CEH, Inc. v. FV "Seafarer" (On 675048)

148 F.R.D. 469, 1993 U.S. Dist. LEXIS 10708, 1993 WL 156902
CourtDistrict Court, D. Rhode Island
DecidedMay 13, 1993
DocketCiv. A. No. 92-0389L
StatusPublished
Cited by12 cases

This text of 148 F.R.D. 469 (CEH, Inc. v. FV "Seafarer" (On 675048)) is published on Counsel Stack Legal Research, covering District Court, D. Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CEH, Inc. v. FV "Seafarer" (On 675048), 148 F.R.D. 469, 1993 U.S. Dist. LEXIS 10708, 1993 WL 156902 (D.R.I. 1993).

Opinion

MEMORANDUM AND ORDER

LOVEGREEN, United States Magistrate Judge.

Before the Court are plaintiffs’ motions to compel the individual defendants Michael A. Doyle (“Doyle”), Roger Scott Smith (“Smith”) and Charles Niles (“Niles”) to answer numerous interrogatories dealing with their financial status. Plaintiffs have included as Count II in their amended complaint a claim for punitive damages based upon the “intentional, willful, malicious and grossly reckless action” of these individual defendants.

Background

During the period May 23 through June 14, 1992, plaintiffs allege they owned certain equipment consisting of lobster pots, trawls and associated fishing gear which was located in the Atlantic Ocean and properly marked. Defendant Doyle was the owner of defendant FV “Seafarer” which was captained by Niles and/or Smith. During the relevant time period, defendants are alleged to have conducted dragging operations in the same location as plaintiffs’ equipment thereby damaging and destroying the same. Plaintiffs seek compensatory damages for the value of the damaged and destroyed equipment and for loss of income resulting therefrom. In addition, plaintiffs seek punitive damages from the named individual defendants.

Plaintiffs bring this action based on “admiralty and maritime jurisdiction and pursuant to 28 U.S.C. § 1333.” See plaintiffs’ amended complaint, Count I, par. 1. There is no statutory or unseaworthiness claim.

Defendants argue they are not required to answer these interrogatories seeking discovery of their assets, net worth and general financial status. Their argument presents a two prong challenge. First, defendants argue their financial status cannot be discovered without a prima facie showing by plaintiffs of facts sufficient to support a punitive damages claim and the mere assertion of such a claim is insufficient. Second, defendants contend plaintiffs cannot recover punitive damages under the general maritime law, relying on Miles v. Apex Marine, Inc., 498 U.S. 19, 111 S.Ct. 317, 112 L.Ed.2d 275 (1990).

Discoverability of Evidence of Financial Status

Plaintiffs have filed an amended complaint, Count II of which includes a claim for puni[471]*471tive damages. Pursuant to F.R.Civ.P. 33, plaintiffs served interrogatories to each of the individual defendants including interrogatories seeking information on each defendant’s detailed financial status, specifically information on asset ownership, bank accounts, liabilities and all financial records. Defendants have filed objections to these interrogatories on the grounds that the information sought is “neither relevant nor reasonably calculated to lead to the discovery of admissible evidence.”

Discovery is a procedural matter governed in the federal court by the Federal Rules of Civil Procedure and not by state discovery practices unless the Federal Rules so indicate. 8 Wright and Miller, Federal Practice and Procedure § 2005 (1970). F.R.Civ.P. 26(b)(1) provides for discovery of any matter which is not privileged and which is relevant to the pending matter. Here there is a claim for punitive damages which is not spurious and, therefore, information as to the financial status of these defendants is relevant in determining punitive damages. City of Newport v. Fact Concerts, Inc., 453 U.S. 247, 270, 101 S.Ct. 2748, 2761, 69 L.Ed.2d 616 (1981). Indeed, very recently, this Court stated, although not in admiralty jurisdiction, “In determining the amount of punitive damages to award, the tort feasor’s financial status is also relevant. Naturally, the effect that a monetary judgment has on a wrongdoer varies with the wrongdoer’s financial means. It is the law generally throughout this country that the wealth of the wrongdoer must be assessed in determining punitive damages.” North Atlantic Fishing, Inc., et al v. Louis Geremia, Trustee, et al, memorandum and order, Chief Judge Lagueux, May 4, 1993, 153 B.R. 607, 614 (citations omitted).

Nevertheless, defendants argue that plaintiffs must show a prima facie case before discovery of financial status is permitted. While some federal courts have taken this position, the majority of federal courts do permit discovery of financial status where a punitive damages claim has been properly asserted. Mid Continent Cabinetry v. George Koch Sons, Inc., 130 F.R.D. 149, 151 (D.Kan.1990) and cases cited therein. There has been no decision cited to me by either party or discovered by me in research that would require a departure from the majority rule. Plaintiffs are entitled to pretrial discovery of each defendant’s financial status. Whether or not plaintiffs may use the financial information at trial does not affect its discoverability. Discovery is based on relevance, not admissibility. Baker v. CNA Ins. Co., 123 F.R.D. 322 (D.Mont.1988). To deprive plaintiffs of discovery on this issue would place them in a very difficult position. If at trial it is determined that plaintiffs have a valid punitive damages claim, they then would have no financial information from defendants to place before the fact finder. The better practice would be to permit pretrial discovery and to reserve the use of such information to time of trial.

If defendants are concerned about disclosure and confidentiality of financial information, they may move for a protective order pursuant to F.R.Civ.P. 26(e). Such a protective order could be fashioned to provide defendants protection from public disclosure or other use of the financial information until such time as its admissibility is determined. This procedure would provide plaintiffs the information necessary to support their punitive damages claim but also afford defendants some protection from public scrutiny of personal financial information.

General Maritime Law and Punitive Damages

Defendants argue further that where punitive damages are not recoverable as a matter of law, discovery of financial information is impermissible citing Johnson v. W.H. Stewart Co., 75 F.R.D. 541, 543 (W.D.Okl. 1976). Specifically, defendants argue that punitive damages are not recoverable under general maritime law citing Miles v. Apex Marine, Inc., 498 U.S. 19, 111 S.Ct. 317, 112 L.Ed.2d 275 (1990). In Miles, the Supreme Court considered whether a non-dependent parent could recover loss of society damages pursuant to a wrongful death claim under general maritime law and whether general maritime law allows a survival action for lost future wages. Id. at 20, 21, 111 S.Ct. at 319, [472]*472320. The Court did not allow recovery for loss of society or lost future earnings in a seaman’s wrongful death and survival action whether brought under the Jones Act, 46 U.S.C.App. § 688, Death on the High Seas Act (“DOHSA”), 46 U.S.C.App. § 761 et seq. or general maritime law since the statutory claims permit only pecuniary damages which do not include damages for loss of society or lost future wages. To be uniform, the Court also stated there can be no such recovery in an unseaworthiness claim brought pursuant to general maritime law.

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148 F.R.D. 469, 1993 U.S. Dist. LEXIS 10708, 1993 WL 156902, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ceh-inc-v-fv-seafarer-on-675048-rid-1993.