Protection of Personal Information As a Ploy to Defy Discovery Obligations*

January 26, 2016 | Scott P. Eisenberg | Insurance Coverage

Introduction

In November 2014, Chief Administrative Judge of the Courts A. Gail Prudenti amended the Uniform Civil Rules of the Supreme and County Courts by adding 22 NYCRR §202.5(e), which expressly mandates the protection of confidential personal information (“CPI”) in papers filed with the Courts. While the intent behind the amendment was a noble one, to wit, the protection of CPI in a world increasingly plagued by technology-based consumer fraud, many attorneys are unilaterally expanding the express text and intention of the section by withholding the CPI not only from documents filed with the Courts, but from all documents exchanged during discovery.

This article looks at the Courts’ minimal treatment of this issue, the disconcerting statistics that fostered the section’s enactment, and the alarming trend of attorneys abusing the section by withholding discoverable information.

  1. The Genesis Of 22 NYCRR §202.5(e)

Demanding a plaintiff’s CPI is one of the most basic and fundamental actions to be taken by defendants in a variety of actions, ranging from personal injury to commercial disputes. Such CPI consists of dates of birth, social security numbers, EIN numbers, and/or financial account numbers. The good-faith and valid reasons behind demanding this information surpass simply being meddlesome and further much more important goals. For example, this CPI is vital for defendants to: (1) do their due diligence and investigate the party(ies) bringing the action; (2) identify and evaluate all potential liens, which helps nurture early settlement discussions; (3) comply with all CMS reporting requirements; and (4) identify personal and/or commercial financial accounts that may have been compromised.

This issue is not one that has been frequently litigated, either before or after the section’s enactment in November 2014. In 2012, the Supreme Court, Westchester County tangentially addressed the issue in Sayyed v. Basit, 2012 N.Y. Misc. LEXIS 6182, at *8-9 (Sup. Ct. Westchester County Mar. 26, 2012), when it held that a plaintiff must provide his Social Security Number to a defendant so that said defendant can comply with the  reporting requirements of section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (“MMSEA”). Id. Specifically, the Court held that plaintiff’s counsel’s “word” that plaintiffs were not Medicare eligible was insufficient, as “section 111 of the MMSEA is to avoid having insurers at the mercy of plaintiffs to determine plaintiffs’ Medicare eligibility.). Id.

However, it is irrefutable that over the past ten years, there has been an explosion of consumer and commercial fraud claims resulting from the theft or piracy of CPI. According to the Bureau of Justice Statistics, in 2014, 17.6 million residents in the U.S. were victims of identity theft; compared to only 3.6 million in 2004. See http://www.bjs.gov/index.cfm?ty=pbdetail&iid=5410, figures which do not include commercial claims. Plaintiffs understandably became apprehensive providing their CPI in documents which were filed in Court and which the general public would therefore enjoy unfettered access to.

The Courts were left with little option but to react and provide some degree of security to these parties, which carved the path to 22 NYCRR §202.5(e). Reaching a fair compromise between plaintiffs’ desires to protect their CPI and defendants’ statutory rights to discovery of same as it is likely necessary and material to nearly every defense, Chief Administrative Judge Prudenti enacted 22 NYCRR §202.5(e) on November 6, 2014, effective as of January 1, 2015. 22 NYCRR §202.5(e) states, in relevant part, that: “the parties shall omit or redact CPI in papers submitted to the court for filing.” (emphasis added). See 22 NYCRR §202.5(e).

The clear and unambiguous wording of the section unequivocally confirms the Courts’ collective desire to protect plaintiffs’ CPI from becoming public information; however, it does not state, either expressly or impliedly, that parties may withhold CPI from their adversaries during discovery. Even the most newly-minted attorney knows that discovery responses do not get filed with the Courts outside of motion practice or for use during trial, whether they are served in an e-file or ECF case, State or Federal case. Nonetheless, we have seen a sharp increase in the number of attorneys unilaterally expanding the scope of this section by withholding the CPI altogether. 

III.      The Unilateral And Improper Expansion Of 22 NYCRR §202.5(e)

Attorneys’ statutory obligations to protect their clients’ CPI does not create an implied right to withhold it. It frustrates the discovery process and inhibits defendants’ ability to launch a comprehensive defense. However, many attorneys are refusing to provide this CPI during discovery, supporting their actions with nothing more than a misinterpretation and/or misapplication of 22 NYCRR §202.5(e). Indeed, we recently received Verified Bills of Particulars from five separate plaintiffs, all responding to our clients’ demands for dates of birth and Social Security Numbers, by merely citing the verbiage of 22 NYCRR §202.5(e).  This is improper.

