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In re Russo

Court of Appeals of Texas, Fourteenth District

April 27, 2018

IN RE CHRISTOPHER J. RUSSO, Relator

          ORIGINAL PROCEEDING WRIT OF MANDAMUS 295th District Court Harris County, Texas Trial Court Cause No. 2016-24818

          Panel consists of Chief Justice Frost and Justices Christopher and Jamison.

          OPINION

          Tracy Christopher Justice

         On April 3, 2018, relator Christopher J. Russo filed a petition for writ of mandamus in this court, his second relating to this discovery dispute. See Tex. Gov't Code Ann. § 22.221 (West Supp. 2017); see also Tex. R. App. P. 52. In the petition, Russo asks this court to compel the Honorable Caroline Baker, presiding judge of the 295th District Court of Harris County, to vacate her March 20, 2018 order, which compels Russo to produce certain documents for which Russo has asserted an act-of-production privilege under the Fifth Amendment of the United States Constitution.

         The real parties-in-interest are Superior Energy Services, Inc., and Stabil Drill Specialties, LLC, and SESI, LLC (collectively, the "Superior Parties").

         The Fifth Amendment privilege does not apply to the records of corporate entities. Russo has not shown that the documents for which he asserted the privilege are not records of corporate entities he allegedly owned or controlled. We therefore deny the petition for writ of mandamus.

         Factual and Procedural Background

         The Superior Parties filed suit, alleging, among other things, that Russo and the other defendants conspired to defraud the Superior Parties of $72 million and other assets over several years. Specifically, the Superior Parties allege that Russo and Martin A. LeBlanc were the executive officers of Stabil Drill, a subsidiary of SESI, and that Russo and LeBlanc engaged in a complex scheme of self-dealing primarily by creating separate but interwoven corporate entities (which they owned or controlled directly or indirectly) to improperly invoice Stabil Drill for goods and services and to benefit themselves by being on both sides of various transactions. The Superior Parties allege that Russo was a member of, owned, and/or controlled several limited liability companies which he used to execute his schemes to defraud the Superior Parties. These corporate entities include, among others, Triple RRR Investments, LLC, Gulf Coast Wireline, LLC, Maverick Rental Tools, LLC, Quest Holdings, LLC, Basket Specialties, LLC, Tri-Eagle NDT Services, LLC, Longhorn Bits LLC, Prime 337, LLC, Russo Energy LLC, Russo Exploration LLC, and Cole Joseph Russo Trust, LLC. In their petition, the Superior Parties assert claims against Russo and his corporate entities for breach of fiduciary duty, fraud, trade secret misappropriation, and civil conspiracy.

         The Superior Parties served Russo and Russo Energy, LLC with several requests for production. Russo withheld some responsive documents, objecting to each request "on the ground that it requires production of documents in violation of Defendant's Fifth Amendment (U.S. Constitution) act-of-production privilege. See United States v. Hubbell, 530 U.S. 27 (2000)."

         On September 22, 2016, the Superior Parties filed a motion to compel production of the withheld documents. The trial judge heard the motion on October 3, 2016, and took the matter under advisement. On August 3, 2017, the trial judge issued an order requiring Russo to prepare a privilege log of all the documents Russo withheld and to deliver the documents to the court for an in camera review. Russo submitted a privilege log listing 2, 277 documents.

         At a hearing on October 20, 2017, the trial judge asked Russo to attempt to reduce the number of documents for which he was asserting his Fifth Amendment privilege. Russo later produced some of the documents he had withheld, submitted amended and supplemental privilege logs (listing a total of 1538 documents), and delivered the documents on the logs to the court for in camera review.

         On February 12, 2018, the trial judge signed an order requiring Russo to produce all of the documents that Russo had listed on the logs.

         On February 21, 2018, Russo filed a petition for writ of mandamus, asking our court to compel the trial judge ...


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