Opinion ID: 1929507
Heading Depth: 3
Heading Rank: 1

Heading: The legal standard applied to EOP's motion to compel production of the information of Other Taxpayers.

Text: When EOP moved to compel the county to produce the nonpublic information of Other Taxpayers, the tax court performed the two-part balancing test required by section 13.03, subd. 6: The presiding officer shall first decide whether the data are discoverable or releasable pursuant to the rules of evidence and of criminal, civil, or administrative procedure appropriate to the action. If the data are discoverable the presiding officer shall decide whether the benefit to the party seeking access to the data outweighs any harm to the confidentiality interests of the agency maintaining the data, or of any person who has provided the data or who is the subject of the data, or to the privacy interest of an individual identified in the data.
The tax court easily decided that the nonpublic information of Other Taxpayers was relevant to the income approach to the valuation of EOP's property and thus was discoverable. This was consistent with our observations in Montgomery Ward, that the value of a comparable property was relevant because the assessor is obligated to consider similar property when making the assessment. 450 N.W.2d at 306.
The tax court weighed this question in favor of confidentiality. The court first minimized any benefit to EOP from use of the information based on the conclusion that EOP's expert could prepare an appraisal without it. [22] The tax court then considered the burden on the county and the Other Taxpayers if the information were made public. It found that the burden outweighed any benefit, emphasizing several harms that would result from the information becoming public: Intervenors and Respondent argue that there is a great burden on the county and third party property owners. Intervenors argue that in the future they would not readily give this detailed information to the assessor because of the risk of it falling into the hands of a competitor. A county assessor would face greater difficulty in resolving tax disputes without this information. Further, litigation may increase as property owners/managers would contest taxes simply to undertake discovery. With the information, they could solicit tenants. Further, the property owners provided this information with the understanding that it would be kept confidential.        If this information were to be turned over to Petitioner, even with prohibitions and/or protections about the release of the information, it could cause taxpayers to be less cooperative. Leases themselves could be used as a basis for a solicitation and luring away of tenants. Further, there is a legitimate concern that if this information were to be released, in the future, building owners would contest taxes in order to obtain competitor's information. This would put an undue burden on the county's property tax collection system. Further, the information is proprietary. Although section 13.03, subd. 6, authorizes the court to fashion and issue any protective orders necessary to assure proper handling of the data by the parties, the tax court's order denying EOP's motion to compel recited the Intervenor's concerns but did not state the court's conclusions on a protective order. Implicitly, the court rejected a protective order when it denied the motion to compel, but it did not explain the rationale. Although I believe that a protective order would have been appropriate, I acknowledge that the denial of it was within the tax court's discretion.