Bricker et al v. R&A Pizza Inc et al
Filing
101
ORDER granting in part and denying in part 68 Motion to Compel. Plaintiffs shall provide the tax returns for the stated years or provide authorizations for the release of those returns to the R&A defendants within seven days of the date of this order. Further, Plaintiffs shall provide the previously agreed upon income verification within the same time frame. Signed by Magistrate Judge Terence P Kemp on 5/23/2011. (er1)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Hilary Bricker, et al.,
:
Plaintiffs,
:
v.
:
Case No. 2:10-cv-278
:
JUDGE MICHAEL H. WATSON
Magistrate Judge Kemp
R & A Pizza, Inc., et al.,
Defendants.
:
ORDER
This employment discrimination case is before the Court to
consider the motion to compel filed by defendants R & A Pizza and
Russell Mentzer.
Through this motion, the defendants seek to
compel the production of tax returns filed by plaintiffs Hilary
Bricker and Katie Bricker from 2007 through the present.
Alternatively, the defendants seek authorizations allowing the
returns to be obtained directly from the Internal Revenue
Service.
The motion has been fully briefed.
For the following
reasons, the motion (#68) will be granted in part and denied in
part.
I.
The Motion to Compel
The background of this case has been detailed in this
Court’s previous orders and will not be repeated here.
In their
motion, the R & A defendants assert that tax returns are
discoverable when they are relevant and when the information they
contain is otherwise unavailable.
They contend that the
Brickers’ returns are relevant because the returns contain
information relating to the issue of damages resulting from lost
income and the veracity of the Brickers’ testimony regarding
their decisions to continue or end their employment with R & A
Pizza.
Further, the R & A defendants argue that the information
they are seeking, at least as it relates to tip income from other
sources, is unavailable from the Brickers’ W-2 forms or from
other past employers.
In response, the Brickers argue that the information
relating to income from other employers contained in their tax
returns dating back to 2007 simply is not relevant.
They contend
that the income Katherine Bricker earned working for an employer
prior to R & A Pizza is not relevant to calculating the amount of
wages she lost when her employment with R & A Pizza was
terminated.
Further, the Brickers dispute the defendants’
assertion that the tax return information will address Hilary
Bricker’s claim that she maintained her employment with R & A
Pizza because she could not afford to quit or Katherine Bricker’s
claim that she was forced to resign.
The Brickers concede that
the information in their tax returns relating to their income
from R & A Pizza may be relevant, but contend that this
information is readily available from their W-2 forms.
In reply, the R & A defendants argue that the tax returns
are relevant to the theories of defense, and specifically to the
issue of the Brickers’ mitigation of damages.
Further, they
claim that they have tailored their request for tax returns to
include only the relevant dates relating to their defense
theories.
Additionally, they contend that they cannot obtain tip
information from the records of other employers because, at least
with respect to Katherine Bricker, six of her employers lack any
records relating to her employment.
Finally, the defendants
assert that the Brickers have not produced the income information
for the period of time following their termination or
constructive discharge as they had agreed.
Consequently, the
defendants seek to compel this information as well.
II.
Legal Standard
The general principles involving the proper scope of
-2-
discovery are well known.
The Federal Rules of Civil
Procedure authorize extremely broad discovery.
United States
v. Leggett & Platt, Inc., 542 F.2d 655 (6th Cir. 1976), cert.
denied 430 U.S. 945 (1977).
Therefore, Fed.R.Civ.P. 26 is to be
liberally construed in favor of allowing discovery.
Dunn v.
Midwestern Indemnity, 88 F.R.D. 191 (S.D.Ohio 1980).
Any
matter that is relevant, in the sense that it reasonably may
lead to the discovery of admissible evidence, and is not
privileged, can be discovered.
The concept of relevance
during discovery is necessarily broader than at trial, Mellon
v. Cooper-Jarrett, Inc., 424 F.2d 499 (6th Cir. 1970), and
"[a] court is not permitted to preclude the discovery of
arguably relevant information solely because if the
information were introduced at trial, it would be
'speculative' at best."
Coleman v. American Red Cross, 23
F.3d 1091, 1097 (6th Cir. 1994).
Information subject to disclosure during discovery need
not relate directly to the merits of the claims or defenses
of the parties.
Rather, it may also relate to any of the
myriad of fact-oriented issues that arise in connection with
the litigation.
340 (1978).
Oppenheimer Fund, Inc. v. Sanders, 437 U.S.
On the other hand, the Court has the duty to
deny discovery directed to matters not legitimately within
the scope of Rule 26, and to use its broad discretionary
power to protect a party or person from harassment or
oppression that may result even from a facially appropriate
discovery request.
