Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-04632/USCOURTS-cand-3_04-cv-04632-20/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 18:1961 Racketeering (RICO) Act

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For the Northern District of California

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States District C

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For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO BAY AREA RAPID

TRANSIT DISTRICT,

Plaintiff,

 v.

SPENCER ET AL,

Defendant.

 /

No. C 04-04632 SI

ORDER RE: DISCOVERY

Via letter brief filed November 1, 2006, defendants “seek clarification” of the Court’s Order re:

Discovery, issued on October 23, 2006 (Docket No. 129). In the Order, the Court granted in part

plaintiff’s request to compel production of several documents responsive to BART’s First Set of

Requests for Production of Documents. Among the documents at issue were the financial records of

defendant FWS. With respect to those records, the Court stated: 

BART also requests the banking and accounting records for defendant FWS. BART

argues these records would allow it to determine the nature and amount of money FWS

received as a result of the BART projects and the amount paid by FWS to the joint

venture, SLG, Virgilio Talao, and other individual defendants. 

Defendants argue the requested material is irrelevant because they have already

produced financial documents for SLG/BMC, the allegedly fraudulent entity.

Defendants further argue that this information is not relevant because FWS was never

a subcontractor on the projects, and all of the information that is needed can be found

by looking at the SLG/BMC records. Additionally, defendants argue that this

information is privileged because it contains trade secrets.

The Court finds that the requested information is relevant to the instant action.

BART alleges in its complaint that FWS paid “kickbacks” to SLG for the use of the

DBE status. FWS’s financial information is plainly relevant to determine whether FWS

actually paid such kickbacks. Defendants’ apprehension of the financial records

becoming public can be resolved by designating this information as confidential or

highly confidential pursuant to the protective order. The Court hereby GRANTS

Case 3:04-cv-04632-SI Document 202 Filed 11/17/06 Page 1 of 2
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BART’s request for FWS’s financial statements.

Oct. 23, 2006 Order at 3:2-17 (emphasis added).

Defendants now seek clarification of this Order, and request that the Court review certain FWS

financial recordsin camera to determine if they are relevant and must be produced. As an initial matter,

the Court’s Order should need no clarification; it means what it says. As can be seen from the passage

quoted above, the Court granted BART’s request for FWS’s financial records, in its entirety.

Nonetheless, the Court has reviewed the documents provided for in camera review, and hereby

determines that they are discoverable, as likely to lead to admissible evidence. The essence of BART’s

claims is that defendants set up various fronts in order to dupe prime contractors and BART into

awarding construction subcontracts they would not otherwise have awarded. FWS allegedly performed

the actual work that some of these fronts were supposed to perform. Furthermore, FWS allegedly paid

kickbacks to SLG for its service as a front. FWS’s financial records may allow BART to piece together

this alleged scheme more clearly. All of FWS’s financial records from the relevant time period are thus

discoverable, including those submitted to the Court for review. 

As stated in the previous order, “[d]efendants’ apprehension of the financial records becoming

public can be resolved by designating this information as confidential or highly confidential pursuant

to the protective order.” The Court hereby ORDERS produced the financial records provided to it in

conjunction with defendants’ letter brief. (Docket No. 135)

IT IS SO ORDERED.

Dated: November 17, 2006 

SUSAN ILLSTON

United States District Judge

Case 3:04-cv-04632-SI Document 202 Filed 11/17/06 Page 2 of 2