Harris et al v. Vanderburg et al
ORDER granting 171 Motion to Compel. Signed by US Magistrate Judge Kimberly A. Swank on 9/19/2022. (Sellers, N.)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WILLIAM HARRIS and PHYLLIS
DOUGLAS MATTHEW GURKINS,
REMCO EAST, INC., and MARY
This matter is before the court on Plaintiffs’ motion to compel financial
condition discovery from Defendants Remco East, Inc. (“Remco”) and Mary Grace
Bishop (“Bishop”). [DE #171]. These matters have been referred to the undersigned
pursuant to 28 U.S.C. § 636(b)(1)(A) for disposition by United States District Judge
James C. Dever III. [DE #175]. For the reasons stated below, Plaintiffs’ motion is
Plaintiffs filed their initial complaint on August 9, 2019, and an amended
complaint on October 24, 2019. (Compl. [DE #1]; Am. Compl. [DE #33].) Plaintiffs
have sued Defendants under the Fair Housing Act (“FHA”), 42 U.S.C. § 3601 et seq.,
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and state law. (See generally Am. Compl.) Plaintiffs seek punitive damages regarding
their FHA claims against each Defendant. (Id. ¶ 73.)
On March 15, 2021, Defendants Remco and Bishop moved for summary
judgment as to all claims against them. (Remco & Bishop Mot. Summ. J. [DE #98].)
Defendants Remco and Bishop did not argue that Plaintiffs had failed to state a prima
facie claim for punitive damages1 or that punitive damages should otherwise be
unavailable should any of Plaintiff’s FHA claims survive summary judgment. (Remco
& Bishop Mem. Supp. Mot. Summ. J. [DE #100].) On February 10, 2022, the court
granted in part and denied in part Remco and Bishop’s motion for summary
judgment, allowing the FHA retaliation 2 claim and state-law claims for trespass,
assault, invasion of privacy, and unfair and deceptive trade practices to proceed.
(Summ. J. Order [DE #130] at 25.) Factual summary is provided in the summary
judgment order. (Id. at 2–3, 20–21.)
On August 19, 2022, the court ordered the parties to submit joint-proposed
trial dates for early 2023 and any update on settlement negotiations. [DE #170]. On
September 1, 2022, Plaintiffs filed the instant motion to compel (Mot. Compel Remco
& Bishop Fin. Disc. [DE #171]) and supporting memorandum (Mem. Supp. Mot.
Compel Remco & Bishop Fin. Disc. [DE #172]); Defendants Remco and Bishop
responded in opposition on September 15, 2022 (Defs. Remco & Bishop Resp. Opp’n
42 U.S.C. § 3613(c)(1) authorizes punitive damages for FHA violations.
42 U.S.C. § 3617 is the retaliation provision of the FHA.
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Rule 26 provides for a broad scope of discovery:
Parties may obtain discovery regarding any nonprivileged matter
that is relevant to any party’s claim or defense and proportional to the
needs of the case, considering the importance of the issues at stake in
the action, the amount in controversy, the parties’ relative access to
relevant information, the parties’ resources, the importance of the
discovery in resolving the issues, and whether the burden or expense of
the proposed discovery outweighs its likely benefit. Information within
this scope of discovery need not be admissible in evidence to be
Fed. R. Civ. P. 26(b)(1). Relevance “has been broadly construed to encompass ‘any
possibility’ that the information sought may be relevant to the claim or defense of any
party,” and the burden rests on the party resisting discovery to demonstrate that
discovery should not be had. EEOC v. Sheffield Fin., LLC, No. 1:06-CV-00889, 2007
WL 1726560, at *3 (M.D.N.C. June 13, 2007).
Rule 26 requires the court to limit the frequency or extent of discovery if “the
discovery sought is unreasonably cumulative or duplicative, or can be obtained from
some other source that is more convenient, less burdensome, or less expensive”; “the
party seeking discovery has had ample opportunity to obtain the information by
discovery in the action”; or the discovery sought is outside the scope of Rule 26(b)(1).
Fed. R. Civ. P. 26(b)(2)(C). The rule also authorizes the court to impose appropriate
limitations on discovery in order “to protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense.” Fed. R. Civ. P. 26(c)(1).
Such protective orders may include, inter alia, provisions “forbidding the disclosure
or discovery,” “prescribing a discovery method other than the one selected by the
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party seeking discovery,” or “forbidding inquiry into certain matters, or limiting the
scope of disclosure or discovery to certain matters.” Fed. R. Civ. P. 26(c)(1)(A),
Punitive damages are available under the FHA. 42 U.S.C. § 3613(c)(1).
“Punitive damages may be awarded . . . where the defendant’s conduct is shown to be
motivated by evil motive or intent, or when it involves reckless or callous indifference
to the federally-protected rights of others.” Matarese v. Archstone Pentagon City, 795
F. Supp. 2d 402, 449 (E.D. Va. 2011) (first citing Quigley v. Winter, 598 F.3d 938, 953
(8th Cir. 2010); then citing Alexander v. Riga, 208 F.3d 419, 430–31 (3d Cir. 2000);
and then citing Bradley v. Carydale Enters., 730 F. Supp. 709, 726 (E.D. Va. 1989)),
aff’d in part, vacated in part on other grounds sub nom. Matarese v. Archstone
Cmtys., LLC, 468 F. App’x 283 (4th Cir. 2012) (per curiam) (unpublished).
