Opinion
CV166066292S
03-21-2018
CONNEX CREDIT UNION, INC. v. The BARBERINO BROTHERS, INC. et al.
UNPUBLISHED OPINION
OPINION
Wilson, J.
This is a breach of contract and CUTPA action. The plaintiff Connex Credit Union, Inc. (plaintiff) commenced this action by service of writ summons and complaint against the defendants, Barberino Brothers, Inc., Barberino Car Country, LLC, Thomas A. Barberino, Sr. and John Mocaldo. The operative complaint is the Revised Complaint dated November 17, 2017, and alleges the following facts. The plaintiff is one of Connecticut’s largest credit unions that provides several financial services and products, including financing for automobiles. The defendant, Barberino Brothers, Inc. (Barberino Brothers) is a Connecticut corporation and the defendant, Barberino Car Country, LLC (Barberino Country) is a Connecticut limited liability. Barberino Brothers and Barberino Country, collectively referred to as the " Dealerships" operate car dealerships in Connecticut. The individual defendants, Thomas A. Barberino, Sr., and John Mocaldo, are officers of the Dealerships. (The individual defendants and the Dealerships are collectively referred to as the defendants.)
Prior to June 29, 2015, the plaintiff and the Dealerships were parties to Dealer Retail Agreements (Dealer Agreements). The plaintiff and the Dealerships entered into a settlement agreement on June 29, 2015 (" Settlement Agreement" ) to settle claims that the Dealerships allegedly violated the Dealer Agreements by, among other things, encouraging customers who were plaintiffs’ borrowers to breach their retail installment contracts with the plaintiff by turning the collateral over to the plaintiff during the term of the loan. Although the settlement terminated the Dealer Agreements, the plaintiff still owns a large portfolio of loans originated by the Dealerships. The Settlement Agreement required the Dealerships to " not directly or indirectly advise, recommend or suggest to any person or entity that they may want to or should turn in to the plaintiff their automobile that is financed through the plaintiff." Revised Compl, ¶ 10. The plaintiff alleges that the Dealerships have violated the Settlement Agreement by continuing to tell customers to return their keys and cars to the plaintiff during the term of their loan.
The defendants have served two sets of interrogatories, on the plaintiff. The plaintiff has filed a motion for protective order (# 118) and claims that some of the interrogatories seek information protected by the Gramm-Leach-Bliley Act (GLBA). Specifically, the plaintiff claims that interrogatories 3, 4, 9, 16, and 18 in Exhibit A (# 120), which was filed in support of the motion for protective order, and all of the interrogatories and requests for production in Exhibit B (# 120) may require the plaintiff to disclose customer information, including their names, addresses, loan numbers, and other personally identifiable financial information (PIFI). The plaintiff recognizes that the information is relevant and is not seeking to avoid responding to the PIFI interrogatories, however, the plaintiff seeks appropriate protections so that confidential consumer information is not disclosed. The motion for protective order appeared on this court’s February 20, 2018 short calendar as take papers.
DISCUSSION
The trial court has the inherent authority to moderate the discovery process by imposing protective orders under appropriate circumstances. See Rosado v. Bridgeport Roman Catholic Diocesan Corp., 276 Conn. 168, 221-22 n.59, 884 A.2d 981 (2005). The Supreme Court has " long recognized that the granting or denial of a discovery request rests in the sound discretion of the [trial] court ..." (Internal quotation marks omitted.) Barry v. Quality Steel Products, Inc., 280 Conn. 1, 16-17, 905 A.2d 55 (2006).
