Crest Catering Co. v. Superior Court

TRAYNOR, C. J. Carl Kirsten, as administrator of an Employee Welfare and Retirement Fund and as assignee of the trustees of the fund, brought an action against Crest Catering Company to compel payment of contributions allegedly owed to the fund under the terms of a contract with a labor union. He alleged that in June 1957 Crest orally agreed with the union to make contributions to the fund at specified hourly rates for each hour worked by each of its employees and to be bound by the terms of certain trust instruments establishing the fund. He also alleged that Crest failed to make a full and complete accounting of its indebtedness under the contract.

During discovery proceedings, Kirsten directed interrogatories to Crest as to the number of employees and the hours worked by each during the period in issue in order to ascertain the correct amount due under the alleged contract. When Crest responded that all its books and records had been destroyed by fire, Kirsten suggested that Crest obtain the requested information from copies of its employment tax returns. The completeness and accuracy of Crest’s answers to several sets of interrogatories became the subject of a sharp and acrimonious dispute. On Kirsten’s motion the court ordered Crest to produce for inspection copies of its quarterly returns submitted to the California State Department of Employment and to the federal agencies. Crest then filed this petition for a writ to prohibit enforcement of the order on the ground that copies of its employment tax returns filed with the Department of Employment are privileged under sections 1094 and 2111 of the Unemployment Insurance Code.1

Section 2031 of the Code of Civil Procedure provides that a party may be ordered to produce for inspection “any designated documents, papers, books, accounts, letters, photographs, objects or tangible things, not privileged ...” which relate to pending litigation. (Italics added.)

With exceptions not here relevant, section 1094 of the Unemployment Insurance Code provides that the information delivered to the Department of Employment by an employing unit “shall be for the exclusive use and information of the [277]director . .. and shall not be open to the public, nor admissible in evidence in any action or special proceeding. ...” Section 2111 provides that the information “is confidential and shall not be published or open to public inspection in any manner . . .” and declares that any employee of the department who violates this section is guilty of a misdemeanor.