The Punitive Damages Exception to Your Right to Privacy
In most circumstances, in California you cannot seek someone’s private financial information unless it is intimately related to the cause of action. For example, if you are suing someone for Financial Elder Abuse and accusing a person for transferring bank funds from their grandparent’s account to their own account, then you can likely subpoena the Defendant’s bank records for the relevant time period. However, if you have the same cause of action but the basis is that the Defendant stole a car from their grandparent, then you likely cannot subpoena the Defendant’s bank records even though they might show the deposit of funds the Defendant received from selling the stolen car.
The reason for this is because under the California Constitution all people are granted an inalienable right to privacy and the California Supreme Court has held that this right extends to a person’s financial information (Valley Bank of Nevada v. The Superior Court (1975) 542 P.2d 977.).
However, if you have a claim for punitive damages, you can possibly perform discovery regarding the Defendant’s financial status.
Under California Civil Code section 3295, the Plaintiff may introduce evidence of the Defendant’s financial condition if the Defendant is found liable for punitive damages. At which point the Plaintiff may demonstrate to the judge/jury how much money the Defendant has. The reason why this evidence is admissible is because the purpose of punitive damages is to prevent the defendant from performing the wrong action in the future and so if the punitive damage amount is a drop in the bucket of the Defendant’s financial portfolio, it is not much of a deterrent—but you need to know the Defendant’s financial condition in order to determine what would be sufficient.
Additionally, under that same code provision, any evidence—whether testimony or documentation—cannot be sought during the pre-trial stage of litigation, instead all discovery must be done live in the court room. The reason for this is because pre-litigation is performed through the power of the state government, and to allow a violation of the Defendant’s right to privacy without proper due process would be unconstitutional, which isn’t an issue once the Defendant is found liable for punitive damages. Which leads me to the last segment of California Civil Code section 3295 that is relevant to this discussion, which is that while you ordinarily cannot do pre-litigation discovery regarding someone’s financial situation, the legislation explicitly carved out an exception if a judge provides an order to that effect.