United States District Court, W.D. Texas, Austin Division
WAL-MART STORES, INC., et al.
TEXAS ALCOHOLIC BEVERAGE COMMISSION, et al.
W. AUSTIN, UNITED STATES MAGISTRATE JUDGE
the Court are The Texas Package Stores Association's
Challenge to Objections and Motion to Compel Production (Dkt.
No. 179); Wal-Mart's Response (Dkt. No. 184) and
TPSA's Reply (Dkt. No. 190). The District Court referred
the above-motions to the undersigned Magistrate Judge for
resolution pursuant to 28 U.S.C. §636(b)(1)(A),
Fed.R.Civ.P. 72, and Rule 1(c) of Appendix C of the Local
Rules. The Court held a hearing on the motions on February 7,
suit Wal-Mart and three of its subsidiaries are challenging
the constitutionality Texas statutes regulating the retail
sale of liquor, contending that the statutes violate the
Equal Protection and Dormant Commerce Clauses of the U.S.
Constitution. The statutes regulate grants of permits to make
retail sales of distilled spirits by limiting the number of
permits a person may own and the types of companies which may
own them. Plaintiffs argue that the ban on public
corporations, as well as the consanguinity consolidation
provision of the statutes unconstitutionally discriminate
against out-of-state companies in both effect and purpose.
Texas Package Stores Association (TPSA), an intervenor in
this case, brings this motion to challenge objections made by
Wal-Mart to TPSA's requests for production, and to compel
Wal-Mart to produce responsive documents. There are five
categories of requests in TPSA's motion: (1) Requests for
Production (RFP's) 1-13, which ask for communications to
Texas governmental entities, including the Texas Legislature,
TABC, and the Governor; (2) RFP's 14-15, which request
communications with other public corporations regarding this
litigation; (3) RFP's 16-33, which request documents
“relating to” select statements made by
Wal-Mart's expert; (4) RFP's 34-36, which request
documents relating to Wal-Mart's proposed business plans
in Texas; and (5) RFP's 41-43, which request documents
relating to Wal-Mart's claims about the statutes at
issue. For each of these requests, TPSA asks the Court to
overrule Wal-Mart's objections.
was quite a bit of confusion at the hearing about precisely
what relief TPSA is requesting in this motion. TPSA states
that it is merely requesting the Court to overrule objections
made by Wal-Mart to each of the requests for production. In
fact, TPSA noted that this motion is solely about
objections. It explained that after the Court overrules
Wal-Mart's objections to the requests, Wal-Mart will be
under “compulsion” to produce responsive
documents, and any disagreements about the actual production
could be addressed at that time. In TPSA's words, it is
concerned that Wal-Mart is “holding a bombshell”
because of one or more of the objections, and requested that
the Court simply overrule all of the objections en masse.
cause of the confusion is not one-sided, however. Much of the
confusion comes from Wal-Mart's overabundance of caution
in responding under the new discovery rules, which now
require that when a party makes an objection, it also state
whether it is withholding any documents subject to that
objection. In every one of its responses to TPSA's
requests, Wal-Mart has leveled one or more objection, and in
each instance it states that it is withholding documents
pursuant to that objection. TPSA was therefore concerned that
there are identified, responsive documents sitting on
Wal-Mart's counsel's desk that have not been
produced, any of which may be a “bombshell.” The
Court attempted to get clarity on this point in an exchange
with Wal-Mart's counsel, Mr. Kelso:
THE COURT: With regard to the statements in your responses,
Mr. Kelso, that-uh-documents are being withheld based on the
objections, are there identified documents, like you were
describing theoretically of the stack A and stack B, or is it
simply a theoretical-there's probably documents out there
that could theoretically be responsive to a request for
anything related to predatory pricing, we are not looking for
them, and-there's probably documents out there that are
responsive-so that is what's being withheld?
MR. KELSO: My understanding is that it is purely theoretical.
It's a requirement of the new versions of the rules to
say-to include a statement if you are withholding documents
based on an objection.
THE COURT: But there is not an identified document that you
MR. KELSO: That is my understanding. Not based on the
THE COURT: Okay.
MR. KELSO: And Judge, I'll say on this point, we will
stand in front of Judge Pitman or you or whoever if there is
some critical document that's responsive to these
requests that hit upon our search terms, if we propose that
we decide to ...