A ruling from the United States District Court for the
Eastern District of North Carolina has denied an employment discrimination
plaintiff’s motion to compel production of an individual defendant’s net worth
information. In so doing, the court
aligned itself with other federal court rulings that have held that a plaintiff
may obtain discovery of net worth information only after first establishing an actual
prima facie entitlement to a punitive damages award.
The case, Jackson-Heard v. Elizabeth City State University,
is an employment discrimination action brought by Mary Jackson-Heard, a former
professor of accounting with the defendant school. Claiming she was unlawfully terminated, the
plaintiff asserted claims of race discrimination, age discrimination, and
gender discrimination. In addition to
suing the University, the plaintiff also sued the Dean of the School of
Business under 42 U.S.C. Section 1981. Among other relief, the plaintiff sought
an award of punitive damages.
The plaintiff served discovery requests seeking detailed
information and financial documents relating to the individual defendant’s
personal net worth. The plaintiff
claimed that such information was discoverable in order to explore and develop her
claim for punitive damages. The
defendant, however, objected to the requests on grounds that they were
overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery
of admissible evidence. The plaintiff
filed a motion to compel production of the requested information.
In its ruling, the court acknowledged the intended broad
scope of discovery. The court also
quoted the language of Rule 26 stating that relevant information, for discovery
purposes, need not be admissible at trial so long as it is reasonably
calculated to lead to the discovery of admissible information. At the same time, the court noted the trial
court’s broad discretion in determining relevance for discovery purposes.
Turning then to the specific issue at hand, the court
acknowledged that a defendant’s financial position is relevant to the issue of
punitive damages. At the same time,
however, the court pointed to several federal court decisions that have held
that a plaintiff must establish a prima facie case of actual entitlement to
punitive damages before requiring production of sensitive financial
information. The court determined that
the plaintiff had not yet shown an entitlement to punitive damages and, also,
found that the information the defendant had provided was sufficient in any
event. For the reasons, the motion to
compel was denied.
The ruling provides defendants with some hope for limiting
harassing discovery requests. Under this
ruling and the precedents cited, a plaintiff cannot pry into a defendant’s
sensitive financial status by merely asserting a claim for punitive
damages. Instead, the plaintiff must establish
that the punitive damages claim has actual merit.
The ruling represents a notable difference in philosophy
between federal and state courts in North Carolina. Frequently, North Carolina’s state court judges
take much more liberal views on the permissible scope of discovery in civil
lawsuits. Many times, plaintiffs in
North Carolina actions pursue punitive damages claims and promptly serve
discovery requests seeking similar documents and information. Although the scope of discovery standard is
theoretically the same under both federal and state rules of civil procedure,
state court judges are traditionally far more accommodating to requests for net
worth information.
