Judge: Stuart M. Rice, Case: BC570051, Date: 2025-01-03 Tentative Ruling
Case Number: BC570051 Hearing Date: January 3, 2025 Dept: 1
Moving Party: Defendant Gen Alhambra LLC
Responding Party: Third-Party Employment Development
Department
Ruling: Motion to compel subpoena denied. Defendant is required to comply with the
consumer notice requirements of the Code of Civil Procedure.
This is a wage and hour class and Private Attorney General
Act (PAGA) action. The Court granted preliminary approval of a settlement
on November 21, 2023. Final approval of the settlement has seemingly
stalled because defendant Gen Alhambra LLC (Defendant) is missing roughly 25%
of the social security numbers of the settlement class. Defendant
requested that information from the Employment Development Department (EDD) but
was unable to obtain it through public records requests, and so served a
subpoena on the EDD. The EDD objected on various grounds. Defendant
now moves to compel the EDD to comply with the subpoena and for $1,000 in
sanctions.
While the Court has provided a full legal analysis of the
motion below, it must be noted that a delay of over a year to obtain Final
Approval of this settlement is unacceptable. It is entirely unclear why the
defendant does not have copies of its own employment and tax return records, which
should have been maintained in the normal course of business. It is equally
troubling that the EDD is devoting resources to opposing this motion rather
than assisting the Defendant in providing this recompense to workers in the
State of California. Certainly, there are options to provide the needed
information that would not run afoul of legal requirements which the EDD must
adhere to that could have been worked out without court intervention and
further delay. The parties should be prepared to discuss a solution to this
relatively simple matter at the time of the hearing.
Legal Standards
A party seeking discovery from a person who is not a party
to the action may obtain discovery by oral deposition, written deposition, or
deposition subpoena for production of business records.¿ (Code Civ. Proc., §
2020.010.)¿ A deposition subpoena may command either: (1) only the attendance
and testimony of the deponent, (2) only the production of business records for
copying, or (3) the attendance and testimony of the deponent, as well as the
production of business records, other documents, electronically stored
information, and tangible things.¿ (Code Civ. Proc., § 2020.020.)¿¿¿
¿
A service of a deposition subpoena shall be affected a
sufficient time in advance of the deposition to provide the deponent a
reasonable opportunity to locate and produce any designated documents and,
where personal attendance is commanded, a reasonable time to travel to the
place of deposition.¿ (Code Civ. Proc., § 2020.220, subd. (a).)¿ Personal
service of any deposition subpoena is effective to require a deponent who is a
resident of California to: personally appear and testify, if the subpoena so specifies;
to produce any specified documents; and to appear at a court session if the
subpoena so specifies.¿ (Code Civ. Proc., § 2020.220, subd. (c).)¿ A deponent
who disobeys a deposition subpoena may be punished for contempt without the
necessity of a prior order of the court directing compliance by the witness.¿
(Code Civ. Proc., § 2020.240.)¿A motion to compel compliance with a deposition
subpoena must be made within 60 days after completion of the deposition record,
the date objections are served, or the date specified for production, and be
accompanied by a meet and confer declaration. (Code Civ. Proc., §2025.480,
subd., (b); Board of Registered Nursing v. Sup.Ct. (2021) 59
Cal.App.5th 1011, 1032-1033.)¿
Discussion
The subpoena at issue requests production of “All unredacted
records Gen Alhambra, LLC filed with the EDD on forms DE 9/DE9C dated from
1/1/2012 to 12/31/2018; and forms DE 34 from dated from [sic]
1/1/2012-12/31/2018.” (Choe Decl., Ex. 5.) As discussed, the
Defendant argues that it should be able to obtain its own tax returns that it
filed with the EDD in order to recover the social security numbers needed to
complete the settlement. It is unclear why Defendant does not have this
information in its own records already. Nonetheless, there is no dispute
that what Defendant is seeking from the EDD are its own documents, which it
created and submitted to the EDD.
The EDD does not contend that it would be unreasonably
burdensome to locate the documents and comply with the subpoena, and indeed,
the EDD has a mechanism in place for processing document requests of this
kind. The EDD simply contends that Defendant has failed to comply with
particular procedural requirements and that certain statutes and privileges
forbid disclosure of the information Defendant seeks. The Court will
address these contentions in turn.
First, the EDD contends that the subpoena was not personally
served, as is required under Code Civ. Proc. § 2020.220(b) and (c). While
that may be, the EDD did not raise that objection in its response to the
subpoena. The only apparent objection that the EDD stated is that the
“Subpoena is not for Disability Insurance of Unemployment Insurance
records.” (See Choe Decl., Ex. 7.) There does not appear to have
been any prejudice in Defendant’s failure to personally serve the subpoena on
the EDD, which is not a natural person, and appears to have received the
subpoena in such a way as to be able to object to it and oppose Defendant’s
motion. This objection has been waived.
b.
