Consumer Financial Protection Bureau v. Check & Credit Recovery, LLC ( 2023 )

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[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-14468
____________________
CONSUMER FINANCIAL PROTECTION BUREAU,
Plaintiff-Appellant,
versus
MARCUS BROWN,
SARITA BROWN,
TASHA PRATCHER,
GLOBAL PAYMENTS, INC.,
FRONTLINE PROCESSING CORP.,
Defendants-Appellees,
CHECK & CREDIT RECOVERY, LLC,
UNIVERSAL DEBT SOLUTIONS, LLC,
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2 Opinion of the Court 21-14468
WNY SOLUTIONS GROUP, LLC,
WNY ACCOUNT SOLUTIONS, LLC,
CHECK & CREDIT RECOVERY, LLC,
CREDIT POWER, LLC,
S PAYMENT PROCESSING & SOLUTIONS, LLC,
MOHAN BAGGA,
VARINDERJIT BAGGA,
SUMANT KHAN,
Defendants-Cross Defendants-
Appellees,
GLOBAL CONNECT, LLC,
FRANCIS DAVID CORP,
d.b.a. Electronic Merchant Systems, Inc.,
Defendants-Cross Claimants-
Appellees,
PATHFINDER PAYMENT SOLUTIONS, INC., et al.,
Defendants.
____________________
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21-14468 Opinion of the Court 3
Appeal from the United States District Court
for the Northern District of Georgia
D.C. Docket No. 1:15-cv-00859-RWS
____________________
Before BRANCH and GRANT, Circuit Judges, and SCHLESINGER,∗
District Judge.
BRANCH, Circuit Judge:
The Consumer Financial Protection Bureau (“CFPB”) is not
exempt from the rules of discovery. Nonetheless, the CFPB tried
to bring a wide-ranging civil lawsuit against 18 defendants without
ever being deposed. When the district court ordered the CFPB to
sit for Rule 30(b)(6) depositions, the CFPB doubled down by
engaging in dramatic abuse of the discovery process. The district
court imposed sanctions for this misconduct.
On appeal, the CFPB maintains that it behaved properly.
We conclude, however, that violating the district court’s clear
orders and derailing multiple depositions is nowhere near proper
conduct. Thus, after careful review and with the benefit of oral
argument, we affirm the district court’s sanctions order.
I. Background
A. The Underlying Lawsuit
∗ Honorable Harvey Schlesinger, United States District Judge for the Middle
District of Florida, sitting by designation.
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4 Opinion of the Court 21-14468
The CFPB brought this action under the Consumer
Financial Protection Act (“CFPA”) and the Fair Debt Collection
Practices Act (“FDCPA”) against 18 defendants for engaging in or
substantially assisting a fraudulent debt collection scheme.
Essentially, the CFPB alleged that several individuals “created
limited liability companies in Georgia and New York” to
“perpetrate a debt-collection scheme targeting millions of
consumers.” Thirteen of the defendants were individuals, and
their respective companies, who directly participated in the
scheme.
The other five defendants—the appellees here—were not
direct operators of the scheme; rather, they simply provided
services to the individuals who were. One appellee, Global
Connect, LLC (“Global Connect”), allegedly provided the
telephone broadcast services that the individual debt collectors
used to “broadcast millions of threatening and false statements to
consumers.” The other four appellees—Global Payments, Inc.
(“Global Payments”), Pathfinder Payment Solutions, Inc.
(“Pathfinder”), Frontline Processing Corp. (“Frontline”), and
Electronic Merchant Systems (“EMS”)—allegedly provided the
processing services that were used to “withdraw funds from the
consumers’ accounts.”
The CFPB alleged that these service-providing entities
“provided substantial assistance” to the debt collectors’ “unlawful
conduct” and engaged in “unfair acts or practices” in violation of
the CFPA. In other words, these service-providing entities knew
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21-14468 Opinion of the Court 5
or should have known that their platforms were advancing the debt
collectors’ unlawful conduct.
B. The CFPB’s Conduct During Discovery
The CFPB’s problematic conduct began during discovery.
