District Court (Ill.) Denies Discovery Targeted to Impugn TCPA Plaintiff’s “Serial Filer” Status Because Repeat Litigants May be Better Able to Monitor the Conduct of Counsel, Who are the Class’s Real Champions

In Charvat v. Travel Services, 2015 WL 3917046, at *4-5 (N.D.Ill., 2015), Judge Wood affirmed the Magistrate Judge’s sua sponte imposition of relevancy objections to deny discovery toward a serial TCPA Plaintiff.

RCL contends that Charvat’s tax returns are relevant to show that he derives substantial income from TCPA litigation and that his motivation for filing this action is financial gain rather than selfless consumer advocacy. (Def.’s Mot. for Recons. at 7, Dkt. No. 237.) It contends that Charvat’s purported financial motivation for this case is relevant to the issue of his fitness to serve as a class representative.  Seventh Circuit precedent does not support this contention. In Murray v. GMAC Mortgage Corp., 434 F.3d 948 (7th Cir. 2006), the court reviewed the class certification claim of a plaintiff who had filed nine consumer class actions herself and whose family members had filed at least forty more. The court rejected the “professional plaintiff” characterization as a basis for determining that the plaintiff was unfit to serve as representative of the proposed class, finding that “[n]othing about the frequency of [plaintiff’s] litigation implies that she is less suited to represent others than is a person who received and sued on but a single offer.” Id. at 954. As the court further explained, “[r]epeat litigants may be better able to monitor the conduct of counsel, who as a practical matter are the class’s real champions.” Id.  RCL cites CE Design v. King Architectural Metals, Inc., 637 F.3d 721 (7th Cir. 2011), and Donaca v. Dish Network, LLC, 303 F.R.D. 390 (D. Colo. 2014), as support for its assertion that a plaintiff’s status as a serial litigant could be relevant to his ability to serve as a class representative and should be examined on a case-by-case basis. But neither case held that a plaintiff’s income from prior repeated class action litigation could be considered as a factor weighing against his adequacy as a class representative. In Donaca, the court held that the plaintiff was not a proper class representative because he was not a member of the class he purported to represent: he did not receive calls from the telemarketers whose calls defined the class and he could not identify any other potential plaintiffs who had received calls from the marketer who called him. 303 F.R.D. at 396.   In CE Design, the court reiterated its approach in Murray v. GMAC Mortgage and again observed that serial litigation is not an impediment to a plaintiff’s appointment as class representative: “[I]t’s not unlawful to be a professional class action plaintiff. Indeed, an experienced plaintiff in such an action may be able to ensure that class counsel act as faithful agents of the class.” 637 F.3d at 724 (citations omitted). The court instead found that two other characteristics dictated reconsideration of the plaintiff’s appointment as class representative: first, the plaintiff had arguably consented to the marketing faxes for which it claimed damages and second, its president had apparently been untruthful in his deposition testimony about that consent. Id. at 726–28.  In the present case, RCL has had the opportunity to discover whether the actions of Charvat or his family members consented to the phone calls that are the subject of his complaint. (See 11/20/2014 Order on Doc. Req. Nos. 42–43, 45, 46–49 at 5, Dkt. No. 229.) RCL does not suggest that the request at issue here would lead to evidence of Charvat’s consent to receive those calls. Murray and CE Design establish that Charvat’s desire for financial gain is not relevant to impugn his credibility and RCL makes no attempt to argue that his tax returns are relevant for any other purpose.  RCL next argues that Charvat’s income from TCPA litigation, his history of litigation, and his communications with others about TCPA litigation all are relevant to a material issue in the class certification analysis—namely, whether litigation of the matter as a class action would be a superior method of fairly and efficiently adjudicating the controversy. See Fed. R. Civ. P. 23(b)(3). RCL contends that the information it seeks would demonstrate that “there is no impediment for the average citizen to get the same or similar relief that the Plaintiff has in his other TCPA cases” and that “putative class members would actually fare much better by filing individual lawsuits than proceeding with a class action.” (Def.’s Mot. for Recons. at 12, Dkt. No. 237.)  But RCL has identified no basis for its apparent premise that Charvat’s recoveries in other cases are relevant to the superiority analysis here. District courts in this Circuit have analyzed the superiority question by examining whether potential recovery by the proposed class members is large enough to provide them with incentive to pursue their claims individually. See Herkert v. MRC Receivables Corp., 254 F.R.D. 344, 352–53 (N.D. Ill. 2008). Yet “[o]nly when all or almost all of the claims are likely to be large enough to justify individual litigation is it wise to reject class treatment altogether.” Murray, 434 F.3d at 953. It is thus apparent that the appropriate inquiry for superiority analysis relates to the damages suffered by the potential class plaintiffs in this case. RCL does not offer any support for a conclusion that evidence of the recovery Charvat may have received from other defendants in other actions sheds any light on the damages suffered by the potential class members here. Thus, the magistrate judge’s denial of RCL’s motion on relevance grounds cannot be considered clearly erroneous or contrary to law.