Anderson v. Credit One Bank NA

ADDITIONAL CASES Orrin S. Anderson, a/k/a Orrin Anderson, a/k/a Orrin Scott Anderson, Debtor and Plaintiff, on behalf of himself and all others similarly situated v. Credit One Bank, N.A., Defendant; 15-08214 CORRECTED MEMORANDUM OF DECISION ON MOTIONS FOR SANCTIONS AND CLASS CERTIFICATION Plaintiff Orin S. Anderson (“Plaintiff” or “Anderson”) brought this adversary proceeding for himself and as a putative class action to enforce his and the other class members’ bankruptcy discharge under 11 U.S.C. §727(b) of their unsecured debts to defendant Credit One Bank, N.A. (“Defendant” or “Credit One”) and its successors and assigns, and the injunction protecting the discharge under 11 U.S.C. §524(a)(2). The basis for the claimed discharge violation was Credit One’s conceded systematic refusal after the discharge of an unsecured debt upon which it was a reporting entity to notify credit reporting agencies of the debt’s changed status from “charged off” to being subject to the bankruptcy discharge. As noted in Anderson v. Credit One Bank, N.A. (In re Anderson), 884 F.3d 382, 385 (2d Cir. 2018), cert. denied, 139 S. Ct. 144 (2018), “charging off” a delinquent debt “means the bank changed the debt from a receivable to a loss on its own accounting books.” The fact that such a debt has been charged off thus does not mean that it is uncollectible as a matter of law. In contrast, an obligor on a debt discharged under section 727(b) of the Bankruptcy Code and subject to the statutory injunction under section 524(a)(2) of the Bankruptcy Code cannot be compelled to pay it. See Montgomery v. Wells Fargo Bank, N.A., 2012 U.S. Dist. LEXIS 162912, at *9, *13-14 (N.D. Cal., Nov. 13, 2012) (“A bankruptcy discharge relieves a consumer of any legal obligation to repay a discharged debt, see 11 U.S.C. §727(b), whereas a consumer may be liable to repay a debt that has been charged off.”). See also Persinger v. Southwest Credit Systems, L.P., 20 F.4th 1184, 1196 (7th Cir. 2021) (“a discharged debt cannot be collected (indeed, it is unlawful to try”)); Long v. Turner, 134 F.3d 312, 317-18 (5th Cir. 1998); Alsibai. v. Experian Info. Sols., Inc., 488 F. Supp. 3d 840, 844-46 (D. Mn. 2020); Torres v. Chase Bank USA, N.A. (In re Torres), 367 B.R. 478, 487 (Bankr. S.D.N.Y. 2007). (To protect the discharge, Congress permits a debtor to voluntarily reaffirm a debt only in the limited circumstances detailed in 11 U.S.C. §524(c).) Credit One acknowledged the distinction, see May 5, 2015 Transcript [Adv. Dkt. 16] (“5/5/15 Tr.”) of hearing on Credit One’s motion to dismiss, at 78-79,¹ notwithstanding its repeated contention (including as recently as its objection to the present class certification motion) that a “charge off” is no different than a bankruptcy discharge. Extensive case law and commentary recognize that, given the importance of accurate credit reporting to consumers’ access to credit (or at least consumers’ widely held belief in its role), the pressure to pay debt exerted by the repeated, unexcused refusal to correct a credit report to reflect a bankruptcy discharge subjects the violator to contempt sanctions under Taggert v. Lorenzen, 139 S. Ct. 1795, 1801-02 (2019). See Dibattista v. Selene Fin. LP (In re Dibattista), 615 B.R. 31, 43 (S.D.N.Y. 2020); Minech v. Clearview Fed. Credit Union (In re Minech), 632 B.R. 274, 281-84 (Bankr. W.D. Pa. 2021), and the cases cited therein; see also 4 Collier on Bankruptcy, 524.02[b] (16th ed. 2022) (“The failure to update a credit report to show that a debt has been discharged is also a violation of the discharge injunction if shown to be an attempt to collect the debt. Because debtors often feel compelled to pay debts listed in credit reports when entering into large transactions, such as a home purchase, it should not be difficult to show that the creditor, by leaving discharged debts in the credit report, is attempting to collect the debt.”); Micah A. Smart, “Dawn of the Debt: The Increasing Problem of Creditors Infecting the Discharge Injunction with Zombie Debt,” 70 Me. L. Rev. 36, 47-8 (2018) (“Refusing to update credit reports post-discharge when requested, absent a legitimate reason should be considered a violation of the discharge.”). Here, Credit One never offered a legitimate reason for persisting in its policy not to correct obligors’ credit reports to reflect their bankruptcy discharge, with the exception, discussed below, that it had sold the underlying debt before the discharge and therefore allegedly had no duty to update the reports and its related contention that because of such sales it had no continuing motive to pressure its former obligors to pay.² This Memorandum of Decision explains the Court’s reasons for granting Plaintiff’s motion for sanctions [Adv. Dkt. 140] (the “Sanctions Motion”) based on Credit One’s repeated, lengthy, and willful discovery failures, including its submission of false affidavits and repeated misrepresentations to the Court — made as late as the middle of oral argument on the Sanctions Motion — before it conceded the falsity of such affidavits and representations, which thwarted Plaintiff’s efforts to disprove Credit One’s “no duty” and “no motive to collect” defenses. Thus the Court will enter a default judgment on liability and a partial judgment on sanctions against Credit One in favor of Plaintiff under Fed. R. Civ. P. 37(b)(2)(A)(vi), incorporated by Fed. R. Bankr. P. 7037. This Memorandum of Decision also explains the Court’s reasons for granting in part and denying in part Plaintiff’s motion for class certification [Adv. Dkt. 109] (the “Class Certification Motion”), by (a) certifying an opt-out class under Fed. R. Civ. P. 23(b)(3), incorporated by Fed. R. Bankr. P. 7023, comprising “all individuals who: [a]fter May 2, 2007, have had a consumer credit report relating to them prepared by any of the credit reporting agencies in which one or more of their Tradeline [unsecured] accounts or debts with Credit One was not reported as discharged despite the fact that such debts had been discharged as a result of their bankruptcy under Chapter 7 of the Bankruptcy Code,”³ with customary carve-outs, and (b) denying to certify an injunctive class under Fed. R. Civ. P. 23(b)(2) comprising the same people, on the basis that such request is now, albeit belatedly, moot in the light of a Stipulation and Order agreed by Credit One on March 29, 2017 [Adv. P. Dkt. 104] after its discovery failures came to light. Jurisdiction The Court has jurisdiction over this adversary proceeding under 28 U.S.C. §§157(a)-(b) and 1334(b) and the Amended General Order of Reference, dated January 31, 2012 (Preska, C.J.). As noted in Anderson v. Credit One, 884 F.3d at 388, the parties agree that Anderson’s claim is a core proceeding under 28 U.S.C. §157(b), and it is in fact “core” under that provision and under Article III of the United States Constitution, as it is “well established that the discharge is the foundation upon which all other portions of the Bankruptcy Code are built.” Id. at 889; see also Montano v. First Light Fed. Credit Union (In re Montano), 398 B.R. 47, 55 (Bankr. D.N.M. 2008). Further, the Circuit determined that because the enforcement of the discharge is “central to the statutory scheme” and the bankruptcy courts’ power to enforce it, this dispute would not be subject to arbitration under the Federal Arbitration Act, and “the class action nature of this case does not alter our analysis.” Id. at 389-91. Belton v. GE Capital Retail Bank (In re Belton), 961 F.3d 612, 615-17 (2d Cir. 2020), cert. denied, 141 S. Ct. 1513 (2021), adhered to that that analysis, including in the light of the Supreme Court’s post-Anderson decision in Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (2018). See also Henry v. Educ. Fin. Serv. (In re Henry), 944 F.3d 587 (5th Cir. 2019). Belton also noted, however, that “we have not endeavored to address whether a nationwide class action is a permissible vehicle for adjudicating thousands of contempt proceedings, and neither our decision today nor Anderson should be read as a tacit endorsement of such,” id. at 617, leaving the issue “for another day.” Id. at 618. Credit One previously moved for, among other things, an order striking Plaintiff’s class allegations of a nationwide class based on jurisdictional arguments in favor of arbitration, see Credit One Bank, N.A. and Credit One Financial’s Motions to Compel Arbitration, to Strike Class Allegations, to Dismiss or Stay [Adv. Pro. Dkt. 7] at 21-23 (the “Motion to Dismiss and Strike”), which the Court denied by order dated May 14, 2015 [Adv. Dkt. 15], but it did not raise the separate issue of the Court’s jurisdiction to determine whether Credit One violated the discharge orders of other judges,⁴ nor did it do so in its opposition [Adv. Dkt. 118, 143, 152] to the Class Certification Motion. Because Belton observed in dicta, however, that “we question whether a bankruptcy court would even have jurisdiction [over a nationwide class action] to hold a creditor in contempt of another court’s [discharge] order.” 961 F.3d at 617, the Court addresses that jurisdictional issue here as a question of law, Golden v. Discover Bank (In re Golden), 630 B.R. 896, 917 (Bankr. E.D.N.Y. 2021); Haynes v. Chase Bank (USA), N.A. (In re Haynes), 2014 Bankr. LEXIS 3111, at *4 (Bankr. S.D.N.Y., July 22, 2014), that cannot be waived. The issue is not the easiest to parse,⁵ but I conclude that the well-recognized proposition that “[s]anctions for violations of an injunction are…generally administered by the court that issued the injunction,” Baker v. GMC, 522 U.S. 222, 236 (1998), is — as indicated by Justice Ginsburg’s use of the word “generally” in Baker — not a jurisdictional limitation. The Fifth Circuit addressed the issue in Crocker v. Navient Sols. L.L.C. (In re Crocker), 941 F.3d 206, 216 (5th Cir. 2019), in which it declined to follow Eleventh Circuit precedent that the bar to seeking enforcement of an injunction outside of the issuing court is jurisdictional. Instead, the Crocker court found the “usual enforcement rules for injunctions” emanate from at least “respect for judicial process” and should not be cast aside without good reason. Id.⁶ See also Geltzer v. Brizinova (In re Brizinova), 565 B.R. 488 (Bankr. E.D.N.Y. 2017), which noted the general rule as a matter of propriety and the wisdom behind it, but stated, “That is not to say that it is never appropriate for one judge to enforce an order that was entered by another judge in a different case. For example, in the bankruptcy context, courts may distinguish between whether they are asked to enforce a ‘purely statutory order’ such as…the discharge injunction set forth in Bankruptcy Code section 524, on the one hand, and an injunction ‘individually crafted by the bankruptcy judge,’ on the other. And sometimes it may not be feasible for the parties to return to the courtroom of the issuing judge.” Id. at 503 (internal quotation and citation omitted). As discussed in In re Haynes, 2014 Bankr. LEXIS 3111, at *21-25, as well as in In re Golden, 630 B.R. at 918-20, 926-27; Ajasa v. Wells Fargo Bank, N.A. (In re Ajasa), 627 B.R. 6, 23-25, 26-31 (Bankr. E.D.N.Y. 2021); and Walls ex rel. Herself v. Wells Fargo Bank, N.Y. (In re Walls), 262 B.R. 519, 528 (Bankr. E.D. Cal. 2001), the discharge order entered in individual, consumer bankruptcy cases is a national form from which the bankruptcy courts may not deviate; it is, moreover, supported by a statutory injunction under section 524(a)(2) of the Bankruptcy Code and the power conferred on the Court by section 105(a) of the Bankruptcy Code to “issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title”⁷ — including Bankruptcy Code sections 524(a)(2) and 727(a) — that, unlike the All Writs Act’s grant of power to federal courts “in aid of their respective jurisdictions,”⁸ confers power on courts exercising bankruptcy jurisdiction to enforce and carry out the Bankruptcy Code. See generally Bessette v. Avco Fin. Servs., 230 F.3d 439 (1st Cir. 2000), which reversed an order that precluded bringing class action claims except in the court that issued the original discharge orders. Bessette observed that the power to enforce the discharge resides in both common law contempt and section 105(a) of the Bankruptcy Code and that because “[a]ppellant seeks enforcement of the statutory injunction set forth in §524, not one individually crafted by the bankruptcy judge, in which that judge’s insights and thought processes may be of particular significance…few of the practical reasons for confining contempt proceedings to the issuing tribunal apply here. Id. at 446.