Fifth Amendment + Civil Litigation = Dismissal

In a topic also addressed on 600Camp today, the interplay of criminal proceedings and civil litigation can be challenging. The conclusion of Dunne v. Brinker Texas, Inc. summarizes one potential result: “Under the particular facts of this case, the only possible remedial measure that could have protected Dunne’s Fifth Amendment privilege was an abatement. But an abatement could not cure the prejudice Chili’s had already suffered from being unable to identify fact witnesses for the more than a year that had passed since it first requested that information. In addition, there was no indication how long the case might sit in limbo, when trial might be, and whether Dunne would continue to assert his Fifth Amendment rights in the event of an appeal. We conclude the trial court did not abuse its discretion in striking Dunne’s pleadings and therefore affirm.” No. 05-16-00496-CV (Aug. 10, 2017).

“It’s a secret” still a valid discovery objection.

In In re Michelin North America, Inc., the Dallas Court of Appeals conditionally granted a writ of mandamus to protect Michelin from being forced to produce certain discovery.  The district court ordered Michelin to produce specifications for tires similar to the allegedly defective tire at issue in that case in addition to financial information for the decade prior to the litigation.

The court of appeals held that Michelin satisfied its burden under Texas Rule of Evidence 507 to resist the discovery of trade secrets through the affidavit of an engineer who worked in Michelin’s legal department but that Michelin failed to satisfy its burden of proving its financial data was a trade secret because it failed to offer an affidavit until after the hearing on the motion to compel (helpful hint: it should be filed 7 days before the hearing under TRCP 193.4(a) if it is in affidavit form).  The court also held that the plaintiffs failed to meet their burden under Rule 507 to show “with specificity” exactly how the lack of information would impair the presentation of the case on the merits “to the point that an unjust result is a real, rather than a merely possible, threat.”  On the issue of financial information, though Michelin failed to timely prove its trade secrets privilege, Michelin was saved by a secondary argument that the district court’s order was too broad because the discovery included financial information from several years earlier and only current financial information is relevant for calculation of punitive damages.

In re Michelin


Order to Produce Privileged Document Is Mandamus-Ebola

Almost a year after the Ebola virus and dozens of news crews arrived in Dallas, the Court of Appeals has conditionally granted mandamus to prevent Texas Health Resources’ insurer from being required to produce a privileged note regarding a plaintiff’s Ebola-related claims. Nina Pham, who contracted the disease while working as a nurse at Presbyterian Hospital, has sued THR on a variety of tort claims for the injuries she sustained from the disease. The single document at issue reflects a conversation among the insurer’s claims adjuster, THR’s associate general counsel, and its risk manager. Although the insurer and its claims adjuster were not parties to the lawsuit, the Court nevertheless held that the communications reflected in the document were privileged. Because the note was made in the course of investigating Pham’s claim, and because the insurer represents the employer rather than itself on claims involving the employer’s liability policy, the note reflected a confidential communication within the scope of the attorney-client privilege.

In re Texas Health Resources, No 05-15-00813-CV

Absolute Privilege in a Quasi-Judicial Administrative Process

The Court of Appeals has affirmed summary judgment in favor of the defendant in a libel and business disparagement case.  The case arises out of statements made by OAC Senior Living in an administrative waiver proceeding initiated by a competitor, Senior Care Resources. The allegedly defamatory statements were made to the Texas Department of Aging and Disability Services, a state agency designated to administer and monitor human services programs, including Medicaid. If that sounds like the sort of thing that would be absolutely privileged under defamation law, the Court of Appeals agrees with you. Although DADS is not a court, it was exercising quasi-judicial power in determining whether to grant Senior Care’s requested waiver. The Court’s opinion provides a lengthy analysis of when it is proper for a court to conclude, as a matter of law, that such a proceeding qualifies as quasi-judicial for purposes of the absolute privilege defense.

