Federal Trade Commission v. Doxo Inc

• Court: District Court, W.D. Washington
• Decided: December 16, 2024
• Docket: 2:24-cv-00569
• Status: Unknown

Opinion

1 2

3 4 5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 FEDERAL TRADE COMMISSION, CASE NO. 2:24-cv-00569 8 Plaintiff, ORDER 9 v. 10 DOXO, INC.; STEVE SHIVERS; 11 ROGER PARKS,

12 Defendants. 13 1. INTRODUCTION 14 This matter comes before the Court on Defendants Doxo, Inc., Steve Shivers, 15 and Roger Parks’s (collectively, “Doxo”) motion to compel Plaintiff Federal Trade 16 Commission (FTC) to respond more fully to Doxo’s Interrogatory No. 6. Dkt. No. 28. 17 For the reasons explained below, the Court DENIES the motion to compel. 18 2. BACKGROUND 19 The FTC brings claims against Doxo under Section 5(a) of the Federal Trade 20 Commission Act (FTC Act), 15 U.S.C. § 45(a), Section 521 of the Gramm-Leach- 21 Bliley Act (GLB Act), 15 U.S.C. § 6821, and the Restore Online Shoppers’ 22 Confidence Act (ROSCA Act), 15 U.S.C. §§ 8401-8405. Dkt. No. 1 ¶ 1. In short, FTC 23 1 alleges that Doxo, “a third-party bill payment platform,” “dupes consumers into 2 using its service by disguising itself as their billers’ official payment channel” and

3 “adds junk fees to consumers’ bills that in the bulk of cases they could avoid if they 4 paid their biller directly.” Id. ¶¶ 2-3. 5 During its presuit investigation, the “FTC issued a Civil Investigative 6 Demand to Doxo that sought, inter alia, all consumer complaints and inquiries 7 ‘from any source (e.g., consumers, businesses, third parties, government entities).’” 8 Dkt. No. 31 at 2. At first, Doxo refused. Id. But “[d]uring a subsequent meet-and-

9 confer with Doxo’s counsel…, counsel for the FTC proposed that Doxo produce all 10 complaints from a sampling of days,” and Doxo agreed. Id. (emphasis added). In 11 June 2023, Doxo sent all consumer communications from an agreed-upon sample 12 period to the FTC, totaling around 7,000 consumer communications.1 Id. at 2-3. 13 According to counsel for the FTC, “[i]n anticipation of litigation against Doxo, and at 14 my direction, FTC employees reviewed a portion of the complaints produced by 15 Doxo. . . . Based on that review, I performed calculations estimating the total

16 number of relevant consumer complaints Doxo has received.” Id. at 3. The FTC 17 stated this estimate in its complaint, alleging that “tens of thousands of consumers 18 have complained to Doxo that they were misled[.]” Dkt. No. 1 ¶ 6. 19 In Interrogatory No. 6—the request in dispute here—Doxo asked the FTC to 20 “[s]tate all facts supporting FTC’s contention that ‘tens of thousands of consumers 21 1 The FTC refers to these documents as “complaints,” while Doxo claims that they 22 are transcripts of customer service calls. See Dkt. No. 28 at 5, 6, 12. This may prove to be a distinction without a difference, but for now, the Court will use neutral 23 language and refer to the documents as “consumer communications.” 1 have complained to Doxo that they were misled,’ as alleged in paragraph 6 of the 2 Complaint.” See Dkt. No. 28 at 3. The FTC responded:

3 The FTC objects to this Interrogatory as overly broad unduly burdensome in that it asks for ‘all facts’ supporting the allegation. The 4 FTC further objects to this interrogatory on the ground that discovery has only recently commenced, and Defendants have not yet completed 5 production in response to any document requests propounded by the FTC. The FTC further objects to this Request to the extent it seeks 6 information protected from disclosure by the deliberative process privilege, the attorney-client privilege, the work product doctrine, or any 7 other applicable privilege or protection.

8 Without waiving the foregoing, the FTC refers Defendants to the consumer communications (i.e., JSON files) produced by Doxo in the 9 following Bates range: DOXO_008673-DOXO_307258.

