By Jane Salem, staff attorney, Nashville

The Appeals Board recently affirmed two trial court decisions to limit what’s discoverable regarding family and financial information in a workers’ compensation lawsuit.

The opinions restate longstanding principles: judges have discretion in making calls about discovery, and it’s a fact-intensive inquiry. So it’s hard to give absolutes. But the opinions do offer guidance if you’re thinking about what to request, or object to, about an injured worker’s family and finances.

Facts

In Anderson v. U.S. Foods, Inc., written discovery asked Anderson for the names, addresses, and birthdays of his children, along with the names and addresses of their other biological parent(s). U.S. Foods then asked if Anderson “contribute[s] to the financial support of any of the children or stepchildren,” and “[i]f so, [to] please state the nature of the support, including amounts and percentages of support.”

As for his finances, U.S. Foods asked for a list of all individual or joint bank accounts, including but not limited to checking, savings, or investment accounts.

It further requested Anderson disclose “any and all sources of income from which you have received a benefit beginning with the date of the incident through the present,” and, “For each source, provide the following: (a) The name of the source; (b) A description of or the reason the income and or benefit was provided to you and; (c) How much you received in a dollar amount.”

U.S. Foods additionally requested copies of his income tax returns for the last five years; copies of all pay stubs from the date of injury to the present; and copies of bank statements from the date of injury to the present.

U.S. Foods argued that Anderson had undisclosed child support obligations, which might affect its withholding obligations subject to a garnishment. It would also affect the permanent disability award. U.S. Foods additionally alleged that Anderson was earning income from other sources, which would also affect temporary disability benefits.

Anderson countered with the usual objections—overbreadth and relevance—adding that it was an unwarranted intrusion into his family and financial affairs.

The trial court balanced U.S. Foods’ need for discoverable information versus the harm that could result from its disclosure. The judge denied the motion to compel regarding the children but granted as to disclosure of any child support obligations.

As to his financial information, the judge concluded that Anderson’s privacy rights outweighed U.S. Foods’ need for his banking information, but it granted the motion to compel production of his “sources of income” and tax returns.

Arguments

U.S. Foods took a deep dive into Anderson’s privacy expectations and rights in its argument on appeal. Among its contentions was that if an employee has a right to privacy for banking information, the relevance of that information to the litigation outweighs any privacy interest, and bank statements, “which show deposits of income and when the income was received, are highly relevant to the adjudication of temporary benefits.”

Anderson countered that U.S. Foods ignored the standard of review: whether the trial court abused its discretion. He also pointed out that U.S. Foods is receiving the information it requested because the judge granted the requests as to sources of income and tax returns, which show his earnings.

U.S. Foods addressed the standard of review in a reply brief, saying the trial court’s conclusion was “illogical and based on an erroneous assessment of the evidence.” It reiterated its privacy rights arguments.

Decision

The Board concluded that U.S. Foods “disregard[ed] a trial court’s critical role in addressing the scope of discovery.” It cited Johnson v. Nissan North America, Inc., which held:

“Analyzing whether a discovery request is proper requires the balancing of numerous considerations. There is no sharp line of demarcation which separates the field in which discovery may be freely pursued from that in which it is forbidden. These considerations include relevancy or reasonable possibility of information leading to discovery of admissible evidence; privilege; protection of privacy, property and secret matters; and protection of parties or persons from annoyance, embarrassment, oppression, or undue burden or expense.”

Also, Rule 26 of the Tennessee Rules of Civil Procedure states that discovery must be relevant to the subject matter of the action or reasonably calculated to lead to the discovery of admissible evidence, and it must be appropriate to the needs of the case. The rule also gives a judge “discretion to limit discovery depending on ‘the needs of the case, the amount in controversy, … and the importance of the issues at stake in the litigation.’”

The Board then wrote that the judge in this case balanced the employer’s need for the information against the harm that could result from its disclosure. The trial court considered, among other things, “the privacy and property interests of the party from whom the information was being sought.”

Applying this, the Board reasoned:

“[T]he specific information requested, including his children’s ‘full names, addresses, dates of birth, and the names and addresses of the biological parents’ does not, standing alone, provide any information regarding Employee’s child support obligations, if any. Moreover, Employer has alternative, less intrusive ways of obtaining relevant information concerning Employee’s child support obligations, including directly asking Employee whether he has a child support obligation.”

The Board then found no abuse of discretion in denying portions of U.S. Foods’ motion relating to Anderson’s bank statements and personal information about his children. In a footnote, the judges reminded that Fourth Amendment cases about search and seizure and privacy expectations didn’t apply when considering whether the judge abused her discretion to resolve a discovery dispute.

A similar conclusion

Earlier today, the Board issued a similar ruling in Hurt v. Vinebrook Homes Trust, Inc. The trial court in that case denied a motion to compel bank records. Applying Johnson, the Board held:

“[T]he court ultimately concluded that Employee’s privacy interests in his personal banking records outweighed Employer’s need to obtain that information, especially since it had already obtained other documents, including pay stubs and tax returns, reflecting his earnings. We find nothing in the record indicating that the trial court abused its discretion in denying Employer’s motion.”

Takeaways

The standard disclaimer: the opinions below are mine, from a staff attorney, not the entire Court. Please read the decisions and discern for yourself what’s important about them. And please don’t cite to this blog in your next motion to compel (although I’d be flattered if you did!).

Additional disclaimer: what you’re about to read is my own “get off my lawn” moment.

For starters, remember that the Court rules (scroll to rule 17) promote cooperation: “Parties are encouraged to obtain any necessary discovery informally to avoid undue expense and delay. When these attempts fail or the complexity of the case makes informal discovery impracticable,” discovery proceeds under the Tennessee Rules of Civil Procedure unless the Court rules provide an alternative procedure.

So yes, we have an adversarial justice system, and we live in times when reaching out to an opponent isn’t popular. But remember that the Board suggested “directly asking Employee whether he has a child support obligation” in Anderson. Maybe that could’ve been done with an email, call, or text?

Next, Rule 26 gives the judge “discretion.” That’s hard to overcome on appeal, as these opinions show. So if you’re going to appeal a discovery call, think long, hard, and realistically about the chances of success. Of course it can be done, but it won’t be easy. Cite these opinions and/or Johnson; don’t go down a constitutional law rabbit hole.

In addition, check your templates. Are you regularly asking for the same information and not tailoring it to the individual case? In other words, are you sending (gasp) boilerplate? Please don’t. Along these lines, remember that Rule 17 limits the number of interrogatories, requests for admission, and requests for production to 20 each including subparts. You’d be surprised how often attorneys surpass that number. Well, maybe not.

Further, put yourself in the judge’s shoes. Resolving discovery disputes where the parties contest everything isn’t fun. If someone is saying, “It’s about the principle,” well, it’s probably not. It’s about personalities.

Finally, if there’s a child support obligation, disclose it! It’s discoverable, and kids should be housed, fed and clothed (said the former family law attorney). As for financial information, tax returns and questions about “sources of income” are probably acceptable. Beyond that, what are the circumstances of the case that warrant more?

Thanks for indulging my opinions. Now go read these opinions.