Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_04-cv-04080/USCOURTS-cand-5_04-cv-04080-3/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1051 Trademark Infringement

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United States District Court

For the Northern District of California

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*E-FILED 9/28/05*

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

SONISTA, INC., 

Plaintiff,

 v.

DAVID HSIEH, ET AL., 

Defendants.

 /

NO. 5:04-cv-4080 RMW (RS)

ORDER GRANTING

DEFENDANT'S MOTION 

TO QUASH PLAINTIFF'S

SUBPOENA DUCES TECUM TO

THE EXTENT IT SEEKS

DEFENDANT'S TAX RETURNS

I. INTRODUCTION

Defendant Pixa, Inc. ("Pixa") moves to quash a subpoena duces tecum served on Pixa's

accountant, Tang and Lee, LLP ("Tang"), by plaintiff Sonista, Inc. ("Sonista") to the extent that it seeks

Pixa's tax returns and related documents. The motion was fully briefed and heard by the Court on

September 28, 2005. Based on all papers filed to date, as well as on the oral argument of counsel, the

motion to quash the subpoena to the extent that it seeks Pixa's tax returns and accountant work papers is

granted, as explained below.

II. BACKGROUND

Sonista alleges that defendants David Hsieh, Techpac, Inc. ("Techpac"), and Pixa (collectively,

"defendants"), misappropriated its trademark, DVOne, in violation of the Lanham Act. On July 29, 2005

Sonista served a subpoena duces tecum on Tang seeking all documents relating to Pixa. Pixa objects to the

Case 5:04-cv-04080-RMW Document 108 Filed 09/28/05 Page 1 of 4
United States District Court

For the Northern District of California

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subpoena to the extent that it seeks production of its tax returns and documents used to prepare them. Pixa

argues that those documents are privileged and, absent a showing of relevance and a compelling need by

Sonista, the documents should not be produced. It points out that Sonista has already requested, and Pixa

has provided, copies of all of its financial statements, including balance sheets and income statements, from

October 2003 through December 2004. Sonista responds that it needs the returns to establish claims in the

case and for impeachment purposes.

III. STANDARDS

Rule 45 of the Federal Rules of Civil Procedure governs subpoenas duces tecum for the production

of documents with or without the taking of a deposition. Pursuant to Rule 45, the nonparty served with the

subpoena duces tecum may make objections to the subpoena within 14 days after service. Fed.R.Civ.Pro.

45(c)(2)(B). "Only the witness can prevent disclosure by objection. The party to whom the subpoenaed

records pertain cannot simply object. Rather, a protective order or motion to quash the subpoena is

required." McCoy v. Southwest Airlines Company, Inc., 211 F.R.D. 381, 384 (C.D. Cal. 2002). 

While tax returns are not absolutely privileged, Heathman v. District Court, 503 F.2d 1032 (9th

Cir. 1974), in order for the tax laws to function properly, public policy discourages unnecessary public

disclosure of tax returns. Premium Service Corp. v. Sperry & Hutchinson Co., 511 F.2d 225, 229 (9th

Cir. 1975). Accordingly, the party seeking production of tax returns must prove: (1) they are relevant to the

action and (2) there is a compelling need for them because the information sought is not readily available

from another source. Aliotti v. Senora, 217 F.R.D. 70 (N.D. Cal. 2003). 

IV. DISCUSSION

Pixa, the party to whom the subpoenaed records pertain, moves to quash the subpoena duces

tecum to the extent that it seeks Pixa's tax returns and related documents. Pixa correctly cites to controlling

caselaw which holds that, in order for tax returns to be disclosed, the party seeking disclosure must prove

they are relevant to the action and demonstrate a compelling need for them. The parties do not dispute that

Pixa's tax returns are relevant here. Therefore, the only remaining issue is whether Sonista has established a

compelling need for the returns and associated work papers. 

Pixa contends that Sonista cannot establish a compelling need sufficient to warrant the disclosure of

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1Moreover, as Pixa correctly notes, if discovering who signed the returns is of such importance, then Sonista

presumably should have asked this question of Pixa's CEO, David Wu, during his deposition on September 7, 2005. Sonista

did not do so. 

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the tax returns because Sonista already possesses all the financial information pertaining to Pixa's use of the

trademark in question. Sonista states, however, it is entitled to review Pixa's tax returns "for additional

information that cannot be gleaned from other documents already produced." (Opposition at p. 2).

Specifically, Sonista claims it is entitled to know who signed Pixa's returns, in order to make certain

arguments regarding corporate control and for impeachment of the individual defendants. Yet, even

assuming such information would be useful for those stated purposes, courts have nonetheless been

reluctant to grant disclosure of tax returns solely for impeachment. See Fed. R. Civ. Pro. 26(b), 1970

Amendment Advisory Committee Notes. Sonista's impeachment argument, in short, is an insufficient

justification on which to require tax return disclosure.1

V. CONCLUSION

For the reasons stated, Pixa's motion to quash the subpoena duces tecum to the extent that it seeks

Pixa's tax returns and related work papers is granted. The remainder of the subpoena, however, is not

challenged. Therefore, should Tang be in possession of any other documents responsive to the subpoena, it

must provide such materials to Sonista within twenty (20) days of the date of this order. IT IS SO

ORDERED. 

Dated: 9/28/05 /s/ Richard Seeborg 

RICHARD SEEBORG

United States Magistrate Judge

Case 5:04-cv-04080-RMW Document 108 Filed 09/28/05 Page 3 of 4
United States District Court

For the Northern District of California

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THIS IS TO CERTIFY THAT NOTICE OF THIS ORDER HAS BEEN DELIVERED TO:

David J. Brezner brezner.david@dorsey.com,

rodriguez.bertha@dorsey.com;scott.craig@dorsey.com;DocketingDept-SF@dorsey.com;stillwell.judith

@dorsey.com 

Peter Ehrlichman Ehrlichman.Peter@dorsey.com, overlie.lynne@dorsey.com 

Diane J. Mason mason.diane@dorsey.com,

rodriguez.bertha@dorsey.com;scott.craig@dorsey.com;stillwell.judith@dorsey.com;DocketingDept-SF

@dorsey.com 

John Franklin McIntyre , Jr jmcintyre@popelka.com, ssmith@popelka.com 

Brian C. Park park.brian@dorsey.com, smith.lisa@dorsey.com 

Jason Rhodes rhodes.jason@dorsey.com, steele.jennifer@dorsey.com 

Douglas F. Stewart stewart.douglas@dorsey.com, smith.lisa@dorsey.com 

Dated: 9/28/05 Chambers of Judge Richard Seeborg

By: /s/ BAK 

Case 5:04-cv-04080-RMW Document 108 Filed 09/28/05 Page 4 of 4