Request for Production Nos. 72 and 73 were directed to all Defendants. Request for Production No. 65 was directed to Defendant K3 Manager LLC. Tailored versions of Interrogatory No. 10 were directed to Defendants K3 Manager, LLC, KC Holdings, LLC, Nathan Kadish, and Michael Kadish.

To the extent Defendants argue that Plaintiffs' requests seeking Defendants' financial information in support of Plaintiffs' prayer for punitive damages are premature and should not be allowed at this juncture, this Court disagrees and notes that in the parties' Joint Rule 26(f) Report, “Neither side request[ed] phasing discovery” (Docket No. 50 at 11) and that no party has pointed this Court to any request/order for bifurcation. Under the federal rules, a district court has discretion to control the sequence of discovery “for the parties' and witnesses' convenience and in the interests of justice[.]” Fed. R. Civ. P. 26(d)(3). When a punitive damages claim has been asserted, a majority of federal courts permit pretrial discovery of financial information about defendants without requiring the plaintiff to establish a prima facie case on the issue of punitive damages. CEH, Inc. v. FV “Seafarer,” 153 F.R.D. 491, 497-98 (D.R.I. 1994) (collecting cases); Baker v. CNA Insurance Co., 123 F.R.D. 322, 330 (D. Mont. 1988) (not premature for plaintiff to seek discovery of information regarding defendant's financial status relevant to punitive damages claim even though plaintiff must first prevail on issue of liability before evidence of defendant's financial condition would be relevant; plaintiff should not be precluded from adequately preparing case as to damages); Vollert v. Summa Corp., 389 F. Supp. 1348, 1351 (D. Hawaii 1975) (plaintiff's demand for discovery of financial information relevant to issue of punitive damages not premature; existence of liability is threshold issue in almost all actions seeking money damages and should not preclude plaintiff from preparing his case as to damages). This Court elects to follow the majority practice.

The term “tenant files” is defined as “any collection of records, files, or folders – kept in paper or electronic format – regarding any person or household that either rented or occupied a dwelling unit in an apartment building[ ] or any person or household who inquired, inspected, or applied to rent a dwelling.”

The term “prospective tenant files” is defined as “any collection of records, files, or folders – kept in paper or electronic format – regarding any person or household who inquired, inspected, or applied to rent a dwelling.”

See City of Newport v. Facts Concerts, Inc., 453 U.S. 247, 270 (1981) (noting that “evidence of a tortfeasor's wealth is traditionally admissible as a measure of the amount of punitive damages that should be awarded.”); Oakes v. Halvorsen Marine Ltd., 179 F.R.D. 281, 284 (C.D. Cal. 1998) (evidence of net worth crucial to issue of punitive damages); United States v. Big D Enterprises, Inc., 184 F.3d 924, 932 (8th Cir. 1999) (under federal law, evidence of defendant's financial worth traditionally admissible for purpose of evaluating amount of punitive damages), cert. denied, 529 U.S. 1018 (2000); but see Fieldturf International, Inc., v. Triexe Management Group, Inc., 2004 WL 866494, *3 (N.D. Ill. 2004) (“[o]nly current financial documents are relevant to a claim for punitive damages.”) (citations omitted); United States v. Autumn Ridge Condominium Association, Inc., 265 F.R.D. 323, 328-29 (N.D. Ind. 2009) (holding same in FHA case; noting that district courts have concluded that financial records over approximately the past two-year period sufficient to establish a defendant's current net worth and so ordering) (collecting cases so holding).

Under federal law, tax returns and related documents “do not enjoy an absolute privilege from discovery.” Premium Services Corp. v. Sperry & Hutchinson Co., 511 F.2d 225, 229 (9th Cir. 1975); Heathman v. United States District Court, 503 F.2d 1032, 1035 (9th Cir. 1974) (Title 26 U.S.C. § 6103(a)(2) only restricts dissemination of tax returns by government and does not otherwise make copies of tax returns privileged). Nevertheless, a public policy against unnecessary public disclosure arises from the need, if the tax laws are to function properly, to encourage tax payers to file complete and accurate returns. Premium Services Corp., 511 F.2d at 229. Courts generally apply a two-pronged test to assure a balance between the liberal scope of discovery and the policy favoring the confidentiality of tax returns. A. Farber & Partners, Inc. v. Garber (“Farber”), 234 F.R.D. 186, 191 (C.D. Cal. 2006); Hilt v. SFC Inc., 170 F.R.D 182, 189 (D. Kan. 1997). First, the court must find that the returns are relevant. Second, the court must find that there is a compelling need for the returns because the information contained therein is not otherwise readily obtainable. Farber, 234 F.R.D. at 191; Hilt, 170 F.R.D. at 189. Although, as discussed above (see supra notes 2, 5), information regarding Defendants' financial condition and net worth are relevant to plaintiff's claim for punitive damages, the Court finds there is no compelling need for Defendants' tax returns and that discovery of tax returns is not proportional to the needs of the case as Defendants can respond with the requisite financial information through other means.