Judge Theresa M. Traber, Case Number: 22STCV04378, Date: 2024-05-14 Tentative Ruling

Judge: Theresa M. Traber, Case: 22STCV04378, Date: 2024-05-14 Tentative Ruling

Case Number: 22STCV04378 Hearing Date: May 14, 2024 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: May 14, 2024 TRIAL DATE: March 11, 2025

CASE: G&P Group, Inc, v. City National Bank

CASE NO.: 22STCV04378

MOTION TO QUASH THIRD-PARTY SUBPOENAS FOR BUSINESS RECORDS

MOVING PARTY: Plaintiff G&P Group, Inc.

RESPONDING PARTY(S): Defendant City National Bank

CASE HISTORY:

· 02/03/22: Complaint filed.

· 01/05/23: First Amended Complaint filed.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is an action for breach of contract stemming from a commercial banking agreement.

Plaintiff moves to quash a series of third-party subpoenas for business records propounded to various financial institutions by Defendant.

TENTATIVE RULING:

Plaintiff’s Motion to Quash Third-Party Subpoenas for Business Records is GRANTED.

This ruling is conditioned on payment of $300 in filing fees within 10 days of this order.

DISCUSSION:

Plaintiff moves to quash a series of third-party subpoenas for business records propounded to various financial institutions by Defendant.

Multiple Motions in One

Plaintiff has improperly moved to quash six separate subpoenas in a single motion. Multiple motions should not be combined into a single filing.¿(See¿Govt. Code,¿§ 70617(a)(4) [setting forth the required filing fee for each motion, application, or any other paper or request requiring a hearing];¿see¿also¿Weil & Brown, Civil Procedure Before Trial, [8:1140.1] at 8F-60 (The Rutter Group 2011)¿[“Motions to compel compliance with separate discovery requests ordinarily should be filed separately.”].)

In the interest of an efficient resolution of this dispute, the Court will consider all six subpoenas as presented in a single motion. However, the Court will condition its ruling on the payment of an additional $300 in filing fees.

Legal Standard

Code of Civil Procedure section 1987.1 provides:

If a subpoena requires the attendance of a witness or the production of books, documents, or other things before a court, or at the trial of an issue therein, or at the taking of a deposition, the court, upon motion reasonably made by any person described in subdivision (b), or upon the court's own motion after giving counsel notice and an opportunity to be heard, may make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as the court shall declare, including protective orders. In addition, the court may make any other order as may be appropriate to protect the person from unreasonable or oppressive demands, including unreasonable violations of the right of privacy of the person.

(Code Civ. Proc. § 1987.1(a).) There is no meet and confer requirement in section 1987.1. There is no requirement for a showing of good cause for production of documents in connection with a deposition subpoena. (Code Civ. Proc. § 2020.510(b); Terry v. SLICO (2009) 175 Cal.App.4th 352, 358.)

Plaintiff’s Evidentiary Objections

Plaintiff objects to the Declaration of Robert Wartburg in support of Defendant’s opposition to the Motion. The Court rules on these objections as follows:

Objection No. 1: OVERRULED. Objection goes to weight, not admissibility.

The remainder of the objections pertain to statements in the declaration which are not material to the Court’s ruling. The Court therefore declines to rule on the balance of the objections.

Analysis

Plaintiff seeks to quash six deposition subpoenas for business records issued by Defendant to (1) Barclays Bank Delaware; (2) Capital One N.A.; (3) EverBank, N.A., (4) Goldman Sachs Bank USA; (5) JP Morgan Chase Bank, N.A., and (6) PayPal, Inc. Each of the subpoenas sought seven categories of documents and records, consisting of any documents or communications pertaining to accounts opened or held with each institution by Plaintiff since January 1, 2015, including account statements (Nos. 1-3), loans (No. 4), investment products (No. 5), or savings products sought or obtained by Plaintiff from each institution since that date (No. 6). (Declaration of Damion Robinson ISO Mot. Exhs. 4-10 Nos. 1-6.) The subpoenas also sought any documents or communications pertaining to any payment made by Plaintiff to each institution since January 1, 2015, with special emphasis on payments pertaining to accounts, loans, and investment or savings products held by George or Elizabeth Barraza, the individual owners of G&P Group. (Id., No. 7.)

Plaintiff argues these subpoenas are improper because they demand broad disclosure of the private financial information of Plaintiff and its employees, officers, and shareholders.

In ruling on a privacy objection in the context of discovery, the party asserting a privacy right must establish a legally protected privacy interest. (Williams v. Superior Court (2017) 3 Cal.5th 531, 552.) The party asserting a privacy right must also establish an objectively reasonable expectation of privacy in the given circumstances. (Id.) Further, the party asserting a privacy right must establish a threatened intrusion that is serious. (Id.) The Court need not proceed to the fourth step of balancing competing interests if all three of the above are not satisfied. (Id. at 555.) If the Court reaches the fourth step, the Court must balance the competing considerations. The party seeking information may raise whatever legitimate and important countervailing interests disclosure may serve. (Id. at 552.) The party seeking protection may identify feasible alternatives that serve the same interests or protective measures that would diminish the loss of privacy. (Id.) Courts may not require the party seeking discovery to demonstrate a “compelling need” simply because discovery of any facially private information is sought. (Id. at 556-557.) When a privacy interest is asserted, the party seeking production must show that the information sought is directly relevant to a cause of action or a defense. (Harris v. Superior Court (Smets) (1992) 3 Cal.App.4th 661, 665, citing Britt v. Superior Court (1978) 20 Cal.3d 844, 859-62.)

