter of [the] action.” Mach. Sols., Inc. v. Doosan Infracore Am. Corp.,

323 F.R.D. 522, 526 (D.S.C. 2018) (internal quotations omitted). “Relevant matters are therefore

ones which relate to a party’s claim or defense and include information about persons who know

of such relevant matters.” Marfork Coal Co. v. Smith, 274 F.R.D. 193, 203 (S.D.W. Va. 2011).

“Relevance is not, on its own, a high bar. There may be a mountain of documents and emails that

are relevant in some way to the parties’ dispute, even though much of it is uninteresting or

cumulative.” Virginia Dep’t of Corr. v. Jordan, 921 F.3d 180, 188–89 (4th Cir. 2019).

The Federal Rules establish four factual predicates necessary for any class claim to

proceed: “numerosity, commonality, typicality, and adequacy of representation.”3 Broussard v.

Meineke Disc. Muffler Shops, Inc., 155 F.3d 331, 337 (4th Cir. 1998) (citing Fed. R. Civ. P. 23(a)).

“[I]t is essential that a plaintiff be afforded a full opportunity to develop a record containing all the

facts pertaining to the suggested class and its representatives.” Int’l Woodworkers of Am., AFL-

CIO, CLC v. Chesapeake Bay Plywood Corp., 659 F.2d 1259, 1268 (4th Cir. 1981). Thus,

discovery pertaining to numerosity, commonality, typicality, and adequacy of representation is

relevant to the class certification inquiry. See, e.g., EQT Prod. Co. v. Adair, 764 F.3d 347, 355

3 Rule 23(b)(3) also requires a finding that class issues predominate over individual issues.

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(4th Cir. 2014); Scott v. Family Dollar Stores, Inc., 733 F.3d 105, 109 (4th Cir. 2013); Harris v.

Ballone, 681 F.2d 225, 229 (4th Cir. 1982).

The TCPA was enacted to place limitations on telemarketing calls. See Mims v. Arrow

Fin. Servs., LLC, 565 U.S. 368, 372–75 (2012) (describing the TCPA’s statutory scheme). The

TCPA makes it unlawful “to make any call . . . using any automatic telephone dialing system or

an artificial or prerecorded voice . . . to any telephone number assigned to a . . . cellular telephone

service.” 47 U.S.C. § 227(b)(1)(A)(iii). However, the same provision also exempts from its sweep

“a call . . . made with the prior express consent of the called party.” Id.; see Am. Ass’n of Political

Consultants, Inc. v. Fed. Commc’ns Comm’n, 923 F.3d 159, 169 (4th Cir. 2019) (“Because

consent generally diminishes any expectation of privacy, phone calls that qualify for the consent

exemption are less intrusive than other automated calls.”). In pertinent part, the TCPA’s

implementing regulations clarify that the exemption applies to “a call made with the prior express

written consent of the called party or the prior express consent of the called party when the call is

made by or on behalf of a tax-exempt nonprofit organization.” 47 C.F.R. § 64.1200(a)(2).4

“The Family Educational Rights and Privacy Act (“FERPA”) is a federal law that protects

the privacy rights of students in their educational records.” Doe v. Roe, 295 F. Supp. 3d 664, 678

(E.D. Va. 2018). FERPA defines “directory information” to include certain information related to

a student, including their name, address, and telephone listing. 20 U.S.C. § 1232g(a)(5)(A). The

statute requires educational institutions providing public directory information to “give public

notice of the categories of information which it has designated as such information with respect to

each student attending the institution” and “allow [parents or eligible students] a reasonable period

4 The parties dispute whether defendant is a tax-exempt nonprofit organization that is not required to obtain

prior express written consent under the TCPA. The court does not resolve this issue here.

