IN RE METHODIST PRIMARY CARE GROUP AND TMH PHYSICIANORGANIZATION, Relators
ORIGINAL PROCEEDING WRIT OF MANDAMUS 234th District Court
Harris County, Texas Trial Court Cause No. 2015-35424
consists of Justices Boyce, Donovan, and Jewell.
William J. Boyce Justice
discovery mandamus arises from litigation surrounding two
doctors who left one medical practice to join another.
and defendants below are Methodist Primary Care Group
("Methodist Primary Care") and TMH Physician
Organization d/b/a Houston Methodist Specialty Physician
Group ("Methodist Specialty"). The real
party-in-interest and plaintiff below is Associates in
Medicine, PA ("Associates").
underlying litigation involves allegations that relators
stole trade secrets, tortiously interfered with patient
relationships, and committed other actionable conduct when
two doctors left Associates and moved their medical practices
to Methodist Primary Care. The discovery fight focuses on the
propriety of a March 8, 2018 discovery order authorizing a
third-party expert, paid for by Associates, to search
electronic practice management systems used by relators and
other entities for certain data stored in the cloud and
accessible via the internet. See Riley v.
California, 134 S.Ct. 2473, 2491 (2014) ("Cloud
computing is the capacity of Internet-connected devices to
display data stored on remote servers rather than on the
device itself."). The data at issue pertains to
relators-and to more than 200 other entities affiliated with
the Methodist System, which are not parties to this
filed a petition for writ of mandamus asking this court to
compel the presiding judge of the 234th District Court,
Harris County, to vacate the March 8 order granting
Associates's motion to compel. The March 8 order appoints
Pathway Forensics LLC to conduct, at Associates's
expense, a data search of internet-accessible electronic
practice management systems used by Methodist Primary Care,
Methodist Specialty, and the other Methodist System entities.
Associates contends this order is necessary to obtain
evidence relevant to proving the damages it seeks.
of this mandamus turns on the standards governing discovery
of electronic data under Texas Rule of Civil Procedure 196.4
and In re Weekley Homes, L.P., 295 S.W.3d 309 (Tex.
2009) (orig. proceeding).
conclude that partial mandamus relief is warranted because
the March 8 order (1) runs afoul of Rule 196.4 and In re
Weekley Homes, and (2) encompasses certain electronic
data that Associates has not requested in discovery and has
not shown to be within relators' possession, custody, or
Factual and Procedural Background
Primary Care is an independently-managed Texas non-profit
organization comprised of primary care physicians affiliated
with the Methodist System. In turn, this system encompasses
approximately 209 different entities. Methodist Primary Care
has clinics throughout the greater Houston area. Payments for
services performed by Methodist Primary Care are billed and
collected by Methodist Specialty under a Billing Services
dispute underlying this mandamus proceeding began in May 2015
when Drs. Shari Rubin and Joshua Septimus joined Methodist
Primary Care after having practiced medicine with Associates.
About a month after their move, Associates sued the two
doctors; it later filed an amended petition adding Methodist
Primary Care and Methodist Specialty as defendants.
alleges that Drs. Rubin and Septimus gave confidential
information and trade secrets to Methodist Primary Care in
connection with moving their practices. Associates asserts
causes of action against Drs. Rubin and Septimus for
misappropriation of trade secrets, breach of fiduciary duty,
fraud, and breach of contract. Associates asserts causes of
action against Methodist Primary Care for misappropriation of
trade secrets, conspiracy to breach fiduciary duty and to
commit fraud, tortious interference with prospective business
relations, and common law unfair competition. Associates
asserts an "alter ego" theory against Methodist
Specialty. Associates seeks actual damages and the
disgorgement of all sums obtained through the alleged theft
of trade secrets.
served relators with 17 requests for production of documents
reflecting the revenues and profits generated by Drs.
Rubin's and Septimus's referrals of patients, along
with documents reflecting "ancillary services"
billed and collected by Methodist Specialty from May 2015 to
requests for production, Associates defined "ancillary
services" as "all Designated Health Services as
identified in 42 C.F.R. § 411.351." According to
relators' petition, ancillary services are services
ordered by a physician to be performed by others such as lab
services and x-rays.
requests for production defined "documents" to
include "electronic information which shall be produced
in their native format."
