Commercial Litigation and Arbitration

Caselaw Split as to Whether to Permit Discovery of Financial Information Relevant to a Determination of Punitive Damages Prior to Summary Judgment

Pasternak v. Kim, 275 F.R.D. 461 (S.D.N.Y. 2011):

The question then becomes whether the time is right for the discovery Pasternak seeks. As Magistrate Judge Francis recently noted, "[c]ourts in this circuit are split on the issue of allowing pretrial disclosure of financial information relevant to a determination of punitive damages. Some permit it. Others have found that such disclosure is premature." Copantitla v. Fiskardo Estiatorio, Inc., No. 09 Civ. 1608 (RJH)(JCF), 2010 U.S. Dist. LEXIS 33430, 2010 WL 1327921, at *16 (S.D.N.Y. Apr. 5, 2010) (citations omitted). Here, I am not convinced that the discovery Pasternak seeks needs to be produced at this juncture of the litigation. During the hearing today, counsel for Kim represented that he planned to move to strike the claim for punitive damages at the summary judgment stage of the case. As the discovery sought is highly sensitive and confidential, it would be premature to order that it be produced given that the need for its disclosure may be abrogated by motion. Therefore, I decline to grant Pasternak access to the discovery he seeks at this time, and deny his application without prejudice to renewal. See Copantitla, 2010 U.S. Dist. LEXIS 33430, 2010 WL 1327921, at * 16 (access for financial information denied without prejudice to renewed application following summary judgment motion); Uebelacker v. Paula Allen Holdings, Inc., No. 06 C 326, 2006 WL 6021169, at *1 (W.D. Wis. Jan. 3, 2006) (delaying decision on motion to compel defendants' financial status until pending summary judgment motion decided). If Kim's motion to strike the punitive damages claim is denied by Judge Swain, then Pasternak may renew this application and Judge Swain — or the undersigned upon referral — will determine whether the timing of such disclosure (as well as its scope and format) should take place before trial or after a finding of liability.

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