United States District Court, N.D. California
DISCOVERY ORDER RE: DKT. NO. 77
MARIA-ELENA JAMES United States Magistrate Judge
before the Court is a Joint Discovery Letter Brief filed by
Plaintiff Cynthia Todd (“Plaintiff”) and
Defendants Equifax Information Services LLC and National
Consumer Telecom and Utilities Exchange (together,
“Defendants”). Ltr. Br., Dkt. No. 77. The Letter
Brief addresses Plaintiff's attempts to discover
Defendants' net worth. Having considered the parties'
positions, the relevant legal authority, and the record in
this case, the Court issues the following order.
Rule of Civil Procedure 26 provides that a party may obtain
discovery “regarding any nonprivileged matter that is
relevant to any party's claim or defense and proportional
to the needs of the case[.]” Fed.R.Civ.P. 26(b)(1).
Factors to consider include “the importance of the
issues at stake in the action, the amount in controversy, the
parties' relative access to relevant information, the
parties' resources, the importance of the discovery in
resolving the issues, and whether the burden or expense of
the proposed discovery outweighs its likely benefit.”
Id. Discovery need not be admissible in evidence to
be discoverable. Id. However, “[t]he parties
and the court have a collective responsibility to consider
the proportionality of all discovery and consider it in
resolving discovery disputes.” Fed.R.Civ.P. 26 advisory
committee notes (2015 amendments). Thus, there is “a
shared responsibility on all the parties to consider the
factors bearing on proportionality before propounding
discovery requests, issuing responses and objections, or
raising discovery disputes before the courts.”
Salazar v. McDonald's Corp., 2016 WL 736213, at
*2 (N.D. Cal. Feb. 25, 2016); Goes Int'l, AB v. Dodur
Ltd., 2016 WL 427369, at *4 (N.D. Cal. Feb. 4, 2016)
(citing advisory committee notes for proposition that parties
share a “collective responsibility” to consider
proportionality and requiring that “[b]oth parties . .
. tailor their efforts to the needs of th[e] case”).
alleges Defendants violated the Fair Credit Reporting Act
(“FCRA”), 15 U.S.C. §§ 1681i &
1681e. See Am. Compl., Dkt. No. 5. She requests
Defendants produce information regarding their net worth,
arguing net worth is relevant to the issue of punitive
damages. Ltr. Br. at 2; Letona Decl. ¶ 4, Dkt. No. 77-1;
see 15 U.S.C. § 1681n(a)(1)(B)(2). Defendants
argue their net worth is not relevant and that the
information would be unduly prejudicial. Ltr. Br. at 3.
Supreme Court has cautioned district courts against allowing
plaintiffs to introduce evidence of a corporate
defendant's net worth to establish punitive damages, as
“the presentation of evidence of a defendant's net
worth creates the potential that juries will use their
verdicts to express biases against big business[.]”
State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S.
408, 417 (2003). Despite this potential risk, “evidence
of a tortfeasor's wealth is traditionally admissible as a
measure of the amount of punitive damages that should be
awarded.” City of Newport v. Facts Concerts,
Inc., 453 U.S. 247, 270 (1981). There is no blanket
prohibition against the introduction of such evidence at
trial; indeed, California district courts have allowed
limited discovery on a defendant's net worth in federal
question cases, as well as presentation of this evidence to
jurors, because it is relevant to punitive
damages. See, e.g., Reddy v.
Nuance Comms., Inc., 2015 WL 4648008, at *3
(N.D. Cal. Aug. 5, 2015) (denying motion in limine to exclude
evidence of defendant's net worth or financial condition
for purposes of damages: “the relevance of
[defendant's] net worth outweighs any prejudice.”);
Zuniga v. W. Apartments, 2014 WL 2599919, at *4
(C.D. Cal. Mar. 25, 2014) (granting motion to compel
responses to interrogatory asking defendants in federal Fair
Housing Act action to state their net worth: evidence of
defendant's current net worth was “relevant and
admissible to establish the appropriate amount of punitive
damages.” (citing City of Newport, 435 U.S. at
270)); Henderson v. Peterson, 2011 WL 2838169, at
*15-16 (N.D. Cal. July 15, 2011) (granting defendants'
motion to bifurcate punitive damages phase in 42 U.S.C.
§1983 action: “Should the jury return a verdict
and a compensatory damage award in favor of Plaintiff, the
proceedings will resume and the parties may present evidence
and/or testimony germane to punitive damages (i.e., evidence
of Defendants' net worth.)”); E.E.O.C. v. Cal.
Psychiatric Transitions, 258 F.R.D. 391, 395 (E.D. Cal.