As discussed above, 22 NYCRR §202.5(e) only creates omission and/or redaction obligations relative to documents being filed with the Court, not documents being exchanged between the parties during discovery. As the Court stated in Sayyed, such CPI is both necessary and material to the defense of certain claims, and is therefore discoverable. This information is at the very least necessary for investigation purposes, both into plaintiff as well as potential CMS and collateral source liens, which have historically fostered early settlement discussions, thus saving all parties substantial litigation expenses and assisting in clearing the Courts’ swollen dockets. Common legal sense dictates that not all documents exchanged during discovery will be filed with the Court, and such documents do not fall within the ambit of the section; the duty to protect the CPI arises only when a party is going to file said documents with the Court.

More troublesome than parties’ unilateral expansion of 22 NYCRR §202.5(e) are the scores of defense counsel who simply roll over and accept it. We frequently hear such declarations as “I’ll get it in the medical records” or “it will be on the authorizations anyway.” Not only is this an example of lazy defense work, it is no longer even necessarily accurate. Such CPI is commonly redacted in medical records produced in response to authorizations and is almost always redacted within the authorizations themselves, another practice in which we have witnessed a steady increase in recent years.

Allowing attorneys to utilize 22 NYCRR §202.5(e) in this unintended manner creates a dangerous precedent, and may serve to embolden those same attorneys to begin scouring all of New York’s laws for other verbiage that can be distorted to meet their clients’ needs. This is not a farfetched notion. For example, how frequently have your adversaries asserted venue in a particular county because the underlying incident occurred within said county? This tactic is often employed to place a case in a more favorable venue; however, although frequently overlooked, “place of the occurrence” is not an enumerated basis for venue in actions involving at least one New York State resident under New York Civil Practice Law and Rules (“CPLR”) §503(a). Or perhaps look at CPLR §2214(b) and the unfortunate reality that the service deadlines set forth therein have deteriorated to mere suggestions, rather than mandates.

These are only two brief examples of how years of acquiescence by defense counsel on certain issues has resulted in a situation where the rules governing litigation have become, in many instances, suggestive as opposed to mandatory. Plaintiffs’ should not be permitted, outside ­­­­­of a Court Order, to use 22 NYCRR §202.5(e) as a shield to protect them from having to disclose all pertinent CPI, as this was not the express intent of Chief Administrative Judge Prudenti, would frustrate the discovery and settlement processes, and would only encourage further malleability of the Stat­­­­e’s laws in the future. 22 NYCRR §202.5(e) is black-letter law, it is not ambiguous, and the inherent necessity of the CPI to the defense of an action renders it necessary and therefore, discoverable.

Conclusion 

The necessity for the enactment of 22 NYCRR §202.5(e) was clear, and that was to provide a layer of protection for parties’ CPI from public access. This was prompted by the increasing volume of electronically-based fraud and identity theft; however, the Courts unambiguously provided this protection only to documents being filed in Court, not those being exchanged in discovery.  Had the drafters of 22 NYCRR §202.5(e) intended to shield the disclosure of such CPI, they would have expressly stated so in the section.  They did not.

Being mindful of the costs associated with such action versus the potential benefits to be gained, it is unlikely that most clients and/or carriers would want to expend funds on discovery-related motions relating solely to address this issue. While this is certainly a valid consideration, it may be a bit short-sighted in that it begets the age old expression, “if you give them an inch, they will take a mile.” While motion practice may be cost prohibitive, this does not mean you will be deprived of numerous opportunities to bring the issue before the Courts. Preliminary Conferences, Compliance Conferences, Status Conferences etc. all provide opportunities for you to raise these issues and start bringing them to the Courts’ attention, as the Courts may not even be aware that such statutory abuses are occurring.

We must avoid sidestepping the battles that may end up costing the war.

Reprinted with permission from the January 26, 2016 edition of the New York Law Journal© 2016 ALM Media Properties, LLC. All rights reserved.

Further duplication without permission is prohibited.

*Co-written with Ellen H. Greiper, Esq., Goldberg Segalla LLP.

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