Opinion
No. CIV S-03-2591 FCD EFB.
January 12, 2011
James C. Sturdevant, State Bar No. 94551, Mark T. Johnson, State Bar No. 76904, Monique Olivier, State Bar No. 190385, THE STURDEVANT LAW FIRM, A Professional Corporation, San Francisco, CA, Debra Smith, State Bar No. 147863, Noreen Farrell, State Bar No. 191600, EQUAL RIGHTS ADVOCATES, San Francisco, CA, Kristen Galles, State Bar No. 148740, EQUITY LEGAL, Alexandria, VA, Attorneys for Plaintiffs.
ORDER
On January 5, 2011, the court heard a motion for a protective order filed by defendants Larry Vanderhoef, Greg Warzecka, Robert Franks, and Pam-Gill Fisher (the "individual defendants"). Dckt. Nos. 513, 515. The motion seeks a protective order precluding or limiting plaintiffs' discovery of the net worth and financial status of the individual defendants. Id. Attorney Noreen Farrell appeared at the hearing on behalf of plaintiffs; attorney David Burkett appeared on behalf of defendants. After the hearing, plaintiffs submitted a proposed order on the motion, as directed by the court; the individual defendants submitted objections to that proposed order; and plaintiffs filed a response to those objections. Dckt. Nos. 517-519. The undersigned has considered all of those filings and issues the following order.
For the reasons stated herein and on the record at the January 5 hearing, the motion for a protective order, Dckt. No. 513, is denied in part and granted in part, as set forth below.
The court finds that the individual defendants did not waive their right to challenge the requested discovery in previous stipulations filed with the court. However, the court rejects defendants' argument that the discovery does not meet the relevancy standard of Federal Rule of Civil Procedure 26(b). The court finds that evidence of the financial status and worth of the individual defendants is relevant to plaintiffs' claim for punitive damages against these defendants, including the reasonableness of a punitive damage award. City of Newport v. Fact Concerts, Inc., 453 U.S. 247, 269-71 (1981); Bains, LLC v. ARCO Prods. Co., 405 F.3d 764, 777 (9th Cir. 2005); Swinton v. Potomac Corp., 270 F.3d 794, 818-19 (9th Cir. 2001). The court also rejects defendants' argument that the existence of an agreement by defendant The Regents of the University of California to indemnify the individual defendants for punitive and other damages precludes the financial discovery sought by plaintiffs.
The court finds, however, that the requested discovery should be limited in time and scope. Specifically, the discovery demands shall be limited to the time period of January 1, 2007 to the present, except as provided below for information related to transfer of money and other assets since this case was filed. For the time period of January 1, 2007 to the present, the court orders each individual defendant to produce information responsive to the following demands (which were summarized and edited to remove duplication by plaintiffs as directed by the court, and which were thereafter modified by the court):
1. Net worth statements and loan/credit applications: Any and all copies of any business or personal financial statements, balance statements, balance sheets, and/or net worth statements, together with any credit applications and loan applications submitted by you or on your behalf to any bank, credit card company or lending institution. (Request for Production ("RFP") # 1.)
2. All income, pension and stock holdings: Documents stating income received or assets from any source including current or previous employment, including without limitation, wages, salaries, bonuses, stock options, commissions, earnings, income employment contracts, pay raises, promotions, payroll deductions, other deductions of any kind, pension plans, pension funds, retirement plans, retirement funds, stock plans and stock funds and other benefits or deductions of any kind to which you are, were or may become entitled in the future. (RFP # 2.)
3. Bank, checking, savings, and credit/charge accounts: The January and June statements for each year since January 1, 2007 of all checking accounts, savings accounts, money market accounts, credit union accounts, pension/retirement account(s), and debit card, credit card and/or charge accounts held, used or maintained by you individually and/or jointly with any other or others. The individual defendants' responses to this RFP may be produced in a redacted form to remove individual transactions and include only balances and cumulative charge information. (RFP #3, 4.)
4. Information related to ownership/beneficial/leasehold or other interest in property and other assets:
a. Any and all evidence of an interest in property of every kind and character (whether as owner, co-owner, fiduciary, trust beneficiary (vested or contingent), partner, limited partner, shareholder, joint venture, mortgagee, developer, manager or otherwise) whatsoever owned by you individually and/or jointly with any other or others, including any reversionary interests, and including, but not limited to, deeds and mortgages. With regard to items of personal and household property, only evidence of items valued at $5000.00 or more must be produced. (RFP #4, 6.)
b. Documents sufficient to identify all corporations, partnerships, associations and other business entities in which you hold ownership, beneficial, or other interests. (RFP #4)
5. Warranty/quitclaim and other deeds: Any and all warranty deeds, quitclaim deeds and deeds to secure debt which name you as grantee or grantor, individually and/or jointly with any other or others, or in your name in trust or in your name as guardian for any other person, relating to any property in which you have or have had any interest or equity. (RFP #5.)
