Chilvers v. New York Magazine Co.Chilvers v. New York Magazine Co.
OPINION OF THE COURT
This motion raises the issue of whether the mere assertion of a claim for punitive damages entitles the claimant as of right to obtain pretrial information with respect to the profits of the alleged offending party.
Defendants move pursuant to CPLR 3133 and 3103 (subd [a]) to strike Interrogatory No. 5 of the fourth set of interrogatories, and to strike Item No. 1 from the notice of discovery and inspection both of which seek information relating to the profits of the defendant New York Magazine for 1978, 1979 and 1980.
This is an action to recover for an alleged libel. On February 28, 1979, New York Magazine published an article written by defendant Martha Hume entitled “Warning: It has been determined that a stress test can be dangerous to your health.” Plaintiffs, who are in the business of fitness monitoring, claim that as a result of this publication their reputation has been damaged.
Defendants claim that both discovery requests are objectionable as they relate solely to the issue of punitive damages. Defendants allege that plaintiffs are only entitled to said financial information “after plaintiffs have established their right to such damages.” Plaintiffs argue
Generally, the wealth of a defendant is not discoverable since “[i]t has been the theory of our government and a cardinal principle of our jurisprudence that the rich and poor stand alike in courts of justice, and that neither the wealth of the one nor the poverty of the other shall be permitted to affect the administration of the law.” (Laidlaw v Sage,
Nevertheless, when dealing with the question of punitive damages, the purpose of which is to deter wrongful acts, there are strong policy reasons why the claimant should be entitled to present to the trier of facts evidence of the financial condition of the offender. Although several courts have taken contrary positions (see Wilson v Onondaga Radio Broadcasting Corp.,
Thus, having found that financial status is a factor in assessing punitive damages, the issue then presented is at what stage of the litigation the claimant may inquire of such status. If the simple allegation of punitive damages allowed an inquiry into a party’s assets, much abuse could result and “[create] undue pressure on defendants in such actions to compromise unwarranted claims.” (Rupert v Sellers, supra, p 271.) To resolve the problem, the Fourth Department in Rupert vacated a notice for the production of income tax returns with the provision that plaintiffs could renew their application for discovery in the event plaintiffs obtained a special verdict entitling them to punitive damages.
The relevancy of a defendant’s wealth, on the issue of punitive damages, is to aid the jury in determining how large a judgment is needed to deter and punish the defendant. Therefore, since this information is only to be used as a guide for punishment, it is premature to permit such discovery at this time. The better procedure is to have the jury render a verdict on the merits and if punitive damages are found warranted to immediately allow discovery on financial status and then proceed to a trial on the amount of such damages to be awarded. (See Exemplary Damages in the Law of Torts, 70 Harv L Rev 517, 528; Rupert v Sellers, supra; Gierman v Toman, 77 NJ Super 18.)
Accordingly, defendants’ motion is granted with the proviso that plaintiffs shall be entitled to the information denied them herein in the event they obtain a special verdict entitling them to punitive damages against New York Magazine. The information sought by plaintiffs is simple to provide and should be available promptly in the event of an award of such damages.