⁹ See also Solow v. Kalikow (In re Kalikow), 602 F.3d 82, 97 (2d Cir. 2010): “[A] court may invoke §105(a) if the equitable remedy utilized is demonstrably necessary to preserve a right elsewhere provided in the Code. These powers are in addition to whatever inherent contempt powers the court may have and must include the award of monetary and other forms of relief to the extent such awards are necessary and appropriate to carry out the provisions of the Bankruptcy Code and provide full remedial relief.” (internal citation and quotations omitted);¹⁰ Cano v. GMAC Mortg. Corp. (In re Cano), 410 B.R. 506, 549-55 (Bankr. S.D. Tex. 2009). Importantly, the Supreme Court’s most recent decision applying section 524 of the Bankruptcy Code, Taggart v. Lorenzen, 139 S. Ct. 1795 (2019), consistent with Kalikow, confirms the dual nature of the power conferred by the Judicial Code’s grant of bankruptcy jurisdiction to enforce the discharge. Taggart found the source of power to enforce the discharge in sections 105(a) and 524(a)(2) of the Bankruptcy Code, id. at 1801, not just the contempt power. Instead, it applied the standard for holding one in contempt to the exercise of power under sections 105(a) and 524(a)(2). Id. See also Law Office of Francis O’Reilly, Esq v. Selene Fin., L.P. (In re DiBattista), 2022 U.S. App. LEXIS 13236, at *6 (2d Cir., May 17, 2022) (stating that sections 524 and 105 empower a bankruptcy court to enforce civil contempt sanctions under traditional principles of equity practice). Jurisdiction flowing from those sections of the Bankruptcy Code and 28 U.S.C. §§157(a)-(b) and 1334(b) therefore can be exercised to determine whether, in recognition of the power conferred by Bankruptcy Rule 7023, the Court should certify a nationwide class of debtors whose identical discharge orders were allegedly breached by implementation of the same, uniformly applied policy, the issue presently before this Court. Taggart is important for another reason bearing on the issue of whether only the court that issued the discharge order has the power to preside over an action to enforce the discharge injunction. It held that the standard for finding a violation of the discharge “is an objective one. A court may hold a creditor in civil contempt for violating a discharge order where there is no ‘fair ground for doubt’ as to whether the creditor’s conduct might be lawful under the discharge order.” Id. at 1804. When the same, systematic violation, for the same systematic reason, is alleged with respect to the breach of many identical, “not detailed” discharge orders, id. at 1802, a court’s application of that objective standard would not necessarily undercut “judicial process,” jurisdictionally or otherwise. It would instead fulfil Congress’ desire to protect a crucial pillar “central to the statutory scheme” and the bankruptcy system. In re Ajasa, 627 B.R. at 28-29, citing In re Anderson, 884 F.3d at 386, 390. The proper focus here, then, is not on this Court’s jurisdiction, which is clear under 28 U.S.C. §§157(a)-(b) and 1334(b),¹¹ but, rather, on whether the putative class should be certified under Fed. R. Civ. P. 23, incorporated by Fed. R. Bankr. P. 7023, which is discussed later in this Memorandum of Decision. See Bessette, 230 F.3d at 446; Ajasa, 627 B.R. at 26 (“[T]his Court’s subject matter jurisdiction to consider these Plaintiffs’ claims, including their request to proceed as class representatives in a Rule 23 class, should not be limited by the scope of that request — including a request to proceed as a nationwide class. If the Plaintiffs meet their burden as a nationwide class, then they will prevail, and an appropriate class will be certified — and if they do not, then a class will not be certified.”). See also In re Cano, 410 B.R. at 555 (“Where it is clear that this Court has authority over the named plaintiffs’ claims, the Court will not dismiss the suit based on concerns more appropriately addressed during a class certification hearing.”). See generally, Kara Bruce, “The Debtor Class,” 88 Tul. L. Rev. 21, 51-71 (Nov. 2013).¹² Consideration of the Sanctions Motion Before Consideration of the Class Certification Motion “[C]ourts within the Second Circuit and other circuit courts have held that that ‘in general, issues relating to class certification should be decided before a decision on the merits is rendered.’” Ddmb, Inc. v. Visa, Inc., 2021 U.S. Dist. LEXIS 249783, at *143 (E.D.N.Y., Sept. 27, 2021), quoting Mendez v. Radec Corp., 260 F.R.D. 38, 44 (W.D.N.Y. 2009). Two policies — embodied in Rule 23(c)(1)’s requirement that the court determine whether to certify an action as a class action “[a]t an early practicable time after a person sues or is sued as a class representative”¹³ and Rule 23(c)(2)’s notice requirements — underly this practice: fairness to absent, putative class members and fairness to the defendant. Mendez v. Radec Corp., 260 F.R.D. at 47-48. The latter point is reflected in the advisory committee’s notes to the 1966 amendment to Rule 23(c) regarding the drafters’ concern with “one-way intervention” — the unfairness that occurs when potential members of a class are allowed to await final judgment on the merits without risk to themselves in order to determine whether participation in the class would be favorable to their interests. Weissman v. Collecto, Inc., 2019 U.S. Dist. LEXIS 8600, at *25-26 (E.D.N.Y., Jan. 17, 2019). A defendant can waive an objection to the early disposition of a putative class plaintiff’s claims against it, however. Id. at *26. See also Ddmb, Inc. v. Visa, Inc. 2021 U.S. Dist. LEXIS 249783, at *144-45, and the cases cited therein. Generally, a waiver, either express or implied, is found where the defendant has also moved for dispositive relief before determination of class certification or where the parties have decided to proceed with merits discovery leading to a merits determination before or simultaneously with class action discovery and determination of class certification. Mendez v. Radec Corp, 260 F.R.D. at 46-47. See also Chery v. Conduent Educ. Servs., LLC, 2022 U.S. Dist. LEXIS 10859, at *9-10 (N.D.N.Y, Jan 20, 2022) (finding implied waiver where defendant sought a schedule for the filing of dispositive motions and there was low risk of a large number of opt-outs in the event of a ruling in plaintiff’s favor); Blitzko v. Weltman, Weinberg & Reis Co., LPA, 2019 U.S. Dist. LEXIS 161495, at *32-33 (N.D.N.Y., Sept. 23, 2019); Alig v. Quicken Loans, Inc., 2016 U.S. Dist. LEXIS 195216, at *24-28 (D. W.Va., Aug. 25, 2016); Vu v. Diversified Collection Servs., 293 F.R.D. 343, 351 (E.D.N.Y. 2013). Here, Credit One has not raised the ordinary timing sequence, and indeed the procedural history of this litigation confirms its waiver of it. First, Credit One pursued its Motion to Dismiss and Strike [Adv. Dkt. 7], in which it asserted not only its arbitration-related jurisdictional defenses but also alleged dispositive defenses on the merits. Id. at 28-29. The parties’ Joint Report under Fed. R. Civ. P. 26 [Adv. Dkt. 14] focused on merits discovery, id. at 5-6, and proposed “any motion schedule be stipulated by the Parties with the consent of the Court.” Id. at 7. On February 10, 2016, allegedly after the completion of discovery on the merits, Credit One sought leave under Local Rule 7056-1 to file a motion for summary judgment based on its substantive defenses against Plaintiff. Adv. Dkt. 53. After the Court found that discovery was not in fact complete, Credit One proposed a pre-trial order “consistent with either the parties’ Rule 26(f) report or the proposed scheduling order accompanying this filing.” Adv. Dkt. 56, at 3. The accompanying proposed order contemplated the completion of merits discovery and the filing and consideration of Credit One’s motion for summary judgment on a parallel track with a motion for class certification. Adv. Dkt. 56-3. After considering Plaintiff’s response, which essentially argued that Credit One had continued to fail to comply with its discovery obligations, the Court entered a scheduling order that set a date for the completion of fact discovery, subject to extension “if the Court concluded that a party has not properly responded to discovery demands or for other good cause,” as well as expert discovery, and reserved the parties’ rights to seek to move for summary judgment before or after the filing of a class certification motion. Adv. Dkt. 59. Thereafter, Plaintiff filed the Sanctions Motion. After its bench ruling on the Sanctions Motion, the Court held a conference, attended by replacement counsel for Credit One, regarding the next steps in the litigation. The Court stated, “I have concluded, based on the post-trial briefing, that the appropriate sanction here is a default judgment on the merits, but not with respect to class certification or damages,” November 10, 2016 Transcript of Case Status Conference [Adv. Dkt. 101], at 4, and continued, “That does leave issues remaining in the case, obviously. I don’t believe that — I think the law is clear on this, that the default should [not] extend to the class certification point — and certainly not the damages. I haven’t established damages.¹⁴ So if the class is certified, then that’s it. I mean, I don’t need to hear the merits as to the breach of a discharge. So I think the parties should be focusing on discovery related to the class, and if you want to bifurcate it still, you can, or discovery can also at that point deal with damages.” Id. at 5. Neither party disagreed with this approach, which the parties thereafter followed, including as set forth in the Court’s amended scheduling order. Adv. Dkt. 102. Under the foregoing caselaw, therefore, the Court will follow the sequence previously adopted in this proceeding, starting by explaining its reasons for entering a default judgment against Credit One based on its discovery failures. Although this is not a necessary factor, following this sequence is especially warranted because consideration of the Sanctions Motion was not just a matter of both parties’ choice but was dictated by Credit One’s improper discovery conduct. Anderson’s Right to a Default Judgment Based on Credit One’s Extraordinary Discovery Abuse A. Applicable Standard. Fed. R. Civ. P. 37, incorporated by Fed. R. Bankr. P. 7037, addresses the consequences of the failure to provide required disclosure or discovery. Fed. R. Civ. P. 37(b)(2)(A) establishes the power of the court where the action is pending to award sanctions for not obeying a discovery order, and Fed. R. Civ. P. 37(c)(1) establishes that power for a party’s failure to provide information or identify a witness as required by Fed. R. Civ. P. 26(a) or (e).¹⁵ Rule 37(b)(2)(A) states that [i]f a party or a party’s officer, director, or managing agent — or a witness designated under Rule 30(b)(6) or 31(a)(4) — fails to obey an order to provide or permit discovery, including an order under Rule 26(f), 35, or 37(a), the court where the action is pending may issue further just orders. They may include the following: (i) directing that the matters embraced in the order or other designated facts be taken as established for purposes of the action, as the prevailing party claims; (ii) prohibiting the disobedient party from supporting or opposing designated claims or defenses, or from introducing designated matters in evidence; (iii) striking pleadings in whole or in part; (iv) staying further proceedings until the order is obeyed; (v) dismissing the action or proceeding in whole or in part; (vi) rendering a default judgment against the disobedient party; or (vii) treating as contempt of court the failure to obey any order except an order to submit to a physical or mental examination. Rule 37(c)(1) states that [i]f a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at trial, unless the failure was substantially justified or harmless. In addition to or instead of this sanction, the court, on motion and after giving an opportunity to be heard: (A) may order the payment of the reasonable expenses, including attorney’s fees, caused by the failure; (B) may inform the jury of the party’s failure; and (C) may impose other appropriate sanctions, including any of the orders listed in Rule 37(b)(2)(A)(i)-(vi). Rule 37′s sanctions serve three purposes: “[f]irst, they ensure that a party will not benefit from its own failure to comply. Second, they are specific deterrents and seek to obtain compliance with the particular order issued. Third, they are intended to serve a general deterrent effect on the case at hand and on other litigation, provided that the party against whom they are imposed is at some sense at fault.” Roberts v. Bennaceur, 658 Fed. Appx. 611, 614 (2d Cir. 2016), quoting S. New Engl. Tel. Co. v. Global NAPs Inc., 624 F.3d 123, 144 (2d Cir. 2010). See also NHL v. Metro. Hockey Club, 427 U.S. 639, 643 (1976); Gregory P. Joseph, 1 Sanc. Fed. Law of Lit. Abuse §47 (2022) (“Rule 37 authorizes the Court to sanction certain types of discovery abuses for the purpose of (1) penalizing the culpable party or attorney; (2) deterring others from engaging in similar conduct; (3) compensating the court¹⁶ and other parties for the expense caused by the abusive conduct; and (4) compelling discovery.”). The trial court has “wide discretion” in imposing sanctions under Rule 37,” Ayinola v. Lajaunie, 855 Fed. Appx. 30, 32 (2d Cir. 2021); Shcherbakovskiy v. Da Capo Al Fine, Ltd., 490 F.3d 130, 135 (2d Cir. 2007), but that discretion is limited in three ways. First, sanctions can be imposed under Fed. R. Civ. P. 37(b)(2)(A) only when a party fails to obey an order to provide or permit discovery.¹⁷ Daval Steel Prods. v. M/V Fakredine, 951 F.2d 1357, 1363 (2d Cir. 1991). However, “The language of Rule 37(b)(2) requires a prior order but does not by its terms require an order issued pursuant to Rule 37(a),” and the order need not have been in writing; it just needs to be clear and to have been breached. Id.; see also Dreith v. Nu Image, Inc., 648 F.3d 779, 787 (9th Cir. 2011); Penthouse Int’l, Ltd. v. Playboy Ent., Inc., 663 F.2d 371, 388 (2d Cir. 1981) (“The fact that the March 22 order was oral rather than written, and that it was not issued on a formal Rule 37(a) motion, does not deprive it of any of its binding force and effect.”); Pavarini McGovern, LLC v. Waterscape Resort LLC (In re Waterscape Resort LLC), 2015 Bankr. LEXIS 183, at *36-37 (Bankr. S.D.N.Y., Jan. 21, 2015); 1 Sanc. Fed. Law of Lit. Abuse at §48. Second, to satisfy due process, the sanction must be “just,” consistent with the plain language of Rule 37(b). Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 707 (1982) (noting that “[a] proper application of [Rule 37(b)] will, as a matter of law,” be presumed to comply with due process); Linde v. Arab Bank, PLC, 706 F.3d 92, 115 (2d Cir. 2013); Daval Steel Prods. v. M/V Fakredene, 951 F.2d at 1366 (“[T]he Supreme Court [in Insurance Corp. of Ireland] has indicated that in determining whether a sanction is ‘just’ the record should be reviewed to ascertain whether the district court abused its discretion.”). As noted above, the trial court’s discretion in imposing “just” sanctions under Rule 37(b) is wide. Emamian v. Rockefeller Univ., 823 Fed. Appx. 40, 44-45 (2d Cir. 2020) (“A district court has wide discretion in imposing sanctions, including severe sanctions, under Rule 37(b)(2).…In reviewing the exercise of discretion, we afford considerable deference to the district court’s familiarity with the proceedings.”) (internal quotations and citations omitted); Funk v. Belneftekhim, 861 F.3d 354, 365 (2d Cir. 2017) (“We accord deferential review to a district court’s imposition of Rule 37 discovery sanctions, and we will reverse only for abuse of discretion, which we will not identify absent an error of law, a clearly erroneous finding of fact, or a decision that cannot be located within the range of permissible options available to the district court.”); S. New Engl. Tel. Co., 624 F.3d at 144. In evaluating the exercise of such discretion, courts generally consider the following: “(1) the willfulness of the non-compliant party or the reason for the noncompliance; (2) the efficacy of lesser sanctions; (3) the duration of the period of noncompliance; and (4) whether the non-compliant party had been warned of the consequences of noncompliance.” Funk v. Belneftekhim, 861 F.3d at 366; World Wide Polymers, Inc. v. Shinkong Synthetic Fibers Corp., 694 F.3d 155, 159 (2d Cir. 2012). However, “these factors are not exclusive, and they need not each be resolved against the party challenging the district court’s sanctions for us to conclude that those sanctions were within the court’s discretion.” SEC v. Razmilovic, 738 F.3d 14, 25 (2d Cir. 2013); World Wide Polymers, Inc., 694 F.3d at 159. The imposition of a default judgment sanction, or a sanction that on its face is lesser but would have much the same effect as a default, is generally limited to “extreme situations, as when a court finds willfulness, bad faith or any fault on the part of the noncompliant party,” Guggenheim Capital, LLC v. Birnbaum, 722 F.3d 444, 450-51 (2d Cir. 2013). Also, such sanctions should be imposed “usually after consideration of alternative, less drastic sanctions,” World Wide Polymers, Inc., 694 F.3d at 159 (internal quotation and citation omitted); John B. Hull, Inc. v. Waterbury Pet. Prods., Inc., 845 F.2d 1172, 1176-77 (2d Cir. 1988). However, consideration of lesser sanctions also is one of the general factors to apply under Rule 37(b)(2), and, even in connection with the imposition of a default judgment, each of those factors, with the exception of the need to find willfulness, bad faith, or fault on the part of the noncompliant party, need not be resolved against the party challenging the sanction, Roberts v. Bennaceur, 658 Fed. Appx. 611, 613-14, especially if the noncompliant party’s conduct is truly egregious. Id. at 614-15; see also S. New Engl. Tel. Co., 624 F.3d at 148 (“[D]istrict courts are not required to exhaust possible lesser sanctions before imposing dismissal or default if such a sanction is appropriate on the overall record.”); 1 Sanc. Fed. Law of Lit. Abuse at §49. Thus at some point, assuming the requisite willful, bad faith, or otherwise egregious conduct is established, speculation as to whether an effective lesser sanction could be identified is unavailing. See Sieck v. Russo, 869 F.2d 131, 134 (2d Cir. 1989): Defendants now complain that the district court abused its discretion because softer sanctions than a default judgment were available. This argument fails to take into account that when soft sanctions were imposed, the defendants continued to defy the court. In effect the defendants’ argument is that somewhere between the imposition of a $2,000 fine and the entry of a $1 million default there exists a sanction that would have convinced them to appear for deposition. Apparently, defendants perceive that the function of a reviewing court is to search, like Goldilocks, for a sanction that is not too hard, not too soft, but one that is just right. We, however, prefer to play the other role in that story, and provide the teeth to enforce discovery orders by leaving it to the district court to determine which sanction from the available range is appropriate. See also Cine Forty-Second Street Theatre Corp. v. Allied Artists Pictures Corp., 602 F.2d 1062, 1068 (2d Cir. 1979) (“[W]here counsel clearly should have understood his duty to the court the full range of sanctions may be marshalled.”); Abreu v. City of N.Y., 208 F.R.D. 526, 530-31 (S.D.N.Y. 2002) (explaining that the “availability of lesser sanctions” analysis is relative to Rule 37′s three goals: “Considering the full record before it, it is this Court’s opinion that none of the lesser sanctions are likely to serve Rule 37′s three goals.”). “Non-compliance may be deemed willful when the court’s orders have been clear, when the party has understood them, and when the party’s non-compliance is not due to factors beyond the party’s control. In addition, a party’s persistent refusal to comply with a discovery order presents sufficient evidence of willfulness, bad faith or fault.” Id. at 530 (internal quotations and citations omitted.). See also Joint Stock Co. Channel One Russ. Worldwide v. Infomir LLC, 2019 U.S. Dist. LEXIS 166373, at *93 (S.D.N.Y., Sept. 26, 2019), aff’d, 2020 U.S. Dist. LEXIS 63099 (S.D.N.Y., Mar. 26, 2020). The key inquiry into willfulness, bad faith, or fault may take into account, moreover, the overall context, including the sophistication of, and prior or repeated misconduct by, the noncompliant party, even if some of that misconduct was not directly in breach of an order. Id., 2019 U.S. Dist. LEXIS 166373, at *62 (“the district court is free to consider the full record in the case in order to select the appropriate sanction”) (quoting S. New Engl. Tel. Co., 624 F.3d at 144); 1 Sanc. Fed. Law of Lit. Abuse, at §49; see also Ayinola v. Lajaunie, 855 Fed. Appx. at 33 (sanction of a default judgment not warranted because it was not apparent from the entire record that non-compliance was willful or the result of bad faith: noncompliance with the only deadline defendant failed to meet was for less than two months; further, defendant tried to comply but faced administrative challenges including a strained relationship with counsel who ultimately resigned leaving defendant to complete discovery); City Merch., Inc. v. Tian Tian Trading, Inc., 2022 U.S. Dist. LEXIS 34618, at *12-13 (S.D.N.Y. Feb. 28, 2022) (although pro se litigants, like all litigants, have an obligation not to flout court orders, “discretion typically leads Courts to afford pro se litigants at least more than one warning before imposing sanctions”). Especially when considering a severe sanction, courts also consider prejudice to the moving party, Medina v. Gonzalez, 2010 U.S. Dist. LEXIS 101601, at *47 (S.D.N.Y.,, Sept. 23, 2010),¹⁸ and the client’s, as opposed to its counsel’s, complicity. Metro Opera Ass’n v. Local 100, Hotel, Emples. & Rest. Emples Int’l Union 212 F.R.D. 178, 227-28 (S.D.N.Y. 2003), mot. for reconsideration den., 2004 U.S. Dist. LEXIS 17032 (S.D.N.Y. Aug. 27, 2004); Medina v. Gonzalez, 2010 U.S. Dist. LEXIS 101601, at *47.¹⁹ Third, and last, to satisfy due process, a Rule 37 sanction “must be specifically related to the particular ‘claim’ which was at issue in the order to provide discovery.” Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. at 707; S. New Engl. Tel. Co. v. Global NAPs Inc., 624 F.3d at 147. B. Credit One’s Conduct of Discovery. As noted above, although courts and commentators recognize that the refusal to correct a credit report by a reporting entity to reflect a bankruptcy discharge may be proscribed under section 524 of the Bankruptcy Code, most courts require something more than simply showing the existence of an inaccurate report before they award sanctions. A reporting entity’s systematic refusal in the face of a debtor’s repeated requests to correct the report may be enough evidence of pressure to pay the debt (as the only way to get it off the report). See In re Van Pelt, 599 B.R. 1, 6-7 (Bankr. E.D. Ky. 2019); Russell v. Chase Bank USA, NA (In re Russell), 378 B.R. 735, 743 (Bankr. E.D.N.Y. 2007). Or a refusal coupled with a motive to do so, either expressed (“we won’t change the report unless you pay”) or implied (such as the retention of an interest in the debt after its sale to another entity, or evidence that the creditor’s policy not to correct enhances its ability to sell the debt) may suffice. See generally In re Minech, 632 B.R. at 283-84: [T]o cast the otherwise innately ambiguous act of credit reporting as something more coercive requires evidence to objectively connect it to collection activity. Although not required, other collection activity helps to place the credit report in context. Similarly, a refusal to change a knowingly inaccurate report may suggest that the creditor is seeking to collect a debt. Beyond these situations, ‘[i]t is largely a matter of the court knowing [pressure] when it smells it.’ (Internal citations omitted.) In response to the claim that its systematic refusal, even after the commencement of this adversary proceeding, violated the bankruptcy discharge, Credit One asserted several defenses in addition to its arbitration-based arguments: (1) Plaintiff’s claim was time-barred in whole or in part, (2) reporting that the claim is “charged off” is synonymous with reporting that the obligor owes nothing on the account, (3) because Credit One sold the debt before the obligor’s discharge, reporting the debt as “charged off” was in any event accurate when it was reported, pre-sale, and Credit One had no obligation to update the report, (4) because Credit One had no ongoing relationship with the debt after its sale, including no agency relationship with the purchaser, Credit One had no motive to enforce the debt by refusing to correct the credit report even if it had the obligation to do so, (5) under the circumstances, Credit One’s refusal to correct reports was not an act to collect the debt, and (6) in any event, Anderson lacked standing, including to request class treatment (although it is not clear whether this argument was based on the arbitration provisions of Anderson’s credit card agreement or on the argument that he was not harmed by Credit One’s refusal to update credit reports to reflect the discharge).²⁰ By Order dated May 14, 2015 [Adv. Dkt. 15], the Court denied Credit One’s Motion to Dismiss and Strike on the first and second defenses listed above, as well as on its arbitration-based defenses.²¹ The last defense is discussed later in this Memorandum of Decision’s section on the Class Certification Motion. The third through fifth defenses noted above clearly raised the need for discovery, being fact-based. As discussed below, Credit One consistently thwarted such discovery on those issues — including in the face of the Court’s orders directing it to provide such discovery — and thus a sanction for such prolonged and willful noncompliance is “specifically related to the particular ‘claim’ at issue in the order to provide discovery” for purposes of the first and third requirements for imposing Rule 37 sanctions discussed above. Early in this adversary proceeding, both the Plaintiff and the United States Trustee (the branch of the Department of Justice responsible for protecting the integrity of the bankruptcy system, including as to conduct that might violate the bankruptcy discharge), had the understanding that most, and perhaps all, of Credit One’s debt sales were to one or more of its affiliates. This was in fact borne out by later testimony²² and admissions, although the degree of Credit One’s ties to such entities²³ with respect to the sale, servicing, and credit reporting of the consumer accounts at issue remained unclear — one could say was obfuscated — because of contradictory statements by Credit One and failures by it and its affiliates during discovery. When Plaintiff deposed Credit One’s 30(b)(6) witness, Plaintiff was told that Credit One remained the servicer of the sold debt at least for some unspecified period (and that it, not the purchaser, remained on the tradeline),²⁴ while counsel for the affiliated purchasers disclaimed their own responsibility for credit reporting.