Judge: Mark H. Epstein, Case: 21SMCV00085, Date: 2023-04-18 Tentative Ruling
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Case Number: 21SMCV00085 Hearing Date: April 18, 2023 Dept: R
The motion to quash is GRANTED.
Plaintiff rented a unit to defendants. Defendants did not pay the rent as owed. That led to a dispute and eventually defendants vacated the premises, still without paying all of the rent due. Defendants claimed that they did not need to pay right away due to COVID protections, and they asserted financial hardship. Plaintiff claims that defendants not only owe the rent, but that they also trashed the unit and will owe the costs of repair. In addition, plaintiff asserts a variety of other torts, claiming that there was fraud in the inducement and fraud related to the COVID declaration. More specifically, plaintiff alleges that defendants did not have the kind of financial hardship envisioned by the COVID moratoria but rather simply chose to use their money to finance the construction of other property.
At issue here are two third party subpoenae. The one to JPMorgan Chase bank seeks a broad swath of financial information for a 1.75 year period including all cancelled checks that cleared, although plaintiff is willing to limit the scope to checks of at least $1000. Plaintiff also seeks loan applications submitted between 2019 and 2020. The other subpoena is to UCLA and seeks W-2 and 1099 statements from UCLA, plaintiff Chayes’ employer.
The court is convinced that this invades defendants’ right to privacy. Defendants, two individuals, have a constitutional right to privacy. That does not mean that their finances are for all purposes off limits, but it does mean that the normal discovery standard does not apply. Rather, the court must balance the plaintiff’s need for the information against the intrusion on defendants’ financial privacy. Plaintiff asserts there is very little real intrusion. Plaintiff notes that defendants have settled another case without a confidentiality provision and that they have in other ways disclosed certain financial information. The court agrees that to the extent defendants have disclosed financial information as part of a settlement that has no confidentiality provision, the settlement agreement might itself be discoverable. But that hardly warrants the kind of subpoena issued to JPMorgan Chase. The court appreciates that plaintiff was willing to reduce the time period to 2020—12 months instead of 21—and to checks of $1000 or more, but the intrusion remains significant and to get that material, plaintiff must articulate some important need for the information and demonstrate that there are not less intrusive means of getting it.
The court does not see a huge need for defendants’ financial information. To the extent defendants owe money for past due rent or for damage to the property, they do; this discovery has nothing to do with that. The only issue the court sees here—and the one articulated by plaintiff—is whether the COVID declaration was true or false. There again, that assertion hardly seems to be this case’s true heart. The COVID declaration had nothing to do with inducing plaintiff to enter into the lease. The lease far predated the COVID moratoria. And by the time the COVID declaration was signed, defendants had vacated the premises. In other words, defendants did not use the COVID declaration to avoid eviction—they were already gone. At most the COVID declaration might delay the time they had to pay the rent (which has come due in any event) and might relieve them from some penalties. Or it might not. But it is hardly at the heart of this litigation and getting the information must be done in a targeted way, not the blunderbuss discovery plaintiff propounded. Plaintiff also suggests that this goes to credibility. This court will not allow a fishing expedition into defendants’ finances in the hope that it will lead to some credibility attack. The bottom line is that there might be some legitimate need to intrude to some extent on defendants’ financial privacy, but it is not a huge need and it does not require a huge intrusion. The subpoena to JPMorgan Chase is overbroad.
As to the UCLA request, the court agrees the subpoena is much narrower. But it goes directly to tax information. The better approach would have been to subpoena, for example, the year end pay stub or some limited number of pay stubs to the extent that there is some legitimate debate about money defendants received from UCLA (and there might be), or a year end pay stub and any other remittance from UCLA to plaintiffs for something other than salary or expense reimbursement.
The bottom line is that the subpoenae are overbroad and intrusive. It is not the court’s job to try and craft its own discovery with a narrower scope. While the court has discretion to do so, it is not required and the court will exercise its discretion in this case not to do so. Plaintiff can try again, but plaintiff ought to be more careful.
In the meantime, the court will reluctantly agree that all future meet and confers can be in writing only. At least it appears that these parties are unable to have a civil conversation. Plaintiff’s counsel declares that defendants spent the bulk of the meet and confer yelling at her and not letting her speak and also stating that they intended to make the case so expensive that plaintiff could never recover a net sum. Defendants assert that this is nothing but a pack of lies, but the court is not so sure. If it occurred, it is inappropriate and sanctionable. Defendants claim that plaintiff spent the time threatening them and threatening to put defendant’s ex-wife and child on the witness stand. While it could be that those parties will ultimately be witnesses, given that plaintiff has turned this case into a blood feud (with help from the defense), such a threat seems aimed more at the same target as defendants’ alleged attack. The fact is that this case has devolved into more of a Jarndyce v. Jarndyce situation than a real legal debate. This kind of behavior needs to stop and stop now, but the court has no level of confidence that it will. However, because the court no longer requires the parties to speak to one another, there will be a written record of what is said and the court believes it has ample tools at its disposal to impose appropriate sanctions—including, if necessary, terminating sanctions—if one party gets the message and the other party does not.
Another alternative, and one that the court is considering seriously, is to have a discovery referee appointed who will not only decide discovery matters (by making a report and recommendation), but will also preside over meet and confer efforts to the extent that they are to be oral. The costs would be divided initially between the parties with reallocation a possibility on a dispute by dispute basis.