Notice to Consumer
Next, the EDD argues that Defendant has failed to comply
with the procedures for obtaining the personal records of employees set forth
in Code Civ. Proc. §§ 1985.3 and 1985.6. As held in Board of
Registered Nursing v. Superior Court of Orange County (Johnson &
Johnson) (2021) 59 Cal.App.5th 1011 (Johnson & Johnson),
A deposition subpoena that seeks
“personal records pertaining to a consumer” must be accompanied by proof that
the consumer was served with notice of the subpoena or by the consumer's
written authorization to release his or her personal records. [Citation.]
[¶…¶]
State agencies are specifically
included in the consumer notice requirement. [Citation.] The statutory
procedures are applicable to any subpoena seeking “‘personal information’”
maintained by an agency that is otherwise exempt from public disclosure. (Ibid.)
The term “personal information,” as adopted by the consumer notice statutes,
means “any information that is maintained by an agency that identifies or
describes an individual, including, but not limited to, his or her name, social
security number, physical description, home address, home telephone number,
education, financial matters, and medical or employment history. It includes
statements made by, or attributed to, the individual.”
(Id. at 1037.)
Although the records sought were created by the subpoenaed
agencies in that case, they contained personal information of consumers, and
therefore the subpoenaing party was required to comply with the notice
requirements:
Because defendants' subpoenas seek
the personal information of investigated or disciplined health care
professionals, without redaction, defendants were required to provide notice to
these persons. Defendants did not do so. The state agencies properly refused to
produce such information. (See Code Civ. Proc., § 1985.3, subd. (k).) The trial
court erred by ordering its production.
(Id. at 1038.)
Here, it is undisputed that the information Defendant seeks
includes “personal information” as that term is defined in Civ. Code §
1798.3(a), which governs the notice procedures of Code Civ. Proc. §
1985.3. (See Code Civ. Proc. § 1985.4 [applying Code Civ. Proc. § 1985.3
to subpoenas for “personal information” under Civ. Code § 1798.3 maintained by
state or local agencies].)
Defendant contends that this objection was waived as
well. “Any one may waive the advantage of a law intended solely for his
benefit.” (Civ. Code § 3513.) However, the notice procedures of
Code Civ. Proc. § 1985.3 are not for the benefit of the EDD, but for the
benefit of the employees whose personal information might be subject to
disclosure. EDD was without standing to waive compliance on behalf of the
employees. There has therefore been no waiver. Defendant does not
dispute that the records it seeks otherwise come within Code Civ. Proc. §
1985.3. The Court must therefore deny Defendant’s motion.
To avoid wasted effort should Defendant comply with Section
1985.3 and be required to serve another subpoena, the Court will nonetheless
address the EDD’s other contentions.
c.
Failure to Follow Power of Attorney Procedure
The EDD contends that Defendant did not follow the EDD’s
procedures for designating a person with power of attorney to whom the records
could be disclosed. Now that Defendant has served a subpoena, this is a
moot point and irrelevant to disposing of this motion. There is no
requirement that any particular person within a subpoenaing entity authorize
the subpoena, rather issuance of subpoenas is part of the agency of the
entity’s litigation counsel. The Court is satisfied that Defendant’s
counsel possesses the necessary authorization from Defendant to request the
records sought by the subpoena.
2. Substantive
Protections
The EDD contends that Unemp. Ins. Code § 1094 prohibits
disclosure of the records Defendant seeks through the subpoena. That
section provides that “[e]xcept as otherwise specifically provided in this
code, the information obtained in the administration of this code is
confidential, not open to the public, and shall be for the exclusive use and
information of the director in discharge of his or her duties.” To be
clear, Defendant is seeking its own filings with the EDD that it made over the
past many years. As is patent from the record, the EDD has a system in
place for releasing its records upon request. (See, e.g., Choe Decl., Ex.
1 [EDD authorization form], Ex. 2 [EDD power of attorney declaration].)
It is difficult to imagine how Unemp. Ins. Code § 1094 could possibly be
intended to prevent a company from accessing its own filings, particularly
where the EDD has set up a system for doing so by records request. At no
time during that process did the EDD assert that Defendant’s records were
confidential and privileged as to Defendant or that Unemp. Ins. Code § 1094
forbade compliance with Defendant’s request. It was only upon receipt of
the subpoena that the EDD so asserted. (See Choe Decl., Ex. 9.)
