Discovery from

Nonparties

John Smith

26th Annual Advanced Evidence & Discovery Course 2013

March 21, 2013

Outline❶ Policy Considerations

❷ Policy Considerations

❸ Arbitration v. Litigation in Federal or State Courts

❹ E-discovery

❺ Examples of How to Obtain Nonparty Discovery

❻ Practical Considerations

❼ Nonparties Resisting Discovery and Asserting Privileges

3

❷Policy Considerations

Parties have broad discovery rights.

Resolution of disputes by what truth reveals, not what is concealed.

In re Colonial Pipeline, 968 S.W.2d 938, 941 (Tex. 1998) (quoting Jampole v. Touchy, 673 S.W.2d 569, 573 (Tex. 1984))

4

Rule 501 embodies this policy

TRE 501 provides the general rule: – Except as otherwise provided by Constitution, by

statute, or by other rules prescribed pursuant to statutory authority, no person has a privilege to:

(1) refuse to be a witness; (2) refuse to disclose any matter; (3) refuse to produce any object or writing; or (4) prevent another from being a witness or

disclosing any matter or producing an object or writing.

5

But discovery is not boundless

• However, discovery is a “tool to make the trial process more focused, not a weapon to make it more expensive. Thus trial courts ‘must make an effort to impose reasonable discovery limits.’...’Reasonable’ discovery necessarily requires some sense of proportion.”

In re Allstate County Mut. Ins. Co., 227 S.W. 3d 667, 670 (Tex. 2007)

6

Nonparties have rights under the rules

• In both litigation and arbitration, nonparties have rights to not be unduly intruded upon or harassed.

7

The biggest limitation

The Remedy is Contempt• Enforcement: the remedy is contempt. Where?

– Subpoena can be enforced by the issuing court or a district court in the county in which the subpoena was served. TRCP 176.8. In re Suarez and Texas Dep’t of Family & Protective Services, 261 S.W.3d 880, 883 (Tex. App.--Dallas 2008, orig. proceeding)(“the rule provides for enforcement of a subpoena through contempt, not sanctions”)

– On matters relating to a deposition, an application may be made to the Court in which the action is pending, or to any district court in the district where the deposition is being taken. An application for an order to a deponent who is not a party shall be made to the court in the district where the deposition is being taken. TRCP 215.1

– How? A court’s power to impose sanctions on non-parties is limited to its contempt power. See TRCP 215.2(a) & (c) (authorizing contempt as only sanction against non-parties); see also Jefa Co., Inc. v. Mustang Tractor and Equipment Co., 868 S.W.2d 905, 908 (Tex. App.-Houston [14th Dist.] 1994, writ denied) (“appropriate sanction for a nonparty’s noncompliance with discovery is placing the nonparty in contempt of court”); Exoxemis, Inc. v. Seale, No. 04-95-00673-CV, 1996 WL 471271, at *6 (Tex. App.-San Antonio Aug. 21, 1996, no writ) (trial court could not impose sanction on nonparty because “the trial court was powerless to treat him as a party in the absence of proper jurisdiction over his person in accordance with the mandatory rules relating to service of process”); In re Suarez and Texas Dep’t of Family & Protective Services, 261 S.W.3d 880, 883-84 (Tex. App.--Dallas 2008, orig. proceeding)(“We decline to hold that a party can file a motion for sanctions against a non-party, serve the motion on the non-party with a citation information it that it has ‘been sued’, and thereby subject the non-party to possible sanctions based on its alleged violation of a subpoena occurring before the sanctions motion was filed. Neither will we muddle the rules’ clear provisions for addressing a failure to obey a subpoena--a motion for contempt pursuant to rule 176.8.”)

8

PRIVACY-CENTEREDPRIVILEGES

1. Physician-patient privilege2. Mental health privilege3. Income tax returns or other

sensitive financial information

9

In re Whipple, 2012 WL 556313

• A 2012 San Antonio Court of Appeals opinion states that “Courts . . . have consistently found that a claim for mental anguish will not, standing alone, make a plaintiff’s mental or emotional condition a part of their claim.”

• “The mental condition becomes ‘part’ of a claim or defense if the pleadings indicate that the jury must make a factual determination regarding the condition itself.”

10

In re Collins, 286 S.W.3d 916 (Tex. 2009)

• In light of the potentially sensitive nature of the information disclosed under the physician-patient relationship, the Supreme Court has emphasized that trial courts have a “heavy responsibility . . . to prevent any disclosure that is broader than necessary.”