²⁵ This raised the possibility of the following maze for consumers in response to Credit One’s “no responsibility to update” argument: Credit One is listed on the obligor’s tradeline, while affiliated purchasers (who apparently disclaimed any credit reporting responsibility) are not, but Credit One was no longer the owner of the debt, so, conveniently for Credit One and the Sherman Entity purchasers, no one in the Sherman Entity family took the post-sale, postdischarge responsibility to correct the credit report to reflect the discharge. That most purchasers of the debt, either primary or secondary, were Sherman Entities affiliated with Credit One, and may have worked closely with Credit One on the sales and servicing of the debt, made testing that logic even more important in the context of this proceeding: the entire organization could benefit from the pressure the foregoing reporting, or non-reporting, construct placed on the obligors. The United States Trustee and Plaintiff sought discovery of those relationships, including the underlying buy/sell documents, whether and how Credit One retained any remaining agency or economic interest or credit reporting role after its sale of the debt, the degree of affiliation between buyer and seller, as well as any policies or procedures of Credit One or communications between it and its debt buyers, including its affiliates, and/or credit reporting agencies pertaining to credit reporting of discharged debt — all of which would illuminate the strength or weakness of Credit One’s third through fifth defenses discussed above. Indeed, such discovery also could shed light on the meaningfulness of Credit One’s “charge off” of the debt: a systematic policy of transferring distressed debt, especially to an affiliate, at least suggests that the owners of Credit One and its affiliated transferee(s) may have believed the debt to be collectible notwithstanding Credit One’s accounting write off, at least opening the door to the temptation to improperly pressure obligors to pay by refusing to correct their credit reports after they received a bankruptcy discharge.              The United States Trustee sought such discovery under Bankruptcy Rule 2004, which request was granted by an order dated February 5, 2015 [Main Case Dkt. 33] (the “Rule 2004 Order”); the Plaintiff did so under Fed. R. Bankr. P. 7026, 7030, and 7034 incorporating Fed. R. Civ. P. 26, 30 and 34. This should not have been an onerous process. Credit One is a sophisticated, regulated financial institution.²⁶ There has never been a credible suggestion that it does not understand how discovery under the Federal Rules works or that it lacked the administrative ability to produce documents, including electronically stored information, responsive to the foregoing types of requests. Counsel for Credit One and the Plaintiff indeed agreed early in this proceeding on a Rule 26(f) Joint Status Report, dated April 30, 2015 [Adv. Dkt. 14] providing for the completion of fact discovery by December 31, 2015, a deadline consistent with those in the similar proceedings brought against other credit card companies by counsel for the Plaintiff. Nevertheless, it was clear from Credit One’s initial responses to the Rule 2004 Order and Plaintiff’s attempt to take discovery that it aimed to delay and thwart such requests. See letter of Greg M. Zipes from the Office of the United States Trustee, dated April 28, 2015, requesting a discovery conference on Credit One’s response to the Rule 2004 Order [Main Case Dkt. 36]; Credit One’s Motion for Protective Order, dated May 29, 2015 [Adv. Dkt. 23]; and the letter from counsel for Plaintiff to the Court, dated May 29, 2015 [Adv. Dkt. 24], regarding Credit One’s refusal to participate in discovery. The Court addressed Credit One’s noncompliance with the Rule 2004 Order at the May 5, 2015 hearing. 5/5/2015 Tr. [Adv. Dkt. 16] at 13-34. The United States Trustee complained that Credit One (a) was not providing any internal communications, including emails, responsive to the Rule 2004 Order, id. at 16-17, and (b) took the position that the requested documents would be limited to those specifically referencing Anderson’s account only. Id. at 21-23. On the former point, the Court made it clear that Credit One would have to provide such internal communications, id. at 17 and 30, to the extent it could locate them, and that it would not be excused from locating them based on its views of the merits of the inquiry, as Credit One’s counsel had argued. Id. at 22-23. The Court found Credit One’s narrowing of the request to documents referencing only Anderson’s account to be “just ridiculous,” id. at 24, and when its counsel pressed the argument the Court pointed out that when a subpoena seeks documents pertaining to the parties’ “respective rights and responsibilities in connection with an account” it is obvious that a bank would not have individual memos, emails or policies limited to specific accounts, but, instead, would generate policies covering accounts in general and discuss them in general. Id. When counsel for Credit One still pressed the point, the Court ended the discussion by stating, “If you’re going to make this argument, I will entertain a motion for sanctions. This is the stupidest argument I’ve heard in a long time.…I mean, that really is putting blinders on. And if that’s how you’re approaching this discovery, you’d better stop. You’re smarter than that, I know it,” to which Credit One’s counsel responded, “I appreciate that, Your Honor, and I will endeavor to satisfy the Court’s concerns.” Id. at 25. Despite that pointed colloquy, three weeks later Plaintiff’s counsel filed a letter [Adv. Dkt. No. 24] stating that Credit One was refusing to provide discovery because of its pending motion for a stay pending appeal of the Court’s order denying the Motion to Dismiss and Strike — in essence awarding itself a discovery stay pending appeal before the Court determined its motion for a stay — and on the same day Credit One filed a motion for a protective order [Dkt. No. 23] in which, in addition to making the argument that no discovery should proceed pending the Court’s determination of its motion for a stay pending appeal, Credit One contended that it should not have to provide discovery that was “irrelevant” based on (a) its arbitration arguments, (b) its argument that most, and perhaps all, of Plaintiff’s claims were time-barred, (c) its argument that a report of “charged off, zero balance” allegedly “reflect[s] the fact that the consumer is no longer liable for the discharged debt,” and (d) its argument that in any event it sold the debt at issue before the discharge, the first three points having been denied by the Court’s ruling on Credit One’s Motion to Dismiss and Strike and the last clearly a fair subject for discovery. The Court held a hearing on Credit One’s Motion for a Protective Order on June 15, 2015, at which it told Credit One’s counsel that it was improper for Credit One to refuse to provide discovery based on arguments that the Court had already denied in its ruling on Credit One’s Motion to Dismiss and Strike, or to ignore the current posture of the proceeding. 6/15/15 Tr. at 42-45 [Dkt. 34]. This led to the following ruling: “The Court: ‘There will be no — no, let me be absolutely clear on this. This is in capital letters, N-O, withholding of documents on the basis of a position that’s contrary to any ruling I have given in this case that permits this case to go forward. You are on notice right now that if you do that, you’ll be subject to Rule 11.” Id. at 45-46. The Court went on to warn Credit One’s counsel that “Credit One’s practices and policies dealing with the sale of debt that’s subsequently discharged and credit reporting are front and center in this discovery,” that Credit One’s objection to the production of “Communications with buyers of consumer debt regarding your” and the buyer’s “practices reporting bankruptcy discharges to credit reporting agencies,” as “irrelevant” made the Court “extremely skeptical of how Credit One intends to engage in discovery in this case,” and that if the Court hears “that you’re not producing documents on these grounds or not identifying people with knowledge on it, it will not be pleasant.” Id. at 46-47. Nonetheless, Plaintiff asserted that Credit One continued to resist discovery on such grounds, as detailed in exchanges of letters between Plaintiff’s counsel and Credit One’s counsel on September 11, September 18, September 28, and October 1, 2015, copies of which are attached to a November 25, 2015 letter from Credit One’s counsel to the Court [Adv. Dkt. 41], responding to a November 18, 2015 letter from Plaintiff’s counsel requesting another discovery conference. Adv. Dkt. 39. Importantly, in his November 25, 2015 letter, counsel for Credit One made an additional argument in response to Plaintiff’s request for responsive document production, stating, “[T]here are no ‘withheld’ documents or other documents the Court could order Credit One to produce,” Adv. Dkt. 41 at 2-3, and “In response [to Plaintiff's inquiry re: additional responsive documents] Credit One advised that it has no additional responsive documents to any of these documents requests. In sum, Credit One cannot be compelled to create documents it does not have, or produce documents it does not possess.” Id. at 10.²⁷ The Court held a discovery conference in response to these letters on December 9, 2015. Plaintiff’s counsel summarized the few documents produced to date by Credit One and then stated “Now, we have no emails. We have no emails with relation to goodbye letters.²⁸ We have no emails relating to this policy. We have no notes. We have no minutes. We have no correspondence. I mean, there’s no paper trail of any kind relating to the issue in this case,…which is [Credit One's] policy with regard to [its] refusal to change credit reports or update credit reports when someone’s debt has been discharged in bankruptcy.” 12/9/2015 Tr. at 10 [Adv. Dkt. 45]. In response, the Court stated, “[I]t’s always conceivable they don’t have any [documents], id. at 11, to which Plaintiff’s counsel stated, “If they’re going to make representation to the Court that no such documents exist and no such documents did exist or have been destroyed, then we’ll go to depositions and we’ll probe that.” Id. The Court then had the following colloquy with Credit One’s counsel: “The Court: ‘Is there any other responsive — ‘ “Mr. Slodov: ‘There’s no other documents.’ “The Court: ‘There’s no other responsive documents?’ “Mr. Slodov: ‘That’s what I’ve been told, Your Honor.’ “The Court: ‘No, no. I want that under oath from the person responding to the production. That needs to be — it’s implicit, but I think I need it.’ “Mr. Slodov: ‘Well, then if — ‘ “The Court: ‘Okay. And, of course, obviously if there is any later introduction of any sort of policy, then there will be hell to pay. So that just needs to be done.…It’s implicit in every document production that it’s completely responsive. All right? But from your answer to me, I got the impression that you thought it wasn’t, so I want it under oath that I have diligently pursued with my client and they are prepared and they will state under oath that they have no responsive documents.’ “Mr. Slodov: ‘You want me to sign the declaration — ‘ “The Court: ‘No, no, no. I want you to get that from them.’ “Mr. Slodov: ‘Okay.’” Id. at 13-14. Because Credit One was still reading Plaintiff’s discovery requests too narrowly, or refusing them based on arguments that it had either lost or that were inconsistent with the posture of the proceeding, the Court also made it clear that the foregoing statement would not be limited by some reformulation of Plaintiff’s discovery requests by Credit One or Credit One’s unilateral view of the merits of the underlying dispute: “The Court: ‘[Y]ou are not allowed to pick and choose what you think the issues are. That’s for a motion to dismiss or a summary judgment. Discovery is different.’ “Mr. Slodov: ‘That’s not what I’m saying, Your Honor.’ “The Court: ‘Well it was very clearly what you were saying, and I’ve had enough.…[Y]ou’ve heard it twice now. If you do this one more time, if you pick and choose what you are free to respond to on discovery based on your sense of what the merits are, I will rule against your company.…Are we clear?’ “Mr. Slodov: ‘Yes, Your Honor.’…”The Court: ‘I don’t want to hear onetenth of a second of your saying that’s not the issue in this case. I know what the issue is in this case, and so do you, and you will respond and you’ll do it through your client under oath, and if they don’t have the documents, fine, we’ll move on. If it turns out they did, there will be hell to pay. All right?’” Id. at 15-17. The matter concluded as follows: “The Court: ‘And one reason I’m being a stickler on this is because of the way you have cavalierly treated this process already.’ “Mr. Slodov: ‘And — ‘ “The Court: ‘And I don’t say that lightly.’ “Mr. Slodov. ‘Okay.’ “The Court: ‘So get your act together, check the documents, make sure you haven’t given your clients a free pass on what they can produce and not produce and produce it or risk sanctions or provide a declaration under oath.’” Id. at 17-18. On January 18, 2016, Credit One submitted a verification under penalty of perjury by its Senior Vice President of Risk and Rule 30(b)(6) witness, Helen Lanham. Adv. Dkt. 78-14, Ex. K. The verification stated, A. To the best of my information, knowledge, and belief, Credit One Bank N.A.’s responses to Plaintiff Orin Anderson’s first request for production of documents are true and correct. B. The documents included among the 2,203 pages of materials produced are the only documents responsive to the requests that have been located. C. I am not aware of any other responsive documents in the possession, custody, or control of Credit One Bank N.A., which have not been produced. Id. 2. Later, having reviewed Credit One’s request for leave under Local Bankruptcy Rule 7056-1 to move for summary judgment, the Court responded by asking whether discovery was complete. Credit One’s counsel replied in a letter to the Court dated February 11, 2016 [Adv. Dkt. 54 at 2-3], stating, “[T]o the extent Plaintiff opposes summary judgment on the grounds that additional discovery is needed, Plaintiff’s remedy is to make that showing under Fed. R. Civ. P. 56(d),” clearly implying that, as far as Credit One was concerned, its responses to Plaintiff’s discovery demands were complete and putting the onus on Plaintiff to show otherwise.