*1 THIS CAUSE is before the Court on the City of Miami's (“Defendant” or “the City”) Motion Compel Plaintiffs' Production. [ECF No. 80]. The Motion was referred to the Undersigned to take all necessary and proper action as required by law with respect to it. [ECF No. 15].

The City has moved to compel certain financial documents from Plaintiffs it states are relevant to Plaintiffs' claims of financial loss. The first is Request 9 in the City's Request for Production of Documents:

Although Plaintiffs initially objected to the request, Plaintiffs claim they have since supplied all of the requested documents with the exception of the W-2 forms of its individual employees. [ECF No. 103]. They claim instead they supplied Defendant with a “summary” of their employee W-2 forms. [Id.].

The City has also moved to compel certain documents it refers to as “Loan Related Documents.” [ECF No. 80].

Requests 13, 14, and 15, requests any documents and communications exchanged between the owners of Plaintiff companies and the SBA regarding any of these loans or pandemic relief programs.

Plaintiffs provided the City with a list of the PPP loans and SBA/EIDL loans it received, along with the amounts received, the bank account in which the funds were deposited and the respective dates each loan was received. [ECF No. 83, Exh. 8]. Plaintiffs argue that any further documentation regarding these loans is not relevant and is not proportional to the needs of the case. [ECF No. 83 at 7].

The Court has carefully considered Defendant's Motion to Compel, the record in this case, the applicable law, and the oral arguments of the parties, and is fully advised. For the reasons discussed below, Defendant's Motion to Compel [ECF No. 80] is GRANTED in accordance with this Order.

A. The Requests and the Hearing

*2 Plaintiffs own and operate two restaurants known as “Ball & Chain” and “Taquerias” in an area within the City of Miami, Florida, referred to as “Little Havana.” [ECF No. 1]. Plaintiffs also own the real property on which the restaurants are located. [Id.]. Plaintiffs filed this action against the City of Miami alleging, primarily pursuant to 42 U.S.C. § 1983, that beginning in January 2018, the City “developed and deployed a deliberate policy and plan of action ... to destroy Plaintiffs' fundamental and constitutionally protected rights to their real property and in their business.” See [Id.]. Plaintiffs claim the City used its administrative departments including Building, Planning, Zoning, Fire, Police, Code Enforcement and its staff and employees to harass and close the businesses, ultimately causing lost profits in the amount of $27.91 million. [Id.].

At a hearing regarding this discovery dispute, Plaintiffs stated that they intended to produce the majority of the financial documents Defendant had requested including “[f]inancial statements, profit and loss statement[s], balance sheets, bank account statements,” and documents “that substantiate damages.” [ECF No. 80-1 at 11, 19]. Plaintiffs, however, maintained their objections as to the relevancy and proportionality of the W-2 Forms (the “W-2s”) requested in RFP No. 9 and the COVID relief funds and supporting documents (the “COVID Relief Documents” or “COVID Relief Funds”) requested in RFP No. 12-15. [Id. at 19–20]. The Court then authorized Defendant to file the instant Motion to Compel if the documents Plaintiffs produced were not sufficiently responsive to the RFPs. [Id. at 58].

B. The Motion to Compel

At this juncture, the parties agree that Plaintiffs have in fact produced documents responsive to RFP 9 with the exception that Plaintiffs have not produced (1) the individual W-2s of its employees, although Plaintiffs have provided a “summary” of the W-2s. [ECF No. 103]. And, with respect to the COVID Relief Documents, Plaintiffs have not produced any of the financial documents or communications requested in RFPs 12 through 15.

Defendant argues that Plaintiffs' tax documents, including the individual W-2s, are relevant to the determination of damages and causation. [ECF No. 80 at 9]. Specifically, Defendant avers that the tax information is relevant to (1) show Plaintiffs' financial standing during the relevant period; and (2) understand and verify the accuracy of Plaintiff's internal bookkeeping. [Id. at 9–11]. Defendant further states the tax documents “paint a picture pertinent to causation, speak directly to damages, and may even yield sworn admissions of a party opponent.” [Id. at 11–12]. Furthermore, Defendant alleges that under Fed. R. Civ. P. 26(b)(1), the tax documents sought are proportional to the needs of this “highly publicized case in which the corporate Plaintiffs demanded ‘$27.91 million in lost profits.’ ” [Id. at 12].

