On July 14, 2022, Justice Reed of the New York County Commercial Division issued a decision in Atsco Footwear Holdings, LLC v. KBG, LLC, 2022 NY Slip Op. 50657(U), rejecting an attempt to obtain discovery of tax returns, explaining:
[S]ome of plaintiff’s requests seek corporate tax filings and bank statements from defendant and others. Courts require the party seeking production of tax returns or sensitive financial information to make a strong showing of necessity and demonstrate that the information contained in the returns is unavailable from other sources. Courts have denied motions to compel disclosures of tax returns where the moving party failed to sufficiently demonstrate the information contained in the returns was unavailable from other sources. Plaintiff argues that defendant’s tax filings and bank statements are material and necessary because they constitute information as to defendant’s finances and accounting practices during the time period for which plaintiff is challenging defendant’s calculation of net gross profit. Defendant argues that it should not be required to produce tax filings and bank statements because plaintiff has not made an adequate showing that defendants’ financial information could not be obtained from other sources. Here, although plaintiff contends that the tax returns are necessary, plaintiff does not demonstrate that the information is unavailable from other sources.
Additionally, the court will not compel disclosure where movant has not sufficiently shown a need for responses to its more burdensome requests. The Court of Appeals has made clear that competing interests must always be balanced; the need for discovery must be weighed against any special burden to be borne by the opposing party.
(Internal citations omitted).