At first, the CFPB objected on the following grounds when it was
served with deposition notices pursuant to Federal Rule of Civil
Procedure 30(b)(6): 1 (1) it had “already . . . provided [the
information] to [d]efendants . . . in responses to written
interrogatories,” (2) “[d]efendants inquire[d] into topics within the
law enforcement and deliberative process privilege,” and (3) “the
depositions [were] an improper attempt to question [CFPB]
counsel as to counsel’s mental impressions and analyses.” The
district court overruled the objections, reasoning that Rule 30(b)(6)
applies with equal force to government agencies and “factual
matters are subject to inquiry even if those matters have been
disclosed in interrogatory responses.”
1Rule 30(b)(6) is the principal mechanism for deposing entities, including
government agencies. The rule allows the entity to designate a representative
who testifies on the agency’s behalf. See Fed. R. Civ. P. 30(b)(6) (“The named
organization must designate one or more officers, directors, or managing
agents, or designate other persons who consent to testify on its behalf . . . .
The persons designated must testify about information known or reasonably
available to the organization.”). In the instant case, the service-providing
entities sought to use 30(b)(6) depositions to uncover the factual bases for the
CFPB’s claims against them.
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Dissatisfied, the CFPB tried again to avoid providing a
30(b)(6) representative. This time it moved for protective orders
to reduce the scope of defendants’ questioning, relying on the same
arguments the district court had already rejected. The court
granted in part and denied in part the CFPB’s motions, striking the
balance that facts—including “exculpatory facts”—were fair game
while questioning that “would delve into Plaintiff’s trial strategy”
was off limits.
1. The First Deposition
During the first 30(b)(6) deposition, 2 counsel for Global
Payments met heavy resistance from the CFPB. The 359-page
transcript reveals that the CFPB avoided answering questions
through a number of impermissible tactics.
First, the CFPB lodged more than 70 work product
objections—even objecting to fact-based questions that the district
court had instructed it to answer. For example, the CFPB objected
to the question “[a]re you aware of any facts that Global Payments
knew that the debt collector defendants . . . were collecting
phantom debt?” And it objected to the yes-or-no question “[a]re
you aware of any facts that [a pertinent document] was sent to
Global [Payments]?” As a final and particularly egregious
2 The CFPB designated Michael Godard, a supervisory investigator at the
CFPB, as its 30(b)(6) representative for each deposition covered in this appeal.
Godard spent “a little over 300 hours” preparing for the depositions by
reviewing documents and meeting with counsel.
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example, 3 to a question asking if the deponent spoke to any
witnesses in the case, the CFPB objected and argued that “[t]he
identity of witnesses is work product.” These objections were
often accompanied by an instruction for the CFPB’s witness “not
to answer.”
Second, the CFPB equipped its witness with so-called
“memory aids” 4 from which the witness read verbatim for
extended periods of time. In response to one question, for
example, the witness read from his memory aid for more than 40
minutes and then, after a break, continued reading for 18 minutes
before the parties stipulated that he would have read another 93
pages. This filibuster-style reading occurred repeatedly. And when
Global Payments’s attorneys objected, the CFPB’s counsel would
insist that the witness needed to finish his answer: “Let him finish
the answer, maybe it will be [responsive].”
Third, in response to the district court’s instruction that
exculpatory facts were fair game, the CFPB took the position that
it had not “identified any exculpatory facts” in the entire record.
One illustrative back-and-forth follows:
[Deposing counsel]: The judge in his ruling said that
the [CFPB] was to provide a witness who would
3 There are many, many more examples in the record, but we do not include
them all in the interest of conciseness.
4The “memory aids” were essentially lawyer-prepared scripts that were
hundreds of pages in length.
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testify as to all facts the plaintiff could reasonably
identify as exculpatory. Are you familiar with that
part of the judge’s ruling in your testimony here
today?
[CFPB’s witness]: Yes.
[Deposing counsel]: What, if anything, did you do to
identify exculpatory facts?
[CFPB’s witness]: I didn’t identify any.
[Deposing counsel]: So in the 300 hours that you
spent preparing for this, you didn’t identify a single
fact that was exculpatory as to Global Payments?
...
[CFPB’s witness]: That’s correct.
