Munoz v. PHH Mortgage Corp. ( 2022 )

1 UNITED STATES DISTRICT COURT 2 FOR THE EASTERN DISTRICT OF CALIFORNIA 3 EFRAIN MUNOZ, individually and on 4 behalf of all others similarly situated, 5 et al., No. 1:08-cv-00759-MMB-BAM 6 7 Plaintiffs, ORDER DENYING MOTION TO 8 MODIFY PRETRIAL ORDER, 9 v. DENYING MOTION TO STRIKE 10 AS MOOT, AND DENYING 11 PHH MORTGAGE CORPORATION, MOTION TO DECERTIFY 12 et al., WITHOUT PREJUDICE 13 14 Defendants. 15 Defendants move to decertify the class, ECF 462, and Plaintiffs oppose, 16 ECF 467. As part of their response, Plaintiffs filed—without seeking leave— 17 the expert report of Professor Robert E. Hoyt (Hoyt Report) (ECF 467-3) and a 18 joint report to Congress in 1972 by the Veterans Administration and the De- 19 partment of Housing and Urban Development (Joint Report) (ECF 467-2). As 20 these submissions do not satisfy the final pretrial order’s strict criteria for late 21 witness and exhibit disclosures, see ECF 456, the court construes them as a de 22 facto motion under Federal Rule of Civil Procedure 16(e) to modify the final 23 pretrial order to include (i) Professor Hoyt among Plaintiffs’ trial witnesses and 24 (ii) the Joint Report among Plaintiffs’ trial exhibits. For the reasons explained 25 below, the court DENIES Plaintiffs’ de facto motion to so modify the pretrial 26 order, consequently DENIES as moot Defendants’ motion to strike the Hoyt 1 Report and the Joint Report, and further DENIES without prejudice Defend- 2 ants’ motion to decertify the class. 3 Background 4 Plaintiffs commenced this action on June 2, 2008. ECF 1. Plaintiffs’ first 5 amended complaint, brought on behalf of a class of similarly situated home- 6 owners, alleges that Defendants, various affiliated mortgage lenders (collec- 7 tively PHH) and their captive reinsurer (Atrium), violated the Real Estate Set- 8 tlement Procedures Act of 1974 (RESPA), 12 U.S.C. § 2601 et seq., by receiving 9 kickbacks from private mortgage insurers to which PHH referred Plaintiffs’ 10 business. See ECF 96, ¶¶ 1–7. The court certified the class on June 11, 2015. 11 ECF 288. 12 In the meantime, one week after fact discovery closed on May 9, 2016, 13 ECF 330, and more than two months before expert discovery closed on Au- 14 gust 6, 2016, id., the Supreme Court in Spokeo, Inc. v. Robins, 578 U.S. 330 15 (2016) (Spokeo I), abrogated Ninth Circuit precedent holding that insofar as 16 “RESPA gives [a] [p]laintiff a cause of action,” such a plaintiff “has standing to 17 pursue her claims.” Edwards v. First Am. Corp., 610 F.3d 514, 517 (9th Cir. 18 2010). 19 In Spokeo I, the Supreme Court held that a plaintiff “cannot satisfy the 20 demands of Article III by alleging a bare procedural violation,” because such a 21 violation “may result in no harm.” 578 U.S. at 342. “Article III standing 1 requires a concrete injury even in the context of a statutory violation.” Id. 2 at 341. In so holding, the Court vacated the decision below, which in turn relied 3 on Edwards. See id. at 336 & n.5 (characterizing the decision below as “relying 4 on” Edwards).1 5 The Supreme Court acknowledged that “ ‘[c]oncrete’ is not, however, nec- 6 essarily synonymous with ‘tangible.’ ” Id. at 340. This meant that “the violation 7 of a procedural right granted by statute can be sufficient in some circumstances 8 to constitute injury in fact. In other words, a plaintiff in such a case need not 9 allege any additional harm beyond the one Congress has identified.” Id. at 342 10 (emphasis in original) (citing Fed. Election Comm’n v. Akins, 524 U.S. 11, 20– 11 25 (1998), and Pub. Citizen v. Dep’t of Justice, 491 U.S. 440, 449 (1989)).2 The 12 Court accordingly remanded the case to the Ninth Circuit because its “standing 13 analysis was incomplete.” Id. at 342. The Supreme Court instructed the court 14 of appeals to determine whether the alleged procedural violations of the Fair 15 Credit Reporting Act (FCRA) met “the concreteness requirement.” Id. at 343. 1 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). 