In Re USA Waste Management Resources, L.L.C.

Petition for Writ of Mandamus Conditionally Granted and Opinion filed November
2, 2012.
In The
Fourteenth Court of Appeals
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NO. 14-12-00456-CV
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IN RE USA WASTE MANAGEMENT RESOURCES, L.L.C., Relator
ORIGINAL PROCEEDING
WRIT OF MANDAMUS
133rd District Court
Harris County, Texas
Trial Court Cause No. 2011-21596
OPINION
On May 11, 2012, relator, USA Waste Management Resources, L.L.C., filed a
petition for writ of mandamus in this court. See Tex. Gov’t Code § 22.221; see also Tex.
R. App. P. 52. In the petition, relator asked this court to compel the Honorable Jaclanel
McFarland, presiding judge of the 133rd District Court of Harris County, to vacate her
ruling denying Waste Management’s motion for protection and to enter an order granting
the motion. The real party in interest, Royda Jennings, has filed a response. Waste
Management subsequently filed a reply. We conditionally grant the writ.
BACKGROUND
Waste Management seeks an order granting protection from the disclosure of
communications between its outside counsel and its former employee Jennings. The
communications occurred on July 14, 2010, before Jennings gave a deposition in a
different lawsuit against Waste Management -- the Armstrong lawsuit. The
complained-of order denied the motion for protection of those communications. Waste
Management asserts the communications are privileged. See Tex. R. Evid. 503.
Armstrong was fired by Waste Management for making threats. In connection with its
investigation into the Armstrong situation, Waste Management discussed with Jennings
whether or not she had heard Armstrong make those threats. According to Waste
Management, Jennings confirmed the threats to Waste Management’s in-house attorney,
Kimberly Gee Stith. Armstrong sued for wrongful termination.
Jennings was deposed in the Armstrong lawsuit on July 15, 2010. Before her
deposition, Jennings met with Shauna Johnson Clark, outside counsel retained to defend Waste
Management against Armstrong’s claims. It is this conversation with Clark that is at issue in
this mandamus. Jennings was deposed and stated that she did not hear the threats. According
to Waste Management, they ultimately discharged Jennings in February 2011 for providing
contradictory statements -- the statement to Stith versus the deposition testimony.
Jennings brought a Sabine Pilot1 lawsuit against Waste Management claiming she was
discharged after she refused to commit perjury at Clark’s urging. She filed a no-evidence
motion for summary judgment and attached her affidavit in which she discloses the alleged
conversation between Clark and her on July 14, 2010. Waste Management moved to protect
Jennings’s disclosure of her conversation with Clark. Waste Management argued that
because Jennings met with Clark in the scope of her employment and the confidential
communications made during this meeting were necessary for Waste Management to obtain
1
In Sabine Pilot Service, Inc. v. Hauck,, the Supreme Court of Texas recognized a narrow exception to the
employment-at-will doctrine for an employee who is discharged for the sole reason that the employee
refused to perform an illegal act. 687 S.W.2d 733, 735 (Tex. 1985).
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legal services and advice in a pending lawsuit, the communications are protected from
disclosure by the attorney-client privilege. The trial court denied the motion and Waste
Management sought mandamus relief.
STANDARD OF REVIEW
To be entitled to mandamus relief a relator generally must show that the trial court
abused its discretion and that there is no adequate remedy at law, such as by appeal. In re
Prudential Ins. Co., 148 S.W.3d 124, 135–36 (Tex. 2004) (orig. proceeding). On
mandamus review of factual issues, a trial court will be held to have abused its discretion if
the party requesting mandamus relief establishes that the trial court could have reached but
one decision (and not the decision it made). See Johnson v. Fourth Court of Appeals, 700
S.W.2d 916, 917 (Tex. 1985); In re ExxonMobil Corp., 97 S.W.3d 353, 356 (Tex.
App.—Houston [14th Dist.] 2003, orig. proceeding). Mandamus review of issues of law
is not deferential. A trial court abuses its discretion if it clearly fails to analyze the law
correctly or apply the law correctly to the facts. See In re Cerberus Capital Mgmt., 164
S.W.3d 379, 382 (Tex. 2005); In re ExxonMobil Corp., 97 S.W.3d at 356. Because the
erroneous disclosure of privileged information will materially affect relator’s rights, relator
does not have an adequate remedy by appeal. See Walker, 827 S.W.2d at 843; see also In re
E.I. DuPont de Nemours & Co., 136 S.W.3d 218, 223 (Tex. 2004, orig. proceeding)
(“Mandamus is proper when the trial court erroneously orders the disclosure of privileged
information because the trial court’s error cannot be corrected on appeal.”)