²⁹ Counsel for Plaintiff responded to this letter in a letter to the Court also dated February 11, 2016 [Adv. Dkt. 54], stating, “discovery has just begun and…Credit One has not provided discovery about its practices and policies concerning credit reporting after bankruptcy or treatment of its sold and charged off accounts.” The Court therefore addressed the status of discovery at a conference on February 22, 2016, at which counsel for Credit One stated, “And I think it’s disingenuous for the [P]laintiff’s counsel to say that they’ve gotten next to nothing from Credit One. Credit One has produced what it has.” 2/22/2016 Tr. at 16. Credit One’s counsel then reminded the Court of Ms. Lanham’s prior verification and offered, “If they want us to go ahead and catalog the efforts that were undertaken to identify responsive documents that were in the request for production of documents, if that’s what the Court wants us to do, we can go ahead and do that.…But the end result is, you know, that Credit One doesn’t have further documents to provide.” Id. at 16-17. The Court took counsel up on his proposal: “Well, I think what you suggested is warranted, particularly given the verification that you provided, as to basically what was actually — what were the instructions to Credit One to locate.” Id.³⁰ A month later, Ms. Lanham, Credit One’s Rule 30(b)(6) witness, executed Credit One Bank, N.A.’s Amended Verification, dated March 22, 2016. Adv. Dkt. 76-1, Ex. 1. After referencing her first verification, id. 2, she stated under penalty of perjury that she made the supplemental verification to “provide a step by step description of where documents were looked for and what documents were looked for.” Id. 3. She listed four places where Credit One maintains data regarding customers’ credit card accounts, policies, emails, and records of charged off accounts: its Credit Account System or “CAS;” its Microsoft Office Sharepoint Workspace Program; its Microsoft Outlook email server; and its First Data Resources, or “FDR” program for all R1 charged off accounts, id.

8-11, as well as its use of OpenText Case 360 as a searchable document management system. Id. 12. She stated that “Upon information, inhouse counsel directly handled this document request, and therefore directed Credit One’s efforts to identify responsive documents and locate responsive documents.” Id. 13. Further, Ms. Lanham stated, “Upon information, responsive documents were provided to in-house counsel by [supervisory] staff after performing a search of the CAS system, the Sharepoint Workspace program, R1 system, and the email server system to locate responsive documents.” Id. 17. Ms. Lanham’s Amended Verification noted that additional in-house searches for documents later turned up more responsive documents in a separate system, id. 22, and noted additional documents retrieved from the previously identified systems, id. 23, all of which had recently been provided to Plaintiff. She did not repeat Credit One’s counsel’s and her own prior representations to the Court that Credit One’s discovery responses were complete, but because it was an Amended Verification, the clear implication was that the responses were complete. After depositions in which Credit One employees stated that their documents had not been searched³¹ and identified documents that had not been produced or listed on the privilege log,³² and Credit One still not having produced types of documents that might well be expected to have been created and in its possession or control,³³ Plaintiff’s counsel concluded that such representations were, in fact, false. Plaintiff also formed the view that Credit One and its Sherman Entity affiliates were continuing to stonewall on discovery regarding their respective relationships vis-à-vis the debt at issue and credit reporting responsibilities. Accordingly, on July 11, 2016 [Adv. Dkt. 74] Plaintiff requested another discovery conference, to which Credit One’s counsel replied in a letter to the Court dated July 18, 2016 [Dkt. 76], stating, among other things, “Credit One has produced all documents responsive to Plaintiff’s July 2015 document requests.” Id. at 8. On August 8, 2016, Plaintiff filed the Sanctions Motion under Fed. R. Civ. P. 37. Adv. Dkt. 78. In its objection, dated August 31, 2016 [Adv. Dkt. 85] to the Sanctions Motion, Credit One again stated, this time in all caps and bold print, “CREDIT ONE HAS PRODUCED ALL RESPONSIVE DOCUMENTS,” id. at 32, as well as represented, “Credit One complied with the Court’s prior oral directives to verify the completeness and steps taken to locate documents responsive to Plaintiff’s document requests,” id. at 2, and “Credit One has complied with its obligations to provide documents responsive to Plaintiff’s document request.” Id. at 14. Its objection at least suggested otherwise, however, as it reverted again to Credit One’s practice of arguing the merits of its defenses, including those already rejected by the Court, and its own version of the facts, id. at 3 (stating, “having sold [Platintiff's] charged off account two years prior to his bankruptcy filing…Credit One was not [Plaintiff's] creditor at the time of his bankruptcy filing in January 2014, and had no duty to investigate, update, correct or change its…credit reporting post-discharge”), 39-40 (stating “The Credit One policy manual answers the central issues in this case”), 27 (stating, contrary to Ms. Lanham’s and Ms. Emmerich’s deposition testimony regarding Resurgent’s role in providing notice to Credit One of the accounts of obligors in bankruptcy³⁴ and its own Privacy Policy & Online Policy Statement,³⁵ that “there is no evidence to support a finding that Credit One has the practical ability to obtain documents on demand in the ordinary course of business from…Resurgent”), and 65 (stating “The fact that Vicki Scott, Lisa Cooper-Tippett or George Hughes testified that they were not personally asked to search for responsive documents, does not mean that Credit One did not search for responsive documents”). The September 22, 2016 hearing on Plaintiff’s sanctions motion was one of the most extraordinary that I have held during 20 years on the bench. After Plaintiff’s counsel summarized the history of the parties’ discovery disputes, the Court asked Credit One’s counsel, Michael Slodov, “Are you…saying…that, in fact, Credit One did produce all of the documents responsive to the request?” 9/22/16 Tr. [Adv. Dkt. 89] at 15. After Mr. Slodov temporized and the Court repeated, “Are you taking the position that we did produce all of those documents?” Mr. Slodov replied, “With respect to each document request, yes, Your Honor, we did fully respond with —.” Id. at 15-16. After the Court probed whether Credit One’s discovery response was preceded by “actually going and looking at all the sources, email files, et cetera, and responding with any documents that might be responsive?” Mr. Slodov equivocated, which led to a lengthy colloquy regarding an argument raised by Credit One for the first time, other than in initial boilerplate objections to each discovery request, that doing so would be unduly burdensome, id. at 16-19, which ended, after the Court focused on a specific type of request for customer’s complaints to Credit One about credit reporting, in Mr. Slodov’s admission that “I don’t believe that they did or have not yet done a search of that system for [such documents].” Id. at 19. The Court then turned to Credit One’s responses, or lack thereof, regarding its relationships with Resurgent “whereby Resurgent acts in various ways to provide Credit One with information relating to bankruptcies.” Id. Again Mr. Slodov temporized, referring to “recovery manuals” as if those were the only responsive documents. Id. at 20-21. When the Court probed, with a considerable degree of skepticism, whether there was any record of this relationship regarding the types of accounts at issue besides the manuals, Mr. Slodov responded, “I can say that I haven’t been provided it, and I know that won’t satisfy you. So I can go back and ask again.” Id. at 24-25. When the Court probed further as to the lack of records beyond the manuals and stated its frustration with Mr. Slodov’s again trying to justify non-production by suggesting, despite the Court’s prior ruling and warning, that the document request was limited to Plaintiff’s own account, Mr. Slodov stated, “I’m using that as a way of explaining and trying to get you to understand what it is that — it may be a shortcoming in their system, you know, because it seems logical to you and me that if a file came in from Resurgent, they should have a record that [Plaintiff's] or anybody’s bankruptcy was on the list. But they’re not recording that in their system…[and] [t]here’s no contract [between Credit One and Resurgent].” Id. at 26-27. Mr. Slodov then offered that “The information that is shared [between Credit One and Sherman Entities], as I understand it, relates to accounts that are sold,” id. at 28, apparently to excuse there being no responsive documents, emails, etc. on the basis that such sharing was not important to Credit One and the Sherman Entities. The Court replied, “What else is involved in their relationship beyond that? You’re saying that as if that’s, you know, a minor thing. But what else do they do together?” to which Mr. Slodov eventually replied after the Court repeated “What other business do they have other than dealing with the accounts?” “As far as I know Your Honor, none.” Id. Mr. Slodov then tried to steer the inquiry away from the production of documents by reciting his version of the facts regarding the relationships of Credit One and other Sherman Entities regarding the accounts, their servicing, and credit reporting. Id. at 29-39. The Court steered the discussion back to what records were available to Credit One regarding those asserted relationships, id. at 40-41, to which Mr. Slodov responded by saying that at least as to customer complaints regarding credit reporting, they were not available or would require searching. Id. at 42. Plaintiff’s counsel took issue with much of Mr. Slodov’s factual recitation and expressed great skepticism regarding the failure to produce documents beyond manuals, and the parties again discussed Credit One’s belated “burdensomeness” response. The discussion concluded with Mr. Slodov stating, “I go through the document requests and to the extent that there are requests for searches of documents that concern bankruptcy discharge, post-discharge, you know, it’s tantamount to asking the Court to verify that there are no cats at the courthouse.” Id.at 51. The Court again steered the discussion to the production, or not, of responsive documents: “What sort of instruction…was given to Credit One’s personnel about emails and disclosure?” Id. at 53. Then — THEN — the following colloquy occurred: “Mr. Slodov: ‘My understanding, Your Honor, after going through the — ‘ “The Court: ‘Didn’t you do it? Who did it?’ “Mr. Slodov: ‘My understanding, Your Honor, after going through the process of securing the amended verification, [is] that Credit One did not do any email searches.’ “The Court: ‘None.’ “Mr. Slodov: ‘None.’ “The Court: ‘No email searches.’ “Mr. Slodov: ‘None.’ “The Court: ‘Even though the amended verification says — refers to email, the central email?’ “Mr. Slodov: ‘It refers to it, but it doesn’t say it was searched.’ “The Court: ‘Well, I’m glad we’re hearing that now two hours into this hearing. I’m astonished. What’s the reason for that?’ “Mr. Slodov: ‘It had to do with in-house counsel, who is no longer at Credit One Bank, who dropped the ball on that.’ “The Court: ‘And when did you learn this?’ “Mr. Slodov: ‘It would have been in March.’ “The Court: ‘In March?’ “Mr. Slodov: ‘Yep.’ “The Court: ‘And I just learned of it now.…So if I hadn’t pressed you for the last 10 minutes, would you have told me?’ “Mr. Slodov: ‘Yes, Your Honor.’ “The Court: ‘Oh, really?’ “Mr. Slodov: ‘Yes, Your Honor.’ “The Court: ‘It’s not in the 129-page brief [sic; the brief was 133 pages] you filed, even though this argument has been front and center not only in the motion, but in chambers conferences, discovery conferences, and the like.” Id. at 53-54. After Mr. Slodov offered, “We are willing to work with [P]laintiff’s counsel on protocols for email searches,” the Court stated, “I just don’t believe it anymore.” Id. at 55. And indeed the Court had, and has, no confidence that Credit One, even with new and reputable counsel (who soon after this September 22, 2016 hearing replaced Mr. Slodov and his firm, Sessions, Fishman, Nathan & Israel, LLC) would ever comply with its discovery obligations. Another remarkable aspect of the September 22, 2016 hearing helped confirm that view, although additional confirmation was not really necessary. Mr. Slodov offered up an email dated May 29, 2015, which had not previously been produced to Plaintiff, from the Sherman Entities’ Jon Mazzoli, identified as “an important person in this overall organization,” id. at 57-58, copied to Mr. Slodov as well as to in-house counsel and other officers or employees of Credit One. Id. at 66-68, 69, 81. The email contained Mr. Mazzoli’s own analysis of the issues in this proceeding, his acknowledgment that there might well be responsive emails, and his cavalier conclusion that there should not be further searches and that he instead would simply send along certain letter agreements on third-party sales. Id. at 67-70. Apparently Mr. Slodov offered this to the Court to shift some of the blame for Credit One’s non-production off himself, id. at 57-58, to which the Court responded “[A]t some point you can’t just put on blinders.