1 John T. B oyd, C hief J ustic e (R et.), Se ven th C ourt o f Ap pea ls, sitting b y ass ignm ent. T EX
. G OV ’ T

C ODE A NN . §75 .002 (a)(1 ) (Ve rnon 200 5). NO. 07-06-0315-CV IN THE COUR

T OF APPEALS FOR THE SEVEN TH DISTRICT OF TEXAS

AT AMARILLO PANEL E JANUARY

10, 2007

______________________________ IN RE DIAM OND SHAMR OCK REFINI NG COMPAN Y, L.P., Relator

_______________________________ Memorandum Opinion

_______________________________ Before QUINN, C.J., CAMPBELL, J. and BOYD, S.J. 1 Diamond Shamrock Refining Company, L.P. , petitions for a writ of mandam u s asking us to dire ct the ju dge of the 69 th Judicial D istrict, Moore County , Texas, to r escind his order of June 21, 2 006, compelling the production of various doc uments. We grant the petition. Background The dispute aris es from Diamond Shamro ck’s contest to t he appraisal value assessed by the Moor

e County Appr

aisal Dis trict on D iamond Shamrock’s McKe e Ref iner y. The appraisal covered the y ears 2002 throug h 200 5. After sui t was filed, the District sought the prod uctio n of numerous documents to which D iamond Shamrock obj ected, contending that the informatio n encompassed pri vilege d trade secrets. After a heari ng, the2 The tria l co ur t or de re d th at D iam on d S ha m ro ck res po nd fully a nd co m ple tely t o Reque sts fo r

Producti on Nos. 6, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 3 3, 34 , 35, 36 , 37, 38 , 40, 41 , 42, an d 43

. 2 trial court order

ed Diamond Shamrock to produce all of

the documents. 2 Thereafter, Diamond Shamrock petit ioned for mandamus relief requesting that the order be vacated. Atthe hearing held upon the petit ion for a writ of mandamus, all counsel were asked if they disputed whether t he discover y sought comprised trade secrets. They informed this courtthat , for

pur pose s of t he mandamus proceed ing, they did not. Given this representation , we need not and do not address whether th e items in cont roversy were or are indeed such secrets. Applicable Law To be entitled to a writ of mandamus, there must be p roof that the trial court clearly abused its discr

etion or v iolated a duty imposed by law and that review through appeal is inadequate. Walker v. Packer , 827 S.W.2d 833, 839-40 (Tex. 1992). Furthermore, if the documents involve trade secret s and it is deter mined t hat the trial court abused i ts discretion in requiri ng their di sclosure, t hen mandamus is appro priate for thewrong is not suscep tible to correctio n throu gh appeal. In re Bass, 113 S.W.3d 735, 745 (Tex. 2003). Next, whe ther the trial court abused its discretion in compellin g the discov ery of trade secrets depends

on whether

the party seek ing the informat ion establis hed that it was necessaryfor a fair adjudi cation of its cl aim or defense. In re Continenta l General Ti re, Inc., 979 S.W.2d 609, 613 (Tex. 1998). I n turn, “neces sity depends upon whether

the [data] . . . i s ma terial and necessary to the litigation.’” In re Bass, 113 S.W.3d at 743, quoting In re Continental General Tire, Inc. , 979 S.W .2d 609 (Tex. 1998). It is not en ough3

to simplystate that the i nformation is necessary. Nor do general assertions of unfairne ss suffice. In re Bridges tone /Fi restone, Inc., 106 S.W.3d 730, 732-33 (Tex. 2003). On the cont rary, the party seeking disclosure “must demonstrate with spec ificity ex actly how

the lackof the information w ill impair the presentati on of the case on themerits to the point that
an unjust result is a real, rather than a merely possible, threa t.” Id . In other words, th e litigant must sat isfy the test through the presentati on of competent evi dence. If it does n ot, then compell ing discl osure amounts to an instance of abused di scretion w arranting mandamus relief. See e.g., id. at 734 (so re cognizi ng); In re Continent al General T

