Lagunas-Salazar et al v. Rockwell Collins, Inc. et al

Filing 18

ORDER re 11 Motion to Compel. Plaintiff shall produce to defendants on copy of Matgarito Lagunas-Salazars 2004 through 2011 completed tax returns, on or before 5:00 p.m., October 2, 2012. Signed by Magistrate Judge Cam Ferenbach on 9/28/2012. (Copies have been distributed pursuant to the NEF - EDS)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***

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MATGARITO LAGUNAS-SALAZAR, et al.,

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Plaintiffs,
vs.
DALE SUMMERLIN, et al.,

ORDER
[Motion to Compel Production of Authorizations
for Tax Returns on an Order Shortening Time
(#11)]

Defendants.

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2:12-cv-00867-KJD-VCF

The Court held a hearing on defendants’ Motion to Compel Production of Authorizations for Tax

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Returns on an Order Shortening Time (#11) on September 28, 2012.

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Background:

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Plaintiffs filed their complaint in the Eighth Judicial District Court, Clark County, Nevada, on

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November 3, 2011. (#1-1). The action was removed to this court on May 22, 2012. (#1). Plaintiffs

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allege a claim for negligence arising out of an automobile accident that involved the plaintiffs and

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individual defendant Dale Summerland, who is an employee of defendant Rockwell Collins, Inc. (#1-1).

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On May 29, 2012, the defendants propounded requests for production of documents on plaintiffs. (#11).

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Defendants requested that plaintiff Matgarito Lagunas-Salazar produce tax documents. Id. On June 21,

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2012, the parties submitted a proposed discovery plan and scheduling order, which the Court is

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approving today. (#10). On September 20, 2012, the defendants filed the instant motion to compel.

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(#11). On September 21, 2012, the court issued a minute order giving plaintiffs until September 26,

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2012, to deliver to chambers the completed W-2 forms and tax returns and to file an opposition to the

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motion. (#13). On September 26, 2012, plaintiffs complied with the court’s orders and delivered to

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chambers copies of the W-2 forms and tax returns. (#14).

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Discussion:

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Defendants ask this court to compel the production of authorizations for tax returns for plaintiff

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Matgarito Lagunas-Salazar. (#11). Plaintiff Mr. Lagunas alleges that he can no longer work because of

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his injuries, and as such, defendants asks for his full income tax returns for five years prior to the

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accident through the present date. Id. Plaintiff only provided the first page of the returns, and did not

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provide authorization or any W-2s. Id. Defendants argue that this information is needed to fully assess

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plaintiff’s claim for loss wages and loss of future income. Id. Defendants assert the production of the

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tax documents is appropriate because (1) plaintiff made the tax documents relevant by asserting a claim

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for loss wages, and (2) defendants are not able to obtain the information any other way. Id. (citing

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Gattegno v. Pricewaterhousecoopers, LLP, 205 F.R.D. 70 (D. Conn. 2001).

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Plaintiff asserts that defendants did not attempt to resolve this matter pursuant to LR 26-7(b)

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prior to filing the motion. (#14). The defendants allegedly “failed to offer the merits of their position

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when attempting to resolve the dispute pre-motion with the same specificity with which they have

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briefed the issues in the Motion to Compel.” Id. Plaintiffs assert that they have been more than willing

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to work with defendants through discovery, and that the instant motion was not necessary. Id. Plaintiffs

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also argue that defendants did not demonstrate that the tax documents are relevant to this action as

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required under Fed. R. Civ. P. 26(b)(1).

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Plaintiffs rely on A. Farber & Partners, Inc. v. Garber, 234 F.R.D. 186, 190-91 (C.D. Cal.

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2006), where the court enumerated a test regarding the production of tax returns as follows: “First, the

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court must find that the returns are relevant to the subject matter of the action. Second, the court must

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find that there is a compelling need for the returns because the information contained therein is not

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otherwise readily obtainable.” Id. (citation omitted); see also Cooper, 34 F.R.D. at 482-85; Gattegno,

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205 F.R.D. at 71-72; Flores v. Albertsons, Inc., 2002 WL 1163623, 3-4 (C.D. Cal. 2002); Hilt v. SFC

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Inc., 170 F.R.D. 182, 188 (D. Kan. 1997). Plaintiff asserts that this two part test must be utilized to

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“assure a balance between the liberal scope of discovery and the policy favoring the confidentiality of

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tax returns.” A. Farber & Partners, Inc., 234 F.R.D. at 191.

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Plaintiffs concede that plaintiff Mr. Lagunas’ income is at issue, but state that he has already

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provided the defendants with the first page of his 1040 showing his income, and that he offered to

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produce IRS form W-2s for the requested years demonstrating the apportionment of his and his wife’s

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incomes. Id. These “source alternatives” for the information defendants seek are sufficient, and

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defendants have failed to demonstrate that the complete tax returns are necessary. Id. Plaintiffs’ request

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an award of attorney’s fees for having to oppose this motion in light of the fact that the motion was filed

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three days after plaintiff offered to provide the very information defendant requested. Id.

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Federal Rule of Civil Procedure 34(a) permit each party to serve the opposing party with

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document requests within the scope of Rule 26(b) that are “relevant to any party’s claim or defense...”

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or, for good cause shown, “relevant to the subject matter involved in the action.” Fed. R. Civ. P. 26(b).

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Relevance within the meaning of Rule 26(b)(1) is considerably broader than relevance for trial purposes.

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See Oppenheimer Fund v. Sanders, 437 U.S. 340, 351 (1978) (citation omitted). For discovery purposes,

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relevance means only that the materials sought are reasonably calculated to lead to the discovery of

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admissible evidence. Id.

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Pursuant to Rule 37(a)(3)(B)(iv), “[a] party seeking discovery may move for an order compelling

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an answer, designation, production, or inspection” if “a party fails to respond that inspection will be

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permitted – or fails to permit inspection – as requested under Rule 34.” Fed. R. Civ. P. 37(a)(3)(B)(iv).

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Rule 37(a)(5)(A) states that “[i]f the motion is granted--or if the disclosure or requested discovery is

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provided after the motion was filed--the court must, after giving an opportunity to be heard, require the

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party or deponent whose conduct necessitated the motion, the party or attorney advising that conduct, or

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both to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees.”

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Fed. R. Civ. P. 37(a)(5)(A).

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IT IS HEREBY ORDERED that plaintiff will produce to defendants to one copy of plaintiff

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Matgarito Lagunas-Salazar’s 2004 through 2011 completed tax returns, on or before 5:00 p.m., October

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2, 2012. If the case is still pending when plaintiffs file a later tax return, a copy of that return will be

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produced promptly after filing.

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IT IS FURTHER ORDERED that defendants may not disclosed the contents of plaintiff

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Matgarito Lagunas-Salazar’s tax returns beyond the attorneys working on the case, the attorney’s office

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staff, the adjustor, and the experts. Should the need arise for defendant to disclose the plaintiff’s tax

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information beyond those stated in the previous sentence, defendant’s counsel must check with

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plaintiff’s counsel first.

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IT IS FURTHER ORDERED that defendants should give plaintiff fifteen (15) days’ notice prior

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to using the tax returns as exhibits in a deposition. If the plaintiff objects, the parties must file

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simultaneous briefs one (1) week before the deposition.

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DATED this 28th day of September, 2012.
_________________________
CAM FERENBACH
UNITED STATES MAGISTRATE JUDGE

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