6. Insurance policies with cash surrender terms: All life or other insurance policies and certificates on your life which have a cash surrender term of which you are the owner and/or the insured person, and any documents reflecting the current value of the such policies. (RFP # 7, 8.)
7. Tax returns: Complete copies of all state and federal income tax returns filed by you, individually and/or jointly with any others, including all accompanying schedules, any attachments to such returns and all worksheets used in preparing same, and all 1099, K-1 (IRS Form 1065) and W-2 forms received by you. (RFP # 10.)
8. Stocks and other assets: Any and all stock certificates, bond certificates, mutual funds certificates, tax deferred annuities, profit sharing plan, deferred benefit plan, retirement plan, and any other evidence of ownership or of any interest in any securities, investments, mutual funds, liquid asset funds, or corporation, naming you individually and/or jointly with any other or others, as the owner of the same, and any documents/statements reflecting the current value of such assets. (RFP # 11, 14.)
9. Financial obligations due to you: Any promissory notes or other instruments evidencing any financial obligation due to you as the creditor now or in the future. (RFP # 12.)
10. Financial obligations: All promissory notes or other documents evidencing any financial obligation or indebtedness of you as debtor. (RFP #13.)
The court also finds that plaintiffs may seek discovery of documents and information relevant to the transfer of any assets by the individual defendants since this suit was filed on December 18, 2003. Specifically, in addition to the above RFPs to which defendants must produce responsive documents, the court directs each individual to produce any and all documents that evidence a payment or transfer of any money or other asset owned by each individual defendant, individually or jointly or otherwise, to any person or entity in excess of $10,000.00 for the period of December 18, 2003 to the present.
Finally, the court denies defendants' motion to the extent that it seeks to limit the right of plaintiffs to take depositions relevant to the issue of financial condition and net worth, including depositions of the individual defendants. The court encourages the parties to meet and confer further to address questions regarding the individual defendants' financial circumstances to streamline the scope of any necessary depositions.
In accordance with the foregoing, it is hereby ORDERED that defendants' motion for a protective order, Dckt. No. 513, is denied in part and granted in part as discussed above. Defendants Vanderhoef, Warzecka, Roberts, and Gill-Fisher shall respond to the discovery demands set forth herein within twenty-one (21) days of the entry of this order. These defendants shall also submit to depositions confined to the issue of their financial condition, if deemed necessary by plaintiffs after the parties meet and confer, within the deadlines for such discovery set by the Court.
It is further ORDERED that the Stipulation Regarding Financial Information of Individual Defendants executed by the parties through their respective attorneys on June 18, 2008 and attached hereto as Exhibit A is hereby incorporated as part of this Order.
SO ORDERED.
Dated: January 12, 2011.
STIPULATION REGARDING FINANCIAL INFORMATION OF INDIVIDUAL DEFENDANTS
Plaintiffs AREZOU MANSOURIAN, LAUREN MANCUSO, and CHRISTINE WING-SI NG ("Plaintiffs"), and former individual Defendants LARRY VANDERHOEF, GREG WARZECKA, PAM GILL-FISHER, ROBERT FRANKS, AND LAWRENCE SWANSON ("Individual Defendants") enter into this Stipulation in the event of reversal on appeal of the District Court's order dismissing any or all of these individual defendants. The Parties agree and acknowledge that financial information about the income, assets, and/or debts of these Individual Defendants may be sought and obtained and relied up by the Parties in the future prosecution of this action should any individual defendant re-enter the case.
Subject to and without waiving any objections to the discoverability of any information, the Parties stipulate that access to and use of financial information about the income, assets, and/or debts of these Individual Defendants shall be governed by the provisions of this Stipulation, except as otherwise provided herein, and that the terms of the Stipulation set forth herein may be entered by the Court. This Stipulation shall apply to copies, extracts, and summaries of designated documents.
Accordingly, Plaintiffs and Defendants, by and through their respective counsel of record, hereby stipulate to the entry of the following Stipulation regarding the disclosure of the above-stated documents and the information contained therein.
1. This Stipulation covers documents containing information designated by the Individual Defendants as "Private Financial Information of Individual Defendant" not previously disclosed or produced in this matter and not otherwise accessible through public records.
