Judge: Andrew E. Cooper, Case: 20CHCV00479, Date: 2023-05-04 Tentative Ruling

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Case Number: 20CHCV00479    Hearing Date: May 4, 2023    Dept: F51

Dept. F-51

Date: 5/4/23

Case #20CHCV00479

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F-51

MOTION TO COMPEL FURTHER RESPONSES

(Request for Production of Documents, Set 3)

Motion filed: 3/3/23

MOVING PARTY: Plaintiff Thomas Allen (“Plaintiff”)

RESPONDING PARTY: Defendant Sowers Construction, Inc. (“Defendant”)

NOTICE: ok 

RELIEF REQUESTED: An order compelling Defendant to provide further responses to Plaintiff’s Request for Production of Documents, Set 3, Nos. 67–79. Plaintiff also requests monetary sanctions against Defendant in the amount of $2,822.50.

REQUEST FOR JUDICIAL NOTICE:

Defendant’s request for judicial notice is GRANTED.

TENTATIVE RULING: The motion is granted in part. Defendant is ordered to reproduce responsive documents Bates stamped SOWERS 00146–00371, 00546–00585, 002163–002197 with business revenue for the relevant period unredacted. All remaining requests to compel further responses are denied. Sanctions are denied. Compliance is due no later than 30 days from this date.

The parties are reminded to review the 5/3/19 First Amended General Order Re Mandatory Electronic Filing for Civil. When e-filing documents, parties must comply with the “TECHNICAL REQUIREMENTS” which are set forth at page 4, line 4 through page 5, line 12 of the Court’s 5/3/19 First Amended General Order Re Mandatory Electronic Filing for Civil (particularly bookmarking declarations and exhibits). (CRC 3.1110(f)(4).) Failure to comply with these requirements in the future may result in papers being rejected, matters being placed off calendar, matters being continued so documents can be resubmitted in compliance with these requirements, documents not being considered and/or the imposition of sanctions.

BACKGROUND

On 11/18/22, the Court ordered Plaintiff to serve new RFPs that were narrowly tailored in scope. On 12/13/22, Plaintiff served his third set of RFPs on Defendant. On 1/17/23, Defendant served its responses thereto.

On 3/3/23, Plaintiff filed the instant motion to compel Defendant’s further responses to Plaintiff’s third set of RFPs. On 4/21/23, Defendant filed its opposition. On 4/27/23, Plaintiff filed his reply.

ANALYSIS

A propounding party may move for an order compelling further responses to a discovery request if it decides that: “(1) A statement of compliance with the demand is incomplete”; “(2) A representation of inability to comply is inadequate, incomplete, or evasive”; or “(3) An objection in the response is without merit or too general.” (Code Civ. Proc. § 2031.310, subd. (a).)

Here, Plaintiff seeks to compel additional responses to his third set of RFPs, specifically RFP Nos. 67–79.

I.                   Meet and Confer

Plaintiff has satisfied the preliminary meet and confer requirement under Code of Civil Procedure section 2031.310, subdivision (b)(2).

II.                Privacy Objections

Plaintiff seeks an order compelling Defendant to produce further unredacted responsive documents to RFP Nos. 67–72, 75–76, and 78–79, arguing that Defendant has no right to privacy in such information. “The right to privacy under article I, section 1 of the California Constitution ‘extends to one's confidential financial affairs.’ … This right embraces confidential financial information in ‘whatever form it takes, whether that form be tax returns, checks, statements, or other account information.’” (Overstock.com, Inc. v. Goldman Sachs Group, Inc. (2014) 231 Cal.App.4th 471, 503.) When the production of such private information is sought by way of discovery, the burden falls on the party asserting a privacy interest to show that their privacy interests are so serious that they outweigh the interests of the subpoenaing party’s prospective invasion. (Williams v. Superior Court (2017) 3 Cal.5th 531, 557.)

A.    Balancing Test

The constitutional right to privacy applies to individuals, but not to corporations. (SCC Acquisitions, Inc. v. Superior Court (2015) 243 Cal.App.4th 741, 755–756.) “While corporations do have a right to privacy, it is not a constitutional right.” (Id. at 756.) Therefore, a balancing test must be used, where “the discovery's relevance to the subject matter of the pending dispute and whether the discovery ‘appears reasonably calculated to lead to the discovery of admissible evidence’ is balanced against the corporate right of privacy.” (Ibid.)

Here, Plaintiff argues that “these documents are directly relevant to the subject lawsuit and are necessary to prove Mr. Allen’s claim and damages against defendants.” (Pl.’s Mot., 7:14–15.) “The unredacted accounting documents sought by this request are directly relevant to Thomas Allen’s claim because they will show if Sowers Construction, Inc. did in fact fail to pay profits owing to Thomas Allen.” (Id. at 7:11–13.) Defendant’s document production appears to contain numerous redactions, including pages of the general ledgers that are entirely redacted. (Exs. 2–3 to Carpinelli Decl.)

In opposition, Defendant contends that such responsive documents, in their unredacted forms, would include such private and confidential information as “the amount of taxes Defendants paid or the amounts Defendants’ employees received in their paychecks. The requested documents also contain confidential and proprietary information such as Sowers’s bank account information and other proprietary financial information that will deprive Sowers of its ability to act competitively in the construction industry, as competitors, including the company being operated by Plaintiff, will be able to use this information to try and gain an unfair advantage.” (Def.’s Opp., 10:2–7.)

