Case Number: VC063271    Hearing Date: August 28, 2014    Dept: SEC

ECM GROUP, INC. v. CITY OF CUDAHY
CASE NO.: VC063271
HEARING: 08/28/14

#4
TENTATIVE ORDER

Plaintiff ECM GROUP, INC.’s motion to quash the deposition subpoena for records, served on Custodian Hector Castro, CPA is GRANTED; and GRANTED as to the deposition subpoena served on Castro only with respect to the production of documents. C.C.P. §§ 1987.1, 2025.420.

The requests for sanctions are DENIED.

Plaintiff provided engineering services to defendant City of Cudahy pursuant to a written contract. In its voluminous Third Amended Complaint, plaintiff makes several claims that defendant breached the agreement by failing to pay the agreed-upon amount, that it poached plaintiff’s employees, and committed several other acts of wrongdoing. The issues presented here pertain primarily to damages.

In its deposition subpoena, defendant seeks plaintiff’s tax returns for 10 years prior to May 2011, and also seeks all of the supporting documentation (bank statements, income data, check registers, client billing, etc). The request is overbroad. Tax returns are protected by qualified privilege, and there is at least some privacy interest in financial information. Schnabel v. Superior Court (1993) 5 Cal.4th 704, 721. Plaintiff did not waive that protection. Id.

Defendant contends that the information sought is relevant (or reasonably calculated to lead to admissible evidence) to plaintiff’s damages claims. While some of the documentation sought may be instrumental in the calculation of damages, the requests are overbroad. Production of ten years of essentially all of plaintiff’s finances goes beyond the scope of that necessary to evaluate damages. For that reason, the motion to quash is granted.

In some instances, the Court will narrow the scope of a subpoena rather than enter an order quashing it. Here, however, it appears unsettled whether plaintiff is withdrawing certain of its damages claims and if it does so, whether defendant is willing to narrow its production requests. In the motion, plaintiff argues that in July 2014, it served on defendant a damages calculations sheet which indicates that plaintiff is no longer seeking loss of good will of its business, losses from other municipalities or for replacement costs associated with the employees allegedly poached. Defendant states in opposition that no formal stipulation has been agreed-upon, and that it intends to pursue the discovery until plaintiff dismisses those damages claim. Further meet and confer is in order. As it stands, the subpoenas are overbroad and quashed for that reason.

Defendant is entitled to take the oral deposition of Mr. Castro, who was designated the PMK on plaintiff’s financial situation. He likely has information regarding plaintiff’s profits and losses, timeliness of payments, how invoices are computed, etc. If defendant elects to depose Castro prior to the production of documents, it may do so.