Kapu Gems et al v. Diamond Imports, Inc. et al
Filing
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ORDER DENYING MOTION TO COMPEL PERSONAL INCOME TAX RETURNS AND EXTENDING DEADLINES. Signed by Magistrate Judge Jacqueline Scott Corley on 9/12/2016.(ahm, COURT STAFF) (Filed on 9/12/2016)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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KAPU GEMS, et al.,
Plaintiffs,
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United States District Court
Northern District of California
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Case No. 15-cv-03531-MMC (JSC)
v.
DIAMOND IMPORTS, INC., et al.,
ORDER DENYING MOTION TO
COMPEL PERSONAL INCOME TAX
RETURNS AND EXTENDING
DEADLINES
Defendants.
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The parties had several discovery disputes which have since resolved. The parties still
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dispute, however, Plaintiffs’ request for production of the individual income tax returns of
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defendant Yair Yachdav. Yachdav contends the returns are privileged and need not be produced.
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After considering the parties’ written submissions (Dkt. Nos. 75, 89, 90), and having had the
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benefit of oral argument on September 12, 2016, the Court agrees.
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As the Court’s subject matter jurisdiction is based on diversity, the privilege is governed
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by California law. Fed. R. Evid. 501. Personal income tax returns are privileged under California
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law. Webb v. Standard Oil Co., 49 Cal.2d 509, 513 (1957). Plaintiffs thus bear the burden of
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showing that the privilege nonetheless does not apply or that it was waived. See Quigley v. Am.
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Claims Servs., Inc., No. 2:13-CV-1766-KJM-EFB, 2014 WL 5780958, at *4 (E.D. Cal. Nov. 5,
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2014). “[The tax return] privilege is waived or does not apply in three situations: (1) there is an
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intentional relinquishment, (2) the gravamen of [the] lawsuit is so inconsistent with the continued
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assertion for the taxpayer's privilege as to compel a conclusion that the privilege has in fact been
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waived, or (3) a public policy greater than that of confidentiality of tax returns is involved.”
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Schnabel v. Superior Court, 5 Cal.4th, 704, 721 (1993) (internal quotations and citations omitted).
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Plaintiffs have not shown that any of these three situations apply, and based on its own review of
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the record the Court concludes that none do. Plaintiffs’ motion to compel Yair Yachdav’s
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personal tax returns is therefore DENIED.
As discussed at the September 12, 2016 hearing, the discovery deadline is extended to
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October 28, 2016 and the deadline for filing dispositive motions is extended to November 4,
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2016.1 The parties prefer to maintain the March 2017 trial date. Further, on or before September
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16, 2016, the parties shall submit a joint letter to the undersigned magistrate judge regarding
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whether they would like a referral to a magistrate judge for a settlement conference.
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This Order disposes of Docket Nos. 70, 72 & 75.
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IT IS SO ORDERED.
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Dated: September 12, 2016
United States District Court
Northern District of California
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JACQUELINE SCOTT CORLEY
United States Magistrate Judge
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The district court’s July 18, 2016 Order authorized the undersigned to extend pretrial dates.
(Dkt. No. 73.)
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