2 Both Akins and Public Citizen involved plaintiffs alleging informational injury based on failures by government agencies to disclose information as required by stat- ute. 1 On remand the next year, the Ninth Circuit read Spokeo I as holding 2 that “even when a statute has allegedly been violated, Article III requires such 3 violation to have caused some real—as opposed to purely legal—harm to the 4 plaintiff.” Robins v. Spokeo, Inc., 867 F.3d 1108, 1112 (9th Cir. 2017) (Spokeo 5 II) (emphasis added). From that principle, the court of appeals held that stand- 6 ing to assert a statutory violation requires a plaintiff to establish (1) that “the 7 statutory provision[ ] at issue [was] established to protect [the plaintiff’s] con- 8 crete interests (as opposed to purely procedural rights), and if so, (2) [that] the 9 specific procedural violation[ ] alleged . . . actually harm[s], or present a mate- 10 rial risk of harm to, such interests.” Id. at 1113. Applying that test in the case 11 before it, the court found that the FCRA procedures at issue “were crafted to 12 protect consumers’ (like Robins’s) concrete interest in accurate credit reporting 13 about themselves,” id. at 1115, and that the alleged violation—publication on 14 the Internet of inaccurate information relevant to potential employers— 15 harmed that concrete interest. Id. at 1115–17. 16 Meanwhile, in 2020 the court in this case granted partial summary judg- 17 ment for Plaintiffs and denied Defendants’ cross-motion for summary judg- 18 ment (based in part on Spokeo I) and Defendants’ motion to decertify. See 19 Munoz v. PHH Mortg. Corp., 478 F. Supp. 3d 945 (E.D. Cal. 2020) (ECF 417). 20 Addressing Plaintiffs’ standing, the court determined that even in the wake of 21 Spokeo I and Frank, Plaintiffs 1 have alleged that they were actually and personally harmed when 2 defendants “purposefully provided neither a meaningful disclosure 3 nor a meaningful choice to [their] borrowers regarding [their] cap- 4 tive reinsurance arrangements,” directly implicating one of the 5 harms identified by and targeted for elimination by Congress. 6 Id. at 983 (quoting ECF 96, ¶ 59, and citing 12 U.S.C. §§ 2603, 2604, and 7 2607(c)) (ECF 417, at 44). 8 On May 24, 2021, the court completed its pretrial conference. ECF 450. 9 On June 11, 2021, the court issued a final pretrial order. ECF 456. Among 10 other things, the final pretrial order set a trial date of February 15, 2022, id. 11 at 13, and identified each side’s trial witnesses and exhibits, id. at 15 (Plain- 12 tiffs’ witnesses), 17 (Defendants’ witnesses), 19 (Plaintiffs’ exhibits), 35 (De- 13 fendants’ exhibits). Plaintiffs’ witnesses did not include Professor Hoyt, nor did 14 their exhibits include the Joint Report. 15 Two weeks after entry of the final pretrial order, the Supreme Court de- 16 cided TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021). As relevant here, 17 the Court in TransUnion reiterated Spokeo I’s principle that “[o]nly those 18 plaintiffs who have been concretely harmed by a defendant’s statutory violation 19 may sue that private defendant over that violation in federal court.” Id. at 2205 20 (emphasis in original). Applying that principle in the context of asserted infor- 21 mational injury, the Court held that a plaintiff class lacked standing to recover 22 for violation of the FCRA’s disclosure requirements, because at trial the 1 plaintiffs adduced no evidence of downstream harm caused by the violations. 2 Id. at 2213–14. 3 As examples of such “downstream consequences,” the Court in TransUn- 4 ion observed that the plaintiffs failed to put forth any evidence that they would 5 have tried to correct their credit reports had the defendant made the required 6 disclosures. Id. Nor did plaintiffs present evidence “that the alleged infor- 7 mation deficit hindered their ability to correct erroneous information before it 8 was later sent to third parties.” Id. at 2214. The Court held that “[a]n asserted 9 informational injury that causes no adverse effects cannot satisfy Article III.” 10 Id. (cleaned up). 