Case Name: Maria Leticia Palacios Pacheco, et al. v. U.S.-Sino Investment, Inc., et al.
Case No.: 1-12-CV-236494

I. Statement of Facts

This action arises out of the death of construction laborer Raul Zapata Mercado (“Decedent”), and was filed by Decedent’s widow, family members, and coworkers (collectively, “Plaintiffs”) against defendants including U.S.-Sino Investment, Inc. and Richard Xin Liu (collectively, “U.S.-Sino”) and Wesley Wun Shyong Chen (“Chen”).

Plaintiffs allege that in the fall of 2011, U.S.-Sino began excavation and foundation construction on a property in Milpitas owned by Chen. On January 25, 2012, a building inspector from the City of Milpitas visited the work site and found the excavation and foundation work to be unsafe. The inspector issued a stop work order for the entire project due to these dangerous conditions. However, the defendants did not notify the workers at the Milpitas property—including Decedent—that conditions were unsafe, and instructed them to continue working. On January 28, 2012, the excavation collapsed, fatally suffocating and crushing Decedent.

Plaintiffs filed this action on November 21, 2012. They filed the operative first amended complaint (“FAC”) on January 22, 2013, alleging the following causes of action: (1) wrongful death (against all defendants); (2) negligence (against all defendants); (3) intentional infliction of emotional distress (against U.S.-Sino Investment, Inc. and Dan Luo); and (4) wage claims (against U.S.-Sino Investment, Inc., Dan Luo, and Chen).

II. Discovery Dispute

On October 20, 2014, U.S.-Sino served Loza Construction Inc. (“Loza”) with a subpoena for the production of business records. The subpoena seeks, inter alia, a broad range of documents associated with Loza’s employment of plaintiffs Faustino Zapata Mercado (“Faustino”) and Martin Valenzuela Gaytan (“Gaytan”), Decedent’s co-workers who were present when Decedent was killed. The parties agree that Loza employed Faustino, Gaytan, and Decedent, although they dispute whether the three workers were acting as Loza’s employees when Decedent was killed. On November 15, 2014, Chen served Loza with two subpoenas for the production of business records seeking identical documents.

During November and December of 2014, Plaintiffs’ counsel raised privacy and related objections to the Loza subpoenas in emails to counsel for U.S.-Sino and Chen, and counsel met and conferred concerning the scope of the subpoenas. Counsel for Chen agreed that his client’s subpoenas were duplicative of U.S.-Sino’s, and stated that Chen would accept a response to U.S.-Sino’s subpoena in lieu of responses to his own subpoenas. Counsel for U.S.-Sino proposed a series of amendments to its subpoena, which were directed towards narrower categories of documents and date ranges than the initial subpoenas. Plaintiffs’ counsel indicated that he would agree to the final proposed amendment so long as counsel further limited the documents requested to those pre-dating Decedent’s death. However, counsel for U.S.-Sino would not agree to this restriction.

On December 11, 2014, Plaintiffs filed the instant motion to quash and/or for a protective order concerning the subpoenas to Loza. On February 4, 2015, U.S.-Sino and Chen (collectively, the “Opposing Defendants”) filed separate oppositions to Plaintiffs’ motion. In his opposition, Chen joins in U.S.-Sino’s opposition and seeks monetary sanctions against Plaintiffs’ counsel. On February 10, 2015, Plaintiffs filed reply papers in support of their motion.

On February 11, 2015, Chen filed sur-reply papers in opposition to Plaintiffs’ motion, and on February 13, 2015, Plaintiffs filed sur-sur-reply papers. The Court will not consider these sur-reply and sur-sur-reply papers given that the parties were not authorized to file them.

III. Legal Standard

The court may, “upon motion reasonably made by a [party] … make an order quashing [a] subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as the court shall declare, including protective orders.” (Code Civ. Proc. (“CCP”), § 1987.1, subds. (a) and (b)(1).) In addition, the court may make “any other order as may be appropriate to protect the [moving party] from unreasonable or oppressive demands,” including unreasonable violations of his or her right to privacy. (Id.)

