Opinion ID: 1728775
Heading Depth: 1
Heading Rank: 3

Heading: Information Discoverable to Determine Net Worth

Text: It is also important to delineate the types of information which are discoverable in determining net worth. Discovery of certain types of financial information raises privacy concerns. For example, this Court has recognized that there should not be uncontrolled and unnecessary discovery of federal income tax returns. Maresca v. Marks, 362 S.W.2d 299, 300-01 (Tex.1962) (orig. proceeding); Crane v. Tunks, 160 Tex. 182, 328 S.W.2d 434, 440 (1959) (orig. proceeding), rev'd on other grounds, Walker v. Packer, 827 S.W.2d 833, 842 (Tex.1992). [6] As a result, this Court issued a writ of mandamus to protect tax returns from discovery in a suit seeking punitive damages when the corporation had already provided certified and audited annual reports. Sears, Roebuck & Co. v. Ramirez, 824 S.W.2d 558, 559 (Tex.1992) (orig. proceeding); see also Chamberlain v. Cherry, 818 S.W.2d 201, 205-07 (Tex.App.Amarillo 1991, orig. proceeding) (tax returns not relevant as evidence of net worth where relator makes no claim that other financial statements revealing net worth were requested and were not available). Therefore, trial courts should not allow discovery of private financial records, such as tax returns, when there are other adequate methods to ascertain net worth, such as audited financial reports or W-2 statements. Finally, another problem with unlimited discovery of financial information is the potential for abuse. If all that is required for discovery of sensitive, private, and confidential financial information in tort actions is the mere assertion of gross negligence in a pleading, needless abuse and harassment could result. I suggest that a plaintiff be required to demonstrate a factual basis for its punitive-damage claim before this type of sensitive information is allowed to be discovered. At least twelve jurisdictions now follow this approach, [7] and it is also urged by the American College of Trial Lawyers. [8] Otherwise, this information will be discoverable in every garden-variety fender bender case. It is unfortunate that these important issues were not addressed today by the Court's opinion.