ATTORNEY-CLIENT PRIVILEGE
Applicability
Certain confidential communications made for the purpose of facilitating the rendition
of professional legal services to the client are privileged. Tex. R. Evid. 503(b)(1). The
“subject matter” test2 deems an employee’s communication with the corporation’s attorney
2
In her response, Jennings erroneously applies the “control group test” to this case and argues that, because
she is not an upper echelon employee who could act on her own authority to hire counsel and act on the
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privileged if two conditions are satisfied. First, that the communication is made at the
direction of her superiors in the corporation. Second, where the subject matter upon which the
attorney’s advice is sought by the corporation and dealt with in the communication is the
performance by the employee of the employee’s duties of her employment. In re E.I.
DuPont de Nemours & Co., 136 S.W.3d at 225, n. 3.
The party seeking to limit discovery by asserting a privilege has the burden of proof.
Id. at 223. To meet its burden, the party seeking to assert a privilege must make a prima facie
showing of the applicability of the privilege and produce evidence to support the privilege.
See In re Valero Energy Corp., 973 S.W.2d 453, 457–58 (Tex. App.—Houston [14th Dist.]
1998, orig. proceeding). The prima facie standard requires only the “minimum quantum of
evidence necessary to support a rational inference that the allegation of fact is true.” In re E.I.
DuPont De Nemours & Co., 136 S.W.3d at 223 (quoting Tex. Tech Univ. Health Scis. Ctr. v.
Apodaca, 876 S.W.2d 402, 407 (Tex. App. —El Paso 1994, writ denied)). An affidavit has
been held to be sufficient to make a prima facie showing of attorney-client privilege. See In re
Valero Energy Corp., 973 S.W.2d at 457-58.
Stith’s Affidavit
Attached to Waste Management’s motion for protection is Stith’s affidavit sworn to on
April 19, 2012. Stith averred that in April 2007, a Waste Management employee, Tamara
Shackleford, reported Gregory Armstrong, a colleague, had made comments that he would
“shoot up the place” or “blow up the place” if Waste Management terminated him. Waste
Management has an anti-violence policy which requires employees to report such threats of
violence. Based on Shackleford’s report, Waste Management began an investigation.
Waste Management requires all employees, as a condition of their employment, to fully
cooperate in any investigation of a violation of their anti-violence policy. According to Stith,
as part of the investigation, she met with Jennings and Jennings reported Armstrong had made
advice of counsel to bind the corporation, no attorney-client privilege exists. The subject matter test for the
privilege of an entity has replaced the control group test. See Tex. R. Evid. 503(a)(2); See In re E.I. DuPont
De Nemours & Co., 136 S.W.3d at 225 n. 3.
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similar statements to her as those reported by Shackleford. Armstrong was terminated and
subsequently filed suit against Waste Management. Waste Management retained outside
counsel, Clark, to defend his claims.
Stith testified that, in the summer of 2012, Armstrong requested Waste Management to
present Jennings for her deposition and sent a notice to Clark. Clark requested to meet with
Jennings in advance of her deposition and Waste Management arranged a meeting on July 14,
2012. Waste Management took steps to ensure the conversations that occurred during this
meeting remained confidential, including not having third parties present and requesting that
Jennings keep the conversation confidential.
After the meeting, Clark provided Waste Management with legal advice regarding
Armstrong’s claims and defenses. Clark’s legal advice was based on the confidential
communications from her meeting with Jennings. Waste Management relied upon Clark’s
analysis of her meeting with Jennings and the statements Jennings made in that meeting to
analyze and evaluate its case.
Jennings’ Affidavit
In response to Waste Management’s motion for protection, Jennings filed an affidavit.
In her affidavit, Jennings states that she met with Stith one time, on April 24, 2007. She also
states that she met with Clark on July 14, 2010 to prepare for a deposition in the Armstrong
case. Because the meeting with Clark is the subject of the motion for protections, we do not
reveal that information here. Jennings states that she told the truth in her deposition.
Analysis
The attorney-client privilege allows “‘unrestrained communication and contact
between an attorney and client in all matters in which the attorney’s professional advice or
services are sought, without fear that these confidential communications will be disclosed by
the attorney, voluntarily or involuntarily, in any legal proceeding.’” Huie v. DeShazo, 922
S.W.2d 920, 922 (Tex. 1996) (quoting West v. Solito, 563 S.W.2d 240, 245 (Tex. 1978)). The
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attorney-client privilege attaches to a confidential communication made for the purpose of
facilitating the rendition of professional legal services to the client between a representative of
the client and the client’s lawyer or a representative of the lawyer. See Tex. R. Evid.