11

In re Beeson, 2011 WL 3359711

• Tax records may not be discoverable– May be discoverable to the extent shown relevant

and material to issues in lawsuit– Ex: Net worth for punitive damages if not

otherwise provided

12

ATTORNEY-CENTERED PRIVILEGES

• Attorney-client privilege• Work product privilege

13

Attorney-Client v. Work Product

Work product is both more and less restrictive:1. Applies “in anticipation of litigation”2. Applies to materials other than from lawyers or

others included by Rule 501

14

Core Work Product

• Cases and Tex. R. Civ. P. 192.5(b) distinguish “core work product” from “other” or “everyday work product.” In re Bexar Cnty. Crim. Dist. Attorney’s Office, 224 S.W.3d 182, 187 (Tex. 2007)

• With respect to attorney thought process, the privilege is “absolute.” Banales, 907 S.W.2d at 490

15

Trade Secret Privileges—

Assertions of privilege involving trade secrets.• If a party asserts a trade secret objection to

producing information requested, then the trial court must determine whether the requested production constitutes a trade secret; and if so, then the party seeking production must show reasonable necessity for the requested materials.

In re Union Pac. R.R. Co., 294 S.W. 589, 591-93 (Tex. 2009).

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Journalist’s Qualified Privilege

Tex. Civ. Prac. & Rem. Code Section 22.021A. Applies to information after May 13, 2009. The purpose is “to increase the free flow

of information and preserve a free and active press and, at the same time, protect the right of the public to effective law enforcement and the fair administration of justice.” TEX. CIV. PRAC. & REM. CODE § 22.022.

B. The privilege protects disclosure of “(1) any confidential or nonconfidential information, document, or item obtained or prepared while acting as a journalist; or (2) the source of any information, document, or item described in Subdivision (1).” TEX. CIV. PRAC. & REM. CODE § 22.023(a).

C. To overcome the privilege assertion, a party must “make a clear and specific showing” of a six-part test that:

1) “all reasonable efforts have been exhausted to obtain the information from alternative sources; 2) the subpoena is not overbroad, unreasonable, or oppressive and, when appropriate, will be limited to the verification of

published information and the surrounding circumstances relating to the accuracy of the published information;3) reasonable and timely notice was given of the demand for information, document, or item;4) in this instance, the interest of the party subpoenaing the information outweighs the public interest in gathering and

dissemination of news, including the concerns of the journalist;5) the subpoena or compulsory process is not being used to obtain peripheral, nonessential, or speculative information;

and6) the information, document, or item is relevant and material to the proper administration of the official proceeding for

which the testimony, production, or disclosure is sought and is essential to the maintenance of a claim or defense of the person seeking the testimony, production, or disclosure.” TEX. CIV. PRAC. & REM. CODE § 22.024.

17

Some Procedural Issues To Remember When In A Privilege Dispute

A. The burden of proving the existence of a privilege is on the party resisting discovery1. “The party who seeks to limit discovery by asserting a

privilege has the burden of proof.” In re E.I. DuPont de Nemours & Co., 136 S.W.3d 218, 223 (Tex. 2004) (orig. proceeding).

2. “To meet its burden, the party seeking to assert a privilege must make a prima facie showing of the applicability of a privilege by first asserting the privilege.” In re BP Prods. N. Am., Inc., 263 S.W.3d 106, 112 (Tex. App. – Houston[1st Dist] 2006, orig. proceeding).

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Issues Commonly Arising When Privileges Are Asserted

1. Scope of privilege2. Qualified privileges3. Waiver4. Offensive Use or “sword and shield” waiver5. Conflict of laws principles6. How privilege disputes arise

1. Written discovery2. Depositions3. Third party subpoenas/document requests

19

Who can waive the privilege?

“Under Texas law, discovery privileges are waived by voluntary disclosure by the holder of the privilege.”

In re Ford Motor Co., 211 S.W.3d 295, 301 (Tex. 2006)

• The Court found no waiver when Florida court clerk’s office breached its non-disclosure duty.

• The clerk’s office erroneously produced materials covered by a protective order and made them publicly available.

• Such disclosure does not result in a voluntary waiver of the privilege by the holder.

20

Contact Information

CARLOS R. SOLTEROJESSICA PALVINO

McGinnis, Lochridge & Kilgore, LLP600 Congress Avenue, Suite 2100

Austin, Texas 78748(512) 4965-6000

Website: www.mcginnislaw.com

Discovery from

Nonparties

John Smith

26th Annual Advanced Evidence & Discovery Course 2013

March 21, 2013

26th Annual Advanced Evidence & Discovery Course 2013

Discovery from Nonparties

John SmithMarch 21, 2014

26th Annual Advanced Evidence & Discovery Course 2013

Discovery from Nonparties

John SmithMarch 21, 2014

Outline❶ Policy Considerations

❷ Policy Considerations

❸ Arbitration v. Litigation in Federal or State Courts

❹ E-discovery

❺ Examples of How to Obtain Nonparty Discovery

❻ Practical Considerations

❼ Nonparties Resisting Discovery and Asserting Privileges

Today’s Topics

Policy Considerations

Privacy-Centered Privileges

Attorney-Centered Privileges

28

❷Policy Considerations

Parties have broad discovery rights.