11 On October 20, 2021, Defendants in this case moved to decertify the class 12 based on TransUnion. ECF 462. Plaintiffs’ response to this motion on Novem- 13 ber 17, 2021, included the Hoyt Report. See ECF 467, at 17 (describing Profes- 14 sor Hoyt’s qualifications and stating that he would opine “that the captive re- 15 insurance agreements utilized by Defendants—which do not involve a real risk 16 transfer—increased transaction costs and in turn increased the premiums paid 17 for primary mortgage insurance by Class Members”); see also ECF 467-3 (Hoyt 18 Report). Plaintiffs also submitted the Joint Report. See ECF 467, at 15–16 & 19 n.13 (describing the Joint Report and its conclusion that settlement kickbacks 20 result in unnecessarily higher costs to home purchasers); see also ECF 467-2 1 (Joint Report). Plaintiffs made no effort to justify these submissions, either 2 under the final pretrial order’s late disclosure provisions or otherwise. 3 Defendants moved to strike both the Hoyt Report and the Joint Report. 4 ECF 475. Plaintiffs opposed, ECF 499, and Defendants replied, ECF 503. 5 Discussion 6 I. 7 The final pretrial order prohibits the use at trial of “undisclosed wit- 8 nesses” and “undisclosed exhibits” “for any purpose, including im- 9 peachment or rebuttal,” unless the undisclosed witness or exhibit qualifies 10 under either of two separate pathways. See ECF 456, at 10 (witnesses), 11 (ex- 11 hibits) (emphasis and double emphasis in original). The court considers each 12 of these pathways in turn. 13 A. 14 The first pathway for a party proffering an undisclosed witness is to 15 “demonstrate[ ] that the” witness “is for the purpose of rebutting evidence that 16 could not be reasonably anticipated at the pretrial conference.” ECF 456, at 10. 17 The standard is materially the same for late-disclosed exhibits. See id. at 11. 18 Plaintiffs argue that at the time of the pretrial conference, they could not 19 have reasonably anticipated any need to rebut the deposition testimony of their 20 own experts that Plaintiffs suffered no economic injury from captive reinsur- 21 ance agreements. See ECF 499, at 9 & n.6. This is because, according to 1 Plaintiffs, “[p]rior to TransUnion, Plaintiffs were not required to make a show- 2 ing of such harm but instead could rely on the statutory violation to establish 3 injury and standing in cases such as this.” Id. at 9 (citing Munoz v. PHH Corp., 4 659 F. Supp. 2d 1094, 1102 (E.D. Cal. 2009) (ECF 60); Alston v. Countrywide 5 Fin. Corp., 585 F.3d 753 (3d Cir. 2009); and the Ninth Circuit’s 2009 decision 6 in Edwards). TransUnion, Plaintiffs argue, suddenly changed everything for 7 standing purposes by making economic harm relevant for the first time in the 8 litigation. 9 But Plaintiffs’ first amended complaint alleges that they suffered eco- 10 nomic harm. See ECF 96, ¶ 94 (alleging that Plaintiffs were “overcharged for 11 mortgage insurance. Kickbacks and unearned fees unnecessarily and artifi- 12 cially inflate settlement service charges.”). By injecting that issue at the outset, 13 Plaintiffs opened the door for Defendants’ introduction of rebuttal evidence. 14 Thus, throughout this litigation, Plaintiffs should have reasonably anticipated 15 the need to disclose witnesses and exhibits pertaining to economic harm. 16 Still, even if Plaintiffs’ own allegations were not dispositive as to what 17 evidence they should have reasonably anticipated needing to rebut, to deter- 18 mine whether TransUnion changed the relevant law the court must carefully 19 parse Plaintiffs’ claims. It has long been established that “standing is not dis- 20 pensed in gross.” Lewis v. Casey, 518 U.S. 343, 358 n.6 (1996). This means that 21 “a plaintiff who has been subject to injurious conduct of one kind” does not 1 “possess by virtue of that injury the necessary stake in litigating conduct of 2 another kind, although similar, to which he has not been subject.” Id. (quoting 3 Blum v. Yaretsky, 457 U.S. 991, 999 (1982)). Thus, “a plaintiff must demon- 4 strate standing for each claim he seeks to press.” DaimlerChrysler Corp. v. 5 Cuno, 547 U.S. 332, 352 (2006); see also Allen v. Wright, 468 U.S. 737, 752 6 (1984) (“[T]he standing inquiry requires careful judicial examination of a com- 7 plaint’s allegations to ascertain whether the particular plaintiff is entitled to 8 an adjudication of the particular claims asserted.”), abrogated on other grounds 9 by Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014). 