Case Number: 13Y00178 Hearing Date: May 22, 2014 Dept: 77

Defendant HTL Automotive, Inc.’s Motion to Quash Deposition Subpoena for Production of Financial Records, or in the Alternative to Modify Deposition Subpoena and for a Protective Order; Request for Sanctions is DENIED. CCP § 1987.1.

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; Weil & Brown, Civ. Pro. Before Trial (The Rutter Group 2008) ¶ 8:598.

Information may be shielded from discovery if its disclosure would impair a person’s “inalienable right of privacy” provided by Article 1, Section 1 of the California Constitution. Rylaarsdam, et al., California Practice Guide: Civil Procedure Before Trial, section 8:293, citing Britt v. Superior Court (1978) 20 Cal.3d 844, 855–856. But, this privilege is qualified, not absolute. In each case, the court must carefully balance the right of privacy against the need for discovery. Disclosure may be ordered if a “compelling public interest” would be served thereby. Rylaarsdam, supra, at section 8:294, citing Britt, supra, 20 Cal.3d at 855–856; John B. v. Superior Court (2006) 38 Cal.4th 1177, 1199.

The Court must determine whether the records must be produced by carefully balancing the interests involved, i.e., the claimed right of privacy versus the public interest in obtaining just results in litigation. Rylaarsdam, supra, at section 8:323, citing Valley Bank of Nevada v. Superior Court (1975) 15 Cal.3d 652, 657; Alch v. Superior Court (2008) 165 Cal.App.4th 1412, 1422. The factors to be considered include:

(1) the purpose of the information sought;
(2) the effect that disclosure will have on the parties and the trial;
(3) the nature of the objections urged by the party resisting disclosure; and
(4) the “ability of the court to make an alternative order which may grant partial disclosure, disclosure in another form, or disclosure only in the event that the party seeking the information undertakes certain specified burdens which appear just under the circumstances.”

Valley Bank of Nevada, supra, 15 Cal.3d at 658; Pioneer Electronics (USA), Inc. v. Superior Court (2007) 40 Cal.4th 360, 371.

The more “sensitive” the information (e.g., personal financial information, customer lists, trade secrets, etc.), the greater the need for discovery must be shown. Rylaarsdam, supra, at section 8:324, citing Hoffman Corp. v. Superior Court (1985) 172 Cal.App.3d 357, 362; Tien v. Superior Court (2006) 139 Cal.App.4th 528, 540. However, even sensitive personal information may be ordered disclosed if it is shown to be “directly relevant” and “essential to a fair determination” of the action. Rylaarsdam, supra, at section 8:326, citing Alch, supra, 165 Cal.App.4th 1412, 1431–1432.

Moreover, “An order compelling discovery must rest on a showing that the discovery is reasonably calculated to lead to admissible evidence…” Cadiz Land Co. v. Rail Cycle (2000) 83 Cal. App. 4th 74, 117. “California’s liberal approach to permissible discovery generally has led the courts to resolve any doubt in favor of permitting discovery…. In doing so, the courts have taken the view if an error is made in ruling on a discovery motion, it is better that it be made in favor of granting discovery of the nondiscoverable rather than denying discovery of information vital to preparation or presentation of the party’s case or to efficacious settlement of the dispute.” Norton v. Sup. Ct. (1994) 24 Cal. App. 4th 1750, 1761. Parties requesting discovery information are not first required to prove that it would be relevant and admissible. Alch v. Sup. Ct. (2008) 165 Cal.App.4th 1412, 1429-31.

Here, this motion is denied. While the Court will allow Defendant to correct any misunderstandings that the Court has, the Court’s view is that this motion is frivolous. The information sought is central to the case, and indeed is essential to a fair determination of the action. The subpoena is thus reasonably calculated to lead to admissible evidence. There is a sound basis for the Plaintiff to seek the bank records. And the subpoena is narrowly tailored.

The check at issue in this case is written to payee Hooman Collision. A key issue in this case is the veracity of Defendant H.T.L. Automotive Inc.’s denial that it has a connection to Hooman Collision, and Defendant’s additional denial that it controlled Farmers & Merchant Bank Account No. 14198363, into which the check may have been deposited. The Plaintiff has an extraordinarily compelling reason to contest Defendant’s denials: the pre-fabricated endorsement stamp on the cashed check at issue includes (a) both the names of H.T.L. Automotive and Hooman Collision, and (b) Farmers & Merchange Bank No. 14198363. (The first digit of this number on the stamp is unclear to the Court, as is the significance of the number “122201198” elsewhere on the stamp; if Defendant’s motion is actually predicated on Defendant’s unarticulated knowledge that Plaintiff simply has read the wrong particular account number on the stamp, Defendant should make that information known.)

Based on the endorsement stamp alone, Plaintiff has a compelling justification — and even a necessity — to seek documents from the bank that identify the account owner’s name, as it does in Attachment 3 to the subpoena. Plaintiff accordingly has a compelling justification to seek bank statements from the account for April and May 2011, as the check was issued on or about April 28, 2011, and seeking those bank statements is the narrowest way to obtain documents that would confirm that the check was deposited into the account.

Accordingly, this motion is denied.

Plaintiff’s Request for Sanctions is GRANTED. The Court finds sanctions are warranted under CCP § 1987.2. Defendant is ordered to pay sanctions to plaintiff and its attorney in the amount of $1855 within 30 days.

Moving party to give notice.