Resolution of disputes by what truth reveals, not what is concealed.

In re Colonial Pipeline, 968 S.W.2d 938, 941 (Tex. 1998) (quoting Jampole v. Touchy, 673 S.W.2d 569, 573 (Tex. 1984))

Policy Considerations

Broad discovery rights

Resolution of disputes

31

Rule 501 embodies this policy

TRE 501 provides the general rule: – Except as otherwise provided by Constitution, by

statute, or by other rules prescribed pursuant to statutory authority, no person has a privilege to:

(1) refuse to be a witness; (2) refuse to disclose any matter; (3) refuse to produce any object or writing; or (4) prevent another from being a witness or

disclosing any matter or producing an object or writing.

Rule 501

No person has a privilege to:1. refuse to be a witness2. refuse to disclose any matter3. refuse to produce any object or writing 4. prevent another from being a witness

However, discovery is a “tool to make the trial process more focused, not a weapon to make it more expensive. Thus trial courts ‘must make an effort to impose reasonable discovery limits...’Reasonable’ discovery necessarily requires some sense of proportion.”– In re Allstate County Mut. Ins. Co., 227

S.W. 3d 667, 670 (Tex. 2007)

34

But discovery is not boundless

• However, discovery is a “tool to make the trial process more focused, not a weapon to make it more expensive. Thus trial courts ‘must make an effort to impose reasonable discovery limits.’...’Reasonable’ discovery necessarily requires some sense of proportion.”

In re Allstate County Mut. Ins. Co., 227 S.W. 3d 667, 670 (Tex. 2007)

Discovery is not boundless

Tool to make the trial process more focused

Not a weapon to make it more expensive

Discovery is a “tool to make the trial process more focused, not a weapon to make it more expensive. Thus trial courts ‘must make an effort to impose reasonable discovery limits.’ ...’Reasonable’ discovery necessarily requires some sense of proportion.” – In re Allstate County Mut. Ins. Co., 227

S.W. 3d 667, 670 (Tex. 2007)

37

Nonparties have rights under the rules

• In both litigation and arbitration, nonparties have rights to not be unduly intruded upon or harassed.

Nonparties have rights under the rules

In both litigation and arbitration, nonparties have rights to not be unduly intruded upon or harassed.

39

The biggest limitation

The Remedy is Contempt• Enforcement: the remedy is contempt. Where?

– Subpoena can be enforced by the issuing court or a district court in the county in which the subpoena was served. TRCP 176.8. In re Suarez and Texas Dep’t of Family & Protective Services, 261 S.W.3d 880, 883 (Tex. App.--Dallas 2008, orig. proceeding)(“the rule provides for enforcement of a subpoena through contempt, not sanctions”)

– On matters relating to a deposition, an application may be made to the Court in which the action is pending, or to any district court in the district where the deposition is being taken. An application for an order to a deponent who is not a party shall be made to the court in the district where the deposition is being taken. TRCP 215.1

– How? A court’s power to impose sanctions on non-parties is limited to its contempt power. See TRCP 215.2(a) & (c) (authorizing contempt as only sanction against non-parties); see also Jefa Co., Inc. v. Mustang Tractor and Equipment Co., 868 S.W.2d 905, 908 (Tex. App.-Houston [14th Dist.] 1994, writ denied) (“appropriate sanction for a nonparty’s noncompliance with discovery is placing the nonparty in contempt of court”); Exoxemis, Inc. v. Seale, No. 04-95-00673-CV, 1996 WL 471271, at *6 (Tex. App.-San Antonio Aug. 21, 1996, no writ) (trial court could not impose sanction on nonparty because “the trial court was powerless to treat him as a party in the absence of proper jurisdiction over his person in accordance with the mandatory rules relating to service of process”); In re Suarez and Texas Dep’t of Family & Protective Services, 261 S.W.3d 880, 883-84 (Tex. App.--Dallas 2008, orig. proceeding)(“We decline to hold that a party can file a motion for sanctions against a non-party, serve the motion on the non-party with a citation information it that it has ‘been sued’, and thereby subject the non-party to possible sanctions based on its alleged violation of a subpoena occurring before the sanctions motion was filed. Neither will we muddle the rules’ clear provisions for addressing a failure to obey a subpoena--a motion for contempt pursuant to rule 176.8.”)

