United States District Court, D. Nevada
FOLEY, JR. United States Magistrate Judge.
matter is before the Court on Defendant Douglas Gerrard's
Motion to Compel (ECF No. 89), tiled on January 16, 2017.
Plaintiffs filed their Response (ECF No. 93) on January 30,
2017. Defendant filed his Reply (ECF No. 95) on February 3,
2017. The Court conducted a hearing in this matter on
February 15, 2017. Defendant filed his Supplement in support
of his Motion to Compel (ECF No. 97) on February 22, 2017.
Plaintiffs filed their Supplement in opposition of
Defendant's Motion to Compel (ECF No. 102) on March 1,
matter arises from allegations of failure to pay rninimum and
overtime wages under the Fair Labor Standards Act
('FLSA"), 29 U.S.C § 201-208, the Nevada
Constitution, and Nevada Revised Statute § 608.018.
See Amended Complaint (ECF No. 1-1). On February 21,
2017, Plaintiffs withdrew their third and fourth claims for
relief under Nevada law and the Court granted dismissal of
those claims. See ECF No. 98. Plaintiffs allege that
they were employed as promoters, doormen, drivers, and
valets. The parties agree that Plaintiffs were independent
contractors in the promoter positions and that they received
compensation in the form of commission for work performed as
promoters. Plaintiffs allege that Defendants failed to pay
them rninimum and overtime wages for work performed in the
doorman and valet positions. Plaintiffs allege that
Defendants failed to pay them any wages and that they
received only tips from patrons for work performed as doormen
and valets. See Amended Complaint (ECF No. 1-1), pg.
argue that Plaintifls worked as independent contractors and,
therefore, are not entitled to the protections of the FLSA.
See Motion to Compel (ECF No. 89), pg. 5. In the
alternative, Defendants argue that if Plaintiffs are
considered employees, Defendants are entitled to a tip credit
offset pursuant to 29 U.S.C. § 203(m)(2). See
Supplement to Motion to Compel (ECF No. 97), pg. 2. Due
to a lack of formal record keeping and in order to establish
their defenses, Defendants move to compel responses to their
Requests for Production Nos. 4-16. See Motion to
Compel (ECF No. 89), pg. 4-5. Defendants seek the
production of Plaintiffs' financial records including,
tax returns, real property deeds, income statements,
bankruptcy filings, financial statements, and bank account
statements. Id. at pg. 5. Plaintifls argue that
their private financial documents are not relevant to the
determination of whether they are employees or independent
contractors and that Defendants are not entitled to a tip
credit offset. See Opposition (ECF No. 93), pg. 15.
of the Federal Rules of Civil Procedure provides that parties
may obtain discovery regarding any nonprivileged matter that
is relevant to any party's claim or defense and
proportional to the needs of the case, including
consideration of the importance of the discovery in resolving
the issues, the parties' relative access to relevant
information, and whether the burden or expense of the
proposed discovery outweighs its likely benefit. Fed. R Civ.
P. 26(b). Information within the scope of discovery need not
be admissible in evidence to be discoverable. Id.
Roberts v. Clark County School District, 312 F.RD. 594,
601-4 (D. Nev. 2016), the Court discusses the intent of the
2015 amendments to Rule 26(b) and Chief Justice Roberts'
2015 Year-End Report in which he stated:
The 2015 amendments to Rule 26(b)(1) emphasize the need to
impose "reasonable limits on discovery through increased
reliance on the common-sense concept of
proportionality." The fundamental principle of amended
Rule 26(b)(1) is "that lawyers must size and shape their
discovery requests to the requisites of a case." The
pretrial process must provide parties with efficient access
to what is needed to prove a claim or defense, but eliminate
unnecessary and wasteful discovery. This requires active
involvement of federal judges to make decisions regarding the
scope of discovery.
Roberts, 312 F.R.D. at 603.
26(b)(2)(C)(i) provides that on motion or on its own, the
court must limit the frequency or extent of discovery
otherwise allowed by these rules if it determines that the
discovery sought is unreasonably cumulative or duplicative,
or can be obtained from some other source that is more
convenient, less burdensome, or less expensive. The starting
point with respect to a motion to compel discovery remains
the relevance of the requested information. Defendants argue
that the requested documents are relevant for three reasons.
First, the documents are relevant to establish that
Plaintiffs are independent contractors. Second, the documents
are relevant to establish that Defendants are entitled to the
tip credit offset under the FLSA. Third, the documents are
relevant to show credibility.
returns and related documents "do not enjoy an absolute
privilege from discovery." A. Farber & Partners,
Inc. v. Garber, 234 F.R.D. 186, 191 (CD. CaL 2006)
(quoting Premium Serv. Corp. v. Sperry & Hutchinson
Co., 511 F.2d 225, 229 (9th Cir. 1975). Nevertheless,
"a public policy against unnecessary public disclosure
arises from the need, if the tax laws are to function
properly, to encourage taxpayers to file complete and
accurate returns." Premium Serv. Corp., 511
F.2d at 229. Tax returns may be discovered where the
party's income or financial condition is in issue and
there is a compelling need because the information sought is
not otherwise available to the requesting party. Fosbre
v. Las Vegas Sands Corp., 2016 WL 54202, at *5 (D. Nev
Jan. 5, 2016); Aliottiv. Vessel SENORA, 217 F.RD.
496, 498 (N.D. CaL 2003). If the requesting party shows the
relevance of the producing party's tax returns, then the
burden shifts to the producing party to show that other
sources exist from which defendants may readily obtain the
information. Fosbre, 2016 WL 54202, at *5.
Defendants have not met their burden of showing the
information sought is relevant to their defense that
Plaintiffs are independent contractors. Defendants argue that
the requested documents are the only way to show that
Plaintiffs received payments from third parties, such as
customers. To determine whether someone is an employee under
the FLSA, courts engage in an economic realities test, which
includes the consideration of factors, such as the degree of
the alleged employee's right to control the manner in
which the work is to be performed, the alleged employee's
opportunity for profit and loss, the alleged employee's
investment in equipment or materials, and whether the service
rendered requires a special skill Real v. Driscoll
Strawberry Assocs., Inc.,603 F.2d 748, 754-55 (9th Cir.
1979). Defendants' argument that Plaintiffs'
financial documents will show payments from third party
customers demonstrating their opportunity for profit and loss
and their investment in equipment or materials is not
convincing. Plaintiffs' financial condition is not in
issue to determine whether they are considered employees
under the FLS A. Further, there are alternative, less