Zhu v. Li
- Jeffrey White
- 4:19-cv-02534
- U.S. District Court · Northern District of California
- 4
In Zhu v. Li, Judge Hixson granted some and denied other requests to obtain information from judgment debtors.
JiaJie Zhu and Jing Li and the other defendants were affected by the discovery rulings; the order required Defendants to identify tax-return preparers and produce responsive retirement-plan documents, while denying or limiting the other requests.
What happened
In Zhu v. Li, JiaJie Zhu asked the court to require Jing Li and other defendants to provide information and documents for judgment-debtor discovery.
The requests concerned tax preparers, lawsuits, retirement accounts, tax returns, and wills or trusts. The court considered whether the requests were relevant, premature, or protected by California’s tax-return privilege.
Judge Hixson granted the requests about tax preparers and retirement-plan documents, denied the request about prior lawsuits, denied the tax-return request without prejudice, and denied the request for wills or trusts.
The detailed version
- Zhu v. Li · No. 4:19-cv-02534
- Jeffrey White
- Sept. 7, 2023
Background
The court addressed a joint discovery letter concerning requests for production and interrogatories related to judgment-debtor discovery. The order ruled on interrogatory 7, interrogatory 20, and requests for production 6, 22, and 23.
Rulings
- Interrogatory 7: The request asked Defendants to identify the companies or people who prepared their federal tax returns or extensions. The court understood the request to refer to returns for 2022 and 2023, although the order directing production states “2022 and 2033.” The court granted the motion to compel as to interrogatory 7 and ordered Defendants to identify the preparers within seven days. The court did not decide what information a tax preparer might later have to produce because no subpoena had been issued and Defendants’ deadline to produce their financial documents had not arrived.
- Interrogatory 20: The request sought information about every legal action in which Defendants had been parties during the previous ten years. The court agreed with Defendants that the remaining information sought was irrelevant to judgment-debtor discovery because other discovery requests already covered ownership interests, lawsuits, debts, and liabilities. The court denied the motion to compel as to interrogatory 20.
- Request for production 6: The request sought documents concerning individual retirement accounts, employee retirement plans, Keogh plans, and other pension or profit-sharing plans for which Defendants were beneficiaries, holders, or owners. The court held that judgment-debtor discovery must be broad enough to uncover possible fraudulent transfers, including transfers from nonexempt assets into exempt assets. The court granted the motion to compel as to this request and ordered Defendant to produce responsive documents within 30 days. It expressly did not decide whether Plaintiff could levy on any retirement account.
- Request for production 22: The request sought Defendants’ federal and state income-tax returns for 2021 and 2022. Defendants invoked California’s privilege against disclosing tax returns. The court held that Plaintiff’s request was premature because Plaintiff had not shown that Defendants had failed in good faith to produce conventional, nonprivileged financial records or had produced only meaningless or unreliable information. The court denied the motion to compel as to request 22 without prejudice.
- Request for production 23: The request sought Defendants’ wills, trusts, and related amendments. Defendants stated that no responsive documents existed, while also objecting on privacy grounds. The court denied the motion to compel as to request 23.
Effect of the Order
The order required production or identification for interrogatory 7 and request for production 6, but denied the other three discovery requests, including the tax-return request without prejudice. The order concerned discovery only and did not decide whether any retirement account could ultimately be used to satisfy the judgment.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.