National Tank Co. v. Brotherton , 851 S.W.2d 193 ( 1993 )

NECHT, Justice,

dissenting.

Although the Court agrees with relator and disagrees with the trial court on the law of investigative privilege, the Court denies relator relief. Characterizing today’s decision as a modification of Flores v. Fourth Court of Appeals, 777 S.W.2d 38 (Tex.1989), and a departure from Stringer v. Eleventh Court of Appeals, 720 S.W.2d 801 (Tex.1986), the Court concludes that the trial court could not have anticipated this change in the law and therefore cannot be said to have abused its discretion in disallowing relator’s claim of privilege. For this reason the Court declines to grant mandamus, not because the trial court was right — indeed, all indications from the Court’s analysis are that the trial court’s decision was wrong — but because that court should have a chance to reconsider its ruling in light of today’s opinion. I fully agree with the Court’s discussion of privileges, but I do not regard anything the Court says today to conflict with the legal principles stated in Flores and Stringer. Although both opinions have been misconstrued and misapplied by some lower courts, neither is wrong in essence, as I believe today’s decision demonstrates. Since I believe that our decision today announces no substantial change in the law we have announced previously, there is no reason not to grant mandamus. Therefore, I respectfully dissent from the judgment of the Court. In so doing, however, I emphasize that I do not differ with the Court on its view of the substantive law of privileges at issue here.

In Flores we stated:

Determining whether there is good cause to believe a suit will be filed, so that an investigation is done in anticipation of litigation, requires a two-prong analysis. The first prong requires an objective examination of the facts surrounding the investigation. Consideration should be given to outward manifestations which indicate litigation is imminent. The second prong utilizes a subjective approach. Did the party opposing discovery have a good faith belief that litigation would ensue? There cannot be good cause to believe a suit will be filed unless elements of both prongs are present. Looking at the totality of the circumstances surrounding the investigation, the trial court must then determine if the investigation was done in anticipation of litigation.

777 S.W.2d at 40-41. I agree with the Court that satisfaction of the first prong of this test should not require proof in every instance that litigation was imminent when an accident investigation was conducted. But Flores does not require such proof. It requires only that “[cjonsideration should be given” to the imminence of litigation, not that imminent litigation is the sole or even a controlling consideration in applying the first prong of the test. Flores clearly specifies that whether an investigation was done in anticipation of litigation must be determined from the totality of the circumstances, not from only one. On the facts presented in Flores, the Court concluded that the trial court’s decision that a report had not been prepared in anticipation of litigation was not an abuse of discretion.

As the Court notes, several lower courts have misread Flores to require a showing of imminent litigation to satisfy its test. But the fact that an opinion can be misread does not mean that it was wrong. The test set forth in Flores has not changed. An investigation is conducted in anticipation of litigation if the party has litigation in mind so that the prospect of litigation is at least part of the motivation for the investigation. This is the subjective element of the test, but it is not alone enough to establish a claim of privilege. A party’s anticipation of litigation must be both real and reasonable. The latter requirement is the objective element of the test. It may be met by showing that litigation was imminent, but it may also be met, as the Court reminds today, by showing only that there was a substantial chance of litigation.

The occurrence of an accident does not, by itself, satisfy the objective prong of the test. Not all accidents result in litigation. As we said in Stringer: “The mere fact that an accident has occurred is not sufficient to clothe all post-accident investigations, which frequently uncover fresh evidence not obtainable through other sources, with a privilege.” 720 S.W.2d at 802 (emphasis added). This statement, true on its face, was made in reaction to the court of appeals’ unsupported conclusion, contrary to the trial court’s, that the investigation in issue had been conducted when there was good cause to believe a suit would be filed. The following constitutes the entirety of the court of appeals’ analysis:

It is noted that while a claim or suit had not yet been filed at the time of the investigation, the privilege extends to investigations conducted when one has “good cause to believe” a suit will be filed. See Allen v. Humphreys, 559 S.W.2d 798 (Tex.1977). We hold that Santa Fe had a valid right to invoke the protection of Tex.R.Civ.P. 166b 3d_

Atchison, T. & S.F. Ry. v. Kirk, 705 S.W.2d 829, 832 (Tex.App.-Eastland 1986, orig. proceeding). This Court’s opinion in Stringer neither states nor implies that the occurrence of an accident is irrelevant in deciding whether litigation may ensue. Nor does Stringer hold that the circumstances of an accident can never indicate in themselves that litigation is likely to ensue, although some have misread Stringer to say so. The circumstances of Stringer — a collision of two trains resulting in deaths and personal injuries — strongly suggest the likelihood of litigation, but the trial court in that case found that the investigation was not conducted in anticipation of litigation, and the court of appeals did not explain how that finding was an abuse of discretion. The Court disapproves Stringer “to the extent that it holds that the circumstances surrounding an accident can never by themselves be sufficient to trigger the privilege.” Ante at 204. Stringer contains no such holding to any “extent”. Again, we should not disapprove an opinion just because it can be misconstrued.

Today’s decision is not inconsistent with Flores and Stringer. For the Court to criticize these two cases without any necessity is, in my view, completely unjustified. It is also dangerous. If we do not take seriously the rules set by our opinions, we can hardly expect others to do so.

Although I join substantively in Court’s opinion, two additional points require emphasis. First, there is a danger that the Court’s phrase, “a substantial chance of litigation”, ante at 204, will be misconstrued as Flores and Stringer have been. By this phrase the Court does not mean a statistically significant probability that litigation will ensue. If this were the requirement, then it could rarely be met, since most accidents do not result in litigation. Nor does the phrase have meaning independent of the purpose of the privilege and the test to determine its application. Use of the phrase, “substantial chance of litigation”, is but a shorthand reference to the underlying principle that for an investigation to be privileged it .must have been conducted at a time when it would have appeared to a reasonable person, from the totality of all relevant circumstances, that litigation was more than merely an abstract possibility or unwarranted fear. This principle is in turn based upon a more fundamental one that a party’s preparations for litigation ought ordinarily to be privileged from disclosure to his adversary. When these principles are satisfied, the ob-jeetive prong of the test is met. Endless arguments about what is a “chance” and what is a “substantial chance” should not substitute for careful analysis of the controlling principles.

Second, I would point out that there is an exception to the investigation privilege in Tex.R.Civ.P. 166b(3)(e) that is largely ignored in the wrangling over what constitutes “in anticipation of litigation.” That exception allows discovery of materials covered by the investigative privilege “[u]pon a showing that the party seeking discovery has substantial need of the materials and that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means”. This language taken from Fed.R.Civ.P. 26(b)(3) has been the subject of considerable attention in the federal courts and in other jurisdictions, but has not been much applied in Texas since our adoption of it in 1988. Because the exception focuses more directly on the limits of the investigative privilege, it should prove more useful in resolving discovery disputes than arguments about whether litigation was anticipated. And the decisions of federal courts and the courts of other states should be helpful in applying the exception.

CORNYN, J., joins in this dissenting opinion.