Court Opinion

ID: 9618675
Source: CourtListenerOpinion
Date Created: 2023-08-22 05:15:24.9756+00
Date Added: 2024-06-11T18:04:31.166795
License: Public Domain

LOHR, Justice,
dissenting:
The majority holds that, where punitive damages are sought to be recovered from a defendant, discovery with respect to that defendant’s financial worth must be deferred until the plaintiff establishes a prima facie case of entitlement to such damages. I respectfully dissent.
I share the concerns expressed by the majority that discovery is sometimes unnecessarily burdensome and costly and can be used as an instrument for harassment. On the other hand, the procedure mandated by the majority will slow the progress of the case, require two sets of interrogatories or depositions instead of one in some cases, and defer the discovery of financial information which may be relevant to settlement. The determination of whether the plaintiff has established a prima facie case will introduce a mini-trial into the pretrial procedure. A determination that no prima facie case has been established would preclude discovery of financial information. In the event that a prima facie case were later established at trial, the plaintiff would be irreparably disadvantaged in presentation of her case for punitive damages.
In the past we have rejected the argument that a prima facie case must be established before allowing extensive discovery of business and financial information by production of documents under Rule 34, C.R.C.P., in an action for wrongful appropriation of a trade secret. We said “[t]his requirement is not imposed by Rule 34 and contradicts the broader policy of the rules that all conflicts should be resolved in favor of discovery. . . . Any burden that exists should be placed on those opposing discovery.” Curtis, Inc. v. District Court, 186 Colo. 226, 233, 526 P.2d 1335, 1338 (1974). Other states have rejected the argument that a prima facie case of liability for punitive damages must precede discovery of a defendant’s financial condition. State ex rel. Thesman v. Dooley, 270 Or. 37, 526 P.2d 563 (1974); Hughes v. Groves, 47 F.R.D. 52 (W.D.Mo.1969).
A trial court has broad discretion to issue protective orders to address the very concerns which prompt the majority to prohibit discovery of financial information before a prima facie case of liability for punitive damages has been established. C.R.C.P. 26(c) provides in relevant part:
“(c) Protective Orders. Upon motion by a party or by the person from whom discovery is sought, and for good cause shown, the court in which the action is pending or alternatively, on matters relating to a deposition, the court in the district where the deposition is to be taken may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following: (1) That the discovery not be had; (2) that the discovery may be had only on specified terms and conditions, including a designation of the time or place; (3) that the discovery may be had only by a method of discovery other than that selected by the party seeking discovery; (4) that certain matters not be inquired into, or that the scope of the discovery be limited to certain matters; (5) that discovery be conducted with no one present except persons designated by the court; (6) that a deposition after being sealed be opened only by order of the court; (7) that a trade secret or other confidential research, development, or commercial information not be disclosed or be disclosed only in a designated way; (8) that the parties simultaneously file specified documents or information enclosed in sealed envelopes to be opened as directed by the court.”
Under this authority a trial court can devise procedures appropriate to each individual *773case to limit the extent and timing of discovery and prevent dissemination of confidential or embarrassing information. See also Rule 30(d), C.R.C.P., permitting termination or limitation of the scope and manner of taking a deposition “upon a showing that the examination is being conducted in bad faith or in such manner as unreasonably to annoy, embarrass, or oppress the deponent or party .... ” In my view, utilization of the authority of the trial courts to issue protective orders under our rules of civil procedure will best enable the appropriate balance to be struck between a party’s interest in confidentiality and freedom from unnecessarily burdensome discovery, and the interest of the opposing party in obtaining discovery of relevant information.
Should a trial court abuse its discretion in granting or denying protective orders, we can review the matter in advance of trial to ensure full observance of the rules of civil procedure, if the damage to the petitioner could not be cured by appeal from the final judgment. Chicago. Cutlery Co. v. District Court, 194 Colo. 10, 568 P.2d 464 (1977); Curtis, Inc. v. District Court, supra. In appropriate cases where no adequate remedy exists we can review the trial court’s action on applications for protective orders even where error could be corrected on appeal. Cameron v. District Court, 193 Colo. 286, 565 P.2d 925 (1977). Utilization of the extensive and flexible authority of the trial courts under Rule 26(c), C.R.C.P., with appellate review as appropriate, is consistent with the principles which underlie the discovery rules. We have stated those principles to be that the rules should be construed liberally to effectuate their truth seeking purpose, that in close cases the balance must be struck in favor of allowing discovery, and that the party opposing discovery bears the burden of showing good cause that he is entitled to a protective order. See id.
Under the rules, the burden to show good cause for a protective order is upon the party seeking such an order. Rule 26(c), C.R.C.P. This is entirely appropriate with respect to discovery of financial information as well as information of other types. It is the person from whom discovery is sought who is in the best position to know and establish that protective provisions are appropriate because the information sought is confidential, embarrassing, unduly burdensome or expensive to produce, or otherwise deserving of protection.
While we have recognized broad discretion in the trial courts to resolve discovery disputes, e. g., Chicago Cutlery Co. v. District Court, supra, our cases reflect neither insensitivity to those legitimate interests for which protective orders are authorized nor unwillingness to review abuses of discretion by a trial court and to fashion orders to provide appropriate protection. See Cameron v. District Court, supra; Curtis, Inc. v. District Court, supra.
In the instant case the trial court granted discovery of the requested financial information but required that the information be kept confidential by counsel for the plaintiff. Disclosure to the plaintiff herself was prohibited. In my opinion, this order recognized and gave weight to the competing interests of the parties and struck a balance of those interests at a point within the range of the trial court’s discretion.
The financial information required by the interrogatories consisted of gross income, income from medical practice, assets, liabilities, and net worth. I agree with the majority that there are limits to the degree of financial detail appropriate for discovery relevant to a claim for punitive damages. However, in the absence of a showing that the information requested would be sensitive, or extensive and burdensome to produce, because of the defendant’s own business and financial situation, I cannot conclude that the requested information exceeds appropriate limits.
I would discharge the rule.
LEE and DUBOFSKY, JJ., join me in this dissent.