Practice Book § 13-2 provides in relevant part that " [i]n any civil action ... where the judicial authority finds it reasonably probable that evidence outside the record will be required, a party may obtain in accordance with the provisions of this chapter discovery of information or disclosure, production and inspection of papers, books, documents and electronically stored information material to the subject matter involved in the pending action, which are not privileged, whether the discovery or disclosure relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, and which are within the knowledge, possession or power of the party or person to whom the discovery is addressed. Discovery shall be permitted if the disclosure sought would be of assistance in the prosecution or defense of the action and if it can be provided by the disclosing party or person with substantially greater facility than it could otherwise be obtained by the party seeking disclosure. It shall not be ground for objection that the information sought will be inadmissible at trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence ..." " Our rules of discovery are meant to serve the ends of justice by ‘facilitating an intensive search for the truth through accuracy and fairness, provid[ing] procedural mechanisms designed to make a trial less a game of blindman’s bluff and more a fair contest with the basic issues and facts disclosed to the fullest practicable extent.’ " (Citations omitted.) Picketts v. Int’l Playtex, Inc., 215 Conn. 490, 508, 576 A.2d 518 (1990).
Practice Book § 13-5 states in relevant part: " Upon motion by a party from whom discovery is sought and for good cause shown, the judicial authority may make any order which justice requires to protect a party from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following: (1) that the discovery not be had; (2) that the discovery may be had only on specific terms and conditions, including a designation of the time or place; (3) that the discovery may be had only by a method of discovery other than that selected by the party seeking discovery; (4) that certain matters not be inquired into or that the scope of discovery be limited to certain matters ..." Under Practice Book § 13-5 the party seeking the protective order is required to show good cause. The courts have defined good cause as " a sound basis or legitimate need to take judicial action." Welch v. Welch, supra, 48 Conn.Supp. at 19, 828 A.2d 707 [34 Conn.L.Rptr. 171 (2003). " Good cause must be based upon a particular and specific demonstration of fact, as distinguished from stereotyped and conclusory statements." Id. at 20. " Whether or not ‘good cause’ exists for entry of a protective order must depend on the facts and circumstances of a particular case." Carrier Corp. v. Home Insurance Co., Superior Court, judicial district of Hartford-New Britain at Hartford, Docket No. CV 88352383 S (February 11, 1992, Schaller, J.) . " To determine whether good cause exists, courts balance ‘the need for information against the injury that might result if uncontrolled disclosure is compelled.’ " In re Zyprexa Injunction, 474 F.Supp.2d 385, 413-16 (E.D.N.Y. 2007) (quoting Pansy v. Borough of Stroudsburg, 23 F.3d 772, 787 (3d Cir. 1994) ).
" The GLBA [Gramm-Leach-Bliley Act] was a seminal piece of banking legislation inasmuch as it repealed the Glass-Steagall Act’s ban on affiliations between commercial and investment banks." Watters v. Wachovia Bank, N.A., 550 U.S. 1, 29, 127 S.Ct. 1559, 1577 (2007). " Effective November 12, 1999, Congress enacted the [GLBA], Pub. L. No. 106-102, 113 Stat. 1338." The Act declared it to be " the policy of the Congress that each financial institution has an affirmative and continuing obligation to respect the privacy of its customers and to protect the security and confidentiality of those customers’ nonpublic personal information." Federal Deposit Insurance Corporation for Citizens National Bank v. Credit Suisse First Boston Mortgage Securities Corp., United States District Court, Docket No. 12-CV-4000 (LTS) (KNF) (S.D.N.Y. October 27, 2017); 15 U.S.C. § 6801(a).
The GLBA " also vested relevant agencies with the ability to ‘establish appropriate standards for the financial institutions’ in order to further this policy of protecting consumer information. 15 U.S.C. § 6801(b)." Stevens v. Interactive Fin. Advisors, Inc., 830 F.3d 735, 739 (7th Cir. 2016). In connection with the obligations related to disclosure of nonpublic personal information, the GLBA of 1999, 15 U.S.C. § 6802(a) provides: " Except as otherwise provided in this subchapter, a financial institution may not, directly or through any affiliate, disclose to a nonaffiliated thirdparty any nonpublic personal information, unless such financial institution provides or has provided to the consumer a notice that complies with section 6803 of this title."
