Case3:17-cv-00101-RDM Document 103 Filed 08/10/18 Page 1 of 9

THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
CONSUMER FINANCIAL
PROTECTION BUREAU,
Plaintiff,
3:17-CV-101
(JUDGE MARIANI)

v.
NAVIENT CORPORATION, et al.,
Defendants.

MEMORANDUM OPINION
I. INTRODUCTION

Through this lawsuit, the Consumer Financial Protection Bureau ("Plaintiff) seeks to
prove that Navient Corporation, Navient Solutions, Inc., and Pioneer Credit Recovery, Inc.,
(collectively "Defendants"), committed various violations of the Consumer Financial
Protection Act, 12 U.S.C. §§ 5531, 5536, the Fair Debt Collection Practices Act, 15 U.S.C. §
1692e, and Regulation V of the Fair Credit Reporting Act, 12 C.F.R. §1022.42. (Doc. 1).
Presently before the Court are several new disputes that have arisen during the course of
discovery.
The path of discovery has not been smooth in this case. The parties have previously
submitted numerous discovery-related disputes to the Court, (see Docs. 68,70,72, 73,74,
79,83,84), and have appeared before the Court on multiple occasions, both telephonically,
(Doc. 69), and in-person, (Doc. 80), to present their respective positions.

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However, additional discovery disputes came to the Court's attention on July 11,
2018.1 Per the procedure of the Court, Plaintiff, instead offilinga motion, filed a brief letter
with the Court identifying the disputes. (Doc. 95). The Court ordered that "[defendants
shall submit to the Court a concise response to Plaintiffs letter." (Doc. 96). Defendants
responded in a July 13, 2018 letter, and requested "an in-person conference" to discuss the
dispute. (Doc. 97). The Court issued a scheduling order setting a telephone conference for
the parties on August 8,2018. (Doc. 98).
Several days before the conference, on August 5,2018, Plaintiff filed an additional
letter with the Court identifying additional discovery disputes and providing more argument
regarding certain issues raised in its July 11 letter. (Doc. 99). The morning of the
scheduled telephone conference, on August 8,2018, Defendants responded to Plaintiffs
additional discovery disputes in a letter filed with the Court. (Doc. 100).
The parties appeared telephonically before the Court on August 8,2018. For the
reasons that follow, the Court will order that: 1) Defendants produce student loan borrower
documents previously withheld on the basis of the Privacy Act, 5 U.S.C. § 552a; 2)
Defendants produce contact information of former employees contained within their records;
and 3) the fact discovery deadline be extended four months, and all subsequent litigation
deadlines correspondingly extended in accordance with previous order of the Court.

1

Though the disputes were initially raised by Plaintiff and responded to by counsel for Defendant Navient
Solutions, Inc., prudence suggests that the Court make clear that its Order will have application to all
Defendants insofar as the discovery issues addressed would have application to them. Therefore,
references in this opinion and the accompanying Order are to all Defendants.
2

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II. ANALYSIS

In its July 11 and August 5 letters, Plaintiff collectively raises three discovery
disputes that require the Court's resolution. The Court will address each in turn.
A. Student Loan Borrower Documents
The first and most complex dispute involves Plaintiffs requests for certain student
loan borrower documents, (Doc. 95 at 1), that Defendants' have thus far refused to provide
because they assert that the documents belong to the Department of Education and the
Privacy Act, 5 U.S.C. § 552a, prohibits their release. (Doc. 97 at 1-2; see also Doc. 100 at
1). Plaintiff asserts that it is entitled to receive the borrower documents, which it claims are
"essential to identifying the universe of harmed consumers and quantifying damages."2
(Doc. 95 at 1). Plaintiff argues that the Privacy Act "is not a bar to the information sought,"
because the Privacy Act allows for disclosure of covered records "pursuant to an order of a
court of competent jurisdiction, 5 U.S.C. § 552a(b)(11)"; that "[t]he protective order in this
c a s e . . . satisfies this exception"; and that the Privacy Act is "not a vehicle to resist
discovery of relevant information."3 (Doc. 95 at 1-2).

2

Plaintiff did not specifically identify the documents that are at issue in its July 11 letter or at the August 8
telephone conference. Instead, Plaintiffs letter referenced a February 2018 set of requests for production,
(Doc. 95 at 1), and included some of these requests in the form of a copy of Defendants' "Objections and
Responses to Plaintiffs Second Set of Requests for Production," (Doc. 95-1 at A4-28). Regardless, as
addressed below and in the Court's separate order, and without deciding burden or scope issues that are
not before the Court, the Court will require Defendants to produce all disputed borrower documents.
3
Plaintiffs have stated that they attempted to obtain permission from the Department of Education to obtain
the borrower documents from Defendants pursuant to the Privacy Act's exceptions on the prohibitions on
disclosure, but that the Department "was not prepared to grant permission." (Doc. 95 at 1).

