North Carolina District Court Denies Discrimination Plaintiff’s Attempt to Compel Production of Defendant’s Net Worth Evidence

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.