" A general opt-out provision states: ‘A financial institution may not disclose nonpublic personal information to a nonaffiliated third party unless- (A) such financial institution clearly and conspicuously discloses to the consumer, in writing or in electronic form or other form permitted by the regulations prescribed under section 6804 of this title, that such information may be disclosed to such third party; (B) the consumer is given the opportunity, before the time that such information is initially disclosed, to direct that such information not be disclosed to such third party; and (C) the consumer is given an explanation of how the consumer can exercise that nondisclosure option.’ " Federal Deposit Insurance Corporation for Citizens National Bank v. Credit Suisse First Boston Mortgage Securities Corp., supra, United States District Court, Docket No. 12-CV-4000 (LTS) (KNF); 15 U.S.C. § 6802(b)(1).
General exceptions to prohibiting the disclosure of nonpublic personal information include the following provision: " Subsections (a) and (b) shall not prohibit the disclosure of nonpublic personal information ... to comply with Federal, State, or local laws, rules, and other applicable legal requirements; to comply with a properly authorized civil, criminal, or regulatory investigation or subpoena or summons by Federal, State, or local authorities; or to respond to judicial process or government regulatory authorities having jurisdiction over the financial institution for examination, compliance, or other purposes as authorized by law." 15 U.S.C. § 6802(e)(8).
A financial institution is defined as, " any institution the business of which is engaging in financial activities as described in section 1843(k) of Title 12." 15 U.S.C. § 6809(3)(A). " ‘Title 12 U.S.C. § 1843(k), referenced in section 6809(a), is a part of the Bank Holding Company Act of 1956, Pub. L. No. 109-41, 70 Stat. 133(codified as amended at 12 U.S.C. § § 1971-78, 1841-50) (‘BHCA’). The BHCA, in section 1843, limits the ability of the bank holding companies regulated under that statutory scheme to hold interests in nonbanking organizations.’ Am. Bar Ass’n, 430 F.3d at 459." Federal Deposit Insurance Corporation for Citizens National Bank v. Credit Suisse First Boston Mortgage Securities Corp., supra, United States District Court, Docket No. 12-CV-4000 (LTS) (KNF). Activities that are financial in nature are defined in 12 U.S.C. § 1843(k)(4)(A) which states in relevant part: " the following activities shall be considered to be financial in nature: Lending, exchanging, transferring, investing for others, or safeguarding money or securities."
Nonpublic personal information is defined under 15 U.S.C. § 6809(4)(A) as " personally identifiable financial information- (i) provided by a consumer to a financial institution; (ii) resulting from any transaction with the consumer or any service performed for the consumer; or (iii) otherwise obtained by the financial institution. (B) Such term does not include publicly available information ... (C) Notwithstanding subparagraph (B), such term- (i) shall include any list, description, or other grouping of consumers (and publicly available information pertaining to them) that is derived using any nonpublic personal information other than publicly available information; but (ii) shall not include any list, description, or other grouping of consumers (and publicly available information pertaining to them) that is derived without using any nonpublic personal information."
" GLBA does not define the term ‘personally identifiable financial information’ (" PIFI" ) but the Federal Trade Commission, one of the entities with authority to enforce GLBA, defines PIFI to mean any information (i) A consumer provides to you to obtain a financial product or service from you; (ii) About a consumer resulting from any transaction involving a financial product or service between you and a consumer; or (iii) You otherwise obtain about a consumer in connection with providing a financial product or service to that consumer. 16 C.F.R. § 313.3(o)(1).
" Personally identifiable financial information does not include: (A) A list of names and addresses of customers of an entity that is not a financial institution; and (B) Information that does not identify a consumer, such as aggregate information or blind data that does not contain personal identifiers such as account numbers, names, or addresses." 16 C.F.R. § 313.3(o)(2)(ii). " GLBA defines the term ‘consumer’ to mean ‘an individual who obtains, from a financial institution, financial products or services which are to be used primarily for personal, family, or household purposes, and also means the legal representative of such an individual.’ 15 U.S.C. § 6809(9)." Federal Deposit Insurance Corporation for Citizens National Bank v. Credit Suisse First Boston Mortgage Securities Corp., supra, United States District Court, Docket No. 12-CV-4000 (LTS) (KNF).