Defendant argues that although the requested accounting records may be relevant to proving Plaintiff’s damages, this “relevance in no way outweighs the seriousness of these requests’ invasion of the constitutional privacy interests of Mr. Sowers and third parties.” (Id. at 10:11–13.) “That Plaintiff purportedly needs Defendants’ private, confidential, and proprietary financial information to establish his own claims again does not outweigh the Requests’ infringement on Sowers’s corporate right to privacy.” (Id. at 10:25–27.)

Based on the parties’ arguments, the Court finds, with limitation, that Plaintiff’s right to discover facts relevant to his claims against Defendants outweighs Defendant’s corporate privacy right, particularly where, as here, Plaintiff appears amenable to stipulating to a protective order. Although Plaintiff has a compelling need for the facts he seeks, his requests to Defendant for completely “unredacted copies of Defendants’ General Ledgers” is unreasonably overbroad, thereby encompassing financial information of third parties and other information which is not relevant to Plaintiff’s claims. Defendant has a legitimate privacy interest in its financial records, and, as Defendant observes, “the Court has already found that these requests are overbroad and not reasonably particularized.” (15:26–27.)  Furthermore, this litigation does not justify invading the privacy rights of third parties, such as employees.

Although Plaintiff was instructed to tailor the request, the revision fails to sufficiently tailor the demand when balanced against privacy interests. As such, the Court will tailor the request and order that Defendant produce the requested documents with all business revenue for the relevant period unredacted. The Court recognizes that there is private and confidential information contained in the general ledgers, such as payments, bank account information, employee payroll, and tax information, and therefore does not order that this information be unredacted. However, as stated above, Plaintiff has a right to discover facts relevant to his claims (and limited to his claims), which ultimately involve the amounts allegedly owed to him by Defendants.

Accordingly, Defendant is ordered to produce documents Bates stamped SOWERS 00146–00371, 00546–00585, 002163–002197 with all business revenue for the relevant period unredacted.

B.     Previous Court Rulings

Defendant further argues that Plaintiff’s RFP Nos. 75–76 and 78–79 are identical to RFP Nos. 60–61 and 65–66, which were identical to requests in Plaintiff’s 5/11/22 deposition subpoena for the production of business records on Defendants’ accountant, David Small, which the Court quashed on 7/5/22. (Def.’s Opp. 13:24–26.) In its 7/5/22 ruling, the Court found that “the subpoena violates individuals’ constitutional right to privacy in their financial affairs,” and that “such production in an unredacted form would disclose private and confidential information such as bank account information, employee information, and customer information which would violate the privacy rights of Mr. Sowers and third parties.” (7/5/22 Minute Order, p. 4.) Here, Defendant argues that the Court has previously found the requests as violative of Mr. Sowers’ privacy rights, and Plaintiff therefore has no basis to compel further responses to these requests. (Def.’s Opp., 12:26–13:5.)

The Court notes that Plaintiff does not address this issue on reply. Accordingly, the Court applies its reasoning in its 7/5/22 order quashing Plaintiff’s deposition subpoena on David Small for the production of business records, and its subsequent 11/18/22 ruling on Plaintiff’s motion to compel further responses to his second set of RFPs, and declines to compel the same confidential financial information from Defendant requested by Plaintiff’s RFP Nos. 75–76 and 78–79.

III.             Remaining Objections

Plaintiff argues that Defendant’s remaining objections to his third set of RFPs are evasive and lack merit. (Pl.’s Mot., 5:9.) Such objections include that the requests are overbroad and burdensome, oppressive, and improperly seek to discover attorney work product. (Ex. 13 to Decl. of Shelby Daws.)

In opposition, Defendant observes that “the documents that Defendants previously produced that are responsive to these Requests for Production were not redacted pursuant to overbroad, burdensome, and oppressive objections or attorney work product doctrine and attorney-client privilege objections. … rather, the documents were redacted pursuant to objections based on privacy, third party privacy, confidential information, and proprietary business information.” (Def.’s Opp., 16:15–19.)

Indeed, the privilege log Defendant served alongside its responses to Plaintiff’s second set of RFPs indicates that the financial records were redacted for reasons of “Privacy; Third Party Privacy; Confidential Information; Proprietary Business Information.” (Ex. 6 to Daws Decl.) Accordingly, because Defendant does not intend to invoke these particular objections at this time in relation to the redactions at issue, the Court declines to make any finding as to the substantive issues relating thereto. The Court also notes that Plaintiff raises additional arguments in his reply papers, but likewise declines to reach them as they were raised for the first time on reply.

IV.             Sanctions

“The court shall impose a monetary sanction … against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel further response to a demand, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.” (Code Civ. Proc. § 2031.310, subd. (h).) Additionally, “the court may impose a monetary sanction ordering that one engaging in the misuse of the discovery process, or any attorney advising that conduct, or both pay the reasonable expenses, including attorney’s fees, incurred by anyone as a result of that conduct.” (Code Civ. Proc. § 2023.030, subd. (a).)¿

The Court denies sanctions to both parties, as neither has been completely successful on the motion. Although further responses are being ordered, as noted above, the Court finds that the parties each have a legitimate interest in their respective positions regarding the requested documents. Therefore, the Court finds that the circumstances would make the imposition of sanctions on either party unjust.

CONCLUSION

The motion is granted in part. Defendant is ordered to reproduce responsive documents Bates stamped SOWERS 00146–00371, 00546–00585, 002163–002197 with business revenue for the relevant period unredacted. All remaining requests to compel further responses are denied. Sanctions are denied.