…So, to say this is all I got — but, you know, even if what you yourself did, Mr. Slodov, is somehow not an utter failure, the clients also failed. So, I mean, why should I trust them now?” Id. at 58. The Court had a similar reaction to Mr. Slodov’s bizarre attempt to place blame on Ms. Lanham, which only had the effect of placing blame on them both. Mr. Slodov represented that the failure came to light as part of part of her certification process and that “Ms. Lanham’s [certification] was intended to address the email issue.” Id. at 59. The following colloquy ensued: “The Court: ‘It was? How?’ “Mr. Slodov: ‘Well, my instruction, Your Honor, was that we should address the searches that were done on the email server to explain what was searched and why, you know, won’t — what results — ‘ “The Court: ‘Did she say anything in her certification about that?’ “Mr. Slodov: ‘No.’ “The Court: ‘No.’ “Mr. Slodov: ‘And the reason is that I came to learn in the process of assisting Credit One with the verification that they — ‘ “The Court: ‘But you filed this knowing at the time that they hadn’t searched their emails?’ “Mr. Slodov: ‘Yes, Your Honor, but if you’ll hear me out.’ “The Court: ‘Okay.’ “Mr. Slodov: ‘I did ask them to conduct a search of the — ‘ “The Court: ‘But didn’t you recall when I told you to do it over again that it better be right and show the steps that you’d actually done, or otherwise there would be hell to pay and I would draw an adverse inference?’ “Mr. Slodov: ‘I do recall what you said, Your Honor.’ “The Court: ‘And you disclose — and yet, nevertheless, the certification, which was prepared, with your assistance, by Ms. Lanham where both you and she — at least you, I’m assuming she knew, too, that there had not actually been a search of any emails, didn’t disclose that fact.’ “Mr. Slodov: ‘Yes, Your Honor.’” Id. at 59-60. In the light of the hearing’s revelations, the Court stated that it was now considering entering a default judgment on the Plaintiff’s Rule 37 motion but requested post-hearing briefing on the issue. Id. at 102-03. Nothing in those briefs changed the Court’s initial view at the close of the September 22, 2016 hearing that a default judgment was warranted under Rule 37 and the caselaw discussed above. Credit One’s conduct violated the Court’s July 15, 2015, December 9, 2015, and February 22, 2016 bench orders on discovery, which were clear and which Credit One’s counsel acknowledged he understood. Those orders were accompanied by warnings of severe consequences to Credit One if they were not complied with.³⁶ As previously discussed, Credit One’s discovery failures also pertained directly to the claims at issue in this adversary proceeding. A default judgment sanction here also is “just” as provided in Rule 37(b).³⁷ As for the key inquiry, discussed above, whether Credit One’s conduct was willful, extreme or egregious, and in bad faith, or Credit One was “at fault,” Credit One falsely stated to the Court nine different times (on November 25, 2015, December 9, 2015, January 18, 2016, February 11, 2016, February 22, 2016, March 22, 2016, July 18, 2016, August 31, 2016, and during the first half of the hearing on September 22, 2016 — in counsel’s letters, counsel’s representations during hearings and in pleadings, and twice in verifications under penalty of perjury by its Rule 30(b)(6) witness — that it had provided a complete response to Plaintiff’s document requests. The falsity of these representations was neither minor nor a matter of excusable neglect; indeed, Credit One has not offered any excuse for its knowing failures. Instead, counsel belatedly acknowledged that both he and Ms. Lanham knew that Ms. Lanham’s March 22, 2016 Amended Verification was false (meaning that her first, January 18, 2016 verification also was false), yet she signed and he filed it and kept its falsity from the Plaintiff and the Court for the next six months. In addition to the authorities cited above, see Metro. Opera Ass’n v. Local 100, Hotel Emples. & Rest. Emples. Int’l Union, 212 F.R.D. at 222, which gave “great weight” in imposing a default sanction to defendant’s “aggressively willful” noncompliance in the face of “high-decibel allegations of [discovery] failure where defendant “continually professed full compliance — falsely and…without making a reasonable inquiry,” instead making “repeated, baseless representations that all documents had been produced.”³⁸ See also Joint Stock Co. Channel One Russ. Worldwide v. Infomir LLC, 2019 U.S. Dist. LEXIS 166373, at *78, *81-82 (“Even if not perjurious, these statements were made so cavalierly, with so little regard for counsel’s duties of candor and diligence, as to rise to the level of bad faith.”). Credit One’s noncompliance during the ten months from its November 25, 2015 letter to the Court claiming that it had no further documents to produce, to its admissions at the September 22, 2016 hearing, was lengthy under any circumstances.³⁹ See Agiwal v. Mid Island Mortg. Corp., 555 F.3d at 303 (no abuse of discretion to have dismissed a claim after six months of noncompliance); Joint Stock Co. Channel One Russ. Worldwide v. Infomir LLC, 2019 U.S. Dist. LEXIS 166373, at *97 (collecting cases finding noncompliance for at least approximately six months to be “long overdue” and thus warranting serious sanctions); Local Union No. 40 of the Int’l Ass’n of Bridge, Structural & Ornamental Iron Workers v. Car-Win Constr., Inc. 88 F. Supp. 3d 250, 265-66 (S.D.N.Y. 2015) (collecting cases finding that “periods of six months or more weigh…heavily towards” dispositive sanctions). Such delay was prejudicial to the Plaintiff beyond, moreover, the prejudice that delay normally causes, such as the enhanced likelihood of the ordinary course destruction of evidence by third parties like the Sherman Entities and the departure of knowledgeable personnel from the defendant’s employ. First, having agreed in April 2015 to a December 31, 2015 discovery cutoff date in the parties’ Rule 26(f) Joint Status Report, Credit One then used the expiration of that date, notwithstanding its failure to provide any discovery by the December 9, 2015 hearing and its continued willful failures thereafter, against the Plaintiff in seeking leave to file a summary judgment motion and thereafter in contesting Plaintiff’s requests for an extension of the discovery cut-off date. Second, during the course of the litigation through the end of the September 22, 2016 hearing, Credit One never proposed to correct its credit tradelines to accurately address the obligors’ discharges, with the exception — apparently for tactical reasons — of Mr. Anderson’s tradeline. It continued to take this position during that period, moreover, without ever offering a legitimate reason⁴⁰ and notwithstanding (a) its counsel’s admission that nothing precluded it from doing so, 2/22/16 Tr. at 25-26 [Main Case. Dkt. 64], (b) its knowledge that other credit card issuers had decided to delete obligors’ trade lines post-discharge,⁴¹ (c) testimony that Sherman Entities LVNV and PYOD deleted their obligors’ tradelines when their obligors filed a bankruptcy case,⁴² and (d) the fact, later admitted, that as to accounts with a balance of $99 or less on the date the holder of the account filed for bankruptcy, as a matter of policy Credit One did not sell such accounts and its systems automatically instructed the credit reporting agencies to delete the associated Credit One tradelines within 30 days of Credit One receiving notice of the bankruptcy petition.⁴³ Credit One itself, in addition to its counsel, was equally in bad faith and at fault. Not only is it a sophisticated financial institution with experience in conducting discovery, its Rule 30(b)(6) witness signed two false verifications, was unprepared and unresponsive in her Rule 30(b)(6) deposition, and, as represented by both that witness and Mr. Slodov, Credit One’s woefully inadequate response to Plaintiff’s discovery requests was led by its in-house counsel.⁴⁴ The Court therefore apportions responsibility jointly and severally between client and counsel. See Joint Stock Co. Channel One Russ. Worldwide v. Infomir LLC, 2019 U.S. Dist. LEXIS 166373, at *88; cf. Merck Eprova AG v. Gnosis S.P.A., 2010 U.S. Dist. LEXIS 38867, at *22 (S.D.N.Y. Apr. 20, 2010) (“The Court has elected not to apportion liability between Defendants and defense counsel, under the belief that they are best suited to make that decision, and out of concern that requiring them to disclose information sufficient to determine apportionment could compromise attorney-client confidentiality. If, however, Defendants and defense counsel are unable to agree on apportionment of these sanctions, they may ask the Court to intercede.”). It is unavailing that after it was caught Credit One offered up (a) compliant discovery (although the Court is skeptical, notwithstanding new, reputable counsel, that such discovery would be compliant given Credit One’s own prior failures) and (b) a voluntary deletion of the tradelines for the debt at issue. A contrary approach would vitiate prime purposes of Rule 37(b). See NHL v. Metro Hockey Club, 427 U.S. at 643 (affirming dismissal under Rule 37 because “of respondents’ flagrant bad faith and their counsel’s callous disregard of their responsibilities” even though it “might well be that these respondents would faithfully comply with all future discovery orders entered by the District Court in this case”). See also S. New Engl. Tel. Co. v. Global NAPs Inc., 624 F.3d at 149 (noting that purposes informing Rule 37 may justify a default sanction “[e]ven when a party finally (albeit belatedly) complies with discovery orders after sanctions are imposed”); In re Resulin Prods. Liab. Litig., 223 F.R.D. 109, 117, 118 (S.D.N.Y. 2004) (to allow willfully non-compliant party to avoid dismissal sanction based on promises of future compliance “would render the sanctions provision of Rule 37 a ‘paper tiger’”) (citing Cine Forty-Second Street Theatre Corp. v. Allied Artists Pictures Corp., 602 F.2d at 1068); Bambu Sales, Inc. v. Ozak Trading Inc., 58 F.3d 849, 853 (2d Cir. 1995); cf. Jones v. Synergy One Fed. Credit Union (In re Jones), 2007 Bankr. LEXIS 2020, at *8 (Bankr. E.D. Va., June 8, 2007) (“A creditor’s voluntary correction of a discharge violation after a debtor has suffered damages or incurred counsel fees to redress the violation would not immunize a creditor from a finding of civil contempt and from an award of compensatory sanctions.”). Finally, the Court has carefully considered the efficacy of imposing a lesser sanction than a default judgment, although, as discussed above, “courts are not required to exhaust possible lesser sanctions before imposing dismissal or default if such a sanction is appropriate on the overall record.” S. New Engl. Tel. Co. v. Global NAPS Inc., 624 F.3d at 148. However, the imposition of a monetary sanction in the form of payment of counsel fees related to Plaintiffs’ efforts to get to the bottom of Credit One’s discovery abuses, perhaps coupled with yet another warning, would insufficiently address Credit One’s prolonged, willful, bad faith conduct and the prejudice, discussed above, to the Plaintiff. Moreover, because appliable law as discussed above views the refusal to correct a credit report as a violation of the discharge if there is evidence of the refusal’s coercive purpose, imposing sanctions such as precluding the admission of evidence favorable to Credit One or drawing an adverse inference against it would have substantially the same effect as a default judgment. Indeed, Credit One’s failure to provide a legitimate reason, notwithstanding repeated opportunities to do so, for its policy not to correct its tradelines to reflect the bankruptcy discharge, coupled with its extraordinary efforts to thwart discovery designed to test its asserted defenses, as well as the dribs and drabs that, despite those efforts, emerged during discovery to show the falsity of those defenses, makes it hard to see how Credit One would ever defeat Plaintiff’s claim that its policy violated the discharge. Like most of my colleagues, I do not view enforcement of the bankruptcy discharge as a profit center for former debtors and their attorneys. If a defendant promptly corrects its violation of the discharge and its prior actions did not rise to the level of a calculated or systematic violation, little or no sanction will ensue. But the opposite occurred here, and a default judgment is warranted. The Measure of Credit One’s Default Sanction In PHH Mortg. Corp v. Sensenich (In re Gravel), 6 F.4th at 503, the Second Circuit on direct appeal reversed the bankruptcy court’s imposition⁴⁵ of non-compensatory, or punitive sanctions on a mortgage servicer for charging debtors amounts that were inconsistent with their confirmed chapter 13 plans. Noting that “it is imperative that the court explain its sanctions order with care, specificity, and attention to the sources of power,” id. at 516 (internal quotation and citation omitted), Gravel held that it would confine its review to the authority invoked by the lower court and not consider potential alternative sources of power to award a sanction. Id. at 512. It then reversed the first sanction imposed by the bankruptcy court, which was expressly based on its inherent contempt power, because the orders that were allegedly breached did not clearly enjoin the defendant’s complained-of conduct. Id. at 512-13. Concluding that the bankruptcy court’s express source of power for the second sanction was Fed. R. Bankr. 