DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
VITAL PHARMACEUTICALS, INC.,
a Florida corporation,
Petitioner,
v.
CHERYL OHEL,
Respondent.
No. 4D20-1407
[October 14, 2020]
Petition for writ of certiorari to the Circuit Court for the Seventeenth
Judicial Circuit, Broward County; Keathan B. Frink, Judge; L.T. Case
No. CACE-18-007709 (12).
Alexandra Valdes and Lissette Gonzalez of Cole, Scott & Kissane, P.A.,
Miami, for petitioner.
Chris Kleppin and Allyson Morgado of The Kleppin Law Firm,
Plantation, for respondent.
PER CURIAM.
Petitioner Vital Pharmaceuticals, Inc. seeks certiorari review of an order
compelling it to produce “financial worth” discovery in an employment
discrimination case under the Florida Civil Rights Act (FRCA), where the
former employee’s complaint requested punitive damages. Petitioner
claims that the court departed from the essential requirements of law in
allowing financial worth discovery because there has been no showing of
a factual basis for punitive damages and the discovery is overly broad and
invasive. We conclude that the trial court departed from the essential
requirements of law by failing to consider whether an actual factual basis
exists to support punitive damages. We therefore grant the petition and
quash the order. As discussed below, trial courts retain broad discretion
to control financial worth discovery under the circumstances of each case.
Background
Respondent filed a complaint against petitioner, Vital Pharmaceuticals,
Inc., her former employer, for an alleged violation of the FCRA. She
claimed that petitioner terminated her for discriminatory reasons. She
sought both compensatory and punitive damages. Petitioner answered,
denying any discrimination. Discovery commenced.
Two years into the litigation, respondent filed a request for production
of documents concerning petitioner’s financial worth. Petitioner objected
because there had been no determination that a reasonable evidentiary
basis for the recovery of punitive damages existed and the request was
overly burdensome where the FCRA caps punitive damages at $100,000.
Petitioner offered to provide a statement of its net worth and to stipulate
that it had the ability to pay $100,000 in punitive damages, if awarded.
Respondent moved to compel the financial discovery. At a hearing on
the motion, respondent’s counsel offered to limit the discovery to three
years and to the production of only certain documents. Responding to the
effect of the FCRA damage cap, he noted that the jury is not informed of
the cap. Thus, the assessment of punitive damages requires a plaintiff to
show the reasonableness of the amount, which would require evidence of
the defendant’s financial worth.
Petitioner countered that the financial discovery constituted an
“unfettered fishing expedition.” No depositions had been taken, and not
only had no proof been adduced to form a reasonable basis for punitive
damages, there was no proof to support the validity of the underlying
claim. Noting that petitioner was a substantial company whose amount
of financial resources was available by searching the internet, petitioner
contended that the requested financial discovery was burdensome and
intrusive. Because the FCRA limits punitive damages to $100,000,
petitioner suggested it provide a general statement of net worth and a
stipulation that it can satisfy a punitive damage award of $100,000.
The trial court concluded that because the FCRA allowed a claim for
punitive damages without inquiry into its evidentiary basis, it would allow
discovery for the respondent to obtain information to prove the amount of
punitive damages being sought. The court limited the type of documents
and the scope of the requests to three years. Petitioner then filed this
request for certiorari relief.
Discussion
As to discovery of financial information, we have explained:
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Trial court rulings on discovery issues must stand except in
extraordinary cases. See Martin–Johnson, Inc. v. Savage,
509
So. 2d 1097, 1099-1100 (Fla. 1987). While the potential
invasion of privacy may provide a threshold showing of
irreparable harm, certiorari may be granted only where the
petitioner “affirmatively establishe[s]” that the financial
information is irrelevant to any issue in the litigation and not
likely to lead to the discovery of admissible evidence. See Bd.
of
Trs., 99 So. 3d at 457 (quoting Allstate Ins. Co. v. Langston,
655 So. 2d 91, 95 (Fla. 1995)). The heavy burden in a
certiorari proceeding is on the petitioner, who must show that
the trial court’s order departs from the essential requirements
of law. Where the petitioner fails to clearly establish that the
financial information is wholly irrelevant to any issue in the
litigation, certiorari is inappropriate. See
id.
Elsner v. E-Commerce Coffee Club,
126 So. 3d 1261, 1263 (Fla. 4th DCA
2013).
Section 768.72, Florida Statutes, was enacted in 1986 to resolve the
problem of litigants using punitive damage claims to obtain pre-judgment
financial worth discovery from defendants. As this Court has observed:
Discovery of personal financial information in civil cases-other
than divorce-is generally irrelevant and is usually prohibited
before final judgment. For a long time, one way around this
ban was to allege a claim for punitive damages, thereby
making the defendant’s personal wealth ostensibly relevant
even without a judgment. But the legislature removed that
dodge several years ago. See § 51, Ch. 86-160, Laws of Fla.
Now no such discovery is permitted until the trial judge
determines there is a valid claim for punitive damages to use
as the predicate for such discovery.
