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Current Developments in the Commercial Divisions of the
New York State Courts
Posted: February 20, 2018

Defendant Not Required to Produce Tax Returns

On February 15, 2018, the First Department issued a decision in Weingarten v. Braun, 2018 NY Slip Op. 01130, holding that a defendant was not required to produce tax returns in discovery, explaining:

While New York has a broad policy of discovery, favoring disclosure, disclosure of tax returns is disfavored because of their confidential and private nature, requiring the party seeking to compel production to make a strong showing of necessity and demonstrate that the information contained in the returns is unavailable from other sources. Here, plaintiff failed to identify the particular information the tax returns of Braun will contain and its relevance to the claims made here. How Braun put the allegedly improperly obtained property to use, e.g., by allegedly claiming a loss on his personal taxes, is extraneous to whether the property was, in fact, improperly obtained.

(Internal quotations and citations omitted) (emphasis added).

A big part of complex commercial litigation is giving, receiving and evaluating evidence (this is called “discovery”). The scope of discovery in New York is broad, but as this decision shows, it is not unlimited. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client has a question regarding discovery obligations (and what to do if a litigant is not honoring those obligations).

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