3002.1, it then held that Rule 3302.1 could not serve as a basis for a punitive sanction. Id. at 513-15. In doing so, Gravel distinguished the relief available under that Rule from discovery sanctions under Fed. R. Civ. P. 37, which “are deterrents (specific and general) meant to punish a recalcitrant or evasive party,” id. at 515, although it then noted that it has never decided whether punitive monetary sanctions are proper under Rule 37. Id.⁴⁶ This Court has used a two-step analysis regarding the source of its power to sanction Credit One. First, a default judgment should be issued under Fed. R. Civ. P. 37 against Credit One based on, as discussed above, Credit One’s prolonged, willful, bad faith discovery misconduct. The consequence of that default judgment is the deemed admission of all well-pleaded factual allegations in the complaint, except for those relating to damages. Greyhound Exhibitgroup Inc. v. E.L.U.L. Reality Corp., 973 F.2d 155, 158 (2d Cir. 1992).⁴⁷ “Only in very narrow, exceptional circumstances may a court find an allegation not “well pleaded,” and “[a] defaulting party cannot contest the merits of plaintiff’s claim absent indisputable contradictory evidence.” Williams v. Goldman & Steinberg, Inc., 2006 U.S. Dist. LEXIS 102120, at *6 (E.D.N.Y., May 12, 2006), adopted by 2006 U.S. Dist. LEXIS 50222 (E.D.N.Y., Jul. 21, 2006). No such circumstances or indisputable contradictory evidence were established here. Second, because, notwithstanding the issuance of a default judgment, the burden is still on the Plaintiff to prove that it is entitled to the damages he seeks, Greyhound Exhibitgroup, 973 F.2d at 158, “[e]stablishing the appropriate amount of damages involves two steps: (1) determining the proper rule for calculating damages on a claim; and (2) assessing plaintiff’s evidence supporting the damages to be determined under this rule.” Macquarie Mexico Real Estate Mgmt. S.A. DE D.V. as Attorney-in-Fact for Cibanco v. Hoiston Int’l Enter., 2021 U.S. Dist. LEXIS 191265, at *8-9 (S.D.N.Y., Oct. 1. 2021) (internal quotations and citations omitted). “Upon entry of a default, a plaintiff’s claims for damages generally must be established in an evidentiary proceeding at which the defendant is afforded the opportunity to contest the amount claimed.…[A] district court may determine there is sufficient evidence either based upon evidence presented at a hearing or upon a review of detailed affidavits and documentary evidence.” Cement & Concrete Workers Dist. Council Welfare Fund v. Metro Found. Contrs. Inc., 699 F.3d 230, 234 (2d Cir. 2012) (internal citations and quotations omitted). The moving party is entitled to all reasonable inferences from the evidence it offers. Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981). The Court therefore will determine the measure of the sanction for the default judgment against Credit One based on the “proper rule for calculating damages” on a claim for violation of the bankruptcy discharge under sections 105(a) and 524(a) of the Bankruptcy Code, using the “old soil” of the standard for exercising the contempt power, as stated by Taggert v. Lorenzen, 139 S. Ct. at 1801, liability for such claim having been established as a sanction under Rule 37.⁴⁸ It has long been recognized that a variety of sanctions is available for the violation of the bankruptcy discharge, including (a) compensatory damages, such as for payments made to the creditor because of the violation; attorneys’ fees and litigation costs incurred in enforcing the discharge; other actual losses, such as lost wages or business income and travel expenses; and, in appropriate circumstances, (b) emotional distress damages and (c) non-compensatory sanctions. See generally In re Dogar-Marinesco, 2016 Bankr. LEXIS 4111, at *41 (Bankr. S.D.N.Y., Dec. 1, 2016); In re Haemmerle, 529 B.R. 17, 29-31 (Bankr. E.D.N.Y. 2015); In re Perviz, 302 B.R. 357, 370-74 (Bankr. N.D. Oh. 2003). See also Bessette v. Avco Fin. Servs., 230 F.3d at 445 (“[B]ankruptcy courts across the country have appropriately used their statutory contempt power to order monetary relief in the form of actual damages, attorneys fees, and punitive damages, when creditors have engaged in conduct that violates §524″); In re Beschloss, 2018 Bankr. LEXIS 1364, at *15-17 (Bankr. S.D.N.Y., May 8, 2018); Cherry v. Arendall (In re Cherry), 247 B.R. 176, 187 (Bankr. E.D. Va. 2000). Because the bankruptcy discharge is a court-ordered injunction in furtherance of a statutory injunction, the discharge violation need not succeed in coercing payment for sanctions to be imposed. Congress enjoined “the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset” any debt as a personal liability of a discharged debtor, 11 U.S.C. §524(a)(2), not just such acts that result in collection or recovery on the debt. Congress intended the discharge injunction “to eliminate any doubt concerning the effect of the discharge as a total prohibition of debt collection efforts” and to ensure that “once a debt is discharged, the debtor will not be pressured in any way to repay it.” S. Rep. No. 989, 95th Cong., 2d Sess. 80-81 (1978); H.R. Rep. No. 595, 95th Cong., 1st Sess. 365-66 (1977). The cessation of pressure to pay in and of itself is a prime purpose of the discharge, a tradeoff for debtors having subjected themselves to the rigors of the bankruptcy process. Mooney v. Green Tree Serv., LLC (In re Mooney), 340 B.R. 351, 362 n.29 (Bankr. E.D. Tex. 2006). See, e.g., In re Adams, 2011 U.S. Dist. LEXIS 158090, at *12-14 (E.D. N.C., Jan. 24, 2011) (affirming compensatory damages including attorneys fees and punitive damages although creditor’s inaccurate updating and communication of its accounts did not result in collection); In re Haemmerle, 529 B.R. at 17 (awarding attorneys fees and punitive sanctions for willful collection activity that did not result in debt payment). Although Taggert v. Lorenzen, 139 S. Ct. at 1795, clarified the standard for liability for breach of the bankruptcy discharge — met here because of the default sanction imposed on Credit One under Rule 37 — it did not change the standard for determining remedies for such violations. It simply confirmed that while “the absence of willfulness does not relieve from civil contempt,…subjective intent is [not] always irrelevant. Our cases suggest, for example, that civil contempt sanctions may be warranted when a party acts in bad faith.…[A] party’s record of continuing and persistent violations and persistent contumacy justified placing the burden of uncertainty in the decree on the shoulders of the party who violated the court order. On the flip side of the coin, a party’s good faith, even where it does not bar civil contempt, may help to determine the appropriate sanction.” Id. at 1802 (internal quotations and citations omitted). Monetary sanctions for technical or unintended violations of the discharge that are promptly corrected generally are not warranted. Nicolas v. Oren (In re Nicholas), 457 B.R. 202, 226 (Bankr. E.D.N.Y.); In re Dabrowski, 257 B.R. 394, 415 (Bankr. S.D.N.Y. 2006). As noted, above, litigation over such violations should not become a profit center for former debtors or their counsel. This has led to some confusion in the case law, however, when courts have considered the proper standard for awarding attorneys fees and expenses incurred in enforcing the discharge. Some courts address such fees and expenses as a form of compensatory damages, asking how else would the former debtor stop the breach of the discharge if the violator does not do so voluntarily except by hiring counsel to enforce it, and would not the incurrence of such fees simply be another form of proscribed pressure if the violator were not ultimately liable for them? See Eastman v. Baker Recovery Servs. (In re Eastman), 2010 Bankr. LEXIS 4928, at *7-8 (Bankr. W.D. Tex., Dec. 28, 2010) (fees necessary to enforce injunction are a species of actual damages resulting from defendant’s violation: “It defies logic to suggest that a Plaintiff be required to incur a cost in order to enjoy the benefits of an injunction designed for his benefit, then be denied the right to be reimbursed those costs simply because that cost happens to be attorneys’ fees.”); Sprague v. Williams (In re Van Winkle), 598 B.R. 297, 301-02 (Bankr. D. N.M. 2019); Peyrano v. Sotelo (In re Peyrano), 2016 Bankr. LEXIS 3750, at *2-3 (Bankr. E.D. Okla., Oct. 17, 2016), aff’d 2017 Bankr. LEXIS 1756 (B.A.P. 10th Cir., June 26, 2017); Holley v. Kresch Oliver, PLLC (In re Holley), 473 B.R. 212, 216 (Bankr. E.D. Mich. 2012), aff’d 2013 U.S. Dist. LEXIS 29670 (E.D. Mich., Mar. 4, 2013); In re Bechloss, 2018 Bankr. LEXIS 1364, at *14-15. These courts consider whether the fees and expenses were in fact necessary and proper as part of their evaluation of the reasonableness of the fee and expense request. On the other hand, some courts have stated that attorneys fees and expenses should not be awarded unless the violator acted willfully, in bad faith, vexatiously, wantonly, or for oppressive reasons. In re Haemmerle, 529 B.R. at 29 (collecting cases). It should be noted, though, that such courts generally equate willful, bad faith, or oppressive conduct with “going forward with collection activity knowing or having reason to know that the debtor was in bankruptcy and has received a discharge.” Id.; In re Nicholas, 457 B.R. at 226-27 (attorneys fees and expenses awarded when violator knew of the discharge and had “not ceased his efforts to pursue his discharged claims, even after the Debtor reopened his bankruptcy case to bring his motion”). Confusion also exists in the case law regarding the bankruptcy courts’ power to award non-compensatory, or punitive sanctions for violation of the discharge injunction. Indeed, although “[B]ankruptcy courts often award punitive damages as a noncompensatory sanction for contumacious behavior,” including violation of the discharge, In re Van Winkle, 598 B.R. at 304 (collecting cases); In re Haemmerle, 529 B.R. at 27, 30 (collecting cases); Mejia v. Partners for Payment Relief LLC (In re Mejia), 2018 Bankr. LEXIS 1754, at *13-15 (Bankr. D. Md., June 13, 2018) (collecting cases); Linda L. Schlueter, 2 Punitive Damages, §19.10 (2022) (collecting cases), “[t]he United States Courts of Appeals have been deeply divided for many years on the question of whether bankruptcy courts have the power to…impose punitive sanctions.” PHH Mortg. Corp. v. Sensenich, 2017 U.S. Dist. LEXIS 207801, at *16 (D. Vt., Dec. 18, 2017). Courts holding that bankruptcy courts lack such power employ two rationales, usually together. First, some courts reason that any statutory power under section 105(a) in furtherance of another related section of the Bankruptcy Code, here section 524(a), does not extend to imposing punitive sanctions because compensatory sanctions suffice.⁴⁹ See Adell v. John Richards Homes Bldg. Co., LLC (In re John Richards Homes Bldg. Co. LLC), 552 Fed. Appx 401, 415 (6th Cir. 2013); Knupfer v. Lindblade (In re Dyer), 322 F.3d 1178, 1193 (9th Cir. 2003); In re Hipp, 895 F.2d 1503, 1515 (5th Cir. 1990). This interpretation of what is “necessary or appropriate” under section 105(a) would seem to usurp the trial courts’ fact-finding role, however, and indeed in two of the above decisions it was almost immediately qualified by an exception recognizing that some types of non-compensatory sanctions may nevertheless be appropriate. See In re John Richards Homes Bldg. Co., 552 Fed. Appx at 415 (“§105(a) grants bankruptcy courts the authority to award mild noncompensatory punitive damages”); In re Dyer, 322 F.3d at 1194 (recognizing that “‘relatively mild’ non-compensatory fines may be necessary under some circumstances”). Second, such courts reason that bankruptcy judges are not permitted under the U.S. Constitution to impose criminal sanctions because they are not Article III judges. Adell v. John Richards Homes Bldg. Co, LLC, 552 Fed. Appx at 416; In re Hipp, 895 F.2d at 521 (“Bankruptcy courts have no inherent or statutory power — and none granted them by 11 U.S.C. §105 or by 28 U.S.C. §157 or by [Bankruptcy] Rule 9020 — to preside over section 401(3) criminal contempt trials for violation of bankruptcy court orders.”). Other circuit courts have, however, ruled that bankruptcy courts can impose noncompensatory sanctions in the exercise of their general contempt power or their power under section 105(a) in furtherance of section 524(a) of the Bankruptcy Code. Charbono v. Sumski (In re Charbono), 790 F.3d 80, 85 (1st Cir. 2015); Isaacson v. Manty, 721 F.3d 533, 538-39, 541 (8th Cir. 2013), although in each case, consistent with the dicta in John Richards Homes Bldg. and Dyer, the non-compensatory sanction was mild, $100 and $500 per incident, respectively. See also Brown v. Ramsay (In re Ragar), 3 F.3d 1174, 1179 (8th Cir. 1993) (disagreeing with Hipp’s reading of section 105(a) as never permitting the imposition of non-compensatory sanctions — “[W]e think this is simply wrong” — and further noting “it is difficult for us to see a substantial constitutional question here”). See generally, John A. Pottow and Jason S. Levin, “Symposium: Rethinking Criminal Contempt in Bankruptcy Courts,” 91 Am. Bankr. L.J. 311, 313 (Spring 2017) (“Pottow & Levin”) (discussing the conflict among the courts before concluding that bankruptcy courts are not precluded by the Constitution, statutes, or policy from issuing non-compensatory contempt sanctions). Courts have also pointed out that all noncompensatory sanctions are not necessarily criminal in nature, including when protecting the discharge. See, e.g., In re Mooney, 340 B.R. at 362 n. 29: The imposition of punitive damages under the authority granted under §105 in this context does not carry this court into the realm of criminal contempt as contemplated by 18 U.S.C. §401 and Griffith v. Oles (In re Hipp), 895 F.2d 1503, 1515 (5th Cir. 1990). Clearly every assessment of punitive damages does not occur in that forbidden realm.