26 N.E.3d 147
Ind. T.C.2015Background
- Brandenburg Industrial Service Co., an Illinois scrap-processor, sought refunds for sales/use taxes for 2006–2007 purchases under several Indiana exemptions; the Department issued refunds for the first and third claims, denied the second and fourth, and later determined the first and third refunds were granted in error and issued proposed assessments.
- Brandenburg sued in Indiana Tax Court for refund and served discovery including Interrogatory No. 16 (identify non-expert witnesses and subjects) and Request for Production No. 3 (documents used in Department’s investigation/approval of first and third refund claims).
- The Department initially gave a vague response to Interrogatory No. 16, later supplementing to identify an Audit Review Supervisor as a possible non-expert witness and reserving the right to designate a Rule 30(B)(6) witness; its 30(B)(6) deponent offered little additional detail.
- The Department produced some documents responsive to RFP No. 3 but withheld two pages of handwritten notes, asserting FOIA statutory exemption (Ind. Code §5-14-3-4(b)(6)), deliberative-process privilege, and work-product protection.
- Brandenburg moved to compel (1) a fuller answer to Interrogatory No. 16 and (2) production of the two pages of handwritten notes; Court held a hearing and issued this order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Dept. must fully identify all potential non-expert witnesses and the substance of their expected testimony (Interrog. No.16) | Brandenburg: vague answers prejudice preparation and risk surprise; asks either full ID or limit Dept. to Audit Review Supervisor | Dept.: it identified the Audit Review Supervisor and adequately answered as required for known witnesses | Court: Denied motion — Dept.’s response adequate for witnesses known at time; discovery rules and case management/ Trial Rule 16 address late disclosures |
| Relevance of two pages of handwritten notes | Brandenburg: notes may reveal rationale for refunds/assessments and timeliness issues; therefore potentially relevant | Dept.: notes not pertinent to statutory manufacturing issue and irrelevant under de novo review | Court: Notes are potentially relevant to subject matter (rationale, assessment process) and discoverable |
| Whether Ind. Code §5-14-3-4(b)(6) bars disclosure (statutory FOIA exemption) | Brandenburg: exemption inapplicable in litigation discovery context | Dept.: FOIA exemption protects intra-agency deliberative material | Court: Rejected Dept.’s FOIA objection — statute prevents public disclosure, not preclude discovery between litigants |
| Whether deliberative-process privilege shields notes | Brandenburg: privilege not applicable | Dept.: argues deliberative-process privilege protects notes | Court: Rejected — court holds no deliberative-process privilege exists in Indiana precedent cited |
| Whether notes are protected work product | Brandenburg: seeks production; also argued Dept. waived any privilege claim | Dept.: notes prepared after some appeals and thus prepared in anticipation of litigation; work-product shield applies | Court: Denied work-product protection — notes were prepared in ordinary course of administrative duties (not because of prospect of litigation), so discoverable |
Key Cases Cited
- Popovich v. Indiana Dep’t of State Revenue, 7 N.E.3d 406 (Ind. Tax Ct. 2014) (discusses discovery relevance and limits of FOIA exemption in discovery)
- Whitaker v. Becker, 960 N.E.2d 111 (Ind. 2012) (discusses purpose of discovery to avoid surprise)
- Trost-Steffen v. Steffen, 772 N.E.2d 500 (Ind. Ct. App. 2002) (discovery is self-executing; court intervention under Trial Rule 37)
- Daub v. Daub, 629 N.E.2d 873 (Ind. Ct. App. 1994) (exclusion of undisclosed witnesses rests in trial court’s discretion)
- CIGNA-INA/Aetna v. Hagerman-Shambaugh, 473 N.E.2d 1033 (Ind. Ct. App. 1985) (work-product depends on whether documents were prepared because of prospect of litigation)
- Indiana State Bd. of Pub. Welfare v. Tioga Pines Living Ctr., Inc., 592 N.E.2d 1274 (Ind. Ct. App. 1992) (documents prepared in ordinary course of business are not work product)
- American Bldgs. Co. v. Kokomo Grain Co., 506 N.E.2d 56 (Ind. Ct. App. 1987) (scope of work-product protection)
- State v. Hogan, 588 N.E.2d 560 (Ind. Ct. App. 1992) (burden on party asserting privilege)
- National Eng’g & Contracting Co. v. C & P Eng’g & Mfg. Co., 676 N.E.2d 372 (Ind. Ct. App. 1997) (litigation not imminent where a party lacks knowledge of facts giving rise to claim)
- In re Matter of Snyder, 418 N.E.2d 1171 (Ind. Ct. App. 1981) (public-employee acts in course of official duties are not work product)