2. Telephonic Hearing with the District Court
Because Global Payments felt it was denied the opportunity
to conduct a meaningful deposition—and Frontline and Pathfinder
had noticed depositions for later that week—defendants alerted the
district court to the CFPB’s behavior. Specifically, defendants
expressed concern with the CFPB’s repeated work-product
objections and its witness’s complete reliance on memory aids. In
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21-14468 Opinion of the Court 9
light of these concerns, the district court conducted a telephonic
hearing with the parties. 5
During the hearing, the district court reiterated its guidance
from previous orders that the CFPB’s witness must answer fact-
based questions:
I think what you do is when the question is asked, you
look at what it goes to, and if it goes to an element of
the claim, then that is a fair question. If it’s asking the
witness to analyze it beyond offering the facts[,] then
you’re getting out of bounds and you’re arguably
getting over into work product or you’re getting into
questions that the witness is not qualified to answer
and that are subject to legitimate objections. But so
long as the inquiries are into facts that are within the
knowledge of the [CFPB] and that are within the
scope of the notice, then I think they’ve got to be
answered.
It also reemphasized that defendants were entitled to
question the CFPB about exculpatory facts. 6 The district court also
5 We appreciate that the district court did not yet have a transcript of the first
deposition at the time of the hearing, so it had only the parties’ finger-pointing
as evidence and was unable to analyze independently the extent of the CFPB’s
obstructive conduct.
6 Regarding exculpatory evidence, the district court stated:
I believe I have ruled the defendants are entitled to question
and it’s exculpatory information, and I know I’m using
criminal terms and we just talked about this being a civil case,
but evidence that would be in the possession of the [CFPB]
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indicated that memory aids were acceptable due to the voluminous
record but regurgitating pre-written information would be
insufficient in many cases. 7
that would show that the defendants had not violated these
provisions.
7The district court described the extent to which it would permit the CFPB’s
witness to use memory aids and when it would expect testimony with a
“human touch”:
[N]umber one, it’s okay for a witness to have these kinds of
things with him or her at the time the deposition is given. It
seems to me that this is a good faith effort on the part of CFPB
to give what I said they had to give in denying many parts of
the protective order and the rulings on the protective order,
trying to make it clear that there had to be specific information
given. It seems that these exhibits are, at least on their face, a
good faith effort to accomplish that. At the same time, I think
the witness needs to be prepared and versed, and Mr. Engel
has represented in his e-mail that he does intend to have a
witness who has been prepared to address these topics that
require a more generalized response or a response that’s more
of a human touch than some listing that might be contained in
the exhibits.
It continued: “[M]y expectation is that the [CFPB’s] witness would answer
those questions and, for lack of a better term, the human touch questions, but
would be prepared to answer those and to represent the position of the CFPB.”
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3. Subsequent 30(b)(6) Depositions
Despite having received additional instructions from the
district court, the CFPB continued its obstructionist conduct
during the next four depositions. 8
To start, the CFPB continued to object on work product
grounds and instruct its witness not to answer even simple fact-
based, yes-or-no, and follow-up questions. A few examples are
instructive. 9 The CFPB raised a work product objection to the
question “does the CFPB rely on any facts to demonstrate that
Frontline’s practices were unfair?” The CFPB also lodged the same
objection to the question “did you review any fact that leads you
to the conclusion that Global Connect authored [an e-mail
exhibit]?” And, after being shown an exhibit that arguably
contradicted the script its witness read, the CFPB objected on work
product grounds to the question “do you still believe [your
testimony] was correct?” This pattern persisted throughout all four
depositions.
The CFPB’s witness continued to rely exclusively on
memory aids, but the amount of time he spent reading was
reduced because defendants’ counsel resorted to incorporating into
the record the portions that the witness would have otherwise read
8 In the second deposition after the hearing with the district court, Pathfinder’s
counsel notified the CFPB that it “reserve[d] its rights to move for sanctions
and other remedies available.”
9 Again, we reproduce only a few of many, many examples.
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aloud. One example is sufficient to show the extent of the witness’s
reliance on the memory aids and why incorporation was necessary:
[Deposing counsel]: [I]f you and your counsel don’t
mind, would you be willing to tell us what pages in
[the underwriting document] you plan to read in
providing a response to the question . . . .
