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HSI, Inc. v. 48 States Transport, LLC

United States District Court, M.D. Pennsylvania

January 2, 2020

HSI, INC., Plaintiff
v.
48 STATES TRANSPORT, LLC, et al., Defendants

          MEMORANDUM ORDER

          MARTIN C. CARLSON UNITED STATES MAGISTRATE JUDGE

         I. Statement of Facts and of the Case

         This vehicular accident case comes before us for resolution of a discovery dispute and motion to compel filed by the defendant, 48 States, which seeks disclosure of the plaintiff's income tax returns. (Doc. 35).[1] Specifically, 48 States seeks disclosure of tax returns for the plaintiff, HSI, for the past 10 years. (Id. ¶ 6).

         48 States makes this discovery demand of HSI in the context of a lawsuit in which HSI alleges that it purchased a 2015 Freightliner truck as part of its business in March of 2018, paying $102, 508.94 for this vehicle. (Doc. 1 ¶ 6). According to HSI, on May 4, 2018, this truck was extensively damaged in an accident due to the negligence of a truck driver employed by 48 States. (Id. ¶ 11-14). HSI alleges that this accident resulted in some $42, 000 in damage to its vehicle, and an additional lost revenue of $445, 500 for the period from May 2018 through February 2019 when this vehicle was out of commission. (Id. ¶ 19). Thus, the primary component of HSI's alleged losses in this case consists of lost income totaling more than $445, 000 in 2018 and 2019.

         With HSI's claims framed in this fashion, 48 States seeks tax return information from the plaintiff, a request which HSI has resisted, inspiring this motion to compel. The parties have set forth their respective positions on this issue. Therefore, this dispute is now ripe for resolution. Upon consideration of the parties' submissions, for the reasons set forth below, this motion will be granted in part and denied in part.

         II. Discussion

         Several basic guiding principles inform our resolution of the instant discovery dispute. At the outset, Rule 37 of the Federal Rules of Civil Procedure governs motions to compel discovery, and provides that:

(a) Motion for an Order Compelling Disclosure or Discovery (1) In General. On notice to other parties and all affected persons, a party may move for an order compelling disclosure or discovery. . . .

Fed. R. Civ. P. 37(a).

         The scope of what type of discovery may be compelled under Rule 37 is defined, in turn, by Rule 26(b)(1) of the Federal Rules of Civil Procedure, which provides that:

Unless otherwise limited by court order, the scope of discovery is as follows: 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, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.

Fed. R. Civ. P., Rule 26(b)(1).

         Rulings regarding the proper scope of discovery, and the extent to which discovery may be compelled, are matters consigned to the court's discretion and judgment. Thus, it has long been held that decisions regarding Rule 37 motions are “committed to the sound discretion of the district court.” DiGregorio v. First Rediscount Corp., 506 F.2d 781, 788 (3d Cir. 1974). Similarly, issues relating to the scope of discovery permitted under Rule 26 also rest in the sound discretion of the Court. Wisniewski v. Johns-Manville Corp., 812 F.2d 81, 90 (3d Cir. 1987).

         Therefore, a court's decisions regarding the conduct of discovery, will be disturbed only upon a showing of an abuse of discretion. Marroquin-Manriquez v. I.N.S., 699 F.2d 129, 134 (3d Cir. 1983). Likewise, discovery sanction decisions rest in the sound discretion of the court. Grider v. Keystone Health Plan Cent., Inc., 580 F.3d 119, 134 (3d Cir. 2009). This far-reaching ...


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