Davis v. Colonial Freight Systems, Inc. et al

Filing 101

MEMORANDUM AND ORDER granting 90 Motion to Compel. Once Plaintiff receives a copy of his federal and state tax returns from 2014 through 2016, he SHALL provide Defendants a copy without delay. Signed by Magistrate Judge H Bruce Guyton on 4/24/18. (JBR)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE
THEODUS DAVIS, on behalf of himself and
those similarly situated,
Plaintiff,
v.
COLONIAL FREIGHT SYSTEMS, INC., et al.,
Defendants.

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No. 3:16-CV-674-TRM-HBG

MEMORANDUM AND ORDER
This case is before the undersigned pursuant to 28 U.S.C. § 636, the Rules of this Court,
and Standing Order 13-02.
Now before the Court is Defendants’ Motion to Compel the Production of Plaintiff’s Tax
Returns [Doc. 90]. The parties appeared telephonically before the Court on April 11, 2018, for a
motion hearing. Attorneys Justin Swidler and Travis Martinndale-Jarvis appeared on behalf of
Plaintiff. Attorneys E. Ashley Paynter, Christopher Eckhart, and Richard Hollow appeared on
behalf of Defendants.

Accordingly, for the reasons set forth below, the Court GRANTS

Defendants’ Motion [Doc. 90].
I.

POSITIONS OF THE PARTIES
Defendants request [Doc. 90] that the Court compel the production of Plaintiff’s tax

returns. For grounds, Defendants state that they served Plaintiff with Requests for Production of
Documents and Things (“Requests for Production”) on July 14, 2017.

The Requests for

Production sought Plaintiff’s state and federal income business and personal income tax returns
for the years 2010 through 2016. Plaintiff objected to this Request for Production and also asserted
that he was not in possession of his state and federal tax returns. Plaintiff has since produced a

copy of his 2012 federal income tax return. Later, Plaintiff stated that due to an error on the part
of counsel’s staff, Plaintiff received “certain summaries” from the Internal Revenue Service
(“IRS”) but could not confirm their accuracy. In addition, Plaintiff interposed a new objection on
the basis of the Fifth Amendment. Subsequently, Plaintiff stated that he did not have custody or
control over the tax returns and that upon receipt, he would review them and decide whether to
object. Defendants assert that Plaintiff’s tax returns are relevant because he claims that he was
misclassified as an independent contractor and that Defendant Colonial Freight Systems, Inc.,
(“Colonial”) failed to pay him minimum wage. Defendants explain that his 2014 through 2016
state and federal tax returns will shed light on how Plaintiff classified himself, how he claimed his
expenses (i.e., truck lease payments, fuel and operating costs), and the net income amount Plaintiff
claimed.
Plaintiff responded in opposition [Doc. 97], arguing that the Court should refrain from
deciding Defendants’ Motion to Compel until after Plaintiff has received his tax returns from the
IRS and after Plaintiff has decided whether to stand on his prior objection to producing the same.
Plaintiff states that Defendants sought Plaintiff’s tax returns from 2010 to 2016 but that Plaintiff
only worked for 2014 through 2016. Plaintiff continues that his tax returns are not in his control.
Plaintiff explains that his counsel requested the tax information in December 2017, but Plaintiff
received a tax transcript, which is an IRS-created summary containing information purportedly
from the tax return. Plaintiff properly requested the tax returns on March 15, and his request is
currently pending. Plaintiff states that once he receives and reviews the tax returns, he will be in
a better position to assess his objections. Plaintiff requests the Court to hold the Motion to Compel
in abeyance until Plaintiff has received the tax returns. Plaintiff states that once he receives his
tax returns, he will produce the records or renew/continue his objections and submit a supplement

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to the Court explaining the basis of such objections. Plaintiff also asserts that the tax returns are
not relevant and that he should not have to submit his tax returns in order to prosecute this case.
Plaintiff explains that there is no dispute that Defendant Colonial classified him as an independent
contractor, Plaintiff believes his tax preparer followed Defendant Colonial’s designation, and he
does not intend to argue that he told the IRS that he was an employee. Plaintiff submits that how
he classified his expenses on his tax return is irrelevant because Defendant Colonial never paid
him his expenses.
II.

ANALYSIS
As mentioned above, the Court held a hearing on April 11, 2018. During the hearing,

Defendants argued that the tax returns are relevant, not just with respect to how Plaintiff classified
his expenses, but whether Plaintiff received income from other sources. Plaintiff argued that
Defendants’ request was premature because Plaintiff does not have his tax returns. Plaintiff
responded that with respect to other income sources, Defendants asked this question during his
deposition. Plaintiff continued that his tax returns are only relevant if he worked elsewhere at the
time he worked for Colonial, and there is no evidence that he worked elsewhere. Plaintiff argued
that as a truck driver, he was required to track his hours by law.
The Court has carefully considered the parties’ arguments. As an initial matter, Plaintiff
requests that the Court hold the Motion to Compel in abeyance. The Court finds this request not
well taken, given that the discovery requests were served in July 2017. Accordingly, Plaintiff’s
request is denied.
The next question before the Court is whether Plaintiff’s tax returns are discoverable.
Federal Rule of Civil Procedure 26(b)(1) governs the scope of discovery and provides that
“[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s

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claim or defense and proportional to the needs of the case . . .” The Court finds that Plaintiff’s tax
returns are relevant with respect to the time period that he worked for Defendant Colonial. See
also Queen v. City of Bowling Green, No. 1:16-CV-00131-JHM, 2017 WL 4355689, at *7 (W.D.
Ky. Sept. 29, 2017) (explaining that “[i]t is well settled in the Sixth Circuit that tax returns are not
privileged from disclosure”) (citing DeMarco v. C & L Masonry, Inc., 891 F.2d 1236, 1240 (6th
Cir. 1989) (other citations omitted). Specifically, the Court finds Plaintiff’s tax returns to be
relevant in light of the nature of the dispute (i.e., whether Plaintiff was misclassified as an
independent contractor). See Keller v. Miri Microsystems LLC, 781 F.3d 799, 807 (6th Cir. 2015)
(“If a worker has multiple jobs for different companies, then that weighs in favor of finding that
the worker is an independent contractor.”). The Court, however, is mindful that Plaintiff is not
currently in possession of his tax returns but that he has initiated the process to receive the tax
returns. Accordingly, the Court expects Plaintiff to produce the tax returns without delay once he
receives them.1
III.

CONCLUSION
Accordingly, for the reasons explained above, Defendants’ Motion to Compel the

Production of Plaintiff’s Tax Returns [Doc. 90] is GRANTED. Once Plaintiff receives a copy of
his federal and state tax returns from 2014 through 2016, he SHALL provide Defendants a copy
without delay.
IT IS SO ORDERED.
ENTER:

United States Magistrate Judge
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The Court observes that Plaintiff also states that his tax returns are confidential. The
parties are free, however, to submit a joint motion and an agreed order protective order, consistent
with Federal Rule of Civil Procedure 26(c), with respect to any documents produced in discovery
that are confidential.
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