2. Records containing Private Financial Information of Individual Defendant shall be so designated by stamping copies of the document(s) produced to a party with the legend "CONFIDENTIAL." Stamping the legend "CONFIDENTIAL" on the cover of any multi-page document shall designate all pages of the document as confidential, unless otherwise indicated by the producing party.
3. Material designated as Private Financial Information of Individual Defendant under this Stipulation, the non-public information contained therein, and any summaries, copies, extracts, or documents derived in whole or in part from materials designated as confidential (hereinafter "confidential material") shall be used only for the purpose of the prosecution, defense, or settlement of this action and for no other purpose. Plaintiffs, their counsel and their agents not shall disclose, release, or otherwise publish any records containing Private Financial Information of Individual Defendant or their content except as necessary in this litigation.
4. Throughout this matter, excluding the presentation of evidence at time of trial, confidential material produced pursuant to this Stipulation may be disclosed or made available only to the Court, to a party to this action, to counsel for a party (including the paralegal, clerical, and secretarial staff employed by such counsel), and to the "qualified persons" designated below:
a. Experts or consultants (together with their clerical staff) retained by such counsel to assist in the prosecution, defense, or settlement of this action;
b. Court reporters employed in this action;
c. A witness at any deposition or proceedings in this action; and
d. Any other person as to whom the parties agree in writing.
5. The portion of any deposition in which confidential materials are discussed shall be taken only in the presence of qualified persons, as defined above.
6. Throughout this matter, excluding the presentation of evidence at time of trial, any motion, application, petition, or the like, filed with the Court which includes any confidential material shall be filed under seal.
7. The Parties agree that they will meet and confer, with the Court as necessary, about the handling of material designated by the Individual Defendants as confidential produced pursuant to this Stipulation for trial purposes. Nothing herein shall be construed as a concession by any Party that its presentation at trial of evidence relevant to its claims or defenses should be restricted in any manner, including the financial information designated by the Individual Defendants as confidential.
8. Nothing herein shall impose any restrictions on the use or disclosure by a party of material obtained by such party independent of discovery in this action, whether or not such material is also obtained through discovery in this action, or from disclosing its own confidential material as it deems appropriate. Receipt by any party of any confidential information, shall neither be an admission or claim that the information is confidential information, as asserted by the propounding party, nor an admission with respect to the authenticity, competency, relevance or materiality thereof.
9. Nothing herein shall impose any restrictions on the use by the Parties of confidential material produced pursuant to this Stipulation to prosecute or defend against any claim in this litigation, but rather solely governs the dissemination of said information obtained in the context of this litigation.
10. This Stipulation shall be without prejudice as to the rights of the parties to: (1) bring before the Court at any time the question of whether any particular document or information is confidential or whether its use shall be restricted; or (2) present a motion to the Court for a separate protective order as to any particular document or information, including restrictions different from those specified herein. This Stipulation shall not be deemed to prejudice the parties in any way in any future application for modification of this Stipulation.
11. Neither anything in this Stipulation nor the production of any information or document under the terms of this Stipulation nor any proceedings pursuant to this Stipulation, shall be deemed to have the effect of an admission or waiver of objections or privileges by either party or of altering the confidentiality or non-confidentiality of any such document or information, or altering of any existing right or obligation of any party or the absence thereof.
12. This Stipulation shall survive the final termination of this action and the Court shall retain jurisdiction to resolve any dispute concerning the use of the information disclosed hereunder. Documents covered by this Stipulation shall remain subject to this Stipulation even after the conclusion of this case and may be retained for as long as required by law and then destroyed.
13. The Individual Defendants agree that they shall be bound by the terms of the Stipulated Protected Order between Plaintiffs and Defendant Regents of the University of California Regarding Financial Information of Plaintiffs', entered into June 18, 2008, should they become defendants once again in this litigation.
14. This Stipulation does not apply to any documents produced by any party in discovery thus far which are not otherwise subject to a protective order.
IT IS SO STIPULATED.
DATED: June 18, 2008
_______________ _______________ ________________
DATED: June 18, 2008 EQUAL RIGHTS ADVOCATES By: NOREEN FARRELL Attorneys for Plaintiffs DATED: June 18, 2008 THE STURDEVANT LAW FIRM A Professional Corporation By: MONIQUEOLIVIER Attomeys for Plaintiffs DATED: June 18, 2008 PORTER, SCOTT A Professional Corporation By: DAVID BURKETT Attorneys for Individual Defendants