IV. The Subpoenas

The disputed requests from the subpoena by U.S.-Sino and the subpoenas by Chen are for:

Any and all records pertaining to [Faustino or Gaytan, respectively] related to any employment of him by you, including without limitation employment applications, resumes, references, dates of employment, proof of citizenship/employability in the United States, employment eligibility verification forms, including but not limited to U.S. Citizen and Immigrations Services Form I-9, W-2s, pay stubs or other records of payment, health insurance, entities, persons or companies to [whom] he has provided labor or services through his relationship with you, performance evaluations and reviews, illnesses, vacation time, sick time, worker’s compensation claims, job duties, job descriptions, types of work performed, skills, union affiliation, hours worked, wage or salary information, for the entire period of his employment with you, including to the present if he is presently employed by you.

V. Plaintiffs’ Motion

Plaintiffs move to quash the subpoenas on the grounds that the subpoena by U.S.-Sino does not comply with CCP sections 1985.3 and/or 1985.6 and all of the subpoenas seek private and/or privileged documents that are not relevant to this action.

A. CCP Sections 1985.3 and 1985.6

Pursuant to CCP sections 1985.3 and 1985.6, a subpoenaing party requesting the personal records of a consumer or the employment records of an employee, respectively, must serve the consumer or employee with a copy of the subpoena and a notice of privacy rights. (CCP, §§ 1985.3 and 1985.6, subds. (b) and (e).) Plaintiffs contend that their counsel did not receive notices to Faustino or Gaytan from U.S.-Sino, although they received notices to other plaintiffs whose records were subpoenaed by U.S.-Sino.

However, U.S.-Sino’s notice, which was directed to “Maria Leticia Palacios Pacheco, et al.” in the care of Plaintiffs’ counsel and was accompanied by a copy of the subpoena at issue, was clearly addressed to all of the plaintiffs whose records were encompassed by the subpoena. Service upon Plaintiffs’ counsel was proper. (See CCP, §§ 1985.3 and 1985.6, subds. (b)(1).) Plaintiffs provide no support for the proposition that U.S.-Sino was required to serve multiple copies of this notice where the impacted plaintiffs were represented by the same counsel, and such a requirement would serve no practical purpose.

Plaintiffs’ argument regarding sections 1985.3 and 1985.6 accordingly lacks merit.

B. Privacy and Related Objections

Plaintiffs raise a number of privacy and related objections to the production of the documents encompassed by the subpoenas. The Court will address the categories of documents at issue in turn.

1. Wage and Hour Information

First, Plaintiffs argue that the subpoenas improperly seek tax and pay records, comprising “W-2s, pay stubs or other records of payment,” records concerning “hours worked,” and “wage or salary information.” As urged by Plaintiffs, such records are protected by the privilege against the disclosure of tax returns, the right to privacy in one’s financial affairs, and/or the right to privacy in one’s personnel records. (See Brown v. Super. Ct. (Executive Car Leasing, Inc.) (1977) 71 Cal.App.3d 141, 142 [W-2 forms and other documents integral to tax returns are within the tax return privilege]; Fortunato v. Super. Ct. (Ingrassia) (2003) 114 Cal.App.4th 475, 480-481 [confidential financial information is protected by the right to privacy]; San Diego Trolley, Inc. v. Super. Ct. (Kinder) (2001) 87 Cal.App.4th 1083, 1097 [an employee’s personnel records are protected by the right to privacy].)