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of time after such notice has been given . . . to inform the institution or agency that any or all of

the information designated should not be released without [] prior consent.” Id. § 1232g(a)(5)(A);

34 C.F.R. § 99.37(a). Moreover, “[a]n educational agency or institution may disclose directory

information about former students without complying with the notice and opt out conditions”

required by § 99.37(a), so long as they honor any previous opt out request made while the student

was in attendance. 34 C.F.R. § 99.37(b). Provided an educational institution complies with these

requirements, FERPA regulations allow student directory information to be disclosed without that

student’s prior written consent. 34 C.F.R. § 99.31(a)(11); see 34 C.F.R. § 99.30 (requiring a signed

and dated written consent to disclose personally identifiable information).

In the instant case, plaintiff seeks discovery regarding the following putative class:

All persons in the United States from four years prior to the filing of this action

through the present who (1) Defendant (or a third person acting on behalf of

Defendant) called, (2) on the person’s cellular telephone, (3) using an autodialer,

and (4) for whom Defendant claims it obtained prior express written consent in the

same manner as Defendant claims it supposedly obtained prior express written

consent to call the Plaintiff.

(Compl. ¶ 33). The information sought from plaintiff regarding other individuals at schools other

than Austin Community College is certainly relevant to plaintiff’s class claims. Identifying the

individuals contacted by defendant or Educate Online to advertise defendant’s educational

programs is relevant to numerosity. More importantly, discovery of contact information obtained

from other schools and how that information was obtained is relevant to typicality and

commonality.

Defendant argues that it obtained “prior express consent” from plaintiff because Austin

Community College disclosed public directory information pursuant to FERPA’s notice

provisions, where plaintiff was advised of her right to withhold her public directory information

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but did not do so. See 34 C.F.R. § 99.37(a). However, FERPA’s own implementing regulations

describes such disclosures as “without consent.” 34 C.F.R. § 99.31(a)(11). The court requires a

complete record to rule on the factual predicates of class certification, because the apparent conflict

between FERPA’s characterization of disclosure of directory information as “without consent”

and the TCPA’s defense of “prior express consent” suggests that plaintiff’s use of the phrase “in

the same manner” could encompass any individual contacted by defendant through means of a

public records request allowed by FERPA.

Defendant argues that the process each school uses to implement FERPA’s directory

information disclosure requirements is different, and thus discovering information pertaining to

other schools is irrelevant in the present action. Defendant’s argument is unpersuasive for two

reasons. First, the court has no way of knowing if the other contacted schools use substantially

identical FERPA disclosure processes to Austin Community College until after class discovery.

Second, the court agrees with the magistrate judge’s assessment that it is improper to impose a

limit on class discovery at this juncture on the basis that it is not relevant to class certification.

The issue in this case is not what process a school uses to satisfy the regulatory

requirements of FERPA for disclosure of directory information. The issue is whether, in obtaining

student directory information from schools through public records requests permitted under the

notice and opportunity to opt out provisions of FERPA, defendant obtained prior express consent

(or prior express written consent) sufficient to satisfy the requirements of the TCPA. See, e.g.,

Gorss Motels, Inc. v. Safemark Sys., LP, 931 F.3d 1094, 1100 (11th Cir. 2019) (finding express

permission where plaintiff signed a franchise agreement providing defendant and its affiliates

“may offer optional assistance to [plaintiff] with purchasing items used at or in the Facility”);

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Fober v. Mgmt. & Tech. Consultants, LLC, 886 F.3d 789, 793 (9th Cir. 2018) (finding consent

where, on an enrollment form, plaintiff provided her phone number and agreed third party could

disclose her information “for purposes of treatment, payment and health plan operations, including

but not limited to, utilization management, quality improvement, disease or case management

programs”); Latner v. Mount Sinai Health Sys., Inc, 879 F.3d 52, 55 (2d Cir. 2018) (finding

consent where plaintiff signed a form providing that defendant could share his information for

“treatment” purposes, and could use plaintiff’s information “to recommend possible treatment

alternatives or health-related benefits and services”); Blow v. Bijora, Inc., 855 F.3d 793, 803 (7th

Cir. 2017) (finding consent where plaintiff texted “AKIRA” to short code 46786 on October 1,

2009 in order to opt into Akira’s text program).

