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In re Bilfinger Westcon, Inc.

Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg

December 12, 2019

IN RE BILFINGER WESTCON, INC.

          On Petition for Writ of Mandamus.

          Before Justices Benavides, Longoria, and Perkes

          MEMORANDUM OPINION

          NORA L. LONGORIA, JUSTICE [1]

         Relator Bilfinger Westcon, Inc. filed a petition for writ of mandamus in the above cause on September 25, 2019. In sum, relator contends that the trial court abused its discretion by ordering relator to respond to overbroad and irrelevant discovery requests and to prepare an "inventory" in response to requests for production.[2] We conditionally grant the petition for writ of mandamus in part and deny it in part as discussed herein.

         I. Background

         Relator, an industrial construction contractor, served as one of several prime contractors for the construction of a hot briquette iron facility in Portland, Texas. Relator entered into two contracts to work on the project: the M11 Contract and the M12 Contract. The owner of the project, voestalpine Texas, LLC (voest), ultimately terminated relator from working on the project. After relator's termination, voest instituted an arbitration proceeding against relator for breach of the M11 Contract, which principally involved fabricating and installing small and medium bore mechanical piping in parts of the project. Relator counterclaimed against voest for its unpaid contract balance. The arbitration proceedings, which were extensive and lengthy, resulted in the rendition of a $28, 600, 000 award in favor of relator and a take-nothing judgment for voest.

         Relator thereafter sued Heavy Equipment Movers & Installation, LLC (HEMI), Kevin Maxwell, Advantage Industrial Systems, LLC (AIS), and CMPM Management/Consulting Firm LLC (CMPM) for claims arising from its termination on the M11 contract.[3] Relator alleged, generally, that these defendants sabotaged relator's work on the project and conspired to have relator terminated from the project so that they could take over the profitable M11 Contract. Relator alleged, for instance, that HEMI was paid approximately $47, 000, 000 by voest as a result of relator's termination. Relator brought causes of action against these defendants for tortious interference with an existing contract, civil conspiracy, business disparagement, unjust enrichment, and fraud by nondisclosure.

         The parties engaged in discovery, and the discovery proceedings soon turned contentious. The trial court appointed a discovery and pretrial master "to resolve all discovery and non-dispositive issues and motions filed in this cause" and to submit recommendations for the disposition of such matters to the trial court. AIS and HEMI sought, and relator produced, documents pertaining to relator's performance of the M11 Contract and the arbitration proceedings. Relator produced approximately 200, 000 documents in PDF format and produced one data file, asserting that it was producing those documents "as kept in the ordinary course" of its business. AIS contended that relator failed to organize the documents to correspond to its requests for production and alleged that relator's production constituted an impermissible "document dump." AIS further sought information relating to other projects in which relator had been involved; however, relator refused to produce the requested documents on grounds that the documents lacked relevance and the requested discovery constituted an impermissible fishing expedition. After numerous proceedings before the master and trial court pertaining to relator's method of production for documents pertaining to the M11 Contract and AIS's requested discovery pertaining to relator's other projects, the trial court granted relief in favor of AIS, and this original proceeding ensued. Specifically, by order signed on June 3, 2019, the special master recommended relief in favor of AIS and the trial court approved and adopted that recommendation. On August 28, 2019, the trial court denied relator's motion for reconsideration of that ruling.

         By two issues, relator asserts that the trial court abused its discretion by ordering relator to: (1) "review an estimated 52, 000, 000 pages of records relating to at least 2, 722 unrelated projects spanning a time period from January 1, 2005 to the present to respond to AIS's production requests seeking irrelevant information as to whether [relator] was terminated from, or its work reduced, on any unrelated project, at a cost to relator of over $1, 000, 000," and (2) "effectively create an 'inventory' of approximately 343, 000 pages of documents [relator] previously produced in the format in which they were maintained by identifying each document by Bates number responsive to each of AIS's 150 separate requests for production."

         The Court requested and received a response to the petition for writ of mandamus from AIS. See Tex. R. App. P. 52.2, 52.4, 52.8. AIS asserts that relator could have produced the documents as they were kept in the ordinary course of business, or it could have organized the documents to identify each document that responded to each request for production, but relator refused to comply with either option. AIS also asserts that the trial court did not err in ordering relator to produce documents that are central to its claims and to AIS's defenses against those claims.

         Relator filed a reply to AIS's response generally reiterating the arguments raised in its petition for writ of mandamus and in support of its right to relief by mandamus.