10 Id. at 3-4. 11 In a later meet-and-confer, the FTC stated—and affirms again here—that it 12 does not intend to rely on its presuit analysis to prove its claims. Dkt. No. 31 ¶¶ 8-9. 13 Nonetheless, Doxo moves for an order compelling the FTC to respond more fully to 14 this interrogatory. Dkt. No. 28. 15 3. DISCUSSION 16 Doxo moves to compel disclosure of “all facts supporting the FTC’s contention 17 that ‘tens of thousands of consumers have complained to Doxo that they were 18 misled,’ as alleged in… the Complaint” Dkt. No. 28 at 3. According to Doxo, “the 19 factual basis for an allegation is neither privileged nor work product, but rather 20 facts subject to discovery.” Dkt. No. 28 at 5 (citing cases). 21 The FTC counters that Doxo is already in possession of the approximately 22 7,000 consumer communications that form the factual basis for the FTC’s “tens of 23 thousands” allegation. See Dkt. No. 31 at 2-3. The FTC thus argues that Doxo seeks 1 to discover not merely facts but rather the details of its presuit analysis, which the 2 FTC argues is “quintessential work product.” Dkt. No. 28 at 8. The Court agrees.

3 3.1 Legal Standard. 4 The work-product doctrine protects from discovery material that is (1) 5 obtained and prepared by an attorney or the attorney’s agent (2) in anticipation of 6 litigation or preparation for trial. Fed. R. Civ. P. 26(b)(3); Hickman v. Taylor, 329 7 U.S. 495, 509-12 (1947). The primary aim of work-product protection is to “prevent 8 exploitation of a party’s efforts in preparing for litigation.” Admiral Ins. Co. v. U.S. 9 Dist. Ct. for Dist. of Arizona, 881 F.2d 1486, 1494 (9th Cir. 1989) 10 Work product falls into two general categories: ordinary and opinion. See 11 Holmgren v. State Farm Mut. Auto. Ins. Co., 976 F.2d 573, 576-7 (9th Cir. 1992). 12 Ordinary work product, which includes factual investigations, enjoys only qualified 13 immunity from discovery. See Hausman v. Holland Am. Line-U.S.A., No. CV11- 14 1308 BJR, 2015 WL 8327934, at *1-2 (W.D. Wash. Dec. 9, 2015). A party may obtain 15 discovery of ordinary work product by demonstrating “substantial need of the 16 materials in the preparation of the party’s case and that the party is unable without 17 undue hardship to obtain the substantial equivalent of the materials by other 18 means.” Holmgren, 976 F.2d at 576 (quoting Fed. R. Civ. P. 26(b)(3)). By contrast, 19 opinion work product, which includes attorneys’ “mental impressions, conclusions, 20 or legal theories” (see Fed. R. Civ. P. 26(b)(3)(B)), enjoys nearly absolute immunity 21 from discovery. Id. at 577. “A party seeking opinion work product must make a 22 showing beyond the substantial need/undue hardship test required under Rule 23 1 26(b)(3) for non-opinion work product.” Id. “[O]pinion work product may be 2 discovered and admitted when mental impressions are at issue in a case and the

3 need for the material is compelling.” Id. 4 3.2 Doxo’s motion to compel seeks protected opinion work product. 5 The FTC’s presuit analysis of the consumer communications is assuredly 6 protected work product—it was prepared in anticipation of litigation by the FTC’s 7 attorneys. See Hickman, 329 U.S. at 511-12. Doxo offers no real pushback on this 8 point. See generally Dkt. No. 28. And perhaps for this reason, Doxo frames its 9 motion to compel as “seek[ing] not the FTC’s analysis, but rather the factual basis 10 for the complaint’s allegations.” Id. at 12. 11 But if it is “just the facts” supporting the FTC’s allegation about “tens of 12 thousands” of aggrieved consumers that it seeks, Doxo already possess the 7,000 or 13 so consumer communications that prompted the FTC’s allegation. See generally 14 Dkt. No. 28. This is where Doxo’s argument morphs: it contends that it “does not 15 understand the basis for the allegation” because those communications “cover a 16 wide range of issues,” not just complaints. Id. at 5. In other words, what Doxo really 17 seeks is not the factual basis for the “tens of thousands” allegation, but rather the 18 FTC’s counsel’s opinion about which of those 7,000 communications are 19 “complaints” and their method for divining the “tens of thousands” figure. But 20 counsel’s mental impressions, conclusions, opinions, or legal theories about the 21 litigation are classic opinion work product. Republic of Ecuador v. Mackay 742 F3d 22 860, 869, n.3 (9th Cir. 2014). 23 1 Thus, the Court concludes that Doxo seeks protected opinion work product 2 from the FTC. The question now becomes whether the FTC has waived that