(1979).
See Herbert v. Lando, 44l U.S. 153
Additionally, the Court has discretion to limit or even
preclude discovery which meets the general standard of relevance
found in Rule 26(b)(1) if the discovery is unreasonably
duplicative, or the burden of providing discovery outweighs the
benefits, taking into account factors such as the importance of
-3-
the requested discovery to the central issues in the case, the
amount in controversy, and the parties’ resources.
Fed.R.Civ.P. 26(b)(2).
See
Finally, the Court notes that the scope
of permissible discovery which can be conducted without leave of
court has been narrowed somewhat by the December 1, 2000
amendments to the Federal Rules.
Rule 26(b) now permits
discovery to be had without leave of court if that discovery “is
relevant to the claim or defense of any party ....”
Upon a
showing of good cause, however, the Court may permit broader
discovery of matters “relevant to the subject matter involved in
the action.”
Id.
III.
Analysis
It is well-settled in the Sixth Circuit that tax returns are
not privileged from disclosure.
DeMarco v. C & L Masonry, Inc.,
891 F.2d 1236 (6th Cir. 1989); see also Credit Life Ins. Co. v.
Uniworld Ins. Co., 94 F.R.D. 113 (S.D. Ohio 1982).
Some courts,
in recognizing the sensitive nature of the information contained
in tax returns, have adopted a qualified privilege or stricter
relevancy standard.
See, e.g., Terwilliger v. York International
Corp., 176 F.R.D. 214 (W.D. Va. 1997).
This standard applies a
two-pronged test which analyzes whether the returns are relevant
to the issues raised and, if so, whether the information is not
otherwise available.
Id.
Some district courts within the Sixth
Circuit have endorsed this two-part test for determining when
discovery of a party’s tax returns is permissible.
See, e.g.,
Smith v. Mpire Holdings, LLC, 2010 WL 711797 (M.D. Tenn. Feb. 22,
2010);
BM Investments v. Hamilton Family, L.P., 2008 WL 1995101
(E.D Mich. May 6, 2008).
At the same time, other district courts
have held that the appropriate analysis simply “is whether the
tax returns are relevant to the claim or defense of any party.
Fed.R.Civ.P. 26(b)(1).”
Westbrook v. Charlie Sciara & Son
Produce Co., Inc., 2008 WL 839745, at *3 (W.D. Tenn. March 27,
-4-
2008); see also Kumar v. Hilton Hotels Corp., 2009 WL 3681837
(W.D. Tenn. Oct. 30, 2009); LaPorte v. B.L. Harbert
International, LLC, 2010 WL 4323077 (W.D. Ky. Oct. 26, 2010).
The Sixth Circuit has not adopted the two-part test or heightened
relevancy standard.
See Sciara; Kumar.
With respect to the issue of relevancy, courts typically
find tax returns to be relevant in actions where a party’s income
is in issue, as, for example, where a claim for lost wages has
been asserted.
See, e.g., Reed v. Tokio Marine and Nichido Fire
Ins. Co. Ltd., 2010 WL 420921 (W.D. La. Feb. 1, 2010); Glenford
Yellow Robe v. Allender, 2010 WL 1780266 (D.S.D. April 30, 2010);
Twilley v. International Bedding Corp., 2009 WL 2970407 (N.D.
Ind. Sept. 10, 2009); Burns v. St. Clair Housing Authority, 2008
WL 4837614 (S.D. Ill. Nov. 6, 2008).
In such cases, the
information in tax returns is relevant, especially as it relates
to mitigation of damages.
See, e.g., Kumar, 2009 WL 3681837;
Jackson v. Unisys, Inc., 2010 WL 10018 (E.D. Pa. Jan. 4, 2010).
Here, the R & A defendants seek income tax records for both
Brickers from 2007 through the present.
They contend, with
respect to Hilary Bricker, that the information contained in her
tax returns is relevant to her deposition testimony that she
stayed at R & A Pizza despite Mr. Mentzer’s alleged behavior
because she needed the money.
With respect to Katherine Bricker,
they contend that the information is relevant to the
circumstances of her allegedly forced resignation.
With respect
to both Hilary and Katherine Bricker, they contend that the
information is relevant to their claims of lost wages and the
issue of mitigation.
The Bricker plaintiffs do not dispute that tax returns are
discoverable for a relevant time period as they relate to their
lost wages claims.
However, they contend that, with respect to
Katherine Bricker, tax returns for years prior to her employment
-5-
with R & A Pizza are not relevant to her lost wages claim.
