Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—D. Conn.: Production of notes regarding consumer complaints in FTC suit against Nissan dealership denied, (Aug 1, 2024)

By Donielle Tigay Stutland, J.D.

The court denied in part and granted in part a request to compel production of documents from the State of Connecticut in a suit against Chase Nissan LLC which alleges violations of the FTC Act, the Connecticut Unfair Trade Practices Act, and Connecticut state law.

The federal district court in Connecticut granted in part a motion to compel production requested by a Nissan dealership and the dealer’s principals, general manager, finance manager, and two sales managers in connection with a consumer deception lawsuit filed against dealership and its affiliates by the FTC and the State of Connecticut. The dealership, Chase Nissan LLC, and its affiliates had filed a motion to seek production of the State’s “notes and memoranda from communications with consumers” and a motion to seek production of “documents related to [the] State’s damages claim.” They also asserted that the State’s general objections were improper, and sought an order compelling their withdrawal. The court denied the defendants’ motion to compel production of the State’s “notes from investigators’, attorneys’ and staff members’ communications and meetings with consumers concerning [the consumers’] complaints and declarations,” finding that the documents were protected work product. The court denied in part and granted in part the request to produce “documents related to [the] State’s damages claim.” Finally, the court ordered that, “except as to privilege and work product, the “general objections” asserted by the State of Connecticut be withdrawn (FTC v. Chase Nissan, LLC, No. 3:24-cv-00012-JCH (D. Conn. July 29, 2024)).

In January 2024, the FTC announced that it, along with the State of Connecticut, has taken legal action against Manchester, Connecticut automobile dealership Chase Nissan LLC—which also does business as Manchester City Nissan—along with several key executives and employees for systematically deceiving consumers about the price of certified used cars, add-on products, and government fees. According to a 17-count complaint signed January 2, 2024, and filed January 4 in the federal district court in Hartford, the dealership also regularly charges consumers up to thousands of dollars in junk fees for certification, add-ons, and fees without their consent. Individual defendants include the dealer’s principals, general manager, finance manager, and two sales managers.

The FTC and State of Connecticut charge that the defendants’ conduct violates numerous provisions of the FTC Act, the Connecticut Unfair Trade Practices Act (CUTPA), and Connecticut state law. They seek permanent injunctive relief against future violations of the FTC Act and CUTPA, consumer redress, and any additional relief deemed proper, as well as an award to Connecticut for its attorney fees and costs in bringing the suit.

Communications with Customers. The dealership and its principals argue that the State produced only three categories of documents in its May 13, 2024, document production: “(1) complaints made by consumers; (2) some communications with certain consumers who filed complaints; and (3) signed and unsigned declarations by consumers.” The dealership and its principals inquired whether the State possessed any “notes from investigators’, attorneys’ and staff members’ communications and meetings with consumers concerning such complaints and declarations.” The State confirms that these documents exist, but it contends that they are protected from discovery by the work product doctrine.

The court noted that, “[t]hree conditions must be met to earn work product protection.” “The material must (1) be a document or a tangible thing, (2) that was prepared in anticipation of litigation, and (3) was prepared by or for a party, or by his representative.”

The court began its analysis by finding that the State has met its initial burden to show that the disputed notes and memoranda qualify, at a minimum, for protection as fact work product. The State has produced an affidavit explaining that these documents were all created after the lawsuit was filed. Wrote the court, “courts across the country have had little trouble concluding that interview notes created after the initiation of litigation qualify as protected work product.”

The court found that the documents qualify for fact work product protection and noted that the burden would shift to the dealership and its affiliates to show “substantial need” and “undue hardship.” The court concluded that the dealership had not shown that, and the court denied the dealership’s motion to compel production of the State’s “notes from investigators’, attorneys’ and staff members’ communications and meetings with consumers concerning [the consumers’] complaints and declarations.”

Documents Related to the State’s Damage Claims. The court next turned to the dealership’s request for an order compelling compliance with two requests for production that inquired about the State’s claims for monetary relief. The court noted that prior to commencing litigation, “the State apparently made a settlement proposal to the Defendants that included a monetary component.” The dealership then sent Request for Production No. 11, which inquired about “[a]ll documents and communications concerning the damages calculation verbally proffered to Defendants’ counsel” during the pre-suit settlement negotiations – that is, “on or about October 6, 2023” and Request for Production No. 57, which sought “[a]ll documents and communications related to any other claims by the State of Connecticut’s [sic] for the recovery of monetary and/or economic damages of any type.”

With respect to both Request No. 11 and Request No. 57, the State objected on grounds of “attorney-client, common-interest, deliberative process, or informant’s privileges.”

The court denied the motion with respect to Request for Production No. 11. The court found that the State had indicated that it has produced all responsive documents in its physical possession, and the dealership did not show that the State “controls” or has the practical ability to obtain the responsive documents in the FTC’s possession.

With respect to Request No. 57, the court concluded that the State had not identified a sufficient justification for denying access to that information. The court granted the motion as to Request No. 57, and the State was ordered to produce non-privileged documents.

General Objections. Finally, the court turned to the dealerships’ request to compel the withdrawal of the State’s use of “general objections” in responding to requests for production under Rule 34. The court noted that pursuant to a 2015 amendment, Rule 34 “no longer permits global, generalized objections to each request” for production. The court concluded that the State had not properly invoked the lone exception to the general prohibition against general objections. The court ordered the State to withdraw its general objections and revise its responses.

The Case is No. 3:24-cv-00012-JCH.

Judge: Farrish, T.

Attorneys: Samuel Jacobson for the FTC. Jonathan Blake, Office of the Attorney General, for State of Connecticut. James T. Shearin (Pullman & Comley, LLC) for Chase Nissan LLC d/b/a Manchester City Nissan. James John Healy (Cowdery, Murphy & Healy LLC) for Aiham Alkhatib.

Companies: Chase Nissan LLC d/b/a Manchester City Nissan

Cases: ConsumerProtection ConnecticutNews FederalTradeCommissionNews