10 Here, Plaintiffs’ first amended complaint effectively alleges two related, 11 but distinct, RESPA violations (and corresponding injuries) under 12 U.S.C. 12 § 2607. 13 First, Plaintiffs allege that “PHH’s captive reinsurance agreements were 14 and are sham transactions for collecting illegal kickbacks in return for refer- 15 ring private mortgage business to certain insurers.” ECF 96, ¶ 69. If Plaintiffs 16 prove that allegation at trial, they will establish a violation of 12 U.S.C. 17 § 2607(a),3 because Defendants’ captive reinsurance agreements will fall 3 “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 inci- dent to or a part of a real estate settlement service involving a federally related mort- gage loan shall be referred to any person.” 12 U.S.C. § 2607(a). 1 outside the safe harbor provided by 12 U.S.C. § 2607(c)(2).4 Plaintiffs allege 2 that their injury traceable to this violation was “overcharge[s] for mortgage 3 insurance. Kickbacks and unearned fees unnecessarily and artificially inflate 4 settlement service charges.” ECF 96, ¶ 94. 5 Second, Plaintiffs also allege that Defendants “purposely provided nei- 6 ther a meaningful disclosure nor a meaningful choice to [their] borrowers re- 7 garding [their] captive reinsurance arrangements.” ECF 96, ¶ 59. As the court 8 recognized in its summary judgment ruling, see Munoz, 478 F. Supp. 3d at 983 9 (ECF 417, at 44), this alleges a violation of 12 U.S.C. § 2607(c)(4)’s disclosure 10 requirements.5 Plaintiffs allege that the injury traceable to this violation is 11 informational: they were not provided a meaningful choice whether or not to 12 use the private mortgage insurers referred by PHH. ECF 96, ¶ 59. 13 Thus, Plaintiffs have the burden of proving the alleged injury that is 14 traceable to each alleged violation—the economic injury traceable to the 4 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). 5 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 owner- ship 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. 1 alleged sham transaction violation of § 2607(c)(2) and the informational injury 2 traceable to the alleged disclosure violation of § 2607(c)(4). DaimlerChrysler, 3 547 U.S. at 352; see also Spokeo I, 578 U.S. at 338 (to have standing, “[t]he 4 plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to 5 the challenged conduct of the defendant, and (3) that is likely to be redressed 6 by a favorable judicial decision”) (emphasis added). 7 As to Plaintiffs’ disclosure claim, TransUnion clarified the law by mak- 8 ing clear that asserted informational injury from breach of a statutory duty 9 requires downstream adverse effects to constitute concrete injury for Article 10 III standing purposes. See 141 S. Ct. at 2213–14.6 But Plaintiffs do not proffer 11 Professor Hoyt and the Joint Report to supply evidence of downstream effects 6 In the court’s view, TransUnion clarified, rather than changed, the law on informa- tional 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. De- partment 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 mis- lead. 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). 1 of their asserted informational injury—the Hoyt Report does not opine, for ex- 2 ample, that Plaintiffs would have selected different private mortgage insur- 3 ance providers had PHH provided adequate disclosures. Cf. id. (observing that 4 the TransUnion plaintiffs failed to put forth any evidence that they would have 5 tried to correct their credit reports had the defendant made the required dis- 6 closures, or “that the alleged information deficit hindered their ability to cor- 7 rect erroneous information before it was later sent to third parties”). 