Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_00-cv-00113/USCOURTS-caed-2_00-cv-00113-1/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 42:9607 Real Property Tort to Land

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

HUHTAMAKI FOODSERVICE, INC.,

Plaintiff, No. CIV S-04-1494 LKK JFM

vs.

AMERIPRIDE SERVICES, INC., et al.,

Defendants. ORDER

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AMERIPRIDE SERVICES, INC.,

A Delaware Corporation,

Plaintiff, No. CIV S-00-0113 LKK JFM

vs.

VALLEY INDUSTRIAL SERVICE, INC.,

a former California corporation, et al.,

Defendants. ORDER

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These cases were consolidated for discovery purposes by district court order filed

September 15, 2005. Plaintiff Huhtamaki and Defendant AmeriPride’s motions to compel came

on regularly for hearing October 20, 2005. Plaintiff Huhtamaki was represented by Stephen J.

Darmody. Scott J. Kaplan, Lee N. Smith and Lilly Santaniello appeared for defendant

Ameripride. Upon review of the motion and the documents in support and opposition, upon

hearing the arguments of counsel and good cause appearing therefor, THE COURT FINDS AS

FOLLOWS:

Case 2:00-cv-00113-MCE-DB Document 184 Filed 10/26/05 Page 1 of 4
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26 See November 5, 2003 Status (Pretrial Scheduling) Order at 5. 1

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In light of the district court’s order consolidating the two actions captioned above,

the discovery cut-off for both actions is now May 16, 2006. It is apparent from the joint 1

discovery stipulation that these motions were prematurely brought with regard to every issue save

one. During the scheduled argument, it was agreed that the premature motions would be

continued for hearing until December 8, 2005 at 11:00 a.m. before the undersigned. Counsel

shall file a new joint discovery stipulation pursuant to Local Rule 37-251 no later than December

1, 2005.

The one issue to be resolved now was whether Ameripride could be required to

release financial statements and information in response to Huhtamaki’s interrogatory and

request for production No. 14. Counsel argued their positions on this issue and the court took the

matter under submission.

This action was brought under the Comprehensive Environmental Response,

Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9601, et. seq., and raises various

state law claims as well. CERCLA contains a particularized jurisdictional statement, which

provides that, except as otherwise provided, "the United States district courts shall have

exclusive original jurisdiction over all controversies arising under this chapter, without regard to

the citizenship of the parties or the amount in controversy." 42 U.S.C. § 9613(b).

The parties agree that California law controls the substance of this lawsuit. 

Huhtamaki contends, however, that federal law controls the procedure by which the district court

oversees the litigation. See Hanna v. Plumer, 380 U.S. 460, 473 (1965). Ameripride, relying on

State Farm Mut. Auto Ins. Co. v. Campbell, 538 U.S. 408, 418 (2003), argues that the financial

statements are not discoverable, that its financial records are privileged under state law, and that

state law controls here because Huhtamaki’s punitive damages claims are based upon its state

law causes of action.

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3

Although state law will govern the substance of the claims between the parties

herein, this discovery dispute is procedural, and, being procedural, is governed by federal law. 

Huhtamaki is entitled to the financial records of Ameripride to support the claim which it has

plead for punitive damages. “When a punitive damages claim has been asserted by the plaintiff,

a majority of federal courts permit pretrial discovery of financial information about the defendant

without requiring plaintiff to establish a prima facie case on the issue of punitive damages.” 

CEH, Inc., FV Seafarer, 153 F.R.D. 491, 498 (D.R.I. 1994)(citations omitted). Discovery of

financial records is allowed, “whether or not such evidence would be admissible at trial.” Oakes,

179 F.R.D. at 286, citing CEH, 153 F.R.D. at 498-99. In addition, “one of the purposes behind

the broad federal discovery rules is to facilitate settlement, and such financial information is

valuable in assisting both sides in making a realistic appraisal of the case, and may lead to

settlement and avoid protracted litigation. Oakes, 179 F.R.D. at 286, citing CEH, 153 F.R.D. at

499.

Ameripride’s privacy concerns are addressed by the comprehensive protective

order issued herein on September 20, 2005. However, this court will reduce the time frame

covered from 25 years to 10 years, and will require Ameripride to respond only as to its own

annual reports and/or financial statements. 

The Supreme Court’s ruling cited by Ameripride does not compel a different

result. State Farm Mut. Auto Ins. Co. v. Campbell, 538 U.S. 408, 418 (2003). State Farm is

distinguishable both in terms of its procedural posture as well as the question at issue therein. 

The Court in State Farm addressed the constitutionality of a $145 million punitive damages

award, holding that the punitive damages were awarded to condemn State Farm’s nationwide

policies rather than its conduct directed toward the Campbells. Id. This court does not find that

the holding in State Farm precludes the court from ordering financial statements to be disclosed

in discovery under the Federal Rules. Other courts have continued to order, under federal law,

disclosure of financial information in the context of punitive damages claims. Sonnino v.

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University Kansas Hosp. Authority, 220 F.R.D. 633 (D.Kan. 2004). In a Title VII claim for

punitive damages, the Sonnino court stated, “[i]t is well settled that when a plaintiff alleges

sufficient facts to claim punitive damages against a defendant, information regarding the

defendant's net worth or financial condition is relevant because it can be considered in

determining the amount of such damages.” Id. at 654. In a Sherman Act case, 15 U.S.C. § 15,

evidence of defendant’s financial worth was found to be relevant and discoverable. Ferko v.

National Ass’n for Stock Car Auto Racing, Inc., 218 F.R.D.125, 137-38 (E.D. Tex. 2003). Each

of these cases issued post State Farm. 

Accordingly, IT IS HEREBY ORDERED that:

1. Plaintiff Huhtamaki’s October 3, 2005 motion to compel defendant Ameripride 

to answer interrogatory and request for production No. 14 is partially granted; within thirty days

from the date of this order, Ameripride shall provide its last ten years’ annual reports and/or

financial statements to Huhtamaki, subject to the protective order issued in this case on

September 20, 2005.

2. The remainder of plaintiff Huhtamaki and defendant Ameripride’s October 3,

2005 motion to compel is continued to December 8, 2005 at 11:00 a.m. in courtroom No. 26

before the undersigned. A new discovery stipulation, pursuant to Local Rule 37-251, setting

forth the parties respective positions on any unresolved disputes shall be filed by the close of

business on December 1, 2005. 

DATED: October 25, 2005.

/001

huhtamaki.oah

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