Primary Care responded to these requests by producing profit
and loss statements for Drs. Rubin and Septimus, summaries of
charges and collections for both physicians, and profit and
loss information for an x-ray machine operated at a Bellaire
clinic. Relators responded to the requests for documents
reflecting revenues generated in connection with referrals of
patients and ancillary services by stating that they had
filed a motion to compel and amended motion for sanctions,
arguing that relators possessed but refused to produce
documents or data responsive to the requests at issue. It
further asserted that a search of relators' computer
systems would recover responsive documents and information.
Associates asked the trial court to appoint a forensic expert
to search the electronic databases of relators for several
categories of information. Associates argued that it was
entitled to this relief under the standard established in
In re Weekley Homes for allowing direct access to
another party's computer hard drives. Relators filed a
response arguing that the motion should be denied because
Associates had not satisfied the In re Weekley Homes
conclusion of a hearing on March 5, 2018, the trial court
found that Methodist Primary Care and Methodist Specialty had
defaulted on their obligation to search for and produce data
and documents requested by Associates. The trial court signed
an order granting the motion on March 8, 2018.
March 8 order contains the following determinations.
• Methodist Primary Care and Methodist Specialty
"have defaulted on their obligation to search [their] .
. . records and produce data and documents that have been
requested by [Associates] . . . in discovery."
• The production of Methodist Primary Care and Methodist
Specialty "has been inadequate."
• "A search of [Methodist Primary Care's] . . .
and [Methodist Specialty's] . . . practice management
systems, EPIC and ATHENA would likely lead to the recovery of
relevant and material documents."
• "Thus, the Court GRANTS the motion in part and
ORDERS the appointment of an independent expert . . . to
perform an independent examination of [Methodist Primary
Care's] . . . and [Methodist Specialty's] . . .
practice management systems as outlined below . . . ."
order appoints Pathway Forensics LLC to search the electronic
data of all 209 Methodist System entities using their
practice management systems (EPIC, and, if necessary, their
previous system, Athena). Pathway Forensics is required to
search for documents or data, if any, evidencing (1) revenues
generated by Drs. Rubin and Septimus arising from the
Methodist System from May 15, 2015 to the present, (2)
physician ancillary and professional services performed by or
on behalf of Drs. Rubin and Septimus, and (3) physician
ancillary and professional services performed by other
physicians or on behalf of other physicians within the
Methodist System for all patients referred to those
physicians by Drs. Rubin and Septimus. The order directs that
"[t]he [e]xpert's costs shall be borne by"
relators filed their petition for writ of mandamus on March
14, 2018, we asked Associates to file a response and stayed
the March 8 order.
obtain mandamus relief, a relator generally must show both
that the trial court clearly abused its discretion and that
relator has no adequate remedy by appeal. In re
Prudential Ins. Co., 148 S.W.3d 124, 135-36 (Tex. 2004)
(orig. proceeding). A trial court clearly abuses its
discretion if it reaches a decision so arbitrary and
unreasonable as to amount to a clear and prejudicial error of
law or if it clearly fails to analyze the law correctly or
apply the law correctly to the facts. In re Cerberus
Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005)
(orig. proceeding) (per curiam). The appellate court reviews
the trial court's application of the law de novo. See
Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig.
proceeding). The relator must establish that the trial court
could reasonably have reached only one conclusion.
Id. at 840.
discovery order that compels production beyond the rules of
procedure is an abuse of discretion for which mandamus is the
proper remedy." In re Nat 'l Lloyds Ins.
Co.,507 S.W.3d 219, 223 (Tex. 2016) (orig. proceeding)
(per curiam). "Mandamus relief is available when a trial
court compels production of electronic data and information
beyond the permissible bounds of discovery." In re
Pinnacle Eng'g, Inc.,405 S.W.3d 835, 847 (Tex.
App.-Houston [1st Dist.] 2013, orig. proceeding) (citing
In re Weekley Homes, 295 S.W.3d at 322). The harm
that a party will suffer from being required to relinquish
control of its data for forensic inspection, and the harm
that might result from revealing ...