AMICUS SUPPORT NEEDED IN TEXAS SUPREME COURT ON CONFIDENTIALITY OF TRADE SECRET DOCUMENTS PRODUCED DURING DISCOVERY

Plaintiff Betty Cowan sued her insurer, Fire Insurance Exchange (FIE), to establish coverage for alleged mold damage to her property. Her attorney sought discovery of voluminous documents and information that were admittedly privileged as trade secrets, confidential or proprietary information (including personnel files, claims-handling material, training material, and vendor lists). Cowan's attorneys secured a protective order allowing them to retain FIE's confidential and proprietary documents after the conclusion of the lawsuit and to use those documents in any other litigation where her attorneys were counsel of record.

FIE filed a writ petition seeking to compel Cowan's counsel to return all protected documents to FIE because it would be impossible for FIE or the trial court to monitor compliance with the protective order after the Cowan litigation concluded, especially with respect to all individuals involved in future litigation who might have access to the information. FIE argued that the trial court erred by extending the shared discovery doctrine beyond the confines of products liability litigation, where shared discovery is allowed to protect the public from potentially dangerous products. (See Garcia v. Peeples, 734 S.W.2d 343 (Tex. 1987); Eli Lilly and Co. v. Marshall, 850 S.W.2d 155 (Tex. 1993).)

The Court of Appeal denied FIE's writ petition, holding that the trial court's order adequately protected FIE from involuntary disclosure of its trade secrets. (In re Fire Insurance Exch., No. 09-04-301 CV, 2004 WL 2113037 (Tex.App. 2004), citing, Garcia v. Peeples, 734 S.W.2d 343 (Tex. 1987); Eli Lilly and Co. v. Marshall, 850 S.W.2d 155 (Tex. 1993) and In re State Farms Lloyds, No. 09-03-311 CV, 2003 WL 22149155 (Tex.App. 2003).) FIE will be petitioning the Texas Supreme Court to grant review, and is seeking amicus support for its petition. FIE's petition for review is due on November 8. Amicus letters supporting the petition should be filed no later than November 15, if possible.

Amicus letters supporting review need not be long or complicated. Rather, they merely need to explain why this is an important issue that the Texas Supreme Court ought to review (e.g., explain why the law is uncertain and/or confusing, that litigants face these issues in numerous lawsuits throughout the state, and that discovery and dissemination of confidential documents is a serious problem confronting institutional litigants that has the untoward effect of coercing large settlements in cases that have little or no merit).

For additional information about this litigation, please contact David Axelrad or Tom Watson at our office (818-995-0800), or FIE's counsel in Texas: Clint Lewis (409-899-5600) and Chris Martin (713-632-1701).

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