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Defendants respond that they maintain the borrower documents on behalf of the
Department of Education, which owns the documents, and that Defendants are required to
follow the directives of the Department of Education with respect to disclosure of the
documents. (Doc. 97 at 1-2.) Defendants state that the Department of Education requires
third-parties, including Plaintiff, to obtain permission to get the documents in order to comply
with the Privacy Act, which otherwise prohibits their release. (Id. at 2.) Defendants claim
that the borrower document discovery dispute is really between Plaintiff and the Department
of Education and not Plaintiff and Defendants, and should be resolved by them. (Id.)
The Court agrees with Plaintiff that Defendants cannot assert that the records may
ultimately belong to the Department of Education or use the Privacy Act to shield the
requested borrower documents from production. As an initial matter, there is no dispute
that the borrower documents at issue are in the possession of Defendants, even if, as
Defendants assert, they are owned by the Department of Education. (Doc. 97 at 1 (letter to
the Court from Defendants' counsel stating "The records exist on Navient's systems, but
they are the property of the federal government and subject to ED's control.")). Under Fed.
R. Civ. P. 34(a)(1), requests can be made for production of documents, electronically stored
information, and things in "the responding party's possession, custody, or control." The
inquiry thus shifts to available privileges that Defendants' can assert to justify its refusal to
produce the documents. See Fed. R. Civ. P. 26(b)(1) (scope of discovery includes "any
nonprivileged matter that is relevant to any party's claim or defense" (emphasis added)).

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The Privacy Act, 5 U.S.C. § 552a, does not provide such a discovery privilege.
Laxalt v. McClatchy, 809 F.2d 885, 888-89 (D.C. Cir. 1987); Weahkee v. Norton, 621 F.2d
1080,1082 (10th Cir. 1980); Johnson v. Folino, 528 F. Supp. 2d 548,552 (E.D. Pa. 2007);
Forrest v. U.S., No. CIV. A. 95-3889,1996 WL171539, at *2 (E.D. Pa. Apr. 11,1996);
Adelman v. Brady, CIV. A. No. 89-4714,1990 WL 39147, at *2 (E.D. Pa. Mar. 28,1990).
The Privacy Act generally prohibits government agencies from disclosing "records," which
are:
any item, collection, or grouping of information about an individual that is
maintained by an agency, including, but not limited to, his education, financial
transactions, medical history, and criminal or employment history and that
contains his name, or the identifying number, symbol, or other identifying
particular assigned to the individual, such as a finger or voice print or a
photograph
5 U.S.C. § 552a(4); see also 5 U.S.C. § 552a(b) ("No agency shall disclose any
record

"). The Privacy Act also requires government agencies to apply the

protections mandated by the Privacy Act to record systems operated by government
contractors.4 5 U.S.C. § 552a(m)(1). The parties do not appear to dispute that the
borrower documents at issue in the discovery dispute are "records" as defined in the
Privacy Act.
Despite the Privacy Act's general prohibition on disclosure of records, the
Court agrees with the rulings of numerous courts that have found that the Privacy
4

Although unnecessary to determine in ruling on this discovery dispute, the Court notes that the Second
Circuit has previously ruled that one of the Defendants in this case, Pioneer Credit Recovery, Inc., is not a
government agency. See Burch v. Pioneer Credit Recovery, Inc., 551 F.3d 122,125 (2d Cir. 2008).
5

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Act does not create a qualified discovery privilege. See, e.g., Laxalt, 809 F.2d at 888
("The Privacy Act, however, does not create a qualified discovery privilege as that
concept is generally understood, and we find no basis in the statute or its legislative
history for inferring one."). "Therefore, a party can invoke discovery of materials
protected by the Privacy Act through the normal discovery process and according to
the usual discovery standards, and the test of discoverability is the relevance
standard of FRCP 26(b)(1)." Forrest, 1996 WL171539, at *2 (citing Laxalt, 809 F.2d
at 889). Indeed, the Privacy Act's inclusion of an exception for release of records
pursuant to court order, 5 U.S.C. § 552a(b)(11), "make[s] it completely clear that the
[Privacy] Act cannot be used to block the normal course of court proceedings,
including court-ordered discovery." Adelman, 1990 WL 39147, at *2. Thus,
Defendants cannot rely on the Privacy Act to resist Plaintiff's document requests for
borrower documents, made in the course of discovery.5 Without deciding burden or
scope issues not squarely before the Court, the Court will order that Defendants
must produce the disputed borrower documents.6

