Court of Appeals of Texas, Fourth District, San Antonio
the 73rd Judicial District Court, Bexar County, Texas Trial
Court No. 2016-CI-06300 Honorable David A. Canales, Judge
Sitting: Sandee Bryan Marion, Chief Justice, Rebeca C.
Martinez, Justice, Irene Rios, Justice
C. MARTINEZ, JUSTICE
consolidated appeals arise from a business dispute involving
trade secrets. After a jury trial concluded, the trial court
ordered several admitted exhibits sealed or redacted. Later,
the trial court denied appellants' motions to modify the
sealing order but clarified the order. Appellants contend in
the first consolidated appeal, No. 04-18-00509-CV, that the
trial court erred by entering the sealing order. In the
second appeal, No. 04-18-00844-CV, appellants contend the
trial court erred by refusing to modify the sealing order.
Some appellants also contend, in the second appeal, that the
trial court's clarification order is void for vagueness.
contends that we do not have jurisdiction to consider the
first appeal. We first address and deny appellee's
jurisdictional challenge. We then hold that the trial court
erred when it entered the sealing order. Our resolution of
the first appeal renders the second appeal moot.
Title Source, Inc. ("Title Source") and Appellee
HouseCanary, Inc. f/k/a Canary Analytics, Inc.
("HouseCanary") develop and compile algorithms,
software, and data as part of their businesses. Each prize
this information as proprietary trade secrets. We take no
position on whether this information is, in fact, "trade
secrets" as the law defines that term.
Source sued HouseCanary for breach of contract, fraud, and
tortious interference. HouseCanary counterclaimed for
misappropriation of intellectual property under the Texas
Uniform Trade Secrets Act ("TUTSA") and other
in the case, the parties agreed to a stipulated protective
order (the "SPO"). Among other things, the SPO
provides procedures for the parties to mark information as
"CONFIDENTIAL" or "HIGHLY CONFIDENTIAL -
ATTORNEYS' EYES ONLY." The SPO grants limited
protections for such materials and also specifies procedures
for sealing the materials in court. The parties dispute the
importance of the SPO, but no party disputes that it was
validly entered and is enforceable.
pretrial hearing, the parties presented their lists of
exhibits to be preadmitted. Counsel for Title Source and
counsel for HouseCanary stated their agreement that the
exhibits should be preadmitted and that the parties had no
objection to preadmission. The trial court preadmitted the
exhibits. Among the preadmitted exhibits are the 14 exhibits
the court later sealed or ordered redacted that are in
dispute in these appeals.
a month into the seven-week trial, Title Source moved to
close the courtroom during the trial testimony of a Title
Source fact witness who Title Source anticipated would
testify about its computer source code. Title Source asserted
this code was a trade secret. Title Source also moved to seal
documents that would be filed or placed into the record
regarding its source code. These records had not been
preadmitted before trial. Title Source argued that the
requirements for sealing court records under Texas Rule of
Civil Procedure 76a did not apply, but Title Source attempted
to comply with the requirements regardless. The trial court
ordered these source-code documents sealed. HouseCanary too
obtained temporary closure of the courtroom during testimony
concerning its computer source code.
undisputed that HouseCanary did not request for the exhibits
at issue in these appeals be sealed until after the trial
concluded. According to HouseCanary, these exhibits reveal
HouseCanary's purported trade secrets. The parties do not
dispute that several of these exhibits were discussed and
displayed at trial; however, they dispute the extent to which
the exhibits were discussed and displayed and whether members
of the general public or press viewed the exhibits when
end of trial, the trial court instructed the jury not to talk
about or mention confidential aspects of the case regarding
trade secrets. The trial court did not provide any guidance
as to what those "confidential aspects" were and
did not identify particular exhibits as containing trade
six weeks after trial ended, HouseCanary filed a motion to
seal thirty exhibits that had been admitted into evidence at
trial. The motion only refers to Texas Rule of Civil
Procedure 76a. HouseCanary gave public notice of its request,
and appellants The Reporters Committee for Freedom of the
Press and the Houston Forward Times (collectively,
"Media Intervenors") as intervenors and Title
Source opposed the request. The trial court held a public
hearing on the matter and denied HouseCanary's motion
from the bench.
days later, HouseCanary filed a "Motion to Reconsider
Whether to Seal Certain Core Materials." HouseCanary
narrowed its request to eight exhibits, which HouseCanary
asserted contain its "most sensitive information."
