United States District Court, D. Kansas
PAMELA L. STEAD, Plaintiff,
UNIFIED SCHOOL DISTRICT #259 Wichita Public Schools, SEDGWICK COUNTY, KANSAS and JOHN ALLISON, Defendants.
JAMES P. O'HARA, Magistrate Judge.
This action arises from the resignation of plaintiff, Pamela L. Stead, as principal of Enterprise Elementary School, following an investigation of her school's testing procedures. Plaintiff brings contract, tort, and constitutional claims against defendants, Unified School District No. 259 and John Allison, the District's superintendent, asking for lost wages, benefits, retirement pay and damages due to emotional distress, physical and mental injuries, pain, and suffering. This case is before the undersigned U.S. Magistrate Judge, James P. O'Hara, on defendants' motion to compel (ECF doc. 59). Specifically, defendants move to compel plaintiff to produce tax records and supplement certain discovery responses. For the reasons discussed below, plaintiff's motion is granted in part and denied in part.
I. Tax Returns
On April 23, 2014, defendants served their second request for production of documents, asking for "[c]omplete copies of Plaintiff's tax returns for the years of 2011, 2012, and 2013." On May 28, 2014, plaintiff objected to this request as overly broad and seeking information that may be readily obtained through other sources. In support of her response, plaintiff cited two District of Kansas cases, stating that the law disfavors the disclosure of tax returns unless they are relevant to the litigation and the information contained therein is not readily obtained from other sources. In response to the instant motion, plaintiff argues that defendants have not responded to the "case law provided by plaintiff... holding that tax returns are not discoverable where the information sought is available through less obtrusive means."
As a general rule, courts do not favor compelling production of tax returns. However, no absolute privilege exists preventing their discovery. This district has developed a two-pronged test to assure a balance between the liberal scope of discovery and the policy favoring the confidentiality of tax returns. "First, the court must find that the returns are relevant to the subject matter of the action. Second, the court must find that there is a compelling need for the returns because the information contained therein is not otherwise readily obtainable." "The party seeking production has the burden of showing relevancy, and once that burden is met, the burden shifts to the party opposing production to show that other sources exist from which the information is readily obtainable."
Plaintiff relies on Hilt and Kelling to withhold the requested tax records. In Hilt, the court applied the two-pronged test and found that tax returns were relevant to the issue of damages because the plaintiff in that case sought economic losses-front and back pay. Although the plaintiff had already produced a redacted tax return which "adequately reveal[ed] her income", the court ordered her to produce an unredacted tax return for inspection by defense counsel for the purpose of the lawsuit. In Kelling, the court recognized that the party resisting disclosure should bear the burden of establishing alternative sources for the information. The resisting party stated in his deposition that he had no written records concerning the relevant information. Based in part on the foregoing, the court ordered production since the "party resisting disclosure" had not set forth an alternative source for the tax return information.
As cited by both parties, in Johnson, the court applied the two-pronged test and held that "[t]o the extent the tax return in this case reveals Plaintiff's income, Defendants have satisfied the first prong of the test by showing Plaintiff's return is relevant to the issue of damages. Plaintiff claims economic losses. He seeks back and front pay. He has put his income at issue." Because the plaintiff failed to provide sufficient evidence to establish that the information found in the returns was readily available from other sources, the court ordered the plaintiff to produce tax returns consistent with the defendants' request for production. Additionally, the court prohibited redaction of any information evidencing income from any source before and after separation of employment, but allowed redaction of information that relates solely to the plaintiff's spouse or dependents because there was no showing that this information was relevant.
Here, defendants assert plaintiff's tax returns for 2011-2013 are relevant to the issue of damages because plaintiff is seeking lost wages. Defendants argue that they do not know where plaintiff was employed during the fall of 2012 until the fall of 2013 except for what plaintiff testified to during her deposition. Defendants insist that they need this income information to properly defend against plaintiff's claim for lost wages.
In response, plaintiff asserts that she was questioned at length during her deposition about every source of income she has received since her termination. Plaintiff believes that defendants have obtained complete information about plaintiff's lost income through the service of an "Order for Records" on plaintiff's current employer and other school districts. Further, plaintiff asserts that Johnson "holds that only tax returns for the period after termination could hold any possible relevance." Thus, plaintiff argues plaintiff's 2011 tax return information is irrelevant as she was terminated in April 2012. Plaintiff states, "[a]s noted in Johnson, defendants are free to question plaintiff or request other categories of relevant documents via other discovery methods regarding other sources of income and the amounts thereof." The court does not read Johnson to support plaintiff's argument and plaintiff provides no pin cite or citation other than a reference to "Johnson" in support of her argument. Nonetheless, plaintiff relies, in part, on the foregoing to persuade the court to deny defendants' motion to compel.
Like Johnson, plaintiff has put her income at issue by claiming she has suffered economic losses and requesting lost wages. As such, plaintiff's tax returns are relevant to the issue of damages. Because plaintiff resigned on or around April 30, 2012,  plaintiff argues her 2011 tax return is completely irrelevant to the issue of damages. Plaintiff also asserts that information regarding her husband's income is irrelevant. Defendants fail to explain why plaintiff's husband's income or plaintiff's income for the year preceding her termination is relevant and it is defendants' burden to show the requested tax returns are relevant. In consideration of the foregoing, the court finds that only plaintiff's tax returns for 2012 and 2013 are relevant to the subject matter of this litigation.
As to the second prong of the test, plaintiff mistakenly argues that "Defendants have not met their burden of showing the information sought cannot be readily obtained from other sources." It is plaintiff's burden, as the party resisting discovery, to show that this income information is readily available from other sources. The court finds that plaintiff has not provided sufficient evidence to meet that burden.
Plaintiff asserts that she was questioned at length during her deposition about every source of income she has received since her termination. Plaintiff also states that "[u]pon information and belief, " defendants have obtained complete information about plaintiff's lost income through the service of an "Order for Records" on plaintiff's current employer and other school districts. However, plaintiff does not indicate whether defendants have actually received these records, nor does plaintiff specifically describe what information the records contain. Plaintiff put her income at issue, defendants have shown this information is relevant, and plaintiff has failed to show defendants have any other way of verifying plaintiff's income information for 2012-2013 other than her tax returns. Therefore, plaintiff shall provide her tax returns for 2012-2013, but may redact any information that relates solely to her spouse or dependents.
II. Supplementation of Rule 26 Disclosures and Interrogatory No. 23
Defendant asserts that plaintiff has failed to properly supplement her Rule 26(a) disclosures because she has not provided the telephone number and address of all listed witnesses, nor has she disclosed the nature of the testimony of her witnesses. Defendants ask that plaintiff "be compelled to correct her improper Rule 26(e) supplementation or her witnesses whom she has not provided the proper information ...