With respect to the COVID Relief Documents, Defendant claims the documents go directly to its ability to “assess the valuation of Plaintiffs' purported damages and to verify the accuracy of internal bookkeeping, which goes to the Plaintiffs' claims of loss profits and expenses.” [Id. at 17]. Defendant also argues that the documents are relevant to defend against Plaintiffs' claims and to “investigate the veracity of any representations made in supporting documentation,” which “may lead to admissions of a party opponent on whether the Plaintiffs complied with City codes, and whether [the] loans/grants paid for the labor associated with bringing the subject properties into compliance.” [Id. at 17–18].

Finally, Defendant argues that it is entitled to explore how or to what extent the attestations made in the COVID Relief Fund applications relate to causation and Plaintiffs' claimed damages. [Id. at 19]. Defendant also notes that any COVID Relief Funds Plaintiffs received will not appear as taxable income, and thus will not be reflected in any tax information Plaintiffs produce. [Id. at 15]. The City also appears to contend that the underlying certifications made by Plaintiffs or Plaintiffs' representatives to obtain the loans are relevant because it would inform the City regarding “the true causation of said damages,” perhaps suggesting that there may be evidence that Plaintiffs' damages resulted from the pandemic rather than the City's actions. [Id. at 19–20].

*3 Finally, Defendant claims that the request for the COVID Relief Documents is proportional because (1) the “amount in controversy and public interest in this case is immense”; (2) the Plaintiffs can access the documents easily; (3) the Plaintiffs' resources are “of little question”; (4) the city needs the information to have a “clear picture of the Plaintiffs' financial situation”; and (5) the inconvenience of disclosing the information does not outweigh the benefit to Defendant. [Id. at 19].

C. Plaintiff's Response

In their Opposition [ECF No. 83] and Sur-Reply in Opposition [ECF No. 91], Plaintiffs reiterate that they “have produced all tax records requested by the City in RFPs 9–11” but maintain their relevance and proportionality objections as to the individual W-2s and the COVID Relief Documents. [ECF No. 91 at 1].

Plaintiffs maintain Defendant has failed to show how individual W-2s for non-party employees are relevant to the calculation of Plaintiffs' damages. [Id. at 2–3]. The Plaintiffs further aver that the Court should protect the non-party employees from collateral consequences that may arise from disclosure of their private information to the City. [Id. at 3]. Finally, although they had produced the requested tax documents, with the exception of the individual W-2s, Plaintiffs claim that to obtain tax records, the City must show a “compelling need” in addition to relevance, and that the City has failed to meet that burden. [ECF No. 83 at 5-6].

Regarding the COVID Relief Documents, Plaintiffs argue that the documents are irrelevant because (1) the funds do not impact the Plaintiffs' profits; and (2) Plaintiffs already produced the pandemic loan and loan forgiveness amounts to Defendant. [Id. at 8].

More specifically, Plaintiffs state that the loans are long-term debt and that “forgiveness is non-taxable and irregular income that is not applied against expenses,” so it “does not impact expenses, revenue or profit.” [Id. at 8-9]. Plaintiffs further argue that because the loan and forgiveness amounts themselves are not relevant to the lost profit analysis, the application information is also irrelevant to that analysis. [Id. at 9].

Plaintiffs maintain that nothing in the underlying applications and certifications related to the COVID Relief Documents are relevant to inform Defendant about the cause of Plaintiffs' claimed damages in this case. Finally, Plaintiffs claim whether they used the COVID relief funds to pay for labor or bring their properties into compliance has nothing to do with Plaintiffs' damages or the City's alleged liability for the same and is therefore irrelevant.

They further maintain that the request for the underlying documents is not proportional to the needs of the case because it is a merely a fishing expedition, and the information provided would be duplicative of the tax information already provided.