In its motion to reconsider, HouseCanary relied
"solely" on TUTSA as the basis for sealing, and
specifically disclaimed reliance on Texas Rule of Civil
Procedure 76a. HouseCanary also asked the trial court to
modify the SPO to recognize TUTSA as the statutory basis for
sealing. The trial court heard the matter and verbally ruled
it would grant HouseCanary's motion to reconsider and
order the eight exhibits sealed. The trial court did not
verbally order that the SPO be modified. The trial court
instructed HouseCanary to draft an order conforming to the
drafted an order that included the eight exhibits specified
in the motion to reconsider and six additional exhibits that
HouseCanary asserted were exact copies of the eight
originally-specified exhibits or contained excerpts from
those eight exhibits. Soon thereafter, the trial court signed
an order granting the motion to reconsider and ordering the
eight originally-specified exhibits sealed in their entirety.
The trial court also ordered the additional six exhibits to
be redacted to remove and seal the trade secrets contained
therein. Title Source and the Media Intervenors appealed this
order, which is the subject of the first appeal.
after the trial court signed the sealing order, HouseCanary
filed, in a separate federal-court proceeding, a motion that
included a copy of two of the eight entirely-sealed
exhibits. The document filed in federal court is and
has been available to the public, except for a brief period
during which it was under seal by the federal court.
Source and the Media Intervenors moved to vacate the sealing
order as to the two exhibits publicly available in federal
court. The Media Intervenors also sought clarification
regarding the extent of their right to publish documents they
lawfully obtain. The trial court denied the motion to unseal
the two exhibits but issued a clarifying order as to the
Media Intervenors' right to publish. Title Source and the
Media Intervenors appealed the trial court's orders on
these matters in the second appeal.
Canary initially challenges this court's jurisdiction
under Texas Rule of Civil Procedure 76a to consider the first
appeal. This dispute raises an issue central to the appeal-
whether and to what extent the Texas Uniform Trade Secrets
Act ("TUTSA") supplants Rule 76a when a party moves
to seal alleged trade secrets. We will consider any potential
conflict only to the extent necessary to resolve the appeal.
specific authorization for interlocutory appeals and original
proceedings, appellate courts only have jurisdiction over
final judgments. CMH Homes v. Perez, 340 S.W.3d 444,
447 (Tex. 2011). The Texas Supreme Court has deemed that
orders relating to sealing or unsealing court records made
pursuant to Rule 76a are final, appealable judgments.
Jack B. Anglin Co., Inc. v. Tipps, 842 S.W.2d 266,
272 n.13 (Tex. 1992); Eli Lilly & Co. v.
Marshall, 829 S.W.2d 157, 158 (Tex. 1992).
terms, Rule 76a applies to the trial court's sealing
order and gives this court jurisdiction over the first
Any order (or portion of an order or judgment) relating to
sealing or unsealing court records shall be deemed to be
severed from the case and a final judgment which may be
appealed by any party or intervenor who participated in the
hearing preceding issuance of such order.
Tex. R. Civ. P. 76a(8).
Canary argues Rule 76a does not apply, despite this language,
because the trial court ordered sealing pursuant to TUTSA,
not Rule 76a, and because TUTSA is entirely incompatible with
Rule 76a and controls.
it is true that the court's order to seal does not
mention Rule 76a, this fact alone does not remove the order
from the ambit of appealable orders specified by Rule
76a(8)-i.e., "any order . . . relating to sealing or
unsealing court records." "Any order" includes
an order to seal pursuant to ...