Gaedeke Holdings VII LTD et al v. Thrower et al

Filing 655

ORDER denying 628 plaintiffs' Motion to Compel Landon Speed, Todd Baker and Baker Petroleum and Investments, Inc. to Produce Tax Returns (as more fully set out). Signed by Honorable Vicki Miles-LaGrange on 9/9/2015. (ks)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
GAEDEKE HOLDINGS VII LTD., et al.,
Plaintiffs,
vs.
LANDON SPEED, et al.,
Defendants.

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Case No. CIV-11-649-M

ORDER
Before the Court is plaintiffs’ Motion to Compel Landon Speed, Todd Baker and Baker
Petroleum and Investments, Inc. to Produce Tax Returns, filed July 22, 2015. On August 3, 2015,
defendants Landon Speed, Todd Baker, and Baker Petroleum and Investments, Inc. (“Defendants”)
filed their response, and on August 7, 2015, plaintiffs filed their reply. Based upon the parties’
submissions, the Court makes its determination.
Plaintiffs move the Court for an order compelling Defendants to turn over their personal and
business tax returns. Plaintiffs assert they need these tax returns in order to trace where the profits
from three large transfers of cash – one for $641,250, one for $855,000, and one for $172,125 –
went.1 Plaintiffs further assert that this information is not otherwise readily obtainable because
Defendants did not keep records of how this money was divvied up and now profess not to
remember.
“Tax returns do not enjoy an absolute privilege from discovery.” Biliske v. Am. Live Stock
Ins. Co., 73 F.R.D. 124, 126 n.1 (W.D. Okla. 1977). However, “[t]he Court recognizes that a public
policy against the unnecessary public disclosure of tax returns indicates that a Court should not

1

In their reply, plaintiffs broaden their argument as to why they need the tax returns and
assert that they need the tax returns in order to determine the amount of “profit” Defendants earned.

require the production of tax returns where the information sought is readily obtainable by other
means or from other sources.” Id. (citations omitted).
In their response, Defendants assert that in April of 2013, they provided plaintiffs with the
documents they need to determine how revenue received from defendant Baker Petroleum and
Investments, Inc.’s sale of leases in southwest Oklahoma was spent and distributed. Specifically,
Defendants assert they have produced unredacted copies of bank records, and that the records
contained every statement as well as copies of every check and every deposit slip for each account.
Further, Defendants assert that records for the Key Largo2 account encompassed the entire duration
of the Key Largo account, from the time it was opened through the time it was zeroed out and the
account was closed. Defendants also assert that they have produced all of their lease files and copies
of receipts, invoices and other documents evidencing the expenses incurred to acquire the leasehold.
Plaintiffs do not dispute that Defendants produced these records. Additionally, Defendants contend
that plaintiffs brought redacted bank records, rather than the unredacted records, to the depositions
of defendants Landon Speed and Todd Baker and that defendants Speed and Baker needed the
unredacted bank statements to fully answer plaintiffs’ questions.
Having carefully reviewed the parties’ submissions, the Court finds that Defendants should
not be compelled to produce their personal and business tax returns. Specifically, the Court finds
that the information sought through the tax returns is readily obtainable by other means and/or from
other sources. In fact, the unredacted bank records that have already been produced to plaintiffs
contain the information plaintiffs would need to determine Defendants’ “profits” and/or how

2

“Key Largo” was the name given to the project in southwest Oklahoma that is at issue in
this case, and defendant Baker Petroleum and Investments, Inc. opened a bank account specifically
for the Key Largo project.
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revenue was spent and distributed.3 Further, the Court finds that plaintiffs have not sufficiently
shown that the tax returns would, in fact, contain the information they seek. Defendants assert that
the tax returns indicate income in the aggregate and do not parse out what income came from what
given project or particular oil and gas investment. Plaintiffs have not shown otherwise.
Accordingly, the Court DENIES plaintiffs’ Motion to Compel Landon Speed, Todd Baker
and Baker Petroleum and Investments, Inc. to Produce Tax Returns [docket no. 628].
IT IS SO ORDERED this 9th day of September, 2015.

3

In their reply, plaintiffs assert that because there are at least four different expense totals in
this case and disagreement regarding the profit Defendants earned, they need to see what Defendants
reported to the IRS on the subject of profits. The fact that different individuals have calculated
different expense totals and profits from the bank records, however, does not indicate that the bank
records themselves do not adequately provide the information plaintiffs are seeking. It simply
indicates that different individuals, using the same information, have come to different conclusions.
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