As urged by the Opposing Defendants, neither the tax return privilege nor the right to privacy is absolute. (See Fortunato v. Super. Ct., supra, 114 Cal.App.4th at p. 481 [right to privacy must be balanced against the need for discovery; waiver of the tax return privilege is appropriately considered in light of the right to privacy].) However, to obtain discovery where a serious invasion of the right to privacy is shown, the proponent of discovery must demonstrate that the information sought is “directly relevant” to a claim or defense, and “essential to the fair resolution of the lawsuit.” (Britt v. Super. Ct. (San Diego Unified Port District) (1978) 20 Cal.3d 844, 859; see also Binder v. Super. Ct. (Neufeld) (1987) 196 Cal.App.3d 893, 901 [holding that “direct relevance” requires something more than an assertion that the requested discovery might lead to admissible evidence].) Once direct relevance has been demonstrated, the proponent of discovery must also show that the information sought is not available through less intrusive means. (Allen v. Super. Ct. (Sierra) (1984) 151 Cal.App.3d 447, 449.) The court must then carefully balance the right to privacy against civil litigants’ right to discovery. (Pioneer Electronics, Inc. v. Super. Ct. (Olmstead) (2007) 40 Cal.4th 360, 371.)

Plaintiffs argue that Faustino and Gaytan’s wage and hour information is irrelevant to this action, because these plaintiffs do not bring prospective claims for lost wages. In their opposition papers, the Opposing Defendants withdraw their requests for Faustino and Gaytan’s W-2s, but defend their requests for records evidencing Faustino and Gaytan’s hours worked, as well as their payment and salary information. (See
U.S.-Sino’s Opp., pp. 5, 10; Chen’s Opp., p. 13.)

The Opposing Defendants concede that Faustino and Gaytan are not making prospective wage loss claims. (See U.S.-Sino’s Opp., p. 8; Chen’s Opp., pp. 8-9 [Faustino and Gaytan are not “presently” seeking lost income].) Nevertheless, they contend that Faustino and Gaytan’s records are relevant to certain plaintiffs’ claims for loss of financial support from Decedent. The Opposing Defendants argue that, since Faustino and Gaytan were also employed by Loza, any reduction in work available to these plaintiffs following Decedent’s accident would also have impacted Decedent’s earnings. However, while information concerning a general reduction of available hours at Loza may be relevant to Decedent’s future earnings, the Opposing Defendants’ argument does not establish that Faustino and Gaytan’s individual records are directly relevant to claims for loss of Decedent’s financial support. There is no indication that Faustino and Gaytan’s information is more relevant than that of Loza employees in the aggregate, and it would appear that the Opposing Defendants can discover information concerning available hours at Loza by propounding more generalized discovery requests, without the need to compromise Faustino and Gaytan’s privacy interests.

The Opposing Defendants further argue that the pay records they seek are relevant to Faustino and Gaytan’s claims for emotional distress, noting that Gaytan testified that his emotional distress affected his job performance and both plaintiffs state that they require further care and treatment that they cannot afford. However, Faustino and Gaytan assert simple bystander emotional distress claims (see FAC, ¶¶ 10, 12, 75), which do not require a showing of lost wages or financial need. (See Thing v. La Chusa (1989) 48 Cal.3d 644, 667-668 [setting forth the elements of a bystander emotional distress claim].) While records of Faustino and Gaytan’s hours worked and income after the accident may have some tangential relevance to the severity of their ongoing emotional distress, this information is not directly relevant thereto or essential to the fair resolution of their claims.

Finally, the Opposing Defendants contend that Faustino and Gaytan’s wage and hour records are needed to show that Loza was their employer at the time of the accident. Plaintiffs respond that the Opposing Defendants should propound more generalized discovery upon Loza concerning this issue. However, the Court agrees with the Opposing Defendants that Faustino and Gaytan’s pay records from Loza pertaining to the relevant time period of January 2012 are critical evidence regarding whether Loza employed them on the project at issue. In addition, although the Opposing Defendants merely allude to this issue, Faustino and Gaytan do seek to recover their wages from January 26-28, 2012, which they allege were never paid. (See FAC, ¶ 46.) Wage and hour records from this period are essential to this claim as well.

Consequently, the Court will permit discovery of Faustino and Gaytan’s pay records reflecting their work performed during January 2012. In all other respects, the Opposing Defendants have failed to establish their entitlement to Faustino and Gaytan’s wage and hour records.

