Reverse and Render : Texas Appellate Lawyer & Attorney : Cowles & Thompson Law Firm : Court of Appeals, Texas Supreme Court

The Tyler Court of Appeals recently confirmed that individual federal tax returns are discoverable to the extent they are relevant and material.  In this case, the tax returns were relevant to the claims and the court found that the parties had agreed to the production of the returns.  But that was not the end of the matter.  The court of appeals also found that not all of the information contained in the tax returns was relevant.  Thus, the court of appeals held the trial court abused its discretion by ordering the tax returns produced in their entirety when only portions of the returns dealing with specific income were relevant.  Accordingly, the court of appeals conditionally granted the petition for writ of mandamus and ordered the trial court to vacate its order that the party to produce all individual tax returns from 1999 to the present in their entirety.  The court's opinion in In re Guniganti can be found at this link.

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After waiting more than a decade for some guidance from the Texas Supreme Court on the meaning of "net worth" in discovery matters, we thought we were going to get just that--at least until last Friday, that is.  In last Friday's orders, the high court granted the motion to dismiss filed by the real parties in interest.

I understand that the basis for the motion was that after the supreme court expressed interest and requested briefing, the real parties in interest went back to the trial court and asked the court to vacate its discovery order, which the court did.  The real parties then sought dismissal of the mandamus proceeding, and it appears that the court obliged.

I've written a couple of prior entries about the In re Jacobs case.  Those entries may be found here and here, for those curious to read more about Jacobs.   

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The Dallas Court of Appeals recently held that a trial court abused its discretion by ordering production of irrelevant net worth information.  The Court first acknowledged that "net worth is relevant and discoverable when punitive damages may be awarded."  The Court  noted the "corollary to that rule is that when punitive damages are not recoverable, information about net worth is not relevant and, as a result, not discoverable."  In this case, a patron had consumed alcohol and drove her vehicle causing an accident and injuring the plaintiffs.  The driver pleaded guilty to two counts of intoxication assault.  The plaintiffs sued the defendant for serving the driver "excessive amounts of alcohol."  The Court of Appeals, citing section 41.005(a) of the Civil Practice and Remedies Code, held that punitive damages were not recoverable against the defendant because the claims arose from the criminal conduct of another.  Because punitive damages were no recoverable, the net worth information was not relevant.  Accordingly, the Court conditionally granted the petition ordering the trial court to vacate its order compelling production of net worth information.  The Court's opinion in In re Islamorada can be found here.

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Few writs of mandamus are granted in Dallas, so when I see one in the daily case updates I like to check the opinion out.  I was glad I did so today!  The Dallas Court of Appeals issued an informative opinion today conditionally granting a writ of mandamus to vacate an order that compelled the production of information containing Goodyear's trade secrets. 

Although I generally consider discovery to be a 4-letter word (at least the process of drafting discovery requests and objecting to the other side's requests), the question of whether certain information is discoverable often provides for interesting legal research and analysis.  The question of whether documents should be protected from discovery on the basis of confidentiality or trade secret status is one of those interesting issues.  Too often, however, opinions don't include a detailed analysis of the arguments, objections, and evidence presented in the trial court on discoverability or lack thereof.  Today's opinion in In re the Goodyear Tire & Rubber Company is an exception to that rule.

Justice Lang-Miers provides us with a detailed analysis of the evidence and arguments presented by both sides.  Although it appears that this was not really a close case -- Goodyear provided ample evidence to support its contention that the documents contained trade secrets -- the opinion gives good examples of what types of evidence should be filed to meet your burden of proof.  Those examples can be molded for use in other cases, products cases or otherwise.  The opinion also helps future parties on the losing end of a motion to compel to get a second bite at the apple.  The court did not determine whether the trade secret information is discoverable.  It simply held that Goodyear met its burden to prove the documents contained trade secrets and the plaintiff failed to meet her heightened burden of proving  that the information is necessary to a fair adjudication of her claim.  So, although the original order will be vacated, the plaintiff can return to the trial court and seek to compel production of the information again.  The court's opinion may be found here.

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