Gonzalez v. United States

1

MARTHA GONZALEZ, Plaintiff, v. UNITED STATES OF AMERICA, Defendant.

No. 2:22-CV-3370 (OEM) (JMW)

United States District Court, E.D. New York

October 27, 2023

MEMORANDUM & ORDER

ORELIA E. MERCHANT, UNITED STATES DISTRICT JUDGE

Defendant United States of America (the “Government”) seeks review of Magistrate Judge James M. Wicks' (“MJ Wicks”) non-dispositive discovery order (the “Order”) dated May 15, 2023 denying the Government's motion to compel responses from Martha Gonzalez (“Martha”) and Boris Gonzalez (“Boris”) to the interrogatories propounded separately upon each of them. Specifically, the Government objects to MJ Wicks' finding that under the circumstances presented, the counterclaim defendants in this action, Martha and Boris Gonzalez, “should be treated as one party for purposes of Rule 33(a),” and consequently, limiting the number of interrogatories that may be served on Martha and Boris to 25 requests altogether. See Gonzalez v. United States, No. 22-CV-3370 (NRM) (JMW), 2023 WL 3455059, at *5 (E.D.N.Y. May 15, 2023). Because the Court does not find the Order clearly erroneous or contrary to law, MJ Wick's Order is AFFIRMED. See 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a).

BACKGROUND

A. Relevant Facts

The Court assumes familiarity with the underlying facts in this case which are set out more fully in the Order. The relevant facts below are undisputed unless otherwise noted.

In or around 2011, Martha and her husband, Boris, operated a construction company together called Camabo Industries, Inc. (“Camabo”). Martha was the sole shareholder of Camabo, and Boris acted as the CEO. Complaint (“Compl.”), ECF 1, ¶¶ 1-2, 10-11. After Camabo purportedly failed to pay certain employment taxes in or around 2012 and 2013, the Internal Revenue Service (“IRS”) assessed a tax liability and subsequent penalties on Camabo, which Martha disputes she is responsible for under 26 U.S.C. § 6672. Gonzalez, 2023 WL 3455059, at *1. This is a position Martha has maintained since around 2014. Compl. ¶ 15-16. Ultimately, in June 2017, a lien was filed against Martha in the amount of $1,366,796.72 and the amount due has grown since then. Compl. ¶¶ 18, 29. Martha eventually sought judicial relief from the underlying IRS assessment proceeding in this Court and sued the Government for a “refund and abatement of federal taxes, penalties and interest, and for the release of liens.” See Compl. ¶¶ 1, 30-37.

The Government responded to Martha's suit by impleading Boris into the action and levying their own counterclaims against Boris and Martha together to collect outstanding liabilities for penalties under 26 U.S.C. § 6672. See Government's Answer to Complaint and Counterclaim Against Martha Gonzalez and Boris Gonzalez, ECF 15.^[1] The Counterclaim contained various allegations as to Boris' connection and involvement in Camabo including that “Martha Gonzalez and Boris Gonzalez were co-debtors with regard to certain liabilities of Camabo[.]” Counterclaim ¶¶ 40-49. Along with Martha, the Government sought “judgment against the counterclaim defendant Boris Gonzalez under 26 U.S.C. § 6672 regarding the wages of employees of Camabo” for the periods at issue. Counterclaim, Prayer for Relief ¶ C.

During fact discovery, the Government separately propounded 19 interrogatories on Martha and 25 interrogatories on Boris. See Government's Appeal of the Order (“Gov't App.”), ECF 30, at 2. Martha and Boris resisted answering these interrogatories and maintained that they together should be treated as a single party for discovery purposes because they shared a “common interest” in the litigation. Id. See Gonzalez Letter dated Feb. 6, 2023, (“Gonzalez Ltr.”), ECF 255, at 1 (citing Zito v. Leasecomm Corp., 233 F.R.D. 395, 399 (S.D.N.Y. 2006)). The Government disagreed with this argument then as it does now. See Government's Objection Letter dated Feb. 9, 2023, ECF 25-6, at 2. On March 7, 2023, it filed a letter motion to compel interrogatory responses from both Martha and Boris, claiming that in relevant part “[t]he United States' revised interrogatories do not exceed 25 per party as permitted by Fed.R.Civ.P. 33(a)(1)” because “Martha and Boris are separate parties” and “[t]he United States requested information separately because the determination of whether each party, distinct from any other, is responsible and willful involves a determination of the level of control each had over Camabo[.]” Government's Motion to Compel (“Mot. to Compel”), ECF 25, at 3. On March 13 2023, Martha and Boris jointly filed a letter motion in opposition, Gonzalez' Opposition to Motion to Compel (“Gonzalez' Opp.”), ECF 26; and on April 15 2023, MJ Wicks issued the Order denying the motion to compel.