8 Instead, Plaintiffs proffer Professor Hoyt and the Joint Report to estab- 9 lish the alleged economic harm traceable to the alleged sham transaction vio- 10 lation of § 2607(c)(2). But as to that claim, it has been manifest in this circuit 11 since Spokeo II in 2017 that Plaintiffs’ burden is to show some concrete injury 12 beyond the bare procedural violation of § 2607(c)(2). As the Ninth Circuit put 13 it then: “[E]ven when a statute has allegedly been violated, Article III requires 14 such violation to have caused some real—as opposed to purely legal—harm to 15 the plaintiff.” Spokeo II, 867 F.3d at 1112 (emphasis added). Since 2017 Plain- 16 tiffs have been required to show that (1) § 2607(c)(2) was “established to protect 17 [their] concrete interests (as opposed to purely procedural rights), and if so,” 18 that (2) “the specific procedural violation[ ] alleged . . . actually harm[s], or 19 present[s] a material risk of harm to, such interests.” Id. at 1113. 20 After Spokeo II, Plaintiffs should have moved to reopen discovery as nec- 21 essary so that they could proffer evidence to demonstrate economic or other 1 harm to their concrete interests stemming from Defendants’ alleged violation 2 of § 2607(c)(2).7 Spokeo II—not TransUnion—was the change in the law that 3 made it pellucid that Plaintiffs needed to establish harm to their concrete in- 4 terests to establish standing as to that claim.8 Because Plaintiffs should have 5 reasonably anticipated the need for evidence of such harm some four years be- 6 fore the pretrial conference, the first pathway under the pretrial order for ad- 7 mitting late witnesses and exhibits is now barred to them. 8 B. 9 The second pathway under the final pretrial order for proffering late wit- 10 nesses or exhibits provides that if the undisclosed witness or exhibit “was dis- 11 covered after” the “pretrial conference” (for witnesses) and “the issuance of this 7 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’ con- crete injury traceable to the alleged violation of § 2607(c)(2) before the expert discov- ery 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. 8 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.”). 1 order” (for exhibits), ECF 456, at 10 (witnesses), 11 (exhibits), the proponent 2 “shall promptly inform the court and opposing parties of the existence” of the 3 “unlisted witnesses” and “exhibits” so “the court may consider” whether the 4 witnesses “shall be permitted to testify” and whether the exhibits will be ad- 5 missible “at trial.” ECF 456, at 10 (witnesses), 11 (exhibits) (emphasis added). 6 The proponent must also show satisfaction of certain criteria. 7 As relevant here, the proffering party must show that the witness or ex- 8 hibit could not reasonably have been discovered “prior to the discovery cutoff” 9 for witnesses, id. at 10, and “earlier” for exhibits, id. at 11. In any event, the 10 proffering party must also show that they “promptly notified” the “court and 11 opposing parties” of discovery of the witness or exhibit. Id. at 10–11. 12 In opposing Defendants’ motion to strike, Plaintiffs contend that neither 13 their new expert nor their new exhibit could “reasonably have been discovered” 14 before the expert discovery cutoff of August 16, 2016 (for Professor Hoyt) or 15 earlier (in the case of the Joint Report) because TransUnion changed the ap- 16 plicable standing law in June 2021. As noted above, however, Plaintiffs’ first 17 amended complaint put economic injury at issue, meaning that Plaintiffs could 18 have and should have reasonably discovered both Professor Hoyt and the Joint 19 Report early in the litigation. 