         II. Standard of Review

         Mandamus is an extraordinary remedy issued at the discretion of the court. In re Garza, 544 S.W.3d 836, 840 (Tex. 2018) (orig. proceeding) (per curiam). To obtain relief by writ of mandamus, a relator must establish that an underlying order is void or is a clear abuse of discretion and there is no adequate appellate remedy. In re Nationwide Ins. Co. of Am., 494 S.W.3d 708, 712 (Tex. 2016) (orig. proceeding); see In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex. 2004) (orig. proceeding); Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex. 1992) (orig. proceeding).

         An abuse of discretion occurs when a trial court's ruling is arbitrary and unreasonable or is made without regard for guiding legal principles or supporting evidence. In re Nationwide Ins. Co. of Am., 494 S.W.3d at 712; Ford Motor Co. v. Garcia, 363 S.W.3d 573, 578 (Tex. 2012). We determine the adequacy of an appellate remedy by balancing the benefits of mandamus review against the detriments. In re Essex Ins. Co., 450 S.W.3d 524, 528 (Tex. 2014) (orig. proceeding); In re Prudential Ins. Co. of Am., 148 S.W.3d at 136.

         A 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., 449 S.W.3d 486, 488 (Tex. 2014) (orig. proceeding); In re Deere & Co., 299 S.W.3d 819, 820 (Tex. 2009) (orig. proceeding) (per curiam); Texaco, Inc. v. Sanderson, 898 S.W.2d 813, 815 (Tex. 1995) (per curiam); see In re Shipman, 540 S.W.3d 562, 565 (Tex. 2018) (orig. proceeding) (per curiam). "If an appellate court cannot remedy a trial court's discovery error, then an adequate appellate remedy does not exist." In re Dana Corp., 138 S.W.3d 298, 301 (Tex. 2004) (orig. proceeding).

         III. Discovery

         The scope of discovery is generally within the trial court's discretion. In re Graco Children's Prods., Inc., 210 S.W.3d 598, 600 (Tex. 2006) (orig. proceeding) (per curiam); In re CSX Corp., 124 S.W.3d 149, 152 (Tex. 2003) (orig. proceeding) (per curiam). "Parties are 'entitled to full, fair discovery' and to have their cases decided on the merits." Ford Motor Co. v. Castillo, 279 S.W.3d 656, 663 (Tex. 2009) (quoting Able Supply Co. v. Moye, 898 S.W.2d 766, 773 (Tex. 1995) (orig. proceeding)). Thus, our procedural rules allow the broad discovery of unprivileged information that is "relevant to the subject matter of the pending action." Tex.R.Civ.P. 192.3(a); see In re N. Cypress Med. Ctr. Operating Co., 559 S.W.3d 128, 131 (Tex. 2018) (orig. proceeding); In re Nat'l Lloyds Ins. Co., 449 S.W.3d at 488. It is not a ground for objection "that the information sought will be inadmissible at trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence." Tex.R.Civ.P. 192.3(a).

         Information is relevant if it tends to make the existence of a fact that is of consequence to the determination of the action more or less probable than it would be without the information. See Tex. R. Evid. 401. The phrase "relevant to the subject matter" is to be broadly construed. Ford Motor Co., 279 S.W.3d at 664; see In re Nat'l Lloyds Ins. Co., 449 S.W.3d at 488. A request "is not overbroad merely because [it] may call for some information of doubtful relevance" so long as it is "reasonably tailored to include only matters relevant to the case." Texaco, Inc., 898 S.W.2d at 815; see In re Nat'l Lloyds Ins. Co., 449 S.W.3d at 488; In re Graco Children's Prods., Inc., 210 S.W.3d at 600. Nevertheless, a party's discovery requests must show a reasonable expectation of obtaining information that will aid in the resolution of the dispute. In re CSX Corp., 124 S.W.3d at 152. A discovery request is "overbroad" when it encompasses "time periods, products, or activities beyond those at issue in the case" and, therefore, is not "reasonably tailored to include only relevant matters." In re Alford Chevrolet-Geo, 997 S.W.2d 173, 180 n.1 (Tex. 1999) (orig. proceeding); see also In re Deere & Co., 299 S.W.3d at 820; In re Graco Children's Prods., 210 S.W.3d at 600. Thus, "[a]n order that compels overly broad discovery is an abuse of discretion for which mandamus is the proper remedy." In re Deere & Co., 299 S.W.3d at 820. An overbroad request is improper regardless of whether it is burdensome. In re Allstate Cty. Mut. Ins. Co., 227 S.W.3d 667, 670 (Tex. 2007) (orig. proceeding).