The biggest limitation

The Remedy is Contempt

Some other brilliant observation goes here about this

Subpoena can be enforced by the issuing court or a district court in the county in which the subpoena was served. TRCP 176.8. In re Suarez and Texas Dep’t of Family & Protective Services, 261 S.W.3d 880, 883 (Tex. App.--Dallas 2008, orig. proceeding)(“the rule provides for enforcement of a subpoena through contempt, not sanctions”)On matters relating to a deposition, an application may be made to the Court in which the action is pending, or to any district court in the district where the deposition is being taken. An application for an order to a deponent who is not a party shall be made to the court in the district where the deposition is being taken. TRCP 215.1How? A court’s power to impose sanctions on non-parties is limited to its contempt power. See TRCP 215.2(a) & (c) (authorizing contempt as only sanction against non-parties); see also Jefa Co., Inc. v. Mustang Tractor and Equipment Co., 868 S.W.2d 905, 908 (Tex. App.-Houston [14th Dist.] 1994, writ denied) (“appropriate sanction for a nonparty’s noncompliance with discovery is placing the nonparty in contempt of court”); Exoxemis, Inc. v. Seale, No. 04-95-00673-CV, 1996 WL 471271, at *6 (Tex. App.-San Antonio Aug. 21, 1996, no writ) (trial court could not impose sanction on nonparty because “the trial court was powerless to treat him as a party in the absence of proper jurisdiction over his person in accordance with the mandatory rules relating to service of process”); In re Suarez and Texas Dep’t of Family & Protective Services, 261 S.W.3d 880, 883-84 (Tex. App.--Dallas 2008, orig. proceeding)(“We decline to hold that a party can file a motion for sanctions against a non-party, serve the motion on the non-party with a citation information it that it has ‘been sued’, and thereby subject the non-party to possible sanctions based on its alleged violation of a subpoena occurring before the sanctions motion was filed. Neither will we muddle the rules’ clear provisions for addressing a failure to obey a subpoena--a motion for contempt pursuant to rule 176.8.”)

PRIVACY-CENTEREDPRIVILEGES

1. Physician-patient privilege2. Mental health privilege3. Income tax returns or other

sensitive financial information

42

Privacy-Centered Privileges

Physician-patient privilege

Mental health privilege

Income tax returns

Other sensitive information

In re Whipple, 2012 WL 556313

• A 2012 San Antonio Court of Appeals opinion states that “Courts . . . have consistently found that a claim for mental anguish will not, standing alone, make a plaintiff’s mental or emotional condition a part of their claim.”

• “The mental condition becomes ‘part’ of a claim or defense if the pleadings indicate that the jury must make a factual determination regarding the condition itself.”

44

Whipple, 2012 WL 556313

San Antonio Court of Appeals opinion: Plaintiff’s mental or emotional

condition not part of claim Only if jury must regard

the condition itself

A 2012 San Antonio Court of Appeals opinion states that “Courts . . . have consistently found that a claim for mental anguish will not, standing alone, make a plaintiff’s mental or emotional condition a part of their claim.”

“The mental condition becomes ‘part’ of a claim or defense if the pleadings indicate that the jury must make a factual determination regarding the condition itself.”

In re Collins, 286 S.W.3d 916 (Tex. 2009)

• In light of the potentially sensitive nature of the information disclosed under the physician-patient relationship, the Supreme Court has emphasized that trial courts have a “heavy responsibility . . . to prevent any disclosure that is broader than necessary.”

46

Collins, 286 S.W.3d 916 (Tex. 2009)

Supreme Court emphasis Trial courts have heavy burden Prevent unnecessary disclosure

In light of the potentially sensitive nature of the information disclosed under the physician-patient relationship, the Supreme Court has emphasized that trial courts have a “heavy responsibility . . . to prevent any disclosure that is broader than necessary.”

In re Beeson, 2011 WL 3359711

• Tax records may not be discoverable– May be discoverable to the extent shown relevant

and material to issues in lawsuit– Ex: Net worth for punitive damages if not

otherwise provided

48

Beeson, 2011 WL 3359711

Tax records only discoverable if:1. Shown relevant and material to issues in

lawsuit2. Net worth for punitive damages if not

otherwise provided

50

Contact Information

CARLOS R. SOLTEROJESSICA PALVINO

McGinnis, Lochridge & Kilgore, LLP600 Congress Avenue, Suite 2100

Austin, Texas 78748(512) 4965-6000

Website: www.mcginnislaw.com

Carlos Soltero

Jessica Palvino

McGinnis, Lochridge & Kilgore, LLP600 Congress Avenue, Suite 2100Austin, Texas 78748(512) 496-6000

www.mcginnislaw.com