…This Court is not assessing these punitive sanctions for contempt of this Court’s authority. It is assessing these sanctions…for the violation of the statutory protections provided to [the debtor] under §524 and to which she is entitled as the quid pro quo for properly disclosing and surrendering all of her non-exempt property to the trustee for the benefit of her creditors.…Issuing reasonable sanctions of this type under the proper circumstances is clearly ‘necessary and appropriate’ to insure that the bankruptcy system actually works. Although language utilized in some jurisprudence has unfortunately blurred the lines in this area, [the creditor] committed no crime here, nor is it being punished for one. See also Bmw of N. Am. v. Gore, 517 U.S. 559, 582 (1996), which recognized situations warranting punitive damages where “the injury is hard to detect or the monetary value of noneconomic harm might have been difficult to determine;” In re Latanowich, 207 B.R. 326, 337-38 (Bankr. D. Mass. 1997). The Second Circuit clarified some but not all the foregoing issues pertaining to bankruptcy courts’ power to award non-compensatory sanctions in Rossellini v. United States Bankr. Ct. (In re Sanchez), 941 F.3d 625 (2d Cir. 2019). In Sanchez, a bankruptcy judge sanctioned, under her general, inherent contempt power, a debtor’s attorney $1,000 for failing to comply with multiple orders to show cause to prosecute his client’s chapter 7 case. Id. at 626. In analyzing whether the court had jurisdiction to do so, Sanchez concluded that “inherent sanctioning powers are not contingent on Article III [of the Constitution], but rather are, as their name suggests, inherent in the nature of federal courts as institutions charged with judicial functions,” id. at 627, and that such inherent powers “include the power to impose relatively minor non-compensatory sanctions on attorneys appearing before the court in appropriate circumstances.” Id. at 628. The sanction imposed by the bankruptcy court fell into that category, although Sanchez expressed “no opinion on the outmost bounds of bankruptcy courts’ inherent sanctions powers, including their power to impose more substantial punitive sanctions.” Id., citing In re John Richards Homes Bldg. Co., and In re Dyer, having previously cited In re Charbono in support of the bankruptcy court’s power to issue non-compensatory sanctions. Notably Sanchez did not air any concern that the $1,000 non-compensatory sanction imposed by the bankruptcy court was barred on the basis that it was an exercise of criminal jurisdiction. The questions left open by Sanchez, in addition to what constitutes a “substantial punitive sanction,” include how far the court’s inherent power extends beyond conduct directly before the court, if nevertheless in violation of court orders, and whether an alternative source of power exists in section 105(a) of the Bankruptcy Code in furtherance of another section of the Code, such as section 524(a)(2). As for the former question, the Supreme Court has noted that courts’ inherent power to punish for contempt “reaches both conduct before the court and that beyond the court’s confines, for ‘the underlying concern that gave rise to the contempt power was not…merely the disruption of court proceedings. Rather, it was disobedience to the orders of the Judiciary, regardless of whether such disobedience interfered with the conduct of the trial.’” Chambers v. NASCO, 501 U.S. 32, 44 (1991), quoting Young v. United States ex rel. Vuitton et Fils S.A., 481 U.S. 787, 798 (1987). In wrestling with the “somewhat elusive” distinction between civil and criminal contempt in the context of deciding the contemnor’s due process rights, the Supreme Court noted in Int’l Union v. Bagwell, 512 U.S. 821 (1994), however, that “[s]ummary adjudication becomes less justifiable once a court leaves the realm of immediately sanctioned, petty direct contempts,” and “[s]till further procedural protections are afforded for contempts occurring out of court.” Id. at 832-33. Nevertheless, while finding that the fines at issue for violation of an injunction required additional due process, the Court stated that “courts may still impose noncompensatory, petty fines for contempts such as the present ones without a jury trial.” Id. at 838-39. CBS Broad. Inc. v. FilmOn.com, Inc., 814 F.3d 91 (2d Cir. 2016), also is instructive. After observing that “a district court’s civil contempt power waxes when the contemptuous act occurs in its presence and wanes when the act occurs outside of Court,” id. at 102, citing Bagwell, 512 U.S. at 833-34, FilmOn.com nevertheless stated, again citing Bagwell, “When the contempt involves a simple disobedient act, however, the risk of an erroneous deprivation from the lack of a neutral factfinder is diminished, and the court’s ability to exercise its inherent civil contempt power is amplified.” Id. at 103 FilmOn.com also recognized that if a defendant has engaged in serial violations of injunctions with clear consequences for the failure to comply, “courts have recognized that previous court orders afforded the defendant an opportunity to purge” that could keep the subsequent non-compensatory sanction at issue sufficiently coercive to be civil rather than criminal. Id. at 102. Weighing the facts, which included its determination that a $90,000 non-compensatory sanction for defendant’s “repeated disregard for federal injunctions…throughout the country,” that were “relatively simple” was in a “relatively minor amount which is not large enough to warrant concern with the adjudication process,” the Court concluded that the sanction was civil and affirmed the lower court. Id. at 102-04. As for whether section 105(a) of the Bankruptcy Code permits the imposition of noncompensatory sanctions “if necessary or appropriate to carry out the provisions of” section 524(a)(2), decisions holding to the contrary should be subject to revision in the light of Taggert v. Lorenzen having grounded liability for violation of the discharge, as discussed above, in such sections in addition to the courts’ contempt power, 139 S. Ct. at 1801, as well as the Supreme Court’s recognition of the power available in section 105(a) as long as it is used in furtherance of another section of the Bankruptcy Code. Marrama v. Citizens Bank, 549 U.S. 365, 375-76 (2007).⁵⁰ See Pottow & Levin, 91 Am. Bankr. L.J. at 348-53, 374 (finding “no problem reading §105 for what it is — an expansive conferral of statutory authority (assuming, arguendo, that such a grant is required in the first place) for bankruptcy courts to exercise contempt powers,” including the power to impose non-compensatory sanctions, though recognizing that prudential considerations grounded in due process may constrain such imposition.); In re Mooney, 340 B.R. at 361-62: To limit the Debtor to compensatory damages in this context would send a clear and damaging signal to [the creditor] and other institutional creditors who are routinely involved in bankruptcy cases that its attorneys and other agents are free to ignore a discharge injunction…by quickly retreating and paying only a nominal amount of attorney’s fees if its illegal acts are actually exposed, thereby making the attendant risks of such conduct palatable. Such a message would clearly undermine one of the most fundamental and significant objectives of the bankruptcy system. The Court therefore finds that under these circumstances an award of punitive damages to the Debtor is ‘necessary and appropriate to carry out the provisions of the Bankruptcy Code’ [under sections 105(a) and 524(a)]. Finally, there is some confusion in the proper standard for bankruptcy courts to follow when considering non-compensatory sanctions. One commentator after conducting a lengthy survey of the cases has identified four variations: (1) where the violator acted with malevolent or malicious intent, (2) where the violator acted in an egregious, intentional manner, (3) where the violator acted in reckless disregard of a protected right, and (4) where the violator acted with arrogant defiance of federal law. Linda L. Schlueter, 2 Punitive Damages at §19.10.⁵¹ Frankly, though, there is little meaningful difference among these standards except perhaps the third, each of which except the third requiring a knowing and egregious disregard of the discharge in violation of section 524(a). Courts in the Second Circuit when imposing non-compensatory sanctions for violation of the discharge have based their rulings on (a) a knowing disregard or disrespect for the bankruptcy law, In re Beschloss, 2018 Bankr. LEXIS 1364, at *15-17 (awarding $4,000 punitive damages because defendant, while not acting malevolently, was a sophisticated law firm that continued its conduct even after clear notice); (b) “a clear disregard” of the debtor’s discharge including continuing violations after notice and without “any credible explanation,” In re Haemmerle, 529 F.R. at 30-31 (awarding $500 for each knowing violation, for a total of $69,000, “to deter Wells Fargo from further efforts to collect a discharged debt from this Debtor or from any other debtor”); and (c) a finding of “particularly egregious creditor misconduct” in acting in clear disregard of the discharge, including the failure to comply when given the opportunity to do so, In re Nicholas, 457 B.R. at 227 (awarding $50,000 of punitive damages “to deter [defendant] and others from similar conduct in the future”). See also Watkins v. Guardian Loan Co. of Massapequa, Inc. (In re Watkins), 240 B.R. 668, 680-82 (Bankr. E.D.N.Y. 1999) (imposing $1,792 of non-compensatory sanctions, equal to three times debtor’s out-of-pocket damages, for actions taken with either malevolent intent or a clear disregard and disrespect of the bankruptcy laws); In re Cruz, 254 B.R. 801, 817 (Bankr. S.D.N.Y. 2000) (requiring a finding of “malicious or egregious” conduct for the imposition of punitive damages). Many courts outside of the Second Circuit also follow such a formulation, sometimes by referring to an “egregious and intentional violation” and taking into account the violator’s sophistication and disregard of opportunities to correct a violation. See, e.g., Romanucci & Blandin, LLC v. Lempesis, 2017 U.S. Dist. LEXIS 71526, at *21-22 (N.D. Ill., May 4, 2017) (affirming $50,000 noncompensatory sanction based on clear disregard of discharge by sophisticated defendant, including after notice of motion for sanctions); Nibbelink v. Wells Fargo Bank, N.A. (In re Nibbelink), 403 B.R. 113, 121-22 (Banrk. M.D. Fla. 2009) (awarding non-compensatory sanction of $15,000); Poindexter v. Southwest Mo. Bank (In re Poindexter), 376 B.R. 732, 739 (Bankr. W.D. Mo. 2007); In re Perviz, 302 B.R. at 372. Here, Plaintiff seeks three forms of sanction, although only two for himself, for Credit One’s violation of the discharge. As for himself, he seeks (i) payment of his reasonable attorneys fees and expenses in enforcing the discharge as well as his own related costs, and (ii) “relatively small compensatory⁵² and punitive damages,” leaving the determination of the amount of such sanctions to the Court. Memorandum of Law in Support of Plaintiff’s Motion for Class Certification, dated April 27, 2017 [Adv. Dkt. 109-1], at 15, 17. Plaintiff also seeks certification of a subclass that would be entitled not only to the foregoing sanctions (subject to one satisfaction of the attorneys fees and expenses) but also damages equal to any amounts that the subclass members actually paid on account of their discharged debt. Id. at 16. Credit One has not addressed payment of Plaintiff’s attorneys fees and expenses as damages, and, whether one applies the reasonableness standard of cases such as In re Eastman, 2010 Bankr. LEXIS 4928, at *7-8, or the arguably heightened standard of cases such as In re Haemmerle, 529 B.R. at 29, discussed above, such fees and expenses are appropriate compensatory damages for Credit One’s systematic violation of the discharge.⁵³ Credit One’s systematic refusal to correct its credit tradelines to reflect debtors’ discharges was, as alleged in the complaint [Adv. Dkt. 1] and required to be accepted as true based on its Rule 37(b) default, willful, knowing, and intended to pressure obligors like Anderson to pay their debts based on the obligors’ reasonable belief that the inaccuracy of such information provided to the credit reporting agencies would adversely affect their ability to obtain credit, housing, and employment. Complaint