         The rules of civil procedure allow the trial court to limit discovery under particular circumstances:

         The discovery methods permitted by these rules should be limited by the court if it determines, on motion or on its own initiative and reasonable notice, that:

(a) the discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive; or
(b) the burden or expense of the proposed discovery outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues.

         Tex. R. Civ. P. 192.4(b); see In re Alford Chevrolet-Geo, 997 S.W.2d at 181. Additionally, the trial court may make protective orders "in the interest of justice" to protect the movant from "undue burden, unnecessary expense, harassment, annoyance, or invasion of personal, constitutional, or property rights" that, among other things, orders that: (1) the requested discovery not be sought in whole or in part; (2) the extent or subject matter of discovery be limited; (3) the discovery not be undertaken at the time or place specified; (4) the discovery be undertaken only by such method or upon such terms and conditions or at the time and place directed by the court; or (5) the results of discovery be sealed or otherwise protected, subject to the provisions of Rule 76a. Tex.R.Civ.P. 192.6(b); In re United Fire Lloyds, 578 S.W.3d 572, 578-79 (Tex. App.-Tyler 2019, orig. proceeding). Although a trial court may exercise some discretion in granting a protective order, such discretion is not without bounds. In re Collins, 286 S.W.3d 911, 919 (Tex. 2009) (orig. proceeding). The party seeking a protective order must show particular, specific, and demonstrable injury by facts sufficient to justify a protective order. Id.

         IV. Relevance, Overbreadth, and Burdensomeness

         In its first issue, relator contends that the trial court abused its discretion in ordering relator to "[r]eview an estimated 52, 000, 000 pages of records relating to at least 2, 722 unrelated projects spanning a time period from January 1, 2005 to the present" where the production requests seek "irrelevant information as to whether [relator] was terminated from, or its work reduced, on any unrelated project, at a cost to [relator] of over $1, 000, 000." Relator specifically asserts that it should not be required to search and produce records from 2, 722 unrelated projects over the past fourteen years; the supreme court has prohibited overbroad discovery which is tantamount to a "fishing expedition"; the unrelated projects are irrelevant to the disputed issues in this case; and the disproportionate financial burden on relator outweighs any alleged benefit to AIS.

         Through this issue, relator attacks that portion of the trial court's June 3, 2019 order compelling it to respond to AIS's requests for production 127 through 150. In sum, these requests for production seek documents pertaining to all of relator's projects, contracts, and assignments from 2005 to the present other than those pertaining to the M11 Contract. These requests for production are as follows:

127. Documents or communications evidencing or describing . . . a threatened or actual reduction to or removal of Westcon's work scope on a project or assignment at any time during the period beginning January 1, 2005 and continuing through the present, excluding the Project at issue in this suit.
128. Documents or communications evidencing or describing . . . threatened or actual termination, whether full or partial, of Westcon from any project or assignment at any time during the period beginning January 1, 2005 and continuing through the present, excluding the Project at issue in this suit.
129. Documents or communications evidencing or describing Westcon's actual or alleged failure to meet one or more deadline, milestone, target, or goal for a contract, project, or assignment at any time during the period beginning January 1, 2005 and continuing through the present, excluding the Project at issue in this suit.
130. Documents or communications evidencing or describing criticism by any of Westcon's customers, clients, or past or former personnel of such customer or client regarding Westcon's work at any time during the period beginning January 1, 2005 and continuing through the present, excluding the Project at issue in this suit.
131. Documents or communications evidencing or describing criticism by any of Westcon's customers, clients, or past or former personnel of such customer or client regarding Westcon's failure to meet one or more deadline, milestone, target, or goal for a contract, project, or assignment at any time during the period beginning January 1, 2005 and continuing through the present, excluding the Project at issue in this suit.
132. Documents or communications evidencing or describing criticism by someone on a project other than Westcon's customer or client (e.g., a third-party vendor, contractor, supplier) regarding Westcon's work at any time during the period beginning January 1, 2005 and continuing through the present, excluding the Project at issue in this suit.
133. Documents or communications evidencing or describing criticism by someone on a project other than Westcon's customer or client (e.g., a third-party vendor, contractor, supplier) regarding Westcon's failure to meet one or more deadline, milestone, target, or goal for a contract, project, or assignment at any time during the period beginning ...

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