2009) (information regarding financial condition of Title VII
defendant generally admissible at trial and thus
discoverable); Kalima v. Regents of Univ. of Cal.,
2007 WL 1514785, at *1-2 (N.D. Cal. May 21, 2007) (document
requests regarding defendant's financial condition
“vastly overbroad”; parties to meet and confer
regarding production of documents reflecting defendant's
current net worth).
courts presiding over FCRA cases also have allowed plaintiffs
to present to juries evidence relating to a defendant's
financial condition in connection with their request for
punitive damages. See Ferrarelli v. Federated Fin. Corp.
of Am., 253 F.R.D. 432, 433 (S.D. Oh. 2008) (financial
condition of defendant “highly relevant” but
bifurcating punitive damages phase to avoid possibility of
prejudice); Dixon-Rollins v. Experian Info. Sols.,
Inc., 753 F.Supp.2d 452, 467 (E.D. Penn. 2010)
(“Punitive damages are intended to punish the
defendant, not compensate the plaintiff. Consequently, a
‘jury can consider the relative wealth of a defendant
in deciding what amount is sufficient to inflict the intended
punishment.'” (quoting Cortez v. TransUnion,
LLC, 617 F.3d 688, 718 n.37 (3d Cir. 2010)));
Saunders v. Equifax Info. Servs., LLC, 469 F.Supp.2d
343, 347 (E.D. Va. 2007) (denying motion for remittitur of
punitive damages award in FCRA case where jury was instructed
about purpose of awarding punitive damages and “the
salient factors they could consider in making any award[,
]” including “[d]efendant's income and net
worth” and where jury based decision on sufficient
evidence of misconduct and “the economic ability
(substantial net worth) of the offending defendant to
withstand such an award”).
note the Manual of Model Civil Jury Instructions for the
District Courts of the Ninth Circuit (“Model
Instructions”) on punitive damages instructs jurors to
consider the degree of reprehensibility of the
defendant's conduct-including whether the conduct that
harmed plaintiff was particularly reprehensible because it
also caused actual harm or posed a substantial risk of harm
to non-parties-but instructs them not to set the amount of
any punitive damages in order to punish the defendant for
harm to anyone other than the plaintiff in this case. Ltr.
Br. at 5 (quoting Model Instructions § 5.5 Punitive
Damages (2007) (updated 3/2017)). But that instruction also
explains “[t]he purposes of punitive damages are to
punish a defendant and to deter similar acts in the future. [
] Punitive damages, if any, should be in an amount sufficient
to fulfill their purposes but should not reflect bias,
prejudice or sympathy toward any party.” Id. A
FCRA defendant's current net worth is relevant to
evaluating whether a punitive damages award is
“sufficient to fulfill” its purpose of
deterrence. See Dixon-Rollins, 753 F.Supp.2d at 467;
Saunders, 469 F.Supp.2d at 347.
object to Plaintiff's discovery because evidence of their
net worth might unduly prejudice a jury assessing the amount
of punitive damages in this case. Ltr. Br. at 3-5. This
generalized concern is insufficient to overcome the relevance
of this information for purposes of discovery. See
Fed. R. Civ. P. 26(b)(1). This finding does not preclude
Defendants from moving the Presiding Judge to exclude the
evidence at trial on the ground it would be unduly
prejudicial. Even if “evidence of a defendant's
financial condition is offered in support of such damages,
” the Comment to Model Instruction 5.5 suggests a
“limiting instruction may be appropriate.” Should
this case proceed to trial, Defendants may cure any potential
prejudice by requesting such a limiting instruction or
seeking other appropriate relief.
Defendants' current net worth is relevant to punitive
damages, Plaintiff has requested Defendants produce documents
showing their net worth for the five years preceding and
including the year of trial, currently set for October 2017.
See Letona Decl. ¶ 4, Dkt. No. 77-1; Scheduling
Order, Dkt. No. 49. The undersigned finds this request is
overbroad, and orders Defendants only to produce documents
sufficient to show their current net worth. The undersigned
also denies Plaintiffs request that Defendants' corporate
witnesses be ordered to answer (unspecified) questions they
refused to answer at their depositions. See Id.
¶ 5. These answers would be redundant of the document
production being ordered; requiring witnesses, counsel, and a
court reporter to reconvene to answer these questions
therefore would not be proportional to the needs of the case.
the Court notes the parties did not, as required by the
undersigned's Standing Order re Discovery, attest they
met in person to confer regarding this issue, and it appears
the parties did not do so. See Ltr. Br.; Letona
Decl. ¶ 6 (“[T]he parties have engaged in
extensive meet and confer on this issue, including telephone
calls, e-mails and letters”). Any future letter briefs
will be denied without prejudice if they are not accompanied
by the required attestation.
parties also should direct any future discovery matters to
the undersigned rather than to Judge Laporte. See