Federal Rule of Civil Procedure 26 defines the scope of discovery as follows:

*4 Fed. R. Civ. P. 26(b)(1) (emphasis added).

Pursuant to Federal Rule of Civil Procedure 37(a)(3)(B), “[a] party seeking discovery may move for an order compelling an answer, designation, production, or inspection.” Fed. R. Civ. P. 37. “Motions to compel discovery under Rule 37(a) are committed to the sound discretion of the trial court.” Aatrix Software, Inc. v. Green Shades Software, Inc., No. 3:15-CV-164-J-20MCR, 2019 WL 11648520, at *4 (M.D. Fla. Dec. 10, 2019) (citing Commercial Union Ins. Co. v. Westrope, 730 F.2d 729, 731 (11th Cir.1984)). Importantly, “[w]hile the threshold for showing relevance is relatively low, the ‘proponent of a motion to compel discovery [still] bears the initial burden of proving that the information sought is relevant.’ ” Cardenas v. Toyota Motor Corp., No. 18-CV-22798, 2020 WL 5291936, at *1 (S.D. Fla. Sept. 3, 2020); see also Aatrix, 2019 WL 11648520, at *4.

A. Plaintiffs' Employees' W-2s

The W-2s in this case are non-privileged, relevant, and proportional to the needs of this case, and, thus, should be produced. Moreover, any privacy issues are resolved by the parties' stipulated protective order [ECF No. 78] and the Defendant's representation to this Court that Plaintiffs may redact the names and social security number of each employee. See [ECF No. 100-1 at 61].

When a party places their financial status at issue, their otherwise sensitive financial information becomes relevant. See Kinon Surface Design, Inc. v. Design Works Custom Tables, Inc., No. 15-81484-CIV, 2016 WL 7486717, at *1 (S.D. Fla. Apr. 19, 2016), order clarified, No. 15-81484-CIV, 2016 WL 7486718 (S.D. Fla. May 10, 2016) (“[W]hen Plaintiff's allegations of damages ‘necessarily put Plaintiff's financial status before, during, and after the alleged wrongful conduct at issue, Plaintiff's financial information is relevant and thus generally discoverable.’ ”); see also Kinon Surface Design, Inc. v. Design Works Custom Tables, Inc., No. 15-81484-CIV, 2016 WL 7486718, at *2 (S.D. Fla. May 10, 2016) (“A party seeking lost profits damages has a responsibility ‘to provide adequate discovery concerning their amount and the basis of their computation.’ ”). Further, tax information need only be “arguably relevant” to be discoverable. See Erenstein v. S.E.C., 316 F. App'x 865, 869–70 (11th Cir. 2008) (“Nevertheless, in civil cases, we have not required a showing of compelling need before tax information may be obtained by a party in discovery, but instead have determined that such information need be only arguably relevant.”); see also Maddow v. Procter & Gamble Co., Inc., 107 F.3d 846, 853 (11th Cir.1997).

This Court agrees that the information contained in Plaintiffs' employees' W-2s is arguably relevant given that Plaintiffs have placed their finances, specifically their profits and losses, at issue. Indeed, perhaps realizing this relevance, Plaintiffs have already produced to Defendant their “W-2 summaries,” which contain their “entire payroll.” [ECF No. 100-1 at 57]. Because Plaintiffs have already provided Defendant with a summary of the requested documents, this Court does not see how the actual documents could be deemed irrelevant.

*5 Regarding proportionality, the Court shares Plaintiffs' privacy concerns but believes that those concerns can be alleviated by the stipulated protective order and through the redaction of the names, addresses, social security numbers, and other personal identifiable information of Plaintiffs' employees.

B. PPP Loans

Plaintiffs have not provided the Court with any detail regarding what information is contained in the requested COVID Relief Documents. To the extent that the documents contain information regarding (1) Plaintiffs' income, expenses, profits or losses during the relevant time of this lawsuit; (2) Plaintiffs' claimed damages in this case; or (3) statements from Plaintiffs as to the cause of any business losses during the relevant time period of this case, they are relevant and should be produced. All other information may be redacted.

