in Re Eurecat US, Inc. ( 2014 )

Petition for Writ of Mandamus Denied and Majority, Concurring, and
Dissenting Opinions filed June 5, 2014.
In The
Fourteenth Court of Appeals
NO. 14-14-00365-CV
IN RE EURECAT US, INC., Relator
ORIGINAL PROCEEDING
WRIT OF MANDAMUS
133rd District Court
Harris County, Texas
Trial Court Cause No. 2012-25700
CONCURRING OPINION
I join the majority opinion denying relator Eurecat’s second petition for writ
of mandamus arising from the trial court’s Rule 192.4 protective order barring
discovery from certain third-party customers, and I add this brief concurring
opinion to explain my reasons. When we denied the first mandamus petition, we
held that Eurecat had not established it lacked an adequate remedy by appeal. In re
Eurecat US, Inc., 425 S.W.3d 577, 583 (Tex. App.—Houston [14th Dist.] 2014,
orig. proceeding). In particular, we concluded that Eurecat had not clearly
established that other discovery was unavailable to support its claims and defenses.
Id. We also observed that the trial court had ordered real party in interest Chem32
to identify which of Eurecat’s existing clients it had also done business with, and
that the protective order did not disturb this order. Id.Back in the trial court, Chem32 identified these common customers, and the
parties agreed that Chem32 would provide certain discovery regarding those
customers. Eurecat also sought reconsideration of the protective order, offering
additional arguments for seeking discovery directly from eighty-nine of Eurecat’s
customers directly. The court denied the motion for reconsideration without
providing reasons. As the quote in the dissenting opinion shows, the trial court
mentioned at the reconsideration hearing the balancing it had to perform in ruling
on the protective order. Eurecat now seeks mandamus relief from the denial of its
motion for reconsideration.
For the reasons stated in our previous opinion, I conclude that Eurecat still
has not shown that it lacks an adequate remedy by appeal because other discovery
is unavailable to support its claims and defenses. Id. I also conclude that the
arguments raised by Eurecat in this second mandamus petition do not show that the
trial court clearly abused its discretion in denying the motion for reconsideration.
The arguments Eurecat makes to show a clear abuse of discretion are that: (1) the
third-party discovery was reasonably calculated to lead to the discovery of
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admissible evidence; (2) there is no evidence to support a protective order; and (3)
Chem32 put the third-party customers at issue with its antitrust counterclaim.
I conclude that the first argument, even if true, is not sufficient by itself to
show that a protective order was improper. Under Texas Rule of Civil Procedure
192.4(b), discovery “should be limited” if the court determines that “the burden or
expense of the proposed discovery outweighs its likely benefit, taking into account
the needs of the case, the amount in controversy, the parties’ resources, the
importance of the issues at stake in the litigation, and the importance of the
proposed discovery in resolving the issues.” The Supreme Court of Texas has
observed that this balancing can include consideration of the harm a party will
suffer from disclosing the discovery sought. In re Weekley Homes, L.P., 295
S.W.3d 309, 322–23 (Tex. 2009) (orig. proceeding) (noting “the harm that might
result from revealing private conversations, trade secrets, and privileged or
otherwise confidential communications”).1 The dissenting opinion contends that
the trial court’s remarks on the record show that it did not perform this balancing
properly, but Eurecat has not made that argument, and the trial court’s written
orders do not support it.
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Chem32 also argued in response to Eurecat’s motion to compel that the discovery
sought included trade secrets. In deciding whether to order disclosure of trade secrets, courts
likewise balance “the degree of the requesting party’s need for the information with the potential
harm of disclosure to the resisting party.” In re Cont’l Gen. Tire, Inc., 979 S.W.2d 609, 613
(Tex. 1998) (orig. proceeding). My dissenting colleague contends this trade secret argument is
no longer relevant to discovery from third-party customers, but Eurecat has confirmed that it
intends to ask customers what Chem32 used to sell products and services to customers, which
could include trade secrets and confidential information. Cf. Tex. Civ. Prac. & Rem. Code
§ 134A.002(3)(B)(ii) (West Supp. 2013) (recognizing that trade secret can be misappropriated
from third party who has duty to maintain its secrecy or limit its use).
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I also disagree with Eurecat’s second argument that there is no evidence to
support a protective order. Our record for this mandamus proceeding includes
evidence that the trial court received regarding Eurecat’s previous violation of the
parties’ confidentiality agreement by contacting Haldor Topsoe and urging it not to
do business with Chem32. In striking the balance discussed above, the trial court
could properly consider this evidence of harm to Chem32 from Eurecat’s contact
with third-party customers. Eurecat does not argue that if there was evidence to
support a protective order, the trial court nevertheless abused its discretion in
striking the balance between benefit and burden or harm. Nor does Eurecat argue
that the trial court’s ruling should be reviewed as a discovery sanction. Thus, I do
not consider those issues.
Finally, with respect to Eurecat’s third argument that Chem32’s antitrust
counterclaim put the third-party customers at issue, Chem32 responds that it has
narrowed its counterclaim by stipulation so that third-party discovery is not
relevant. Given this stipulation, I see no basis to hold that the trial court clearly
abused its discretion in denying third-party discovery with respect to the antitrust
counterclaim.
For these reasons, I respectfully concur in the denial of Eurecat’s petition.
/s/ J. Brett Busby
Justice
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Panel consists of Justices Jamison, McCally, and Busby (McCally, J., dissenting).
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