5

The Court appreciates concerns regarding the potentially sensitive nature of personal information in the
disputed borrower records, and expects the parties to comply with the provisions of the Stipulated
Confidentiality Agreement and Protective Order, (Doc. 66-1), to safeguard the information.
6
To avoid future disputes that discovery production in this matter is somehow barred by the Privacy Act,
the Court's separate order explicitly states that all discovery production in this matter is made pursuant to
the order of a court of competent jurisdiction.
6

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B. Former Employee Contact Information
The second discovery dispute involves Defendants' refusal to respond to Plaintiffs
interrogatory seeking the identification of certain classes of current and former employees,
including providing the employees "present or last known address, telephone number, and
e-mail address." (Docs. 99 at 3-4,99-1 at A12, A16-17, A27). Defendants produced lists
that did not contain addresses, telephone numbers, or e-mail addresses of former
employees. (Docs. 99 at 4, 99-1 at A129-30,100 at 2). Defendants assert that they had
previously told Plaintiff what information would be included in the spreadsheet they were
providing, and that the spreadsheet would not contain contact information, with no
contemporaneous objection by Plaintiff. (Doc. 100 at 2). Defendants also assert that
producing the lists was burdensome, {id.), and raised a relevance objection at the August 8
telephone conference.
The Court finds it difficult to believe that Defendants, large and sophisticated
corporate entities, would not retain in their records at least some contact information of
former employees. The Court also finds that a list of former employees with mere "name[s],
title[s], divisions], hire date[s], termination date[s], and the reasons for the termination^],"
{id.), with no associated contact information, is insufficient to respond to Plaintiffs otherwise
reasonable discovery request. Accordingly, the Court will order that Defendants shall be
required to produce last-known contact information, including present or last-known

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address, telephone number, and e-mail address, that is contained in Defendants' records
for the list of former employees at issue in the dispute.
C. Extension of Fact Discovery and Subsequent Deadlines
The final discovery dispute concerns Plaintiff's request to extend fact discovery.
(Docs. 95 at 2,97 at 2-3). Plaintiff asserts that Defendants have dragged their feet on
responding to discovery requests, Defendants have not yet fully responded to many
discovery requests, and the complexity of Defendants' systems and data means that
substantial additional time will be needed to review and analyze the data once Plaintiff
obtains access. (Doc. 95 at 2). Plaintiffs request an extension of the fact discovery
deadline to "five months from when Defendants complete their responses to the Bureau's
written discovery requests." {Id.).
Defendants respond that Plaintiffs request is "an invitation to virtually endless
discovery," that Defendants have been engaged in "strenuous efforts to conclude discovery
in the face of sweeping [Plaintiff] demands for internal emails and other documents of
attenuated relevance," and that any delays in completing discovery are essentially Plaintiffs
fault. (Doc. 97 at 2-3). At the August 8 telephone conference, Defendants' counsel also
noted the immense burden Plaintiffs expansive discovery requests has placed on
Defendants, and that Defendants were ready to "cry uncle."
While the Court agrees with Defendants' understandable desire to bring discovery to
a close and move the litigation forward, it also agrees with Plaintiff that more time is needed

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to complete fact discovery. As these most recent discovery disputes have illustrated, there
is substantial production to be completed to ensure that the parties have a sufficient
evidentiary foundation for pre-trial dispositive motions and beyond. However, the Court will
not grant Plaintiff's ill-defined request for a potentially lengthy extension, and will order that
fact discovery close four months from the current deadline of August 9,2018. All
subsequent deadlines will also be extended in accordance with the Court's previously
granted extension of fact discovery. (Doc. 82). Given the already substantial length of
discovery in this case, the Court advises the parties that it will not be predisposed to grant
further discovery extensions.7
III. CONCLUSION

For the reasons outlined above, the Court will order Defendants to produce the
disputed borrower documents, order Defendants to produce former employee contact
information, and extend the fact discovery deadline and all subsequent deadlines. A
separate Order follows.

United States District Judge
7

The Court notes that at the August 8 telephone conference in response to a question from the Court,
Plaintiffs counsel stated that it had not issued any requests for production of documents since February
2018 and that no further requests for production of documents would be forthcoming. The Court also
reminds the parties that its May 3, 2018 Order prohibits the parties from serving any additional
interrogatories or requests for production of documents beyond those which have already been served.
(Doc. 89 H 7).