Information regarding a defendant’s financial position is relevant to a claim for
punitive damages under the FHA. Matarese, 795 F. Supp. 2d at 449–51; Robert G.
Schwemm, Housing Discrimination Law and Litigation § 25:12 & n.2 (July 2020
updated) (collecting cases); see also Stamathis v. Flying J., Inc., 389 F.3d 429, 442
(4th Cir. 2004) (citing Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 22 (1991), for
the proposition that “a defendant’s financial position is a proper consideration in
assessing punitive damages”).
Plaintiffs have requested punitive damages in their operative complaint and
have made sufficient factual allegations regarding their FHA retaliation claim to
withstand Remco and Bishop’s summary judgment motion. As the court noted, there
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are genuine issues of material fact related to this FHA claim that create a jury
question. (Summ. J. Order at 20–21.)
Defendants Remco and Bishop oppose Plaintiffs’ motion because Plaintiffs
have not “have not made a showing that they will be entitled to punitive damages
from Remco and Bishop.” (Defs. Remco & Bishop Resp. Opp’n at 3.) In support, Remco
and Bishop cite Jackson-Heard v. Elizabeth City State Univ., No. 2:12-CV-8-BO, 2013
WL 594896, at 2 (E.D.N.C. Feb. 15, 2013), for the proposition that a plaintiff must
make a “prima facie showing of entitlement to punitive damages” before discovery of
a defendant’s financial information may be had, and Moore v. Dan Holdings, Inc., No.
1:12-CV-503, 2013 WL 1833557, at *15 (M.D.N.C. Apr. 30, 2013), for the proposition
that “not every lawsuit under [S]ection 1981 calls for submission of this extraordinary
remedy to a jury.” (Defs. Remco & Bishop Resp. Opp’n at 3.) Defendants do not
articulate what a prima facie showing for punitive damages under the FHA is or how
Plaintiffs have failed to make such a showing. (Id. at 3–5.) Defendants advance
factual arguments which would appear relevant to the merits of Plaintiffs’ remaining
FHA claim generally, only implying, in turn, that punitive damages should be
unavailable to Plaintiffs. 3 (Id.)
As the court explained before, it is not clear what constitutes a prima facie
showing for punitive damages under the FHA. (1/11/21 Order [DE #90] at 11–13.)
However, surviving a summary judgment motion is a strong indicator that such a
This could be construed as an attempt by Remco and Bishop to obtain a postsummary judgment but pretrial advisory opinion as to the punitive damages issue.
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showing has been made. See Cf. SMD Software, Inc. v. EMove, Inc., No. 5:08-CV-403FL, 2010 WL 2232261, at *2 (E.D.N.C. June 2, 2010) (prima facie showing as to
punitive damages is required to obtain tax records and “can be satisfied by presenting
evidence in support of the punitive damages claim or by surviving a motion to dismiss
or a motion for summary judgment”); Taylor v. McGill Envtl. Sys. of N.C., Int’l, No.
7:13-CV-270-D, 2015 WL 1125108, at *8 (E.D.N.C. Mar. 12, 2015) (holding that
financial position discovery would be more appropriately addressed after “the parties’
fully developed motions for summary judgment on the issue of punitive damages”
(first citing Blount v. Wake Elec. Membership Corp., 162 F.R.D. 102, 105 (E.D.N.C.
1993), and then citing Nix v. Holbrook, No. 5:13-CV-2173, 2015 WL 791213, at *3
(D.S.C. Feb. 25, 2015))); Blount, 162 F.R.D. at 105 (cited favorably in Jackson-Heard,
2013 WL 594896, at *2); Interstate Narrow Fabrics, Inc. v. Century USA, Inc., No.
1:02-CV-146, 2004 WL 444570 (M.D.N.C. Feb. 24, 2004) (granting renewed motion to
compel financial discovery information after claim survived summary judgment
motion) (cited by Moore, 2013 WL 1833557, at *14 n.8). This indication is even
stronger when, as here, Defendants did not brief the punitive damages issue in their
summary judgment motion.
Plaintiffs seek punitive damages from Defendants Remco and Bishop under
the FHA. Plaintiffs’ FHA claim under 42 U.S.C. § 3617 survived Remco and Bishop’s
motion for summary judgment, which did not challenge Plaintiffs’ punitive damages
request. Remco and Bishop’s respective financial positions are thus relevant to
Plaintiffs’ claim and appear proportional to the needs of the case. See Matarese, 795
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F. Supp. 2d at 449–51. Remco and Bishop have not articulated any other reason for
the court to deny the motion to compel, nor have they articulated any reason to
narrow the scope of discovery sought by Plaintiffs. See Sheffield Fin., 2007 WL
1726560, at *3. Therefore, Plaintiffs’ motion to compel is granted. See Fed. R. Civ. P.
For the foregoing reasons, Plaintiffs’ motion to compel [DE #171] is GRANTED.
This 19th day of September 2022.
L A. SWANK
United States Magistrate Judge
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