The information sought here, by the defendants, through the interrogatories and requests for production requires the plaintiff to disclose customer information, including their names, addresses, loan numbers, and other personally identifiable financial information as defined in the GLBA. The plaintiff acknowledges that the information sought is relevant, and also concedes that disclosure of the information is allowed pursuant to one of the statutory exceptions set forth in § 6802(e)(8), however, the plaintiff is requesting a protective order which would allow it to produce responsive information to the defendants, while also maintaining the confidentiality of its customers’ PIFI.
In McGuire v. Rawlings Co., LLC, Superior Court, judicial district of Fairfield, Docket No. CV-000375212-S (March 14, 2005, Skolnick, J.) , the plaintiff sought to have a bill of discovery order granted to uncover evidence of a pattern of unfair acts and practices by the defendants, Rawlings and Unicare against the plaintiff and other individuals who were recipients of medical cost benefits. The plaintiff claimed that the information sought was necessary to prove her claims in a related action she had filed against the defendants alleging CUTPA and CUIPA violations. The plaintiff requested the court to issue an order requiring Unicare and Rawlings to produce addresses, information and policy numbers of individuals who were sought by Rawlings for reimbursement of medical benefits. The plaintiff argued that the information was necessary and material in order to prove that the reimbursement practices were a general practice and, therefore, the defendants were in violation of CUTPA and CUIPA. The court determined that the plaintiff had met her burden for granting the motion of order of discovery. However, the court went on to determine the extent of discovery and any limitations thereon within the context of the motion for protective order filed by Rawlings and Unicare.
In their motion for protective order, Rawlings and Unicare requested the court to deny or limit the plaintiff’s request for discovery. The defendants argued that they were barred by the GLBA from disclosing privileged and personal customer information. The plaintiff argued that the GLBA provides an exception for the disclosure of such nonpublic personal information in judicial discovery actions. The plaintiff relied specifically on the language in the GLBA exception which states that nonpublic personal information possessed by a financial institution can be disclosed " to comply with Federal, State or local laws, rules, and other applicable legal requirements; to comply with a properly authorized civil, criminal, or regulatory investigation or subpoena or summons by Federal, State, or legal authorities; or to respond to judicial process or government regulatory authorities having jurisdiction over the financial institution for examination, compliance, or other purposes as authorized by law." (Emphasis in original.) McGuire v. Rawlings, Co., LLC, supra, Superior Court, Docket No. CV-000375212S; 15 U.S.C. 6802(e)(8). The plaintiff argued this provision of the GLBA provided an exception for judicially ordered discovery of relevant information. After a thorough analysis of the relevant legal authority, the trial court agreed with the plaintiff. Recognizing that the issue was one of first impression the court looked to other jurisdictions that had interpreted the GLBA and its exceptions and observed that: " Federal district courts and other state supreme courts have addressed the issue of whether a court discovery order qualifies as an exception to the GLBA. Those courts are split as to whether the exception applies to civil discovery orders. Some courts have not ordered disclosure, holding that the GLBA prevents discovery of nonpublic personal information. In Union Planters Bank, N.A. v. Gavel, Civil Action No. 02-1224 (E.D.La., March 11, 2003), vacated on other grounds, Union Planters National Bank Ass’n v. Salih, 369 F.3d 457 (5th Cir. 2004), a financial institution sought a permanent injunction to enjoin a former employee from complying with a subpoena by disclosing the nonpublic personal financial information of its customers. The court granted the permanent injunction on the grounds that, " [t]he GLBA is written with the protection of the customers of the financial institutions in mind. This protection continues in all aspects of the GLBA. Such protection can be seen when financial institutions are allowed to provide nonpublic personal information to nonaffiliated third parties, whereupon the nonaffiliated third party must maintain confidentiality." Id.