Further, the Bricker plaintiffs assert that income earned by
either of them apart from that earned at R & A Pizza is not
relevant to any of their claims.
They claim that the only
relevant income is that which they earned from R & A Pizza and
that the R & A defendants already have that information available
through W-2 statements.
According to the amended complaint, Hilary Bricker began
working for R & A Pizza on August 25, 2005, and Katherine Bricker
began working for R & A Pizza on August 8, 2008.
Turning first
to Katherine Bricker, the R & A defendants have not addressed the
issue of the relevancy of her tax returns relating to income
earned prior to her employment at R & A Pizza in 2008.
They have
not addressed how such information could be relevant to either
her lost wages claim or the circumstances of her allegedly forced
resignation.
Consequently, the motion to compel will be denied
as to Katherine Bricker’s tax returns for 2007.
With respect to the remaining tax returns, the Court finds
that the information they contain is relevant to the Brickers’
claims.
There is no question that both plaintiffs have put their
income in issue, thereby making the information contained in the
tax returns relevant to issues of lost wages and mitigation.
Beyond this, however, the R & A defendants assert that the tax
returns are relevant to provide them a more clear picture of the
Brickers’ income earned from other sources as it relates to their
decisions either to remain employed by, or terminate their
employment with, R & A Pizza.
Presumably, this information could
support defense theories that Hilary Bricker could have afforded
to leave her employment at R & A Pizza but chose not to or that
Katherine Bricker was not forced to resign but chose to leave
because she was earning more money elsewhere.
In light of this,
the Court agrees that the information contained in these tax
-6-
returns may lead to the discovery of admissible evidence relating
to the R & A defendants’ theories of defense and, therefore, is
relevant.
To the extent that this Court needs to consider the second
issue of whether this information is available from other
sources, the R & A defendants have demonstrated that it is not.
While, as the Brickers assert, some of the information the R & A
defendants are seeking is contained within W-2 forms already
within their possession, this is only so with respect to the
Brickers’ employment with R & A Pizza.
As discussed above, based
on their theories of defense, the R & A defendants seek income
information from employers other than R & A Pizza during the
relevant time period.
They contend that they have been unable to
obtain this information from other sources because at least one
former employer is no longer in business and other records are
scant or non-existent.
The Brickers do not dispute the lack of
availability of this information through sources other than tax
returns, having instead focused their argument solely on this
information’s irrelevance.
For all of the above reasons, the
motion to compel will be granted with respect to Hilary Bricker’s
tax returns from 2007 to the present and Katherine Bricker’s tax
returns from 2008 to the present.
The Court notes that, to the extent it is granting the
motion to compel, some concern over privacy protection arises as
a result of the sensitive nature of the information involved.
While the Brickers have not requested any type of protective
order, they summarily have expressed a privacy concern.
In
recognition of this privacy concern, the R & A defendants have
noted that all parties except the Brickers previously have
approved a protective order in this case.
According to the R & A
defendants, the Brickers have not accepted or rejected this
protective order.
Consequently, to the extent the Brickers have
-7-
a privacy concern relating to this information, they are directed
to consider the terms of the protective order already drafted in
this case.
In the event this protective order does not
appropriately address their concerns with respect to their tax
returns, they may seek a protective order from the Court relating
to the returns.
Finally, the Court notes that, to the extent that the
Brickers have agreed to produce income verification dating from
the termination of their employment with R & A Pizza but have not
done so, the motion to compel will be granted.
IV.
Conclusion
For the reasons stated above, the motion to compel (Doc.
#68) is granted in part and denied in part as set forth above.
Plaintiffs shall provide the tax returns for the stated years or
provide authorizations for the release of those returns to the R
& A defendants within seven days of the date of this order.
Further, Plaintiffs shall provide the previously agreed upon
income verification within the same time frame.
V.
Procedure for Reconsideration
Any party may, within fourteen days after this Order is
filed, file and serve on the opposing party a motion for
reconsideration by a District Judge.
28 U.S.C. §636(b)(1)(A),
Rule 72(a), Fed. R. Civ. P.; Eastern Division Order No. 91-3, pt.
I., F., 5.
The motion must specifically designate the order or
part in question and the basis for any objection.
Responses to
objections are due fourteen days after objections are filed and
replies by the objecting party are due seven days thereafter.
The District Judge, upon consideration of the motion, shall set
aside any part of this Order found to be clearly erroneous or
contrary to law.
This order is in full force and effect, notwithstanding the
filing of any objections, unless stayed by the Magistrate Judge
-8-
or District Judge.
S.D. Ohio L.R. 72.4.
/s/ Terence P. Kemp
United States Magistrate Judge
-9-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?