All About Cruises, Inc. v. Cruise Options, Inc.,
889 So. 2d 905, 908 (Fla. 4th
DCA 2004) (Farmer, J., concurring specially) (footnotes omitted). The
punitive damages statute provides (in relevant part):
(1) In any civil action, no claim for punitive damages shall be
permitted unless there is a reasonable showing by evidence in
the record or proffered by the claimant which would provide a
reasonable basis for recovery of such damages. The claimant
may move to amend her or his complaint to assert a claim for
punitive damages as allowed by the rules of civil procedure.
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. . . No discovery of financial worth shall proceed until after
the pleading concerning punitive damages is permitted.
§ 768.72(1), Fla. Stat. (2019) (emphasis supplied).
The FRCA, however, exempts a discrimination claim from section
768.72 and provides (in relevant part) as follows:
(5) In any civil action brought under this section, the court
may issue an order prohibiting the discriminatory practice
and providing affirmative relief from the effects of the practice,
including back pay. The court may also award compensatory
damages, including, but not limited to, damages for mental
anguish, loss of dignity, and any other intangible injuries, and
punitive damages. The provisions of ss. 768.72 and 768.73
do not apply to this section. The judgment for the total
amount of punitive damages awarded under this section to an
aggrieved person shall not exceed $100,000.
§ 760.11(5), Fla. Stat. (2019) (emphasis supplied).
Before section 768.72 was enacted, the Florida Supreme Court
recognized the duty and ability of trial courts under Florida Rule of Civil
Procedure 1.280(c) to protect litigants from harassing and
overburdensome discovery in punitive damage cases. Tennant v. Charlton,
377 So. 2d 1169 (Fla. 1979) (approving of Donahue v. Hebert,
355 So. 2d
1264 (Fla. 4th DCA 1978)). Quoting from Donahue, the court did not
require a plaintiff to accept a statement of net worth as the only proof of a
defendant’s financial assets. However, the court cautioned that a trial
court should protect a party from overly burdensome or harassing
discovery:
In Donahue, the court also correctly recognized that the trial
court should always be sensitive to the protection of a party
from harassment and from an overly burdensome inquiry.
Florida Rule of Civil Procedure 1.280(c) provides that for good
cause shown, the trial court may make any order to protect a
party or person from annoyance, embarrassment, oppression,
or undue burden or expense that justice requires. The trial
court should keep in mind that in most punitive damages
cases, at the time plaintiffs are seeking discovery of
defendants’ financial resources, there has not yet been a
judicial determination of the defendants’ liability. If plaintiffs
were allowed unlimited discovery of defendants' financial
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resources in cases where there is no actual factual basis for
an award of punitive damages, the personal and private
financial affairs of defendants would be unnecessarily exposed
and, in some cases, the threat of such exposure might be used
by unscrupulous plaintiffs to coerce settlements from
innocent defendants. In determining whether defendants’
motion for protective order under rule 1.280(c) is “for good
cause shown,” the trial court may consider, among other
things, whether or not an actual factual basis exists for an
award of punitive damages.
Id. at 1170 (emphasis supplied). Thus, while section 768.72 later made a
factual basis for punitive damages a statutory requirement to obtain
financial discovery in cases in which it is applicable, Tennant still
constitutes the law in those cases involving punitive damages that are not
governed by section 768.72, including the FCRA. A trial court may
consider whether there is an actual factual basis to support a punitive
damage claim when deciding whether to limit, deny, or delay discovery.
The petitioner argued strenuously at the hearing that there was no
basis for punitive damages, and the court should not require production
of financial information until a showing is made. The respondent argued
that no showing was necessary because the statute allowed for an award
of punitive damages. The court made the following ruling:
Here, the statute in which the Plaintiff has filed her case
under, already allows for a claim of punitive damages. So
we’ve already gotten past that stage. They can make the claim
for punitive damages. Now, this is just at the point where they
have to obtain the information in order to prove up their claim
for punitive damages and the amount that they’re going to ask
for.
The court did not consider whether there was an actual factual basis for
punitive damages because it concluded that the statute precluded
consideration of the issue. The court failed to follow Tennant in refusing
to consider whether an actual factual basis for punitive damages exists
before deciding whether to limit, delay, or deny financial worth discovery.
The court’s mistaken conclusion that it could not consider the issue is a
departure from the essential requirements of law.
Respondent relies on Kraft General Foods v. Rosenblum,
635 So. 2d 106
(Fla. 4th DCA 1994), but that case is not applicable. In Kraft, we
recognized that the pleading limitation contained in section 768.72 does
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not apply under section 760.11(5) of the FCRA. Kraft, however, did not
address financial discovery related to a punitive damage claim. Section
760.11(5) of the FCRA allows for the pleading of a punitive damage claim
in the same manner allowed prior to the passage of section 768.72. The
FCRA does not state that the ability to plead a claim automatically allows
full financial worth discovery in every case.
The trial court departed from the essential requirements of law in failing
to recognize its duty and ability under Tennant to protect a litigant from
intrusive financial worth discovery when there is no actual factual basis
for recovery of punitive damages.
