Olsen et al v. United States

Filing 46

ORDER RE: SECOND DISCOVERY DISPUTE 43 (Illston, Susan) (Filed on 3/1/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAMARN OLSEN, et al.,

Case No. 14-cv-05601-SI

Plaintiffs,
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v.

ORDER RE: SECOND DISCOVERY
DISPUTE

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UNITED STATES,

Re: Dkt. No. 43

Defendant.

United States District Court
Northern District of California

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Now before the Court is a discovery dispute letter submitted by the parties. Docket No.
43. This is the second discovery dispute in this case. See Docket No. 30.

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BACKGROUND

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Plaintiffs are the surviving wife and daughter of Sterling Charles Olsen, who died on

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November 22, 2012. Corrected Complaint ¶¶ 3-4, 6. They bring this suit for wrongful death

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against the United States under the Federal Tort Claims Act. Id. ¶ 1. Among other relief, they

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seek “[p]ast and future damages for the loss of the support, earnings, services, and financial

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benefits from Decedent . . . .” Id. at 4.

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Presently at issue is whether plaintiffs must disclose their tax returns to defendant United

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States. Defendant has sought all of plaintiffs’ tax returns filed since 2009. Letter Brief at 1.

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Defendant argues that the tax returns should be disclosed because no privilege applies and because

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“Plaintiffs have claimed lost income and financial support as a form of damages.” Id. at 2.

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Plaintiffs argue that such information should be protected from disclosure due to the public policy

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disfavoring disclosure of tax returns and because plaintiffs have not put their income at issue in

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this case. Id. at 3-4.

LEGAL STANDARD

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Where a plaintiff sues under the Federal Tort Claims Act, federal privilege law governs.

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Young v. United States, 149 F.R.D. 199, 204 (S.D. Cal. 1993); accord. Burrows v. Redbud Cmty.

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Hosp. Dist., 187 F.R.D. 606, 608 (N.D. Cal. 1998). Under federal law, “[t]ax returns do not enjoy

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an absolute privilege from discovery.” Premium Service Corp. v. Sperry & Hutchinson Co., 511

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F.2d 225, 229 (9th Cir. 1975). Nevertheless, there is a public policy against the unnecessary

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public disclosure of tax records. Id. “Accordingly, the Court may only order the production of

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plaintiff’s tax returns if they are relevant and when there is a compelling need for them because

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the information sought is not otherwise available.” Aliotti v. Vessel Senora, 217 F.R.D. 496, 497-

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98 (N.D. Cal. 2003). “The party seeking production has the burden of showing relevancy, and

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United States District Court
Northern District of California

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once that burden is met, the burden shifts to the party opposing production to show that other

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sources exist from which the information is readily obtainable.” A. Farber & Partners, Inc. v.

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Garber, 234 F.R.D. 186, 191 (C.D. Cal. 2006) (citation omitted); accord Dunfee v. Truman

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Capital Advisors, LP, 2013 U.S. Dist. LEXIS 165936, at *10 (S.D. Cal. Nov. 20, 2013); KeyBank

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Nat’l Ass’n v. Nielson, 2011 U.S. Dist. LEXIS 55575, at *9 (D. Nev. May 24, 2011).

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DISCUSSION

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Defendant has failed to show that the requested tax returns are relevant. Defendant argues

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that “Plaintiffs have claimed lost income and financial support as a form of damages.” Letter

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Brief at 2. This is not entirely accurate. This is not a situation where a plaintiff claims to have lost

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his or her own income as a result of a defendant’s conduct. Plaintiffs here have not put their own

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income at issue; rather they have put at issue the earnings and income of the decedent, Mr. Olsen.

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See Corrected Complaint ¶ 14 (“Plaintiffs have suffered and in the future will suffer damages for

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the loss of support, earnings, services, and financial benefits from Decedent . . . .”) (emphasis

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added).

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The Court therefore disagrees with defendant that “[w]hether either one of them has sought

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employment since his death is . . . an important question in the case.” See Letter Brief at 2. Mr.

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Olsen’s daughter, plaintiff Neolani Olsen-Rodriguez, asserts that the support she received from her
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father was in the form of gifts such as help paying for cars, clothes, and tuition. Id. at 3-4. Such

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gifts would not necessarily appear on Ms. Olsen-Rodriguez’s tax returns nor be impacted by her

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employment status before or after his death. Plaintiff Samarn Olsen, Mr. Olsen’s surviving

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spouse, apparently received some of Mr. Olsen’s financial benefits for his care and support. Id. at

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4. Mrs. Olsen has enumerated these benefits in the discovery letter. Id. Presumably defendant

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United States already possesses information regarding what federal benefits Mr. Olsen was

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receiving, and such information would not change based on Mrs. Olsen’s employment status

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before or after his death.

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It is also not clear that the information defendant seeks—regarding plaintiffs’ income and
employment status—is not available from other sources.

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United States District Court
Northern District of California

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The discovery letter indicates that

defendant has already taken plaintiffs’ depositions and received interrogatory responses on the

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topic of plaintiffs’ earnings and employment in recent years. Id. at 2. Defendant therefore has

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whatever statements plaintiffs have already made as to their income and employment. If the

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statements are inconsistent, as defendant alleges, defendant may use those inconsistencies for

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impeachment at trial. It does not need tax returns “to verify or disprove” the statements that

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plaintiffs have already made under oath. See id. at 2. Defendant has not made a showing of

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relevance, and public policy weighs against disclosure of plaintiffs’ tax returns in this instance.

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CONCLUSION

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For the foregoing reasons, defendant’s request to compel the disclosure of plaintiffs’ tax
returns is DENIED.

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IT IS SO ORDERED.
Dated: March 1, 2016
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SUSAN ILLSTON
United States District Judge

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