In a January 7, 2016, decision, a panel of the California Court of Appeals held that while corporations do have a right to privacy, it is not a constitutional right to privacy — and a corporation’s privacy right is subject to a balancing test.
In SCC Acquisitions, Inc. v. Superior Court (Western Albuquerque Land Holdings, LLC), Western was the judgment creditor of a $47 million judgment against SCC Acquisitions. As part of its efforts to enforce the judgment, Western sought to compel production of certain documents per Code of Civil Procedure section 708.030. A trial court granted Western’s motion to compel; SCC appealed that order on the grounds that the requests sought documents of third parties, the right of privacy protected the documents and the requests were overbroad.
Western moved to dismiss SCC’s appeal on the grounds that the order granting its motion to compel is not an appealable postjudgment order under section 904.1, subdivision (a)(2). The Court of Appeal for the Fourth Appellate District exercised its discretion to treat the appeal as a petition for writ of mandate and denied it. The appeals court found that the trial court had the authority to compel SCC to produce documents in its possession or control regarding third parties and rejected SCC’s arguments that the document requests violated the privacy rights of third parties and were overbroad.
The court held that corporations do not have a right of privacy protected by the California Constitution and that only the privacy rights of “people” are protected. Citing Ameri-Medical Corp. v. Workers’ Comp. Appeals Bd., the court held that corporations are not people.
The court noted that a corporation’s privacy rights are subject to a balancing test, and in this case, the balance tipped in Western’s favor:
“Having been assigned a substantial money judgment against SCC, Western has a right to discover facts about the nature and location of assets to make that judgment more than a scrap of paper. The information sought by Western’s discovery is financial in nature and a protective order could be issued, if necessary, to safeguard privacy rights of third parties.”
The attorneys at Glass & Goldberg in California provide high quality, cost-effective legal services and advice for clients in all aspects of commercial compliance, business litigation and transactional law. Call us at (818) 888-2220, send an email inquiry to [email protected] or visit us online at glassgoldberg.com to learn more about the firm and to sign up for future newsletters.