" The Supreme Court of Mississippi also did not recognize the judicial process exception to the GLBA. Citing United Planters Bank, N.A. v. Gavel, the court held that the GLBA preempted the disclosure by an insurance company of a list of names and addresses of every policyholder in the state of Mississippi. ‘[T]o permit a court to order disclosure of private information to a private plaintiff would eviscerate the protections the GLBA establishes.’ Equitable Life Assurance Society v. Irving, 2002-IA-00513-SCT (Mississippi, September 11, 2003).
" Other courts have, however, ordered disclosure based on the ‘judicial process’ exception to nondisclosure under the GLBA. In Marks v. Global Mortgage Group, Inc., 218 F.R.D. 492 (S.D.W.Va., November 21, 2003), the court examined an appeal of a court order compelling discovery of nonpublic personal information of bank customers. The order was granted by a magistrate judge on the grounds that it met the exception under the GLBA, ‘to comply with Federal, State, or local laws, rules, and other applicable legal requirements.’ (Internal quotation marks omitted.) Id. The District Court affirmed the trial court’s order on different grounds, holding that the term ‘judicial process,’ contained in § 6802(e)(8) permits discovery requests of nonpublic personal information. The court held that, ‘15 U.S.C. § 6802(e)(8) permits a financial institution to disclose the non-public personal financial information of its customers to comply with a discovery request.’ Id. The court examined the legislative history of the GLBA and determined that, ‘the legislative history indicates that the House Bill, which added the privacy protections to the GLBA, envisaged an independent judicial process exception.’ Id. ‘When a party must disclose information pursuant to a discovery request, the party is responding to judicial process. Thus under the judicial process exception, the defendant may disclose its customers’ nonpublic personal information in response to the plaintiffs’ discovery request.’ Id.
" Other state appellate courts that have examined this issue have agreed. In Ex Parte National Western Life Ins. Co., Civil Action No. 1030867 (Alabama, October 8, 2004), the Alabama Supreme Court affirmed a trial court discovery order compelling the disclosure of nonpublic personal information of nonaffiliated insurance customers. The court agreed with the Marks court analysis that ‘the phrase judicial process in § 6802(e)(8) encompasses a court order.’ (Internal quotation marks omitted.) Id. Therefore, the court held that, ‘[b]ecause the trial court’s order compelling the production of the information here is certainly judicial process under § 6802(e)(8), the [insurance companies] are not prohibited by the GLBA from [responding] to [that] judicial process and disclosing the requested information.’ (Internal quotation marks omitted.) Id.
" On the same day, the Alabama Supreme Court affirmed a trial court decision ordering an insurance company to produce to the plaintiff customer insurance applications as well as records of complaints alleging fraud or misrepresentation made to an insurance company within the state for a ten-year period. See Ex Parte Mutual Savings Life Ins. Co., Civil Action No. 1031021 (Alabama, October 8, 2004). Again, the court held that the interpretation of the GLBA in Marks was reasonable. ‘We hold that by incorporating the phrase " to respond to judicial process," [in] 15 U.S.C. § 6802(e)(8), Congress created an exception applicable to situations in which the trial court orders the disclosure of a customer’s nonpublic personal information during discovery in a civil action.’ Id. The court did order, as it did in National Western Life, a comprehensive protective order to guard against customers’ privacy whose information is irrelevant to the action. Id.
" The Supreme Court of Appeals of West Virginia has also recognized the judicial process exception to the GLBA. The court held that the exceptions of the GLBA, when tempered by judicial involvement such as protective orders restricting irrelevant material, allow the disclosure by an insurance company to a third-party civil plaintiff of nonpublic personal information obtained from an insured. Marks v. Barnett, 215 W.Va. 123, 131, 595 S.E.2d 65 (2004)." McGuire v. Rawlings Co., LLC, supra, Superior Court, Docket No. CV-000375212-S.
