Alpha Funding v. Continental Funding

In Alpha Funding v. Continental Funding, 17 Misc. 3d 959 (Sup. Ct. Kings Cty., 2007) the court addressed plaintiff and third-party defendant's motion to impose sanctions on defendants for their refusal or failure to respond to certain discovery requests. The defendants argued that the GLBA, and corresponding regulations, prohibited them from disclosing the information in question. (Id. at 964.) The court noted that the GLBA requires a financial institution to give its customers notice and an opportunity to opt out of disclosure before releasing any customer's "nonpublic personal information to a nonaffiliated third party." Id., citing 15 U.S.C. 6802(b)(1). Judge Demarest noted that "while no New York court has yet addressed the issue of whether the disclosure of nonpublic personal information to a nonaffiliated third party to comply with civil discovery is permitted by [the GLBA], the courts that have addressed it have concluded that the GLBA should not bar a proper discovery request so long as the disclosure is made subject to an appropriate protective order ." (Id. at 966.) The court adopted the reasoning of those authorities holding that there is a "judicial process" exception to the GLBA, and concluded that the GLBA permits the use of judicial process expressly authorized by statute, such as the CPLR. (Id. at 966-967.) Of particular importance to the present case, Judge Demarest nevertheless held that her finding that the GLBA did not preclude disclosure did not permit plaintiff and third party defendant to obtain discovery that is improper under the CPLR, such as requests that are overbroad, burdensome, lacking in specificity or irrelevant. (Id. at 968-969.)