On May 26, 2023, the Government appealed MJ Wicks' Order to the undersigned. Gov't App. Specifically, the Government objects to that portion of the MJ Wick's Order finding that Martha and Boris should be considered together as one party such that only 25 interrogatories were allowed to be served, see id. at 3-4, and Martha and Boris opposed this appeal in a letter brief filed June 12, 2023. See Gonzalez' Response to Appeal (“Gonzalez Response”), ECF 31.

B. The Order

In the Order, MJ Wicks concluded that “Martha and Boris should be treated as one party because of the nature of their connections to this case. As such, [the Government] is limited to a total of 25 interrogatories to be propounded on both [Martha and Boris].” Gonzalez, 2023 WL 3455059, at *5. In reaching this conclusion, MJ Wicks followed the reasoning of discovery decisions by judges in this District and other district courts in this Circuit which found that “nominally separate parties should be considered one party for purposes of the 25-interrogatory limitation.” Zito, 233 F.R.D. at 399 (quoting Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure § 2168.1 at 261 (2d ed.1994) (hereinafter “Wright & Miller”)). See Gonzalez, 2023 WL 3455059, at *5 (citing Zito and Liberty Mut. Ins. Co. v. Blessinger, No. CV 06-391 (NGG) (ARL), 2007 U.S. Dist. LEXIS 45961, at *5 (E.D.N.Y. June 25, 2007)).

MJ Wicks reasoned that, under the circumstances presented, Boris and Martha:

[s]hould be treated as one party for purposes of Rule 33(a). There is clearly a common interest shared in light of the allegations of the counterclaims, and their representation by the same attorney is further support. Indeed, other courts have found such similarities. See McCarthy v. Paine Webber Grp., Inc., 168 F.R.D. 448, 450 (D. Conn. 1996) (applying the limit to each ‘side' rather than to each ‘party' because all defendants were represented by the same law firm and filed and responded to all motions jointly); Stiles v. Walmart, No. 2:14-CV-2234-MCE-DMC, 2020 WL 264420, at *4 (E.D. Cal. Jan. 17, 2020) (“Where separate parties are represented by the same counsel and are acting in unison, they may be treated as one ‘party' for purposes of the limit on interrogatories.”).

Id. (footnote omitted).

After finding that Boris and Martha were together a “party” for interrogatory purposes under Rule 33(a)(1), MJ Wicks opined that the Government:

has not made a “particularized showing” to the Court that there is a need for these excessive interrogatories. It has not provided proposed interrogatories for the Court's review, nor has it demonstrated that [Martha and Boris] are the only individuals with this information. Nor has [the Government] shown that the benefits of the interrogatories would outweigh any burden to [Martha and Boris]. Indeed, presumably both [Martha and Boris] will be questioned at depositions. Thus, the Court finds that Martha and Boris should be treated as one party because of the nature of their connections to this case. As such, [the Government] is limited to a total of 25 interrogatories to be propounded on both [Martha and Boris].

Id.

STANDARD OF REVIEW

A magistrate judge may issue orders regarding non-dispositive pretrial matters. Fed.R.Civ.P. 72(a). Discovery orders are generally considered non-dispositive orders. See Thomas E. Hoar, Inc. v. Sara Lee Corp., 900 F.2d 522, 525 (2d Cir. 1990). The district court reviews such orders under the “clearly erroneous or contrary to law” standard which is akin to a “abuse of discretion standard.”^[2] See id.; 28 U.S.C. § 636(b)(1)(A); Arista Recs., LLC v. Doe 3, 604 F.3d 110, 117 (2d Cir. 2010) (“Arista”).

Under the “contrary to law” standard of review, a district court may reverse a finding only if it finds that the magistrate “failed to apply or misapplied relevant statutes, case law or rules of procedure.”^[3] Garcia v. Benjamin Grp. Enter. Inc., 800 F.Supp.2d 399, 403 (E.D.N.Y. 2011). An abuse of discretion may also occur where the court's “decision-though not necessarily the product of a legal error or a clearly erroneous factual finding-cannot be located within the range of permissible decisions.” Arista, 604 F.3d at 117 (internal citation omitted). “Under this highly deferential standard of review, a district court may reverse the order only if ‘on the entire evidence,' the district court is ‘left with the definite and firm conviction that a mistake has been committed.'” Gedeon v. Valucare, Inc., No. 19-CV-6954(JS)(AKT), 2021 WL 135722, at *1 (E.D.N.Y. Jan. 14, 2021) (quoting Gray v. City of New York, No. 10-CV-3039, 2013 WL 3093345, at *2 (E.D.N.Y. June 18, 2013)). “[A] party seeking to overturn a discovery order bears a heavy burden.” Id. (quoting AP Links, LLC v. Global Golf, Inc., No. 08-CV-1730, 2011 WL 888261, at *4 (E.D.N.Y. Mar. 14, 2011)).

DISCUSSION

The Government argues that the plain language of Rule 33(a)(1) of the Federal Rules of Civil Procedure (the “Rules”) controls, and that the Government is entitled to served up to 25...