3 protection. 4 3.3 The work-product protection surrounding the FTC’s presuit analysis is neither waived nor overcome. 5 Doxo argues that the FTC waived any work-product protection over its 6 presuit analysis by presenting its conclusion from that analysis as an allegation in 7 the Complaint. Dkt. No. 28 at 5. The Court disagrees. If the FTC’s presuit analysis 8 were squarely at issue in this case and there was a compelling need for it, then 9 work-product protection would not bar discovery. See Holmgren, 976 F.2d at 577. 10 But the FTC has made clear that it will “not rely on its pre-suit analysis to prove its 11 claims” and that “after receiving discovery from Doxo, [it will] perform a definitive 12 analysis of complaint volume and produce the information supporting that analysis 13 to the extent required by the Federal Rules.” Dkt. No. 31 ¶ 8. This is sufficient for 14 the Court to find that the FTC is not engaged in a “game of ducks and drakes”— 15 that is, resisting discovery now based on work product and later waiving the 16 protection to use its presuit analysis as evidence. See Reynolds Metals Co. v. 17 Yturbide, 258 F.2d 321, 335 (9th Cir. 1958) (Chambers, J., concurring and 18 dissenting). So on this record, Doxo has not demonstrated that the protected 19 material is at issue or in any way vital to this case. 20 Nor has Doxo shown substantial need for the material or undue hardship in 21 producing its own—perhaps contrary—analysis of the consumer communications. 22 Indeed, Doxo already has the consumer communications. If Doxo believes that the 23 1 “tens of thousands” assertion is so lacking in support as to be “scandalous,” it can 2 move to strike the allegation from the Complaint. See Fed. R. Civ. P. 12(f). A motion

3 to compel is not the proper means to challenge the factual merits of the FTC’s 4 pleadings. 5 Finally, the mere fact that the discovery request at issue is a contention 6 interrogatory does not change the outcome. “The following factors are considered in 7 determining the propriety of contention interrogatories: 1) whether the request 8 requires the attorney to disclose theories, mental impressions, or work product; 2)

9 whether the information is in the hands of the proponent or respondent; 3) whether 10 it makes sense to seek the information at an early stage of litigation before 11 substantial discovery has occurred; 4) how does the request made at this stage 12 further the adjudication of the case; and 5) whether the benefits of the early request 13 outweigh the burden in responding.” City of Moses Lake v. United States, No. CV- 14 04-0376-AAM, 2005 WL 8158741, at *3 (E.D. Wash. Nov. 29, 2005) (citing Nelson v. 15 Cap. One Bank, 206 F.R.D. 499, 501 (N.D. Cal. 2001)).

16 Given that (1) Doxo seeks opinion work product; (2) Doxo already has 17 possession of the factual basis underlying the FTC’s opinions; (3) the FTC does not 18 intend to rely on its presuit opinions to prove its claims; (4) this dispute does not 19 advance the disposition of the case; and (5) discovery is still ongoing, the Court finds 20 that the FTC has adequately responded to Interrogatory No. 6 by referring Doxo to 21 the consumer communications that Doxo produced in presuit discovery. No further

22 response is required. 23 1 4. CONCLUSION 2 In sum, the Court FINDS that the FTC has adequately responded to

3 Interrogatory No. 6, and that Doxo’s request for more information runs afoul of the 4 work-product doctrine. The Court therefore DENIES Doxo’s motion to compel. 5 It is so ORDERED. 6 Dated this 16th day of December, 2024. 7 8 a Jamal N. Whitehead 9 United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21

22 23