United States v. McLean

Background

In December 2023, judgment was entered against Jason McLean and in favor of the United States for unpaid federal income taxes for tax years 2016 and 2017. The judgment stated that McLean owed $737,679, plus interest and other statutory additions accruing from and after December 7, 2023. It also ordered McLean to sell any foreign real property he owned, including property in Mexico, and bring the proceeds to the United States for deposit in the court’s registry. The proceeds would then be distributed to McLean’s creditors, including the United States.

The United States served McLean with interrogatories and requests for documents concerning his assets and finances. The requests sought information about his sources of income, business interests, domestic and foreign bank and financial accounts, and domestic and foreign real property. The document requests included financial and investment account statements, documents concerning the foreign property he was ordered to sell, documents concerning foreign property owned through a bank trust, and documents concerning other rental property.

The requests were initially served on McLean’s then-counsel. The United States agreed to extend the response deadline and later gave McLean an additional extension through April 30, 2024. McLean did not respond by that date. The United States made further efforts to confer with him in early May, but he still did not provide the requested responses or documents. McLean also did not respond to the United States’ motion to compel.

Legal standard

The court explained that a judgment creditor—the party owed money under a judgment—may use broad discovery to learn about the judgment debtor’s assets and aid enforcement of the judgment. Federal Rule of Civil Procedure 69(a) permits discovery from any person, including the judgment debtor, under the federal rules or the procedure of the state where the court is located.

The court also explained that interrogatory answers and responses to document requests generally are due within 30 days unless the parties agree to another deadline or the court orders one. Under Rule 37, a party may ask the court to compel answers or document production when the opposing party fails to respond. An evasive or incomplete response is treated as a failure to respond.

Ruling on discovery

The court found that McLean had “utterly failed” to respond to the United States’ interrogatories and document requests and had more than four months to do so. The court ruled that any objections to the discovery requests were waived.

The court granted the United States’ Motion to Compel Discovery Responses. It ordered McLean, on or before July 16, 2024, to provide:

1. His responses to the United States’ First Set of Collection Interrogatories to Judgment Debtor Jason McLean, signed under penalties of perjury; and 2. All responsive documents and electronically stored information requested in the United States’ First Set of Requests for Production of Documents to Judgment Debtor Jason McLean.

The court cautioned that failing to comply with the order may be treated as contempt of court under Rule 37. The order also stated that failure to comply with this or prior consistent orders could lead to appropriate remedies and sanctions, including costs, fines, attorney fees, waiver of objections, limits on evidence, striking pleadings, dismissal with prejudice, or default judgment.

Fees and costs

Because the motion to compel was granted, Rule 37 generally requires the party whose conduct caused the motion to pay the movant’s reasonable expenses, including attorney fees, unless the failure was substantially justified or another circumstance would make an award unjust. McLean did not respond to the motion and did not offer a justification for failing to provide discovery.

The court therefore ordered McLean to bear the United States’ reasonable expenses, including attorney fees, incurred in bringing the motion. The United States had to file a counsel’s affidavit describing the requested expenses by July 16, 2024. McLean could respond to the requested amounts by August 6, 2024. The order did not itself set a specific dollar amount for the expenses.