Davis

ORDER

Introduction

Plaintiffs, Davis and F.D.I.C. (Federal Deposit Insurance Corporation) seek to compel from defendant Leal voluminous discovery including tax return information and general business records. Much of the outcome of the motion will depend on whose privilege law is applied-federal or state. To arrive at the proper determination, it is necessary to understand the nature of the claims brought, the law that will supply the “rule of decision” on the merits, and choice of law determination in actions where the F.D.I.C. is a party.

Background Facts

The complaint has survived a motion to dismiss; therefore, the truth of the factual assertions are accepted for purposes of this discovery motion.

Defendant Leal was in the business of managing large tracts of undeveloped real estate, and one of these tracts involved Barbican Farms, owner of a 642 acre tract in Yuba County. Thomas Nevis, who had previously been associated in business deals with Leal, approached Leal and informed him that he had located prospective buyers (the Smith Group) for the Bar-bican Farms property. In a transaction, the precise details of which need not be discussed here, Leal made a deal with…