...
[CFPB’s witness]: So again in the underwriting
document, I would start at Page 32 at the bottom, 33,
34, 35, 36, and towards the end of 37. And then as far
as the memory aid, I would not include the
monitoring section, which starts at Page 78. Starting
with the memory aid at Page 5. I would go 5 to 78.
[Deposing counsel]: Pages 5 through 78 of the
memory aid?
[CFPB’s witness]: Correct.
[Deposing counsel]: So that I’m clear, do all of the
facts at Pages 5 through 78 of the memory aid
[address the question]?
...
[CFPB’s witness]: I don’t think I can say that every
fact within – on each page. I’d have to look through
every fact to determine that. But I believe those pages
would be generally responsive to your question, that
they contain facts that would answer your question.
[Deposing counsel]: Other than reading Pages 5
through 78 of [the memory aid] and Pages 32 through
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37 of [the underwriting document] into the record,
are you prepared to testify about facts [pertinent to
the question]?
...
[CFPB’s witness]: Other than these documents, no.
[Deposing counsel]: And other than reviewing the
tracts – the tract of [the underwriting document] and
all of [the memory aid] less monitoring provisions,
are you prepared to testify today about any facts
[pertinent to the question]?
...
[CFPB’s witness]: My preparation to testify to those
questions would be contained in the memory aid or
in the underwriting summary.
All in all, in each 30(b)(6) deposition, whether the CFPB’s
tactic was to object at every turn, instruct its witness not to answer,
refuse to acknowledge any exculpatory facts, or have its witness
read extended and nonresponsive answers, the CFPB tried to game
the system so that nothing was accomplished.
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C. The District Court’s Sanctions Order
Because of the CFPB’s contumacious conduct, defendants
moved for sanctions pursuant to Rule 37, 10 requesting that the
district court strike the CFPB’s claims against them. 11
The district court granted defendants’ motions, beginning
its analysis with the rules and what conduct they covered—i.e.,
Rule 37(b) is applicable when a party fails to “obey an order to
provide or permit discovery” and Rule 37(d) is applicable when a
“person designated under Rule 30(b)(6)” fails to appear for that
person’s deposition. Under both rules, potential sanctions included
“striking pleadings in whole or in part.” Fed. R. Civ. P.
10 Federal Rule of Civil Procedure 37 permits a district court to impose
sanctions for a party’s “failure to make disclosures or to cooperate in
discovery.” Fed. R. Civ. P. 37. Specifically, under Rule 37(b)(2)(A), a district
court may issue sanctions “[i]f a party or a party’s officer, director, or
managing agent—or a witness designated under Rule 30(b)(6) . . .—fails to
obey an order to provide or permit discovery . . . .” Id. at 37(b)(2)(A). And,
under Rule 37(d), sanctions are appropriate if “a party or a party’s officer,
director, or managing agent—or a person designated under Rule 30(b)(6) . . .
—fails, after being served with proper notice, to appear for that person’s
deposition . . . .” Id. at 37(d)(1)(A)(i).
11 Defendants technically brought three different motions which all sought
sanctions in the form of striking the claims against them. Considered together,
these motions are the subject of this appeal. Pathfinder also moved for Rule
11 sanctions against the CFPB and its counsel (seeking an award of costs and
attorneys’ fees as well), alleging that the CFPB’s claim amounted to
government overreach and was frivolous. The court denied this motion, and
it is not part of this appeal.
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37(b)(2)(A)(iii); see also id. at (d)(3) (“Sanctions may include any of
the orders listed in Rule 37(b)(2)(A)(i)–(vi).”).
In its Rule 37(b) analysis (failure to obey a court order to
provide or permit discovery), the court found that, despite its
instructions that defendants were entitled to question the CFPB
about the factual underpinnings of its claims, the CFPB “put up as
much opposition as possible at every turn” through a two-pronged
strategy of (1) reading from the memory aids to “bury the
[d]efendants in so much information that it [could not] possibly
identify, with any reasonable particularity, what support[ed] the
CFPB’s claims,” and (2) “assert[ing] privilege objections to
questions that the [c]ourt ha[d] repeatedly ordered to be
answered.” Because “neither form [of opposition was] proper,” the
district court sanctioned the CFPB under Rule 37(b), finding that
the CFPB “demonstrate[d] a willful disregard [for] the [c]ourt’s
instructions.”