2. Immigration-Related Records

The subpoenas also seek certain immigration-related records, namely, “proof of citizenship/employability in the United States” and “employment eligibility verification forms, including but not limited to U.S. Citizen and Immigrations Services Form I-9.” These requests implicate Faustino and Gaytan’s rights to privacy in their personnel files. Given that Faustino and Gaytan do not seek prospective lost wages, their eligibility for future employment is not relevant to their claims, and the Opposing Defendants indicate that they no longer seek these records. (U.S.-Sino’s Opp., pp. 5, 10; Chen’s Opp., p. 13.)

Accordingly, the Opposing Defendants do not establish a need to discover Faustino and Gaytan’s immigration-related records.

3. Health Records

Plaintiffs further object to the subpoena’s requests for records related to Faustino and Gaytan’s “health insurance, … illnesses, vacation time, sick time, [and] worker’s compensation claims.” These requests implicate Faustino and Gaytan’s privacy interests in information related to their medical histories (see Board of Med. Quality Assurance v. Gherardini (1979) 93 C.A.3d 669, 679), as well as their privacy rights in their personnel files.

U.S.-Sino withdraws its requests for these records in its opposition papers; however, Chen indicates that he continues to seek Faustino and Gaytan’s “health information.” (U.S.-Sino’s Opp., pp. 5, 10; Chen’s Opp., p. 13, fn.4.) Chen argues that such information is relevant and not privileged because Faustino and Gaytan “have placed in issue claims regarding a shoulder injury and claims for future care and treatment of this injury as well as mental and emotional injuries as a result of the accident.” (Chen’s Opp., p. 11.)

Where medical information is directly relevant to a plaintiff’s claims and essential to the fair resolution of his or her lawsuit, some courts have stated that the plaintiff has “waived” his or her privacy rights in the information at issue. (See Vinson v. Super. Ct. (Peralta Community College District) (1987) 43 Cal.3d 833, 842.) However, such “waiver” is narrowly construed, and does not authorize probing into areas that are not directly relevant to the plaintiff’s claim. (Id.) Thus, while plaintiffs “may not withhold information which relates to any physical or mental condition which they have put in issue by bringing [a] lawsuit, they are entitled to retain the confidentiality of all unrelated medical or psychotherapeutic treatment they may have undergone in the past.” (Britt v. Super. Ct., supra, 20 Cal.3d at p. 864 [addressing the related issue of waiver of physician-patient or psychotherapist-patient privileges].)

Here, Faustino does claim damages resulting from an injury to his right shoulder and arm, and Plaintiffs concede that health records related to his right shoulder and arm are discoverable. (See Mot., p. 7.) In addition, both Faustino and Gaytan claim ongoing emotional distress damages. (See FAC, ¶¶ 58, 76.) However, Chen does not contend that either plaintiff has placed any specific mental or emotional condition in issue. It is Chen’s burden to demonstrate that the discovery he seeks is relevant to such a condition, and Chen has failed to meet that burden here. (See Tylo v. Super. Ct. (Spelling Entertainment Group, Inc.) (1997) 55 Cal.App.4th 1379, 1388 [before defendants can obtain discovery regarding other potential sources of emotional distress, “they must first identify the specific emotional injuries which [a plaintiff] claims resulted from [their actions] and then demonstrate there is a nexus” to the discovery sought].)

In light of the above, Chen has demonstrated the Opposing Defendants’ need to discover health records concerning Faustino’s right shoulder and arm, but not other health records.

