Judge Mark A. Young, Case Number: 20SMCV00819, Date: 2023-09-26 Tentative Ruling

MOTION: Defendant Michael Levine’s Motion to Quash Deposition Subpoenas for Production of Business Records

Plaintiff Tom Yang (“Plaintiff”) filed suit on June 17, 2021 against Venice Business Partners, Inc. (“VBP”), Michael Lloyd Levine (“Levine”), VBP Motorsports LLC dba VBP Motorsports I LLC (“Motorsports I”), and VBP Motorsports II (“Motorsports II”).

A court may quash a subpoena entirely or partially, and issue an order to protect parties, witnesses or consumers from unreasonable or oppressive demands including violations of privacy. (CCP §1987.1.) “When a motion to quash is properly brought, the burden of proof is placed upon the plaintiff to establish the facts of jurisdiction by a preponderance of the evidence.” (Aquila, Inc. v. Sup. Ct. (2007) 148 Cal.App.4^th 556, 568.)

On October 4, 2023, Plaintiff issued four separate subpoenas to two different financial institutions. Two subpoenas were issued to Bank of America requesting financial documents for both Defendants Levine and VBP. Two identical subpoenas requested the same from JPMorgan Chase Bank, N.A. Levine asserts three arguments in support of quashing these subpoenas. First Levine argues that the documents invade the privacy rights of Levine, and of third parties. Second, Levine argues that Plaintiff has inadequately described the documents requested. Finally, Levine argues that the subpoenas are overbroad and unduly burdensome. As explained below, the Court disagrees, and the Motion is denied.

“Although the scope of civil discovery is broad, it is not limitless.” (Calcor Space Facility v. Superior Court, (1997) 53 Cal.App.4^th 216, 233.) A court must balance the need for discovery with the right of privacy. Our state Supreme Court created a three-step test for just such an occasion. “The party asserting a privacy right must establish a legally protected privacy interest, an objectively reasonable expectation of privacy in the given circumstances, and a threatened intrusion that is serious. (Williams v. Superior Court (2017) 3 Cal.5^th 531, 552, citing Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1.) “The party seeking information may raise in response whatever legitimate and important countervailing interests disclosure serves, while the party seeking protection may identify feasible alternatives that serve the same interests or protective measures that would diminish the loss of privacy. A court must then balance these competing considerations.” (Id.)

Here, Levine has pointed the Court to his personal finances and a legally protected privacy interest. (See Fortunato v. Superior Court (2003) 114 Cal.App.4^th 475, 480-481 and the CA Const. Art. 1, § 1.) Plaintiff, however, has raised a key countervailing interest that overrides Levin’s privacy rights in the case.

Plaintiff argues that the alter ego allegations as to the fourth cause of action for fraudulent inducement override Levine’s privacy interests. Plaintiff allege that Levine, VBP, Motorsports I, and Motorsports II were not separate entities by simply the same entity. (SAC, ¶ 16.) Thus, discovery of financial documentation is crucial to determine that the elements of the alter ego allegations, specifically, whether any commingling of funds took place, whether any entity uses the same offices and employees, and whether one is acting as the mere shell for the other. The financial documents requested are reasonably likely to demonstrate whether these alter ego allegations can be supported. Additionally, there is no other way Plaintiff would be able to obtain this information outside of a subpoena.

For these reasons, the ascertainment of the truth of these allegations outweighs Levine’s privacy interests. Similar to Hecht, Solberg, Robinson, Goldberg & Bagley LLP v. Superior Court (2006) 137 Cal.App.4^th 579, which held that a nonparty law firm, who had a protectible financial privacy right, was not precluded from handing over documents showing the law partnership’s financial records when those records revealed essential details to the case, here, Levine’s records are critical to the alter ego allegations.

Levine also attempts to argue that the privacy rights of third parties will also be invaded, however, not only does Levine fail to identify which third parties will have their privacy rights invaded, but also fails to disclose how they would be violated. The subpoenas focus on the accounts owned by Levine and VBP, and the transactions of those account owners.

Levine’s contends that the deposition subpoena fails to adequately describe the documents sought. Levine attempts to analogize to Calcor Space Facility, Inc. v. Superior Court (1997) 53 Cal.App.4th 216, 223, however, this Court finds that this case is very different from Calcor. In Calcor, the plaintiff served a motion to compel on a nonparty requesting broad categories of documents and other materials without identifying specific documents. Additionally, the plaintiff included almost three pages of definitions and another three pages of instructions. (Id. at 216). The deficiencies present in Calcor are absent here. Plaintiff’s definitions and instructions amount to three pages total, and the requests make up the fourth and final page. More important than the length of the request is the substance; here Plaintiff describes in detail what is being sought:

“Request for Production No. 1: DOCUMENTS reflecting any transfer of funds or payments, through any and all means, including wire transfers, bank deposit entries, ledger entries, statements, cash payments, and check payments, from the VBP account(s) with BANK OF AMERICA, during the period of August 1, 2018 to the date that YOU respond to this demand for production.”

The terms “wire transfers”, “bank deposits entries”, and “statements” refer to specific manners in which money is sent and transactions are documented. Indeed, Bank of America has already responded to Plaintiff’s subpoena without issue.[1] Therefore, there is no reason why JPMorgan Chase Bank, N.A. should not do the same.

Finally, Levine argues that the subpoenas are overbroad and unduly burdensome. Levine misconstrues the subpoenas to demand that the banks search through five years of financial records across all branches and employees. The subpoenas are not requesting documentation regarding every interaction Levine or VBP has had with an employee or branch. As noted above, the subpoenas are seeking specific documents that reflect the financial status of Levine and VBP from shortly before the transaction at issue until now, which amounts to roughly five years. Many banks have sophisticated record keeping technology which makes this task much simpler than Levine implies. One bank has already responded to the subpoenas. Additionally, the causes of action and alter ego allegations support the production of the requested financial documentation.

The moving party here requests sanctions pursuant to CCP § 2023.010 (c). The opposing party requests the same under CCP § 2023.010(e). At this time to Court declines to impose sanctions on either party.

Accordingly, Defendant Michael Levine’s Motion to Quash Deposition Subpoenas for Production of Business Records and request for sanctions is DENIED.

[1] The Court’s ruling here, therefore, solely applies to the two subpoenas served on JPMorgan Chase, Bank N.A., as the subpoenas from Bank of America were already responded to and are therefore moot in this Motion.