Popovich v. Indiana Department of State Revenue
7 N.E.3d 406
| Ind. T.C. | 2014Background
- Popovich's first Motion to Compel IDRS to respond to 53 discovery requests and IDRS's Motion for Protective Order are before the Tax Court.
- Audit occurred for 2002–2004 tax years; Department issued proposed assessments and a LOF in Aug. 2010 for additional income tax, interest, penalties.
- Popovich appealed to Tax Court; discovery disputes began in 2011 with numerous objections by IDRS (work-product, attorney-client, deliberative process, privilege, relevance).
- IDRS supplemented responses multiple times (Oct. 21, 2011 and Dec. 20, 2011; Dec. 30, 2011) and later asserted new objections, including non-relevance.
- Popovich filed the initial motion to compel Nov. 22, 2011; after hearings, the Department supplemented again and filed a protective order motion Jan. 5, 2012.
- The court granted the motion to compel in part and denied the protective order in part, ordering full responses within 45 days, with a separate hearing on expenses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Popovich's discovery requests are relevant to the action | Popovich contends requests relate to audit, penalties, and the 2003 assessment issues. | IDRS argues requests are not relevant to the sole issue of professional gambling status and rely on de novo review doctrine to limit relevance. | Requests are relevant; discovery broad scope applies. |
| Whether a deliberative process privilege shields documents | Deliberative process privilege not recognized in Indiana law; requests should not be blocked. | Indiana recognizes a deliberative process privilege protecting decision-makers' mental processes. | Deliberative process privilege not recognized; privilege not applicable to these requests. |
| Whether mental processes/deliberations of auditors and decision-makers are discoverable | Requests seek all relevant evidence considered by hearing officers, not probing mental processes. | Mental processes of auditors/hearing officers should be protected. | Audit-related materials are discoverable; bar on probing deliberations does not apply to audits. |
| Whether work-product and attorney-client privileges preclude disclosure | Privileges should not blanket-disqualify; require document-by-document analysis. | Some communications fall under work-product/attorney-client protections. | Privileges do not preclude disclosure for most requests; Interrogatory 4 narrowed with specificity; privilege claims must be particularized. |
| Whether other objections (oppressive, ambiguous, burdensome, etc.) preclude discovery | General objections lack justification; parties must articulate specifics. | Requests are burdensome or improper in some respects. | Court finds most boilerplate objections insufficient; discovery should proceed with limited caveat to Interrogatory 4. |
Key Cases Cited
- Hoosier Energy Rural Elec. Coop., Inc. v. Indiana Dept. of State Revenue, 572 N.E.2d 481 (Ind.1991) (trial court broad discretion in discovery, auditing context)
- Baseball, Inc. v. Ind. Dep’t of State Revenue, 672 N.E.2d 1368 (Ind.Ct.App.1996) (deliberative process references; audit context cited)
- Canfield v. Sandock, 563 N.E.2d 526 (Ind.1990) (two-part inquiry: relevance and privilege scope)
- Newton v. Yates, 353 N.E.2d 485 (Ind.1976) (scope of discoverable matter includes non-privileged relevant information)
- Provisor, Medical Licensing Bd. Ind. v., 669 N.E.2d 406 (Ind.1996) (bar against probing mental processes in quasi-judicial settings)