The court in McGuire " adopt[ed] the holdings of the federal and state courts that have allowed insurance companies to disclose nonpublic personal information pursuant to the judicial process exception of the GLBA. See 15 U.S.C. 6802(e)(8). [The court concluded that] [t]he bill of discovery action granted in McGuire’s favor qualified as an order of judicial process. Although judicial process ‘is sometimes used to refer to initial service of process as opposed to other things issued by a court ... such as orders, notices, or other requirements ... the term is generally used to refer to the broader definition.’ Ex Parte National Western Life Insurance Company, supra, Civil Action No. 1030867, n.2 (Alabama, October 8, 2004). ‘[E]ven if the GLBA included no exception for civil discovery, the mere fact that a statute generally prohibits the disclosure of certain information does not give parties to a civil dispute the right to circumvent the discovery process.’ Marks v. Global Mortgage Group, Inc., supra, 218 F.R.D. at 492." Id.
Like the court in McGuire, the court in the present case, agrees with those federal and state cases cited therein that have ordered disclosure of nonpublic personal information based on the " judicial process" exception to nondisclosure under the GLBA, and therefore concludes " that by incorporating the phrase ‘to respond to judicial process,’ [in] 15 U.S.C. § 6802(e)(8), Congress created an exception applicable to situations in which the trial court orders the disclosure of a customer’s nonpublic personal information during discovery in a civil action." McGuire v. Rawlings, supra, Superior Court, Docket No. CV-000375212S.
Here, the plaintiff concedes that the requested information is relevant, however because the requested information raises privacy concerns, it seeks to limit the disclosure of the information sought through its request for a protective order. As this court previously noted, a party seeking a protective order pursuant to § 13-5 is required to show good cause. " To determine whether good cause exists, courts balance ‘the need for information against the injury that might result if uncontrolled disclosure is compelled.’ " In re Zyprexa Injunction, 474 F.Supp.2d 385, 413-16 (E.D.N.Y. 2007) (quoting Pansy v. Borough of Stroudsburg, 23 F.3d 772, 787 (3d Cir. 1994) ). Thus, given the privacy interests involved, the court finds good cause to limit the disclosure of the information sought and issue a partial protective order so those concerns are addressed.
Moreover, " the various state and federal statutes examined [by the cases cited in McGuire ] ... all involve a legislative concern about the disclosure of [nonpublic personal information]. They express ‘a strong interest in protecting the privacy of consumers’ financial information. For that reason it is appropriate for a court to exercise its broad discretion to fashion protective orders.’ " (Citations omitted.) McGuire v. Rawlings Co., LLC, supra, Superior Court, Docket No. CV-000375212.
CONCLUSION AND ORDER
Accordingly, the court grants the plaintiff’s protective order and enters the following order:
1. The defendants’ requests for discovery are limited to from the time of the alleged activity in 2013 to the time of the beginning of the present action in 2016. See McGuire v. Rawlings Co., LLC, supra, Superior Court, Docket No. CV-000375212;
2. The defendants’ requests are limited to information relevant to the claims alleged in the operative revised complaint dated November 17, 2017. Id.
3. The defendants shall maintain the confidentiality of all information produced in response to the PIFI Interrogatories and shall not disclose such information to third parties.
4. Connex shall provide the PIFI requested with appropriate redactions, including labeling any customers with letter identifiers beginning with Customer A, B, etc. and provide under seal a separate identifying key to the defendants.
5. All court pleadings and public use shall refer to customers according to their letter identifier and omit or redact all loan numbers, addresses, telephone numbers, social security numbers, and any other PIFI.
6. The information disclosed shall not be used for any purpose other than the pending action.
7. The information disclosed shall be returned to Connex or destroyed at the conclusion of the proceedings.
It is so ordered.