Petitioner also claims that the production is overly burdensome,
particularly where the FCRA caps the amount of punitive damages at
$100,000. Generally, however, overbroad discovery is not alone a proper
basis to grant certiorari review. Bd. of Trs. of Internal Improvement Tr. Fund
v. Am. Educ. Enters., LLC,
99 So. 3d 450, 456-57 (Fla. 2012). Because of
the broad discretion of the trial court, the petitioner has not shown a
departure from the essential requirements of law as to the scope of the
discovery. Rojas v. Ryder Truck Rental, Inc.,
641 So. 2d 855, 857 (Fla.
1994) (“A trial court possesses broad discretion in overseeing discovery,
and protecting the parties that come before it.”).
Trial courts retain broad discretion to limit financial worth discovery
under the circumstances of each case and may consider the $100,000 cap
that the legislature has placed on punitive damages under the FCRA. Our
denial on this point should not be construed as approving of the scope of
the discovery allowed in this case. The trial court retains discretion to
limit, delay, or deny the discovery in this case as called for by the
circumstances.
By adopting section 768.72, the legislature sought to curtail intrusive
financial worth discovery on unfounded punitive damage claims. The
court in Tennant explained:
If plaintiffs were allowed unlimited discovery of defendants’
financial resources in cases where there is no actual factual
basis for an award of punitive damages, the personal and
private financial affairs of defendants would be unnecessarily
exposed and, in some cases, the threat of such exposure might
be used by unscrupulous plaintiffs to coerce settlements from
innocent
defendants.
377 So. 2d at 1170.
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As our supreme court has said:
Discovery was never intended to be used as a tactical tool to
harass an adversary . . . ; nor was it intended to make the
discovery process so expensive that it could effectively deny
access to information and witnesses or force parties to resolve
their disputes unjustly. To allow discovery that is overly
burdensome and that harasses, embarrasses, and annoys
one’s adversary would lead to a lack of public confidence in
the credibility of the civil court process.
Elkins v. Syken,
672 So. 2d 517, 522 (Fla. 1996).
We doubt that the legislature intended to allow broad and intrusive
financial worth discovery in every case brought under the FCRA. In the
absence of any statutory change, however, trial courts must exercise
discretion and consider the circumstances of each case when determining
the appropriate scope of discovery. Trial courts should exercise their
discretion to prevent overly burdensome discovery, reduce litigation costs,
and preserve confidence in the judicial process.
Because we grant the petition to reconsider the issue of the actual
factual basis for punitive damages in determining the scope of discovery,
the trial court is also free to reconsider its scope, if it deems it appropriate.
Petition granted; order quashed.
LEVINE, C.J., and FORST, J., concur.
WARNER, J., concurs specially with opinion.
WARNER, J., concurring specially.
I concur in the majority opinion. I write to comment on the scope of
financial worth discovery.
Section 760.11(5), Florida Statutes (2019) creates a statutory cause of
action for violations of the Florida Civil Rights Act. That section permits
the award of punitive damages, the amount of which shall not to exceed
$100,000 to an “aggrieved person.” It does not limit the financial
discovery, but as the majority notes, it is doubtful that the legislature
would have intended to allow broad and intrusive discovery in every FRCA
claim.
7
Because of the cap, to require financial discovery in many cases may
be so out of proportion to the maximum amount of punitive damages
recoverable under the cap as to appear as a form of harassment. For
instance, would a plaintiff be entitled to three years of tax returns,
financial statements, and bank statements from a Fortune 500 company
accused of a FCRA violation, when a plaintiff could recover only $100,000
in punitive damages? A company may be forced to settle an unjust claim,
simply because the cost of litigation and production of financial
information is greater than the cost to settle.
It would seem that the $100,000 cap appears to untether the award
from any consideration of the wealth of the defendant, which may make
financial discovery largely unnecessary. While generally a party’s financial
worth is relevant to a punitive damage claim because the monetary
sanction must be sufficient to “punish” the defendant in light of the
defendant’s overall financial situation, that principle has little relevance
when the cap is $100,000 and the company is a large and successful
corporation. For large publicly traded companies, substantial financial
information may be available with no discovery at all. On the other hand,
if the company is defending on the ground that it does not have the ability
to pay any punitive damage amount, more discovery may be needed.
Because of the modest cap, a sworn financial statement may be
appropriate, at least as a first step, in such a case, rather than three years
of financial statements and tax returns. If the financial statement shows
millions of dollars in net worth, why would a plaintiff need more proof in
a FCRA punitive damage claim?
At the hearing before the trial court, respondent noted that many trial
courts have granted similar discovery requests. I do not know the size of
those companies or the facts of each case, but if similar discovery requests
are routine in FCRA cases, this poses an undue burden on companies. If
such intrusive, burdensome discovery is the norm throughout the state,
legislative intervention may be necessary to curb abusive discovery.
We should applaud the legislature’s creation of a statutory claim to
remedy discriminatory practices, including the allowance of punitive
damages, particularly in cases where the discrimination is egregious, but
the compensatory damages are small. The ability to bring such a claim
should not be threatened by harassing litigation tactics.
* * *
Not final until disposition of timely filed motion for rehearing.
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