Defendant argues that, even if plaintiff is correct and disclosures made pursuant to the opt-

out provisions of FERPA are not sufficient to establish prior express consent, whether and to what

extent class members consented to be contacted implicates constitutional standing to sue under the

TCPA. The United States Court of Appeals for the Fourth Circuit recently rejected a similar

challenge to a class claim under the TCPA. Krakauer v. Dish Network, L.L.C., 925 F.3d 643,

652–54 (4th Cir. 2019). Accordingly, the court is unpersuaded by defendant’s standing argument.

Defendant may contest the typicality or commonality of plaintiff’s claims and dispute the

meaning of “in the same manner” in opposition to a motion for class certification on a complete

record. However, the magistrate judge’s ruling that the discovery requested is relevant to class

certification is neither clearly erroneous nor contrary to law.

2. Proportionality and Undue Burden

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Generally, the proportionality of discovery requests is evaluated by weighing “the

importance of the issues at stake in the action, the amount in controversy, the parties’ relative

access to relevant information, the parties’ resources, the importance of the discovery in resolving

the issues, and whether the burden or expense of the proposed discovery outweighs its likely

benefit.” Fed. R. Civ. P. 26(b)(1). Where, as here, the proposed discovery includes in part

subpoenas to nonparties under Fed. R. Civ. P. 45, “[a] more demanding variant of the

proportionality analysis . . . applies.” Jordan, 921 F.3d at 189. In measuring the benefits of the

proposed discovery, the court must evaluate the additional value of the discovery beyond what the

requesting party already has, and the availability of the information from other sources. Id. In

weighing the costs, the court should consider financial costs, privacy or confidentiality interests of

the subpoena recipient and others that might be affected, and whether the subpoena is overbroad.

Id. at 189–190.

The information that plaintiff seeks, including the schools defendant and Educate Online

obtained contact information from and who they solicited, is peculiarly within the control of

defendant and Educate Online. Without such class discovery, plaintiff is left to guess the

individuals that may properly be considered members of the putative class. In sum, the additional

benefit of the information plaintiff requests is significant for the reasons discussed by the court in

evaluating the relevance of plaintiff’s requests.

Turning to the costs, producing the discovery requested by plaintiff certainly imposes a

burden on defendant and Educate Online. Defendant indicates that over 8,000 call recordings and

hundreds of pages of responsive documents have already been produced. Moreover, Educate

Online is an entity that is not a party to this action. However, defendant does not offer any evidence

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regarding how much cost the additional discovery would potentially impose, instead choosing to

hinge its proportionality argument on plaintiffs’ proposed class definition. The privacy interests

of the call recipients also are not implicated here, because the directory information allegedly

obtained by defendant and Educate Online was obtained through public records requests. See 34

C.F.R. § 99.31(a)(11).

Weighing benefits of the proposed discovery against the costs, the requested discovery is

proportional to the needs of the case and not an undue burden. Although defendant comes forward

with the amount of discovery produced thus far, it provides no estimation of the time, cost, or

effort involved to produce plaintiff's requested discovery. Furthermore, the requested discovery

is highly probative in the class certification inquiry. Therefore, the magistrate judge’s

determination is neither clearly erroneous nor contrary to law.

CONCLUSION

Based on the foregoing, defendant’s motion for reconsideration (DE 54) is DENIED.

Defendant and Educate Online are ORDERED to produce discovery as set forth in the magistrate

Judge’s order (DE 51). Where the magistrate judge set deadlines for November 26, 2019,

defendant and Educate Online have 14 days from the date of this order to comply with plaintiff’ □

discovery requests. The court LIFTS stay on pending case activities. Counsel is reminded to

review the court’s order entered November 26, 2019 (DE 55) for critical deadlines and information.

SO ORDERED, this the 17th day of January, 2020.

LOUISE W.FLANAGAN

United States District Judge

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