Judge: Deborah C. Servino, Case: 30-2021-01197395, Date: 2023-01-06 Tentative Ruling

Plaintiff Labor Commissioner, State of California’s motion to compel Defendants SNP Pharmacy, LLC (“SNP Pharmacy”), Bentzion Mandelbaum, Michelle Mandelbaum, Brenda Mandelbaum, and Uri Mandelbaum to provide further responses to requests for production of documents; special interrogatories; and form interrogatories-general, is granted.

As a preliminary matter, Defendants have already agreed to provide supplemental responses for the discovery at issue, except for the special interrogatories and requests for production addressed below. (Opp. at pp. 2-3, & fn. 1.) To the extent Defendants have not already served the agreed-to supplemental responses, Defendants are ordered to serve them within 20 days of the notice of ruling.

Special Interrogatories to Defendants SNP Pharmacy and Bentzion Mandelbaum

In nos. 1 and 8, Plaintiff asked SNP Pharmacy to identify “all banks, credit unions, or other financial institutions, including the branch address, with which YOU have ever had an account, safe deposit box, or other monetary interest from 2015 to the present” and “any and all bank accounts in which rental income collected from the BATAVIA PROPERTY was deposited from 2015 to the present.”

In nos. 6, 9, and 10, Plaintiff asked Bentzion Mandelbaum to identify: “all banks, credit unions, or other financial institutions, including branch address, where the Mandelbaum Family 1998 Revocable Trust has ever had an account, safe deposit box, or other monetary interest from 2015 to the present”; “all banks, credit unions, or other financial institutions, including branch address, where YOU have ever had an account, safe deposit box, or other monetary interest from 2015 to the present”; and “ all bank accounts in which rental income collected from the BATAVIA PROPERTY was deposited from 2015 to the present.”

Plaintiff explained in its separate statement that the bank account information sought by these interrogatories are “necessary for Plaintiff to seek discovery of documents that are relevant to Plaintiff’s fraudulent transfer allegations, including (1) whether SNP transferred its assets to avoid payment of the Labor Commissioner’s citation, (2) whether SNP retained control and possession of the Batavia Property, and (3) whether SNP became insolvent at the time of the transfer of the Batavia Property.”

Defendants responded to these interrogatories with objections only, and refused to provide a substantive response. Specifically, Defendants objected these interrogatories were “overbroad” and “seek[] confidential financial and proprietary information that violate[] Defendants’ privacy rights and proprietary interests.” In their opposition, Defendants claimed that they do “not object to the disclosure of that information, however, the requests at issue seek the broad disclosure of all bank account information—which is not sufficiently tailored given the privacy interests at issue.” Furthermore, Defendants argued that Plaintiff had not established why “in light of the other financial records disclosures relevant to the allegations in the Complaint, the blanket disclosure of effectively all bank account information weighs in favor of disclosure to Plaintiff or is necessary to prosecute this matter.” (Opp. at p. 8 [citing Richards v. Superior Court (1978) 86 Cal.App.3d 265, 273].)

Contrary to Defendants’ contention, Plaintiff did not ask for the “blanket disclosure of effectively all bank account information.”  By these interrogatories, Plaintiff has asked Defendants to merely identify the financial institutions where accounts were maintained, and bank accounts where rental income from the subject real property was deposited, during a time period (i.e., 2015 to the present).  In balancing Defendants’ right to privacy against Plaintiff’s right to discovery, the Court finds the balance gives way to permitting the discovery. (See Williams v. Superior Court (2017) 3 Cal.5th 531, 552.)  The identification of banks and bank accounts is directly relevant to proving Plaintiff’s allegations that SNP Pharmacy’s assets were wrongfully transferred after the labor citation was issued against it.  

Accordingly, Defendants are ordered to provide Code-compliant and verified further responses to these special interrogatories, within 20 days of the notice of ruling.

Requests for Production to Defendants Bentzion Mandelbaum, Michelle Mandelbaum, Brenda Mandelbaum, and Uri Mandelbaum

Defendants have not agreed to provide supplemental responses to the following two requests:

“Any and all DOCUMENTS RELATED TO all bank accounts of the Mandelbaum Family 1998 Revocable Trust from 2017 to the present, including monthly statements, signature cards, account applications, and copies of canceled checks.” This is request no. 3 as to Defendant Bentzion Mandelbaum, but it is request no. 4 as to Defendants, Michelle, Brenda and Uri Mandelbaum.

And, “[a]ny and all DOCUMENTS RELATED to bank accounts where rent and other payments RELATED to the use of the BATAVIA PROPERTY were deposited from 2015 to the present.” This is request no. 13 as to Defendant Bentzion Mandelbaum, but it is request no. 14 as to Defendants, Michelle, Brenda and Uri Mandelbaum.

Defendants objected to these requests, and refused to provide a substantive response, on the grounds that they were “vague, ambiguous, and overbroad,” and invade the right of privacy “by seeking information regarding individuals and/or entities not a party to this litigation, which if disclosed, would constitute an unwarranted invasion into the privacy of such individuals and/or entities as protected by, for example, Article 1, Section 1 of the California Constitution (which provides an inalienable right to privacy creating a fundamental societal interest).” Defendants present the same argument they made in opposing Plaintiff’s motions for further responses to the special interrogatories, i.e., that they “do not object to the disclosure of that information, however, the requests at issue seek the broad disclosure of all bank account information – which is not sufficiently tailored given the privacy interests at issue.”

During the meet and confer process, Plaintiff’s counsel had already agreed that the responsive documents could be produced “with individuals’ private financial information not related to the fraudulent transfer claims redacted (with the exception of the last four digits of bank account numbers).” As Plaintiff explains in its reply, this includes redacting information “such as social security numbers, personal residences, dates of birth and financial information not related to the fraudulent transfer action (e.g., amounts on bank account statements going to vendors not having to do anything with SNP . . . [such as] personal care purchases.” (Reply at pp. 2-3.) In other words, the only transactions that should not be redacted, are those that show transactions relating to SNP Pharmacy. Defendants have not explained how, by limiting the information in this manner, their privacy interests would not be adequately protected.

Accordingly, Defendants are ordered to provide Code-compliant and verified further responses and documents, subject to the redactions described above, within 20 days of the notice of ruling.

In connection with this motion, the Court awards Plaintiff monetary sanctions against Defendants. (Code Civ. Proc. §§ 2023.010, 2023.030.) Within 30 days of the notice of ruling, Defendant SNP Pharmacy, LLC shall pay $420 to the State of California.  Within 30 days of the notice of ruling, Defendant Bentzion Mandelbaum shall pay $420 to the State of California.  Within 30 days of the notice of ruling, Defendant Michelle Mandelbaum shall pay $420 to the State of California.  Within 30 days of the notice of ruling, Defendant Brenda Mandelbaum shall pay $420 to the State of California.  Within 30 days of the notice of ruling, Defendant Uri Mandelbaum shall pay $420 to the State of California.

Plaintiff shall give notice of the ruling.