20 Even assuming, however, that a change in applicable standing law de- 21 termines when Plaintiffs could have reasonably made these discoveries, that 1 change occurred at the very latest with the Ninth Circuit’s decision in Spokeo II 2 in 2017. Yet Plaintiffs did not “promptly inform the court and opposing parties” 3 of the existence of the unlisted witnesses and exhibits until over four years 4 later, on November 17, 2021. And even under Plaintiffs’ theory that applicable 5 standing law did not change until TransUnion was decided on June 25, 2021, 6 Plaintiffs did nothing for almost five months, even though the final pretrial 7 order set a trial date of February 15, 2022. Instead, Plaintiffs waited until No- 8 vember 17, 2021—just three months before trial, as parties accelerated their 9 preparation—to disclose their new witness and exhibit. Even then, Plaintiffs 10 disclosed this new evidence only in the context of opposing a motion to decer- 11 tify. 12 If TransUnion were truly a sea change in the relevant standing law, as 13 Plaintiffs now contend, then they should have disclosed their new expert and 14 exhibit within sixty days of that decision (that is, by August 23, 2021) at the 15 very latest. Then, if the court had agreed with Plaintiffs’ reading of TransUn- 16 ion, the court might have briefly reopened expert and fact discovery to address 17 economic injury. 18 But Plaintiffs chose to wait almost five months. The court finds that 19 Plaintiffs’ unreasonable delay in notifying the court and Defendants means 20 that their disclosure was not “prompt.” This is an independent ground for 1 concluding that the second pathway for late disclosure provided by the final 2 pretrial order is also now barred for Plaintiffs. 3 II. 4 Thus, Plaintiffs’ proffering of Professor Hoyt and the Joint Report disre- 5 gards the final pretrial order. But that’s not the end of the discussion, because 6 the court may modify the final pretrial order to “prevent manifest injustice.” 7 Fed. R. Civ. P. 16(e). Although Plaintiffs have not invoked this provision, the 8 court construes their submission of the Hoyt Report and the Joint Report as a 9 motion seeking Rule 16(e) relief. Cf. Chaudhry v. Angell, No. 1:16-cv-01243- 10 SAB, 2021 WL 4461667, at *6 (E.D. Cal. Sept. 29, 2021) (construing a late-filed 11 notice designating deposition testimony for trial as a motion to modify the pre- 12 trial order). 13 District courts in this circuit weigh four factors when considering Rule 14 16(e) motions to modify a final pretrial order: 15 (1) the degree of prejudice or surprise to the defendants if the order 16 is modified; (2) the ability of the defendants to cure the prejudice; 17 (3) any impact of modification on the orderly and efficient conduct 18 of the trial; and (4) any willfulness or bad faith by the party seek- 19 ing modification. 20 Galdamez v. Potter, 415 F.3d 1015, 1020 (9th Cir. 2005) (citing Byrd v. Guess, 21 137 F.3d 1126, 1132 (9th Cir. 1998)). “It is the moving party’s burden to show 22 that a review of these factors warrants a conclusion that manifest injustice 23 would result if the pretrial order is not modified.” Byrd, 137 F.3d at 1132. 1 Defendants argue, persuasively, that if the court were to permit Profes- 2 sor Hoyt to testify and the Joint Report to be admitted, Defendants would need 3 to retain their own expert or experts, requiring additional depositions. 4 ECF 475, at 12. Fairness would also require the reopening of fact discovery so 5 that Defendants could explore various issues implicated by Plaintiffs’ claim of 6 economic injury. Id. at 12 & n.7. That discovery in turn would justify more 7 motion practice, such as a renewed motion for summary judgment previously 8 sought by Defendants on the standing issue.9 Such new discovery and motion 9 practice would require adjourning a trial date for a four-week trial that has 10 been set since the entry of the final pretrial order on June 11, 2019. The par- 11 ties, the court, and around twenty witnesses have structured their schedules 12 in reliance on the existing schedule. Defendants could not mitigate this preju- 13 dice they would suffer by alteration of the schedule. 14 Finally, the court finds that although Plaintiffs have not acted in bad 15 faith, they have certainly acted willfully by not promptly seeking relief within, 16 at the very latest, sixty days of the Supreme Court’s decision in TransUnion. 17 Although the court disagrees with Plaintiffs’ reading of TransUnion, if it rep- 18 resented the change in the applicable law that Plaintiffs say it did, they should 9 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 De- fendants 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. 