Saravia v. Dynamex, Inc.

          ORDER RE MOTION TO COMPEL PRODUCTION OF TAX RECORDS

          WILLIAM ALSUP UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         In this conditionally certified collective action under the Fair Labor Standards Act, defendants move to compel the production of all opt-in plaintiffs’ tax records. For the reasons stated below, defendants’ motion is Granted in part and Denied in part.

         STATEMENT

         Defendants Dynamex, Inc., Dynamex Fleet Services, Inc., Dynamex Operations East, Inc., and Dynamex Operations West, Inc. (collectively, “Dynamex”) offer delivery logistics services for “last mile” deliveries. Plaintiff Juan Saravia and more than 155 opt-in plaintiffs who contracted with Dynamex to provide delivery services to its clients contend they were misclassified as independent contractors. They seek minimum wages and overtime premiums under the Fair Labor Standards Act.

         In October 2015, an order conditionally certified the collective action for the purpose of facilitating notice to potential opt-in plaintiffs. More than one-hundred fifty individuals opted-in to the collective action. Dynamex sought written discovery from thirty-six of the opt-in plaintiffs. One such request for production was as follows (Perez Decl., Exh. 2):

ALL state and Federal income tax returns for YOU or ANY business entity (e.g., sole proprietorship, corporation, limited liability company, or partnership) in which YOU owned more than a 20% share or interest (including all forms, schedules, attachments, exhibits, 1099s, W2s, 1098s, worksheets and/or supporting documents) and that was involved in TRANSPORTATION SERVICES for all tax years 2008 to the present.

         The opt-in plaintiffs that were subject to this request objected on the basis that it constituted an invasion of privacy. Dynamex filed a discovery letter seeking an order compelling the production of the tax documents. At the hearing on Dynamex’s discovery letter, plaintiffs were ordered to produce tax records from one year for each opt-in plaintiff in a sample group of twelve identified by Dynamex. The deadline for the production was set as June 17 at noon. The undersigned stated, “if they turn out to be very useful, then [Dynamex] can come back to me and we’ll probably get you more” (Dkt. No. 131 at 23-24).

         Dynamex identified twelve opt-in plaintiffs and selected a year for each. Plaintiffs failed to produce a single tax document by the deadline. An hour after the deadline, plaintiffs stated they had acquired documents for only six of the twelve opt-in plaintiffs designated by Dynamex, though they hoped to produce documents from two more soon after but that they could not acquire tax records for the remaining four individuals. Dynamex designated four additional opt-in plaintiffs from which it sought tax records. Plaintiffs produced the tax records for the resulting set of twelve on a rolling basis over the several weeks following the deadline.

         When the designated opt-in plaintiffs finally produced their tax records, they failed to produce informational forms such as 1099s or W2s issued by their businesses, although many indicated they had contracted for labor. Similarly, many failed to produce such forms received by themselves or their businesses. Finally, many omitted required forms or provided forms that lacked signatures.

         On June 21, Dynamex filed a further discovery letter, informing the Court of plaintiffs’ tardy and deficient production. At a hearing, the Court directed Dynamex to file a formal motion to compel the production of the missing tax documents and to expand the scope of the request beyond the sample group, as contemplated at the first discovery hearing.

         This order follows briefing from each side allowed on an abbreviated schedule and oral argument.

         ANALYSIS

         Plaintiffs object to Dynamex’s request for the production of tax records for three reasons. Plaintiffs first assert that Dynamex has failed to meet the exceptions to the qualified privilege for tax records under California law. They next contend that the tax records are of minimal, if any, relevance in this action. Finally, they argue that Dynamex’s motion is merely pretext for harassment and to place a skewed sample of the collective before the Court. Plaintiffs also contend that if Dynamex’s motion is granted, its ...