The district court also found that the CFPB’s witness “failed
to appear” pursuant to Rule 37(d) because, even though he was
physically present, he was effectively unavailable due to his
inability to answer questions without memory aids and refusal to
address exculpatory evidence.
Finally, because the CFPB’s conduct was egregious, 12 and
“the Court [was] not optimistic that reopening the depositions
12 In addition to the
bad faith usage of objections and memory aids, the district
court also found that the CFPB’s repeated insistence that there were no
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would be fruitful,” the district court granted defendants’ motions
for Rule 37 sanctions, struck all claims against the five service-
providing defendants, and dismissed them from the case.
II. Standard of Review
“The standard of review for a Rule 37(b) dismissal is not
whether the reviewing court would, as an original matter, have
dismissed the action; it is whether the district court abused its
discretion in dismissing the action.” Aztec Steel Co. v. Fl. Steel
Corp., 691 F.2d 480, 481 (11th Cir. 1982); see also Marshall v.
Segona, 621 F.2d 763, 766 (5th Cir. 1980) (“The bandwidth of the
District Court’s power to impose Rule 37 sanctions is broad indeed.
We will not interfere unless . . . there has been an abuse of
discretion.”). 13 When reviewing discovery motions, “wide
discretion” is proper because “[a] judge’s decision as to whether a
party or lawyer’s actions merit imposition of sanctions is heavily
dependent on the court’s firsthand knowledge, experience, and
observation.” Harris v. Chapman, 97 F.3d 499, 506 (11th Cir. 1996).
If the district court applies an incorrect legal standard, fails
to follow the appropriate procedures when making the relevant
determination, or makes findings of fact that are clearly erroneous,
exculpatory facts in the voluminous record was a “bad faith attempt to
frustrate the purpose of the [d]efendants’ depositions.”
13 In Bonner v. City
of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc),
this Court adopted as precedent the decisions of the former Fifth Circuit
handed down prior to October 1, 1981.
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it abuses its discretion. Lugo v. Sec’y, Fla. Dep’t of Corr., 750 F.3d
1198, 1207 (11th Cir. 2014). “A factual finding is clearly erroneous
when although there is evidence to support it, the reviewing court
on the entire evidence is left with the definite and firm conviction
that a mistake has been committed.” United States v. Robertson,
493 F.3d 1322, 1330 (11th Cir. 2007) (quotation omitted).
III. Discussion
The district court dismissed the service-providing
defendants after finding that the CFPB violated both Rule 37(b)—
for failure to obey a court order to provide or permit discovery—
and Rule 37(d)—for the witness’s failure to appear at a Rule 30(b)(6)
deposition. We affirm because we conclude that sanctions were
clearly permitted under Rule 37(b) and the CFPB’s discovery
abuses were sufficiently egregious to merit dismissal; thus, the
district court did not abuse its discretion. 14 See Aztec Steel, 691
F.2d at 481.
A. Rule 37(b) Sanctions Generally
The CFPB argues that the district court abused its discretion
in sanctioning the CFPB under Rule 37(b) because the CFPB “made
all reasonable efforts” to comply with the court’s unclear
instructions. We conclude that the district court did not abuse its
discretion in imposing Rule 37(b) sanctions against the CFPB
14 We do not reach the question of whether a 30(b)(6) witness who is physically
present but refuses to offer meaningful testimony has “failed to appear”
pursuant to Rule 37(d).
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because it repeatedly disobeyed the district court’s instructions and
orders regarding the Rule 30(b)(6) depositions. See Aztec Steel, 691
F.2d at 481.