1 have promptly sought relief soon afterwards, because Plaintiffs have the af- 2 firmative burden of demonstrating standing at all stages of the litigation. See 3 Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992). Plaintiffs’ failure to seek 4 relief until almost five months after TransUnion, and their blasé failure to 5 even attempt to justify the late disclosure of Professor Hoyt and the Joint Re- 6 port under the final pretrial order, or to (alternatively) seek modification of the 7 pretrial order under Rule 16(e), cf. Byrd, 137 F.3d at 1132 (affirming trial 8 court’s denial of modification of pretrial order in part because the moving party 9 made no effort to explain whether its request “passed the four-part test gov- 10 erning modifications of pretrial orders”), reveals an indifference to the norms 11 of ordinary court procedures that amounts to willfulness. 12 The court therefore denies Plaintiffs’ motion (so construed) to amend the 13 final pretrial order to add Professor Hoyt and the Joint Report to the lists of 14 Plaintiffs’ disclosed witnesses and exhibits. Correspondingly, in view of this 15 disposition, Defendants’ motion to strike (ECF 475) is denied as moot. 16 III. 17 Invoking TransUnion, Defendants move to decertify the class. ECF 462. 18 Defendants first argue that Plaintiffs suffered no informational injury. Id. at 19 11–15. Defendants further argue that as to such alleged informational injury, 20 individualized standing inquiries will predominate in violation of Federal Rule 21 of Civil Procedure 23(b)(3). Id. at 20–24. Defendants finally argue that even if 1 some members of the class can show downstream adverse effects from infor- 2 mational injury, the named plaintiffs cannot, and therefore the named plain- 3 tiffs’ claims are not typical of the class, as required by Rule 23(a)(3). Id. at 25– 4 26. 5 Defendants’ invocation of TransUnion suffers from the same analytical 6 flaw as Plaintiffs’: it impermissibly mixes and matches the standing require- 7 ments for the separate 12 U.S.C. § 2607(c) violations (and claims) alleged by 8 Plaintiffs. Cf. Int’l Primate Prot. League v. Adm’rs of Tulane Educ. Fund, 500 9 U.S. 72, 77 (1991) (“Standing does not refer simply to a party’s capacity to ap- 10 pear in court. Rather, standing is gauged by the specific common-law, statu- 11 tory[,] or constitutional claims that a party presents.”). 12 The informational injury Plaintiffs contend is traceable to the alleged 13 § 2607(c)(4) disclosure violation does not provide standing for their § 2607(c)(2) 14 sham transaction claim, because such injury is not traceable to the alleged 15 § 2607(c)(2) violation. Thus, the serious standing questions raised by Defend- 16 ants as to the alleged disclosure violation (including predominance and typi- 17 cality) based on TransUnion have no bearing on whether the class should be 18 decertified as to the alleged sham transaction violation.10 10 Defendants present no argument why the class should be decertified as to the sham transaction claim. 1 At this late hour of the case, it is unclear to the court whether Plaintiffs 2 even intend to prosecute their disclosure violation claim, as their trial brief 3 does not mention it. See ECF 525. Accordingly, the certification issues raised 4 by Defendants as to that claim appear to be academic. Thus, the court denies 5 Defendants’ motion for decertification. The court does so without prejudice; 6 Defendants may renew their motion based on the evidence (and claim(s)) pre- 7 sented at trial. 8 Conclusion and Order 9 For the reasons provided above, it is hereby ORDERED that: 10 Plaintiffs’ motion to modify the final pretrial order (so construed) in their 11 response (ECF 467) to Defendants’ motion to decertify the class (ECF 462) is 12 DENIED; 13 Defendants’ motion to strike (ECF 475) is DENIED AS MOOT; and 14 Defendants’ motion to decertify the class (ECF 462) is DENIED WITH- 15 OUT PREJUDICE. 16 Dated: January 31, 2022 /s/ M. Miller Baker 17 M. Miller Baker, Judge11 11 Judge of the United States Court of International Trade, sitting by designation.