1. Legally Protected Privacy Interest

As Plaintiff argues, well-established precedent holds that personal financial information falls within the protections of the right to privacy under the California and United States Constitutions. (Valley Bank of Nev. v. Superior Court (1975) 15 Cal.3d 652, 656; City of Carmel-by-the-Sea v. Young (1970) 2 Cal.3d 259, 268.) Defendant does not dispute that Plaintiff has a legally protected privacy interest in the material sought.

2. Reasonable Expectation of Privacy

Plaintiff argues that it has a reasonable expectation of privacy in its financial affairs under these circumstances because the requests for production are so broadly worded that Defendant is seeking essentially all of Plaintiff’s financial information dating back to 2015. In opposition, Defendant argues that Plaintiff has not demonstrated a reasonable expectation of privacy under these circumstances because Plaintiff put its financial condition at issue. In general, a party has a reasonable expectation of privacy in its banking affairs. (Valley Bank, supra, 15 Cal.3d at 656.) Where the financial information “goes to the heart” of a party’s claims, however, that expectation of privacy is diminished. (Rawnsley v. Superior Ct. (1986) 183 Cal.App.3d 86, 91.)

Defendant contends Plaintiff put its financial condition at issue by alleging that Plaintiff was reliant on loans and credit from Defendant, including overdraft credit, to continue operating its business. Plaintiff alleges Defendant placed it in Defendant’s “Special Assets Division” for distressed accounts without justification (¶¶ 28-30), appointed a representative who induced Plaintiff to go into overdraft and become wholly dependent on Defendant (¶¶ 31-36, 42-57), took effective control of Plaintiff’s finances (¶¶ 61-64), and then cut off Plaintiff’s credit and forced it out of business. (¶¶ 71-79.) Defendant argues without meaningful explanation that these allegations somehow suffice to abrogate Plaintiff’s reasonable expectation in the privacy of its dealings with other financial institutions. The Court is not persuaded that Plaintiff should have expected, by bringing this action, that its financial information would be subject to such expansive subpoenas. The Court finds that Plaintiff has a reasonable expectation of privacy in the information sought in these circumstances.

3. Seriousness of Invasion

Plaintiff argues the broad nature of the requests renders the subpoenas a serious intrusion on the privacy of Plaintiff and its employees, officers, and shareholders. Defendant downplays the seriousness of the threatened intrusion by arguing that the protective order entered on June 21, 2023 in this case mitigates the danger posed by the subpoenas. The Court disagrees. These requests seek disclosure of Plaintiff’s entire financial dealings with multiple banking institutions without any meaningful restriction. This is manifestly a serious intrusion into Plaintiff’s privacy interests.

4. Balancing of Interests

In opposition, Defendant argues that this information is directly relevant to Plaintiff’s claims and Defendant’s defenses and cross-claims, but does not point to any particular claim or defense upon which this discovery might bear. Instead, Defendant broadly asserts that it needs information regarding payments made by Plaintiff to other financial institutions to determine whether the overdrafts from Defendant were actually needed for Plaintiff to operate its business. Although Defendant identifies the institutions to which payments were made, no further details are provided regarding these payments. (Declaration of Robert Wartburg ISO Opp. ¶ 11.) Further, Defendant offers no justification for its inference that these unidentified payments might have been used to pay down other lenders or to fund the Barraza’s personal lifestyles. Mere speculation does not suffice to show direct relevance to any of the issues in this action. Moreover, because Defendant does not identify the specific payments which it seeks to investigate, the Court has no basis upon which to find that the balance of interests requires that the subpoenas be enforced, even with some narrowed scope. Instead, the Court is forced to conclude that the balance of interests requires that the subpoenas be quashed in their entirety.

Defendant served blunderbuss subpoenas for records concerning all or substantially all of Plaintiff’s dealings with other financial institutions for the past nine years. In response to Plaintiff’s well-founded privacy objections, Defendant offers only supposition and innuendo, leaving the Court with nothing upon which to permit even narrowed discovery. Plaintiff is therefore entitled to an order quashing the subpoenas.

CONCLUSION:

Accordingly, Plaintiff’s Motion to Quash Third-Party Subpoenas for Business Records is GRANTED.

This ruling is conditioned on payment of $300 in filing fees within 10 days of this order.

Moving Party to give notice.

IT IS SO ORDERED.

Dated: May 14, 2024 ___________________________________

Theresa M. Traber

Judge of the Superior Court

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.