The University of Phoenix, Inc. v. Indiana Department of State Revenue
2017 Ind. Tax LEXIS 7
| Ind. T.C. | 2017Background
- University of Phoenix subpoenaed the former Indiana Department of State Revenue Commissioner for a deposition about Section 14 of HB 1349, the 2014 Tax Competitiveness and Simplification Report, and a related presentation (the “deposition topics”).
- The Department moved for a protective order; the court denied the first motion but quashed the subpoena and allowed the deposition to be rescheduled.
- University deposed the Department’s three Rule 30(B)(6) witnesses, who provided limited information on the deposition topics, and then reissued a subpoena for the former Commissioner.
- The Department filed a second protective-order motion reiterating prior arguments and noting the 30(B)(6) depositions; the court denied the second motion.
- University filed its own motion to compel production of documents and a proper 30(B)(6) witness; the court granted the motion in part and denied it in part.
- At an evidentiary hearing on sanctions under Ind. Trial Rule 37(A)(4), the University sought $159,446.40 in expenses; the Department sought $12,900.00.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the Department substantially justified in filing its first protective-order motion? | Dept. was reasonably justified; authorities supported limiting a non-party deposition. | Univ. argued the depositional topics were relevant and the motion lacked merit. | The court: Yes. A genuine legal dispute existed, so the first motion was substantially justified. |
| Was the Department substantially justified in filing its second protective-order motion? | Dept. contended informal resolution attempts and similar prior arguments made the second motion reasonable. | Univ. argued the court had already rejected the arguments and the second motion was duplicative. | The court: No. Given the recent denial of the first motion, the second was not substantially justified. |
| Was the University substantially justified in filing its motion to compel production and a proper 30(B)(6) witness? | Univ. argued prior rulings established relevance of the topics and supported compelling further discovery. | Dept. argued changed circumstances (the former Commissioner’s deposition) and the limited value of requested discovery undercut Univ.’s position. | The court: No. Univ. failed to reassess discovery in light of changed circumstances and was not substantially justified. |
| Were the requested expense amounts reasonable? | Univ. sought full recovery ($159,446.40) based on attorney skill, time, case importance, and success. | Dept. argued amounts were excessive, partly duplicative, and prior cases limited reasonable rates/hours. | The court: Partially granted. Awarded Univ. $9,850.50 (for resisting the second protective motion) and awarded Dept. $12,900.00 (for resisting Univ.’s motion to compel). Univ.’s larger request was largely unreasonable or duplicative. |
Key Cases Cited
- Popovich v. Indiana Dep’t of State Revenue, 50 N.E.3d 407 (Ind. Tax Ct. 2016) (awards under T.R. 37(A)(4) are presumptively required unless opposition was substantially justified or other circumstances make an award unjust)
- Ledden v. Kuzma, 858 N.E.2d 186 (Ind. Ct. App. 2006) (explains the meaning of “substantially justified” for discovery disputes)
- Shelby’s Landing - II, Inc. v. PNC Multifamily Capital Institutional Fund XXVI Ltd. P’ship, 65 N.E.3d 1103 (Ind. Ct. App. 2016) (factors trial courts may consider in assessing reasonable fees)
- University of Phoenix, Inc. v. Indiana Dep’t of State Revenue, 64 N.E.3d 1271 (Ind. Tax Ct. 2016) (prior opinion addressing related discovery rulings and relevance issues)