ire, Inc., 979 S.W .2d at 615 (so recognizing). Application of

Law Again, becaus e neithe r party disputed that the discover y in que stion compris ed trade secrets, we do not address that matte r. Instead, we turn ou r attention to whether the Appraisal D istrict met

the test described in Bass , Bridgestone , and Continental

. According to the record before us, the discovery was allegedlysought to facil itate the valuation of the McKee refiner y. Such a valuation could occur through several ways, according to the Appraisal District’s expert and sole wit ness. They i ncludeboth th e inco me or cost approaches. And, when asked by the District if the information in genera l wa s “necessary ,” its ex pert general ly said “[y]es.”Yet, why it was went unexplai ned, save for two instances. Those tw o instances concerned inf ormation about 1) the ref inery’s workforce and union contra cts and 2) Di amond Shamrock’s a cquisiti on of other refineries located outside Moore County

.4

With regard to the union contracts and workforce data, the exper t concluded that such information w hen “using the income approac h” would “serve to help make . . . adjustments” for “certain intangibl es.” Yet, at no time did h e s uggest that he could not complete his appraisal without the informatio n. Nor did he discuss h ow wi th holding the information from him would ha mper h is task in any way . Instead, he si mply said t hat having the data would “help.” Concerning the matter of other refineries acq uired by Diam ond Shamrock, the expertopined that the “ information wo uld be used to develop the com para ble sales approach” and that “[i]t’s always necessary to have good information about the com parable
s ales in order to apply them.”Previous ly thoug h, he had told the t rial court that “bu yers and sellers both look to the i ncome approach for es tablishing value.” So too did he later admit that he also used the cost approach. G iven their different names, one could possibly
assumethat the income, cost, and comparabl e sales approac hes all differed in some way. Whether they do, how

ever, went undeveloped. And, wit h the excepti on of the broad and conclusorystatements cited, the exper t gave no explanation of why the t rade secret information was neces sary to hi s calculati on under any v aluation met hod. Nor wer e we told how thevalue of real ty sold mi les from Moore County has any relevance, much less is necessar

y, to the valuation of realt y wi thin Moore C ounty. It w ent unexplai ned. Also of note is the ev idence illus trating that the Dist rict alr eady had apprai sed the McKee refinery du ring the y ears in que stion. Arg uabl y, there existed data upon which those appraisals were founded for surely an appraisal district would not calculate values from whole cl oth. Yet, the Di strict’sexpert and s ole witnes s conceded that the Dist rict had notprovided t hat information to hi m. Given thi s, any sug gesti on t hat the previously5

undisclosed trade secrets of Diamond Sh amrock were necessary to complete an apprai sal is dubious. Until the extent of that other data, if any, is perused by the expert ( and revealed to the court for as sessment), it cannot be determi ned how w ithholding the trade secrets w ill impair

the Distri ct’s case on the merits. In short, therecord before us lacks ev idence “demonstr at[ing] w ith specifici ty” that the risk of an “unjust result” is “real” if the trade secrets ofDi amond Sham rock remain secret. The Dist rict fail ed to prove nece ssity a s requ ired by Bass , Firestone , and Continental

. And, the concl usory sta tements of the Distric t’s exper t to the contrar

y do not fill the gap. See Coastal Tr an sp. Co. v. C

rown Cent. Petr

oleum, 136 S.W.3d 227, 232 (Tex. 2004) (holding that conclusory statement s a re not e viden ce). Accor dingl y, we conditionally grant mandamus r elief directi ng the tria l court to vacate its June 21, 2006 “Order t o C o m p e l

. ” We are confident that it will comply and w ill issu e a writ of mandamus onlyif does not. Finally , our stay of thetrial cour

t’s direct ive will r

emain in effect until the June 21 storder is v

acated.

Brian Quinn

Chief Justice