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. 

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

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

At least that’s how the Texas Supreme Court’s version of Matthew 7:13 reads.  In a per curiam opinion, the Court recently demonstrated its vigilance in policing overly-broad discovery orders.  In this product liability case, the plaintiff sought all documents of consumer complaints regarding "the sidestep on any model backhoe."  John Deere objected to the request as overly

A recent Dallas Court of Appeals case, MRT, Inc. v. Vounckx, provides some insights on electronic discovery in Texas.

The case essentially involves two main entities: MRT, Inc. and Inter-University Micro-Electronics Center ("IMEC"), though several other related parties and entities were involved.  Basically, IMEC through its agent, Roger Vounckx, persuaded MRT and the several related individuals and entities to invest in a new technology, PhotonLink, which purportedly provided faster and more efficient computer chip communication.

When the investment proved unsuccessful, MRT sued IMEC for fraud, negligent misrepresentation, and breach of fiduciary duty.  During the litigation, MRT served IMEC with requests for production, but did not confer with IMEC beforehand to ascertain how it stored its information electronically.  The requests sought any computer generated or stored information relevant to the lawsuit. 

At depositions, MRT’s counsel learned that IMEC had some computer back up tapes it had not produced.  These tapes were apparently used for retrieval if the data base became corrupted and not for archival preservation.  Because IMEC delayed producing the tapes, MRT filed a motion to compel.  IMEC objected to production because: (1) extracting information from the tapes was too burdensome given there was no indication relevant information was stored on the back up tapes, which would take hours to search; and (2) IMEC had destroyed the back up tapes related to the relevant time period after MRT had sued it.

The trial court denied MRT’s request for a continuance to review the backup tapes and it denied its spoliation motion.  MRT lost at trial and appealed.

Did IMEC improperly withhold the backup tapes?  Did IMEC spoliate evidence when it destroyed the backup tapes after MRT filed the lawsuit?  Read the extended entry to learn what the court decided.  Or if you would rather read the opinion, you can get it HERE.

Continue Reading Electronic Discovery: Duty to Preserve and Produce Electronic Documents

At least since the Texas Supreme Court’s 1994 opinion in Transportation Insurance Company v. Moriel, questions of the right to discovery of a defendant’s net worth information, the definition of "net worth", and the scope of information relating to net worth have been simmering in the district courts and in the courts of appeals.  The latest opinion on the subject has been issued by the Fourteenth District Court of Appeals and the concurring opinion makes case for why it’s time for the Texas Supreme Court to address these thorny issues.  The majority’s opinion in In re Jacobs may be found here.  The concurring opinion may be found here.

Continue Reading Discovery of Net Worth Continues to Simmer