503(b)(1). A “representative of the client” may be any person “who, for the purpose of
effectuating legal representation for the client, makes or receives a confidential communication
while acting in the scope of employment for the client.” See Tex. R. Evid. 503(a)(2)(B).
Jennings failed to dispute that Waste Management requires all employees, as a condition of
their employment, to fully cooperate in any investigation of a violation of their anti-violence
policy. The evidence shows that the subject matter upon which Clark’s advice was sought and
dealt with was the investigation into Armstrong’s threats and that the subject matter of the
communication was the performance by Jennings of the duties of her employment. See In re
E.I. DuPont De Nemours & Co., 136 S.W.3d at 225 n. 3. Waste Management made a prima
facie showing that Jennings’s communication with Clark was confidential, was made for the
purpose of facilitating the rendition of legal services to Waste Management, and was between a
representative of Waste Management and Waste Management’s lawyer. Jennings, in her
response did not produce any evidence controverting any of these points. We therefore
conclude that the trial court abused its discretion to the extent it determined that Waste
Management failed to prove that the attorney-client privilege applies to the July 14, 2010
conversation between Jennings and Clark. See id; In re Valero Energy Corp., 973 S.W.2d at
457–58.
CRIME/FRAUD EXCEPTION
In addition to arguing that Waste Management failed to prove that the attorney-client
privilege applies to the July 14, 2010 conversation, Jennings asserts that the crime/fraud
exception applies. 3 See Tex. R. Evid. 503(d). Under this exception, there is no
attorney-client privilege “[i]f the services of the lawyer were sought or obtained to enable or aid
anyone to commit or plan to commit what the client knew or reasonably should have known to
be a crime or fraud.” Tex. R. Evid. 503(d). The party seeking discovery of an otherwise
3
This is the only exception to the attorney-client privilege that Jennings has asserted.
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privileged communication bears the burden of proving this exception. See Arkla, Inc. v.
Harris, 846 S.W.2d 623, 629-30 (Tex. App.—Houston [14th Dist.] 1993, orig, proceeding);
Volcanic Gardens Mgmt. Co. v. Paxson, 847 S.W.2d 343, 347 (Tex. App.—El Paso 1993, orig.
proceeding). A party who asserts the crime/fraud exception must show: (1) a prima facie case
of the contemplated crime or fraud; and (2) a nexus between the communications at issue and
the crime or fraud. Granada Corp. v. Hon. First Court of Appeals, 844 S.W.2d 223, 227 (Tex.
1992); Arkla, Inc., 846 S.W.2d at 629-30. Mere allegations of fraud are insufficient. In re
Seigel, 198 S.W.3d 21, 29 (Tex. App. —El Paso 2006, orig. proceeding); Arkla, Inc., 846
S.W.2d at 629–30. The crime/fraud exception applies only when communications at issue or
the legal services were sought or obtained in order to aid a person to commit or plan to commit
a crime or fraud. In re AEP Tex. Cent. Co., 128 S.W.3d 687, 692 (Tex. App. -- San Antonio
2003, orig. proceeding); Arkla, Inc., 846 S.W.2d at 630.
Jennings does not allege fraud; rather she alleges the crime of suborning perjury. “To
suborn perjury, a party, acting with the intent to promote or assist a witness in committing
perjury, must solicit, encourage, direct, aid, or attempt to aid the witness to commit perjury.
See Hardy v. State, 246 S.W.3d 290, 296 (Tex. App. —Houston [14th Dist.] 2008, pet. ref’d);
see also Tex. Pen. Code § 37.02(a)(1) and § 7.02(a)(2); Rodriguez v. MumboJumbo, L.L.C.,
347 S.W.3d 924, 927 (Tex. App. —Dallas 2011, no pet.). Jennings’ version of her
conversation with Clark, recounted in her affidavit, 4 describes how she felt but fails to
establish any acts by Clark that rise to the level of suborning perjury. Because the record does
not establish a prima facie case of the alleged crime, we conclude the trial court abused its
discretion to the extent it concluded that Jennings established the crime-fraud exception. See
In re Monsanto Co., 998 S.W.2d 917, 934 (Tex. App.— Waco 1999, orig. proceeding); Arkla,
Inc., 846 S.W.2d at 629–30.
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As previously mentioned, Jennings’s conversation is the subject of the motion to protect so we do not set
forth the contents of her affidavit.
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CONCLUSION
For these reasons, we conditionally grant the petition for a writ of mandamus and direct
the trial court to vacate her ruling denying relator’s motion for protection of the July 14, 2010
conversation between Jennings and Clark and enter an order granting the motion. The writ
will issue only if the trial court fails to act in accordance with this opinion.
/s/ Martha Hill Jamison
Justice
Panel consists of Justices Frost, Christopher and Jamison.
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