Assuming that Unemp. Ins. Code § 1094 is unambiguous,
denying Defendant access to its own filings simply because they were filed in
compliance with the administration of the unemployment insurance laws is an
absurd result. “Even unambiguous statutes must be construed to avoid
absurd results which do not advance the legislative purpose[.]” (Upland
Police Officers Association v. City of Upland (2003) 111
Cal.App.4th 1294, 1304.) The EDD offers no legislative purpose to be
served by refusing to supply Defendant with its own records, and none is
apparent to the Court. No case the EDD cites concerns a subpoenaing party
requesting their own records, and the EDD’s authority is therefore unhelpful to
its position. The Court rejects the EDD’s reliance on Unemp. Ins. Code § 1094
under the circumstances presented here.
The EDD’s reliance on Unemp. Ins. Code § 2111 is unavailing
as well. That section provides that “Except as otherwise provided in
Section 1094, and except with respect to information furnished by the
department in connection with its participation as a party or as a lien
claimant in a judicial or administrative proceeding, information obtained in
the course of administration of this division is confidential and shall not be
published or open to public inspection in any manner.” (Unemp. Ins. Code
§ 2111.) Defendant does not propose to publish its filings or open them
to public inspection and is amenable to the protective order the EDD proposes
(as is the Court). Unemp. Ins. Code § 2111 furnishes no ground to resist
compliance with the subpoena.
The EDD also relies on Unemp. Ins. Code § 13018, which
provides that “the information furnished or secured pursuant to this division shall
be used solely for the purpose of administering the tax laws or other laws
administered by the person or agency obtaining it. Any willful unauthorized
inspection or unwarranted disclosure or use of the information by the person or
agency, or the employees and officers thereof, is a misdemeanor.” (Id., subd.
(a).) The statute goes on to read that “[t]he department shall notify a
taxpayer of any known incidents of willful unauthorized inspection or
unwarranted disclosure or use of the taxpayer’s confidential tax records, but
only if criminal charges have been filed for the willful unauthorized
inspection or unwarranted disclosure.” (Id., subd.
(b).) Taking these two subdivisions together, the restriction on use
“solely for the purpose of administering the tax laws” furnished by Unemp. Ins.
Code § 13018 is meant to apply to the EDD and other similar
agencies, not a taxpayer requesting their own records, as a
taxpayer does not administer tax laws. The Unemployment Insurance Code cannot
reasonably be interpreted to forbid a taxpayer from accessing their own
records.
b.
Official Information Privilege
The EDD also contends that the official information
privilege contained in Evid. Code § 1040 supports their refusal to provide the
limited records sought. This section provides:
(a) As used in this section,
“official information” means information acquired in confidence by a public
employee in the course of his or her duty and not open, or officially
disclosed, to the public prior to the time the claim of privilege is made.
(b) A public entity has a privilege
to refuse to disclose official information, and to prevent another from
disclosing official information, if the privilege is claimed by a person
authorized by the public entity to do so and either of the following apply:
(1) Disclosure is forbidden by an
act of the Congress of the United States or a statute of this state.
(2) Disclosure of the information
is against the public interest because there is a necessity for preserving the
confidentiality of the information that outweighs the necessity for disclosure
in the interest of justice; but no privilege may be claimed under this
paragraph if any person authorized to do so has consented that the information
be disclosed in the proceeding. In determining whether disclosure of the
information is against the public interest, the interest of the public entity
as a party in the outcome of the proceeding may not be considered.
The EDD contends that disclosure is “forbidden by an act of
the Congress of the United States or a statute of this state” under subdivision
(b)(1). For the reasons discussed above, disclosure is not in fact
forbidden by a statute of this state. 20 C.F.R. § 603.4 does not forbid
it either, is not an “act of the Congress of the United States,” and
furthermore, is subject to a subpoena exception. (See 20 C.F.R. §
603.5(h) [“Disclosure of confidential UC information in response to a court
order or to an official with subpoena authority is permissible as specified in
§ 603.7(b).”])
The EDD further contends that the Court must engage in the
balancing test provided under Evid. Code § 1040, subd. (b)(2). However,
the statute provides that no privilege may be claimed under that subdivision
where “any person authorized to do so has consented that the information be
disclosed in the proceeding.” (Ibid.) Defendant’s counsel
has repeatedly so consented. The EDD therefore cannot claim the privilege
under that paragraph so as to require a balancing analysis.
3. Sanctions
Because the Court is denying Defendant’s motion for the
reasons stated above, no sanctions are authorized here. However, even if
the Court were inclined to grant Defendant’s motion, the Court would not award
sanctions against the EDD. The EDD is a public agency which is seeking to
uphold its legislative mandate to keep safe the information entrusted to
it. While the Court does not agree with most of the EDD’s
positions, they were nonetheless taken in the service of its public duties
and obligations as the agency understood them.
Conclusion
For the foregoing reasons, the motion is denied. Defendant
is required to comply with the Notice to Consumer provisions of the Code
of Civil Procedure with respect to the employees whose information would be
contained in the records sought. The Court otherwise overrules the EDD’s
objections to the subpoena. Defendant to give notice.