4. Other Employment Records

Finally, the subpoenas seek other employment records, comprising “employment applications, resumes, references, dates of employment, … entities, persons or companies to [whom Faustino and Gaytan have] provided labor or services through [their] relationship[s] with you, performance evaluations and reviews, … job duties, job descriptions, types of work performed, skills, [and] union affiliation ….” Plaintiffs correctly argue that individuals’ employment history (see Alch v. Super. Ct. (Time Warner Entertainment Co.) (2008) 165 Cal.App.4th 1412, 1427), personnel records (see San Diego Trolley, Inc. v. Super. Ct. (Kinder) (2001) 87 Cal.App.4th 1083, 1097), and union membership information (see UFW of Am. v. Super. Ct. (Maggio, Inc.) (1985) 170 Cal.App.3d 391, 394-395) are protected from disclosure absent a showing of direct relevance.

As an initial matter, it appears that the Opposing Defendants have withdrawn their requests for records related to “entities, persons or companies to [whom Faustino and Gaytan have] provided labor or services through [their] relationship[s] with you” and “performance evaluations and reviews.” (See U.S.-Sino’s Opp., p. 10; Chen’s Opp., p. 13.) Consequently, the Court will not order their production.

With respect to the remaining employment records, the Opposing Defendants rely on their previously-discussed arguments that Faustino and Gaytan’s wage and hour records are relevant to plaintiffs’ claims for loss of financial support from Decedent, Faustino and Gaytan’s claims for emotional distress, and Loza’s employment of Faustino and Gaytan at the time of the accident. The first two arguments fail for the reasons already discussed. As to the third argument, it does not appear to be disputed that Loza employed Faustino and Gaytan at the time of the accident, only that they were working on the job at issue in this capacity. The Opposing Defendants will have access to Faustino and Gaytan’s wage and hour records from the time of the incident in order to address this issue. However, they do not explain why other, more general information from Faustino and Gaytan’s personnel files is required to determine whether they acted as Loza employees on this particular job. This information—“employment applications, resumes, references, dates of employment, … job duties, job descriptions, types of work performed, skills, [and] union affiliation ….”—does not appear to be directly relevant to that issue.

The Opposing Defendants consequently fail to establish that discovery of additional information from Faustino and Gaytan’s personnel files is warranted.

C. Protective Order

Finally, Plaintiffs move for a protective order. The party moving for such an order bears the burden of demonstrating good cause therefore. (See Fairmont Ins. Co. v. Super. Ct. (Stendell, et al.) (2000) 22 Cal.4th 245, 255, citing Goodman v. Citizens Life & Cas. Ins. Co. (1967) 253 Cal.App.2d 807, 819.) Plaintiffs do not explain or support their motion for a protective order, and the proposed order they submitted to the Court does not incorporate such an order.

Plaintiffs’ motion for a protective order is consequently DENIED.

VI. Chen’s Request for Monetary Sanctions

Chen requests $2,000 in monetary sanctions against Plaintiffs’ counsel pursuant to CCP section 1987.2, subdivision (a), which provides that “the court may in its discretion award the amount of the reasonable expenses incurred in making or opposing” a motion to quash, “if the court finds the motion was made or opposed in bad faith or without substantial justification.”

Here, Plaintiffs’ motion was largely successful, and there is no indication that Plaintiffs acted in bad faith or without substantial justification in filing it. While the Court appreciates the Opposing Defendants’ efforts to narrow the scope of the subpoenas at issue through meet and confer, Plaintiffs appear to have contributed to this process in good faith, and were not required to agree to the Opposing Defendants’ proposals when the parties reached an impasse.

Chen’s request for sanctions is accordingly DENIED.

VII. Conclusion and Order

Plaintiffs’ motion is GRANTED IN PART AND DENIED IN PART. The motion is DENIED to the extent that the subpoenas seek (1) Faustino and Gaytan’s pay stubs or other records of payment pertaining to their work performed during January 2012 and other records of their hours worked and work performed during that month and (2) any health records concerning Faustino’s right shoulder and arm. Loza shall produce these records to counsel for the Opposing Defendants within 20 calendar days of the filing of this order. Plaintiffs’ motion for a protective order is also DENIED. Plaintiffs’ motion to quash is otherwise GRANTED.

Chen’s request for monetary sanctions is DENIED.