Whether COVID Relief Documents are relevant in civil matters is a relatively new issue and a case-specific one. Perhaps predictably, federal courts have determined that information regarding these loans is relevant in certain cases and irrelevant in others. See e.g. O'Bryan v. Joe Taylor Restoration, Inc., No. 20-CV-80993, 2021 WL 633948, at *1-*2 (S.D. Fla. Feb. 18, 2021), objections overruled, No. 9:20-CV-80993-WPD, 2021 WL 2000368 (S.D. Fla. Apr. 19, 2021) (finding plaintiff's request for information related to defendant's use of PPP funds irrelevant, disproportionate, and overbroad in claim for unpaid sick leave, because defendant's use of funds would have no bearing on whether plaintiff was eligible to receive sick pay); Barback v. Fisher, No. CV 20-515-SDD-EWD, 2022 WL 965914, at *8 (M.D. La. Mar. 30, 2022) (finding plaintiff's request regarding whether defendant applied for or received PPP funds and statements defendant made about defendant's financial position and operating expenses during the application process was relevant where defendant claimed it fired plaintiff for the non-retaliatory purpose of having to lower its operating expenses); Taylor v. HD & Assocs., LLC, No. CV 19-10635, 2020 WL 6708383, at *3 (E.D. La. Nov. 16, 2020) (finding PPP loan application irrelevant in Fair Labor Standards Act case where actions regarding the PPP loan application took place after plaintiffs stopped working for defendant and the application and admissions within had no bearing on whether plaintiffs were employees or independent contractors); Arthur N. Rupe Found. v. Fresh Acquisitions, LLC, No. 5:20-CV-130-H, 2021 WL 3660762, at *1 (N.D. Tex. Mar. 29, 2021) (finding COVID relief loan applications irrelevant in breach of contract case where the only issues remaining were whether defendant-landlord failed to properly maintain and repair the premises and the calculation of plaintiff-tenant's damages); Petconnect Rescue, Inc. v. Salinas, No. 20-CV-00527-LL-DEB, 2022 WL 448416, at *5 (S.D. Cal. Feb. 14, 2022) (finding COVID relief fund documents and applications relevant “to the limited extent” they showed defendant's owners and businesses with common management and ordering defendant to product the documents and application to the extent they show that limited relevant information).

Here, and as noted, Defendant claims that the COVID Relief Documents are relevant to the extent they contain (1) statements from Plaintiffs as to causation of the damages claimed in this case [ECF No. 80 at 19]; (2) statements from Plaintiffs as to their compliance or non-compliance with City codes [ECF No. 87 at 8-9]; (3) information showing whether Plaintiffs used or intended to use COVID Relief Funds to bring themselves into compliance with City code [Id. at 9]; (4) information concerning Plaintiffs' profits, losses, and damages in this case that may verify the accuracy of Plaintiffs' internal bookkeeping [ECF No. 80 at 18]; and (5) information that helps Defendant “investigate the veracity of any representations made in supporting documentation.” [Id. at 17]. Plaintiffs have not raised any claims of privilege with regard to the documents or communications.

*6 Plaintiffs' contention that Defendant cannot avoid liability by claiming Plaintiffs lost profits solely due to the pandemic clearly has merit. But, Plaintiffs cannot reasonably contend that evidence regarding its calculations concerning how much and which of its losses it attributed to the pandemic and why, and any communications its owners made in relation to that attribution are irrelevant. Plaintiffs placed this at issue when it made a demand for lost profits in the amount of $27.91 million.

This Court finds that the COVID loan documents and communications are relevant to the extent that they contain information regarding Plaintiffs' income, expenses, profits, calculated pandemic-related losses, and/or losses and damages in this case, and statements from Plaintiffs as to the cause of any business losses during the relevant time period and causation of the damages claimed in this case.

One would expect that at least some of that information would be contained in the COVID loan documents and communications. Accordingly, Plaintiffs must turn over the requested documents and communications.

Based on the foregoing, it is hereby ORDERED AND ADJUDGED as follows:

DONE AND ORDERED at Miami, Florida this 7th day of July, 2022.