Rule 37(b) provides: “If a party or a party’s officer, director,
or managing agent—or a witness designated under Rule 30(b)(6) or
31(a)(4)—fails to obey an order to provide or permit discovery . . .
the court where the action is pending may issue further just
orders.” Fed. R. Civ. P. 37(b). “This rule gives district judges broad
discretion to fashion appropriate sanctions for violation of
discovery orders[.]” Malautea v. Suzuki Motor Co., Ltd., 987 F.2d
1536, 1542 (11th Cir. 1993). “Sanctions . . . for violation of an order
are only appropriate if ‘the order stated in specific and clear terms
what acts were required or prohibited.’” In re Se. Banking Corp.,
204 F.3d 1322, 1332 (11th Cir. 2000) (quoting E.E.O.C. v. Gen.
Dynamics Corp., 999 F.2d 113, 116 (5th Cir. 1993)). But “Rule 37,
on its face, does not require that a court formally issue an order
compelling discovery before sanctions are authorized.” United
States v. Certain Real Prop. Located at Route 1, Bryant, Ala., 126
F.3d 1314, 1317 (11th Cir. 1997).
Contrary to the CFPB’s argument, the district court’s
instructions and orders were clear. 15 See In re Se. Banking Corp.,
15As a starting principle, district courts are not required to hold a litigant’s
hand and guide him through the basics of discovery. By repeatedly telling the
CFPB what was expected during a deposition, the district court was already
going out of its way to provide extra instruction to an off-track party.
Unfortunately, the CFPB was not an unsophisticated litigant that merely
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204 F.3d at 1332 (affirming sanctions that were issued after the
defendant violated multiple clear discovery orders). Before the
CFPB sat for the first Rule 30(b)(6) deposition, the district court
considered the CFPB’s initial objections and reconsidered those
same arguments when it moved for protective orders. The district
court emphasized on multiple occasions that “factual matters are
subject to inquiry . . . .” For example, in ruling on one motion for
a protective order, the district court narrowed a potential topic to
“all facts relevant to Plaintiff’s claims against Global Payments,
including all facts that Plaintiff could reasonably identify as
exculpatory.” 16 The clear upshot was that the CFPB had to sit for
depositions during which defendants were “entitled to question the
CFPB about the factual underpinnings of its allegations against
them.” The CFPB did not misunderstand—it disagreed.
If these instructions were not enough—and they should
have been—the district court reasserted these points during the
telephonic hearing after the first deposition. During the hearing,
misunderstood the rules, but rather an arm of the federal government that
sought to overrun them.
16 The CFPB argues that the district court overreached in issuing this
instruction. In its words, “it was improper for the district court to order
[CFPB] to specifically identify evidence that it considered exculpatory,” so it
was assuredly improper to sanction the CFPB for failing to do so. The CFPB
overstates its case. The district court’s instruction did not ask the CFPB to
hand over the keys to its case; rather, it merely reiterated that facts—including
those that were exculpatory—were fair game and could not be hidden from
the service-providing defendants during 30(b)(6) depositions.
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the district court stressed that work product objections should be
limited to work product concerns—“so long as the inquiries are
into facts that are within the knowledge of the [CFPB] . . . they’ve
got to be answered”—and that the CFPB’s witness must do more
than just read verbatim from a lawyer-prepared script—“the
witness needs to be prepared and versed . . . to address these topics
that require . . . a response that’s more of a human touch . . . .”
Nevertheless, the CFPB again ignored these directions in
subsequent depositions. The CFPB’s witness continued to read—
or stipulate that he would have read—canned answers from
memory aids rather than offering organic answers with a “human
touch.” This continued refusal undermined the very purpose of a
Rule 30(b)(6) deposition and rendered the practice nothing more
than a glorified document production—an entirely different
discovery tool with a different purpose. See Fed. R. Civ. P. 34. The
CFPB does not have the power to decide which discovery rules it
will abide by and which it will ignore. 17
Similarly, the CFPB continued to lodge work-product
objections to simple, fact-based questions. During the four
depositions after the telephonic hearing (when the CFPB was given
17The CFPB asks us to credit it for preparing its witness for a significant
amount of time. We are unaware of any rule or case law that recognizes
preparation time as a metric of measuring compliance with the Federal Rules
of Civil Procedure and it is not clear why preparation time—rather than level
of preparedness exhibited during the deposition, for example—should be
considered at all.
