In the bare-knuckle litigation the Consumer Financial Protection Bureau is known for, defendants often try to learn the bases for the bureau’s allegations against them. Normally they get no meaningful answers. But a federal court in Georgia recently gave several defendants something valuable: dismissal of the CFPB’s claims against them.
In the case, CFPB v. Universal Debt Solutions, LLC, the bureau accused a number of companies of running a debt-collection scheme that affected millions of Americans. Several defendants fiercely denied the allegations, claiming the lawsuit was nothing but government overreach. They then sought to take the bureau’s deposition, under Civil Rule 30(b)(6), to understand what evidence the CFPB supposedly has against them.
In civil litigation, that sort of deposition is typical. It allows one side to require a corporate party to designate—and educate—a witness to respond to questions about a defined set of topics. Of course, the CFPB is not a typical party, but rather a public entity, with law-enforcement powers. So attempts to depose CFPB witnesses are generally unsuccessful.
But the judge in Universal Debt Solutions decided otherwise. The key to his ruling lay in the fact that the defendants had created a record of stonewalling by the CFPB, in which the court had often agreed with them about the bureau’s conduct. The CFPB then had to provide a witness. But instead of having that person testify, the individual primarily read aloud from a “memory aid,” reciting from it verbatim for as much as 45 minutes at a time. The court later held that the deposition was a sham and that the CFPB had violated its order to furnish a live witness. As a penalty, the court dismissed four pending claims.
Don’t expect many courts to reach the same conclusion. Most judges would see a deposition notice on the CFPB as an improper attempt to invade the bureau’s law-enforcement and deliberative privileges. Other tribunals will find that written answers to deposition-like questions suffice. But carefully laid groundwork, showing step-by-step how the CFPB refuses to comply with a proper request or to give relevant information, increases the chance of a court sanctioning the CFPB like it did in Universal Debt Solutions.