Senior Care Resources, Inc. v. OAC Senior Living, LLC, No. 05-12-00495-CV

A Pair of Uncommon Privileges

In a products liability and wrongful death lawsuit, Fisher & Paykel Appliances was ordered to produce three reports it had made to the Consumer Product Safety Commission regarding the safety of its gas clothes dryers. F&P objected to the discovery based on Texas Rule of Evidence 502, which states that reports required by law to be made are privileged “if the law requiring it to be made so provides.” The Court of Appeals denied mandamus relief to F&P. The Court rejected application of the Rule 502 privilege because the Consumer Product Safety Act does not provide for any privilege for reports mandated under the statute. The Court rejected F&P’s attempt to have it recognize a more general “self-critical analysis privilege,” holding that such privileges can only be created by statute. The Court also considered the “selective waiver doctrine,” under which the federal Eighth Circuit has held that the privilege for attorney work product is not waived when the material is turned over to a government agency pursuant to subpoena. Noting that most courts around the country have rejected that rule, the Court of Appeals held that “documents transmitted to a regulator as part of an entity’s mandatory reports are not protected from disclosure simply because an attorney chooses which documents or other materials to produce to the regulator or because an attorney prepares or compiles portions of the report to the regulator.”

In re Fisher & Paykel Appliances, Inc., No 05-13-01498-Cl

Appeal Saved by Mandamus

ICON appealed the trial court’s order denying their post judgment motion to enforce a pretrial protective order. ICON sought to prevent the City of Lubbock from publicly disclosing an audit of ICON’s administration of the City’s health care plan. The court of appeals concluded that the trial court’s ruling was not subject to direct appeal; the ruling was not a final judgment or an appealable order under a statutory exception. The court rejected ICON’s attempt to characterize the order as a request for injunctive relief or an order relating to the unsealing of court records. The court determined that the proper procedural vehicle to challenge the ruling is to seek mandamus relief. In the interest of judicial economy, the court treated the appeal as a petition for writ of mandamus.

The court of appeals held that the trial court’s order permitting disclosure of the audit contradicted the plain meaning of its earlier protective order. The audit was created using and analyzing protected materials, and the protective order prohibited public disclosure not only of protected materials, but also any knowledge or intelligence taken from or received by those protected materials.  Because the order denying ICON’s motion was a clear abuse of the trial court’s discretion, the court of appeals conditionally granted mandamus relief.

Icon Benefit Administrators v. Mullin, No. 05-11-00935-CV

Slip and Fall Report Protected by Medical Committee Privilege

The court conditionally granted a writ of mandamus preventing disclosure of a “Confidential Quality Review Occurrence Report” protected by the medical committee privilege.  A visitor to the relator Hospital slipped and fell on Hospital premises, and sought damages in a premises liability suit.  The visitor sought production of all incident reports made by the Hospital related to her fall.  A two-page report titled “Occurrence Report Form” listed the visitor’s name and identifying information, the date and location of her fall, and a description of the occurrence and treatment provided; it was signed by a Hospital nurse.  The report also stated “Confidential Quality Review Committee Document (NOT PART OF MEDICAL RECORD).”  The Occurrence Reports are given to the Hospital’s quality review committee, which provides general governance for the Hospital’s quality of service.  The court held that the Hospital met the standard for claiming medical committee privilege through its privilege log and a doctor’s affidavit because the Occurrence Report was not created in the regular course of business and was not part of a patient’s medical file.  The court rejected the visitor’s argument that because this case involves a non-patient visitor, the medical committee privilege cannot apply.   Instead, the court found that the medical committee privilege is not limited to evaluation of occurrences relating only to direct patient care.

In re Methodist Dallas Medical Center, No. 05-13-00134-CV

In re Blackstone Medical, Inc.

In a short opinion, the court has granted mandamus to a manufacturer of medical devices after the trial court had ordered the manufacturer to produce three emails from its privilege log.  The opinion does not go into much detail about the documents, but quickly concludes that they were privileged because they consisted of communications among employees and the company’s in-house counsel made for the purpose of facilitating the rendition of legal services to the company.  Accordingly, the court concluded that it was an abuse of discretion to compel their production.

In re Blackstone Medical, Inc., d/b/a Orthofix Spinal Implants, No. 05-12-00763