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at least its third set of instructions), there were a shocking number
of improper objections and instructions for its witness not to
answer. 18 To top it off, the CFPB continued to take the incredible
position that exculpatory facts did not exist as to any defendant in
the case.
In light of the CFPB’s repeated failure to obey the district
court’s orders, we conclude that the district court did not abuse its
discretion in imposing Rule 37(b) sanctions. See Aztec Steel, 691
F.2d at 481; Malautea, 987 F.2d at 1542.
B. Dismissal as an Appropriate Sanction
At this point, the question shifts from “should the district
court have issued sanctions?” to “should the district court have
issued that sanction?” 19 The CFPB argues that the district court
abused its discretion by imposing a sanction that was too severe.
“[D]ismissal is a severe sanction . . . .” United States v.
$239,500 in U.S. Currency, 764 F.2d 771, 773 (11th Cir. 1985).
Nonetheless, “the district court retains the discretion to dismiss a
complaint where the party’s conduct amounts to flagrant disregard
18In its brief, the CFPB calls our attention to the few times that it lodged a
proper work product objection and/or allowed its witness to answer a fact-
based question without objecting. We think it obvious that a splash of proper
conduct amidst an expansive sea of impropriety is insufficient to save the
CFPB from sanctions.
19Again, one of the potential sanctions for a Rule 37(b) violation was “striking
pleadings in whole or in part.” Fed. R. Civ. P. 37(b)(2)(A)(iii).
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22 Opinion of the Court 21-14468
and willful disobedience of the court’s discovery orders.” Hashemi
v. Campaigner Publ’ns Inc., 737 F.2d 1538, 1539 (11th Cir. 1984)
(quotation omitted). Although the district court is always required
to assess whether lesser sanctions would suffice, it is not required
to explicitly say as much when the rest of its analysis makes that
finding obvious. See Betty K Agencies, Ltd. v. M/V MONADA,
432 F.3d 1333, 1337–38 (11th Cir. 2005) (“[A] dismissal with
prejudice, . . . is an extreme sanction that may be properly imposed
only when . . . the district court specifically finds that lesser
sanctions would not suffice.” (emphasis in original)); Phipps v.
Blakeney, 8 F.3d 788, 791 (11th Cir. 1993) (“[S]ome cases speak for
themselves and are clear enough without the district court adding
a section to its opinion to explain why lesser sanctions were not
used.”). Finally, the Supreme Court has warned against viewing
dismissal as too extreme when reviewed on appeal with the benefit
of hindsight. Nat’l Hockey League v. Metro. Hockey Club, Inc.,
427 U.S. 639, 642 (1976) (“There is a natural tendency on the part
of reviewing courts . . . to be heavily influenced by the severity of
outright dismissal as a sanction for failure to comply with a
discovery order. . . . But here, as in other areas of the law, the most
severe in the spectrum of sanctions provided by statute or rule
must be available to the district court in appropriate cases . . . .”).
Whether dismissal was an appropriate sanction does not
require much additional analysis. The district court dismissed the
claims against defendants only after determining that “in light of
the [CFPB’s] pattern of conduct in this case, [it was] not optimistic
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21-14468 Opinion of the Court 23
that reopening the depositions would be fruitful.” That is, the
district court offered its rationale for why the severe sanction of
dismissal was necessary.
We are reviewing under the abuse of discretion standard.
There was no such abuse, and we decline to second-guess the
district court’s conclusion that reopening discovery would not be
fruitful in this case that it was intimately familiar with. Hashemi,
737 F.2d at 1539; Nat’l Hockey League, 427 U.S. at 642. Finally,
while the CFPB argues that dismissal was improper because the
service-providing defendants were not prejudiced by its conduct,
we staunchly disagree and believe the record (as reiterated
throughout this opinion) speaks for itself in refuting this
contention.
IV. Conclusion
The CFPB was determined to avoid 30(b)(6) depositions. To
realize its goal, the CFPB employed tactics that the district court
repeatedly forbade. As such, the CFPB clearly violated Rule 37(b)
and severe sanctions were warranted. We therefore hold that the
district court’s sanctions order dismissing the CFPB’s claims against
the five appellees was not an abuse of discretion.
AFFIRMED.