NO. 07-11-00066-CV 

IN THE COURT OF APPEALS 

FOR THE SEVENTH DISTRICT OF TEXAS 

AT AMARILLO 

PANEL E 

JULY 19, 2011 

IN RE MICHAEL ROCKAFELLOW AND MTBC, LTD., 

RELATORS 

Before HANCOCK and PIRTLE, JJ., and BOYD, S.J.1

ON PETITION FOR WRIT OF MANDAMUS 

 Relators, Michael Rockafellow and MTBC, Inc., have filed their petition for writ of 

mandamus, asking this Court to direct the Respondent, the Honorable Les Hatch of the 

237th District Court of Lubbock County, to vacate the order of January 21, 2011, 

authorizing the pre-suit deposition of Rockafellow by real party in interest, SalonQuest, 

L.L.C., and disclosure of documents identifying MTBC’s supplier of SalonQuest 

products. We will conditionally issue a writ of mandamus so directing. 

Factual and Procedural History 

 On January 24, 2011, Rockafellow and MTBC filed a notice of appeal from the 

trial court’s order authorizing SalonQuest’s pre-suit deposition of Rockafellow, president 

of MTBC, and disclosure of documents related to MTBC’s acquisition of SalonQuest’s 

 1

 John T. Boyd, Chief Justice (Ret.), Seventh Court of Appeals, sitting by 

assignment. 
2 

hair care products. See TEX. R. CIV. P. 202. Because SalonQuest’s petition indicated 

that neither Rockafellow nor MTBC were anticipated defendants in SalonQuest’s 

contemplated suit related to the unauthorized distribution of SalonQuest’s hair care 

products, that appeal was docketed as a regular appeal under cause number 07-11-

00022-CV. However, SalonQuest amended its petition to indicate that it did, in fact, 

anticipate bringing various claims against MTBC. As a result, we dismissed that appeal 

for want of jurisdiction. In re Petition of SalonQuest, Inc., No. 07-11-00022-CV, 2011 

Tex. App. LEXIS 1535 (Tex.App.—Amarillo Mar. 2, 2011, no pet.); see In re Jorden, 249 

S.W.3d 416, 419 (Tex. 2008) (orig. proceeding); Thomas v. Fitzgerald, 166 S.W.3d 746, 

747 (Tex.App.—Waco 2005, no pet.). 

 On February 10 and in response to SalonQuest’s amendment, Rockafellow and 

MTBC filed their Emergency Motion for Stay of Deposition and Production of 

Documents. In their motion, they again sought review of the trial court’s order 

authorizing pre-suit deposition of Rockafellow. At this point, Rockafellow and MTBC 

were no longer third parties to the contemplated litigation and were now “anticipated 

defendant[s].” See In re Jorden, 249 S.W.3d at 419. 

 In light of their status as anticipated defendants, mandamus is the proper vehicle 

by which they could seek review of the trial court’s Rule 202 order. See In re Hewlett 

Packard, 212 S.W.3d 356, 360 (Tex.App.—Austin 2006, orig. proceeding). 

Consequently, we construed Rockafellow and MTBC’s motion as a petition for writ of 
3 

mandamus.2 We noted, however, that there were a number of defects present in their 

petition. See TEX. R. APP. P. 52.3. By letter dated February 10, 2011, we notified the 

parties of these defects and afforded Rockafellow and MTBC a reasonable opportunity 

to cure said defects. See TEX. R. APP. P. 44.3. Rockafellow and MTBC amended their 

petition. We sought a response from SalonQuest and received such on April 19. On 

May 11, we received a reply on behalf of Rockafellow and MTBC. 

Analysis 

Availability of Mandamus

 Again, because Rockafellow and MTBC are anticipated defendants in 

SalonQuest’s contemplated litigation, mandamus is the proper vehicle by which to seek 

the relief requested. See In re Hewlett Packard, 212 S.W.3d at 360. The Texas 

Supreme Court has held that no adequate appellate remedy exists if a trial court orders 

a party to produce privileged trade secrets absent a showing of necessity. In re Bass, 

113 S.W.3d 735, 745 (Tex. 2003) (orig. proceeding) (citing In re Cont’l Gen. Tire, Inc., 

979 S.W.2d 609, 615 (Tex. 1998) (orig. proceeding)). Further, a trial court abuses its 

discretion when it erroneously compels production of trade secrets without a showing 

that the information is “material and necessary.” See id. at 738, 743; Walker v. Packer, 

827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding) (concluding that “a clear failure by 

the trial court to analyze or apply the law correctly will constitute an abuse of discretion, 

and may result in appellate reversal by extraordinary writ”). 

 2 By order entered February 10, 2011, we also granted temporary relief by 

staying the deposition authorized by the trial court pending the disposition of this petition 

for writ of mandamus. See TEX. R. APP. P. 52.10(b). 
4 

Trade Secret Privilege Generally

 The trade secret privilege is governed generally by Texas Rule of Evidence 507: 

A person has a privilege, which may be claimed by the person or the 

person’s agent or employee, to refuse to disclose and to prevent other 

persons from disclosing a trade secret owned by the person, if the 

allowance of the privilege will not tend to conceal fraud or otherwise work 

injustice. When disclosure is directed, the judge shall take such protective 

measure as the interests of the holder of the privilege and of the parties 

and the furtherance of justice may require. 

TEX. R. EVID. 507. In the trial court, the party resisting discovery on the basis of the 

trade secret privilege must establish that the information is a trade secret. In re Cont’l 

Gen. Tire, 979 S.W.2d at 613. The burden then shifts to the requesting party to 

establish that the information is necessary for a fair adjudication of its claims. Id. If the 

requesting party meets this burden, the trial court should ordinarily compel disclosure of 

the information, subject to an appropriate protective order. Id. In each circumstance, 

the trial court must weigh the degree of the requesting party’s need for the information 

with the potential harm of disclosure to the resisting party. Id. In other words, when 

trade secret privilege is asserted as the basis for resisting production, the trial court 

must determine whether the requested production constitutes a trade secret; if so, the 

court must require the party seeking production to show reasonable necessity for the 

requested materials. In re Union Pac. R.R. Co., 294 S.W.3d 589, 591 (Tex. 2009) (orig. 

proceeding) (quoting In re Bass, 113 S.W.3d at 738). 

Is the information sought trade secret?

 A trade secret is “any formula, pattern, device or compilation of information which 

is used in one’s business and presents an opportunity to obtain an advantage over 
5 

competitors who do not know or use it.” In re Bass, 113 S.W.3d at 739 (quoting 

Computer Assocs. Int’l. v. Altai, Inc., 918 S.W.2d 453, 455 (Tex. 1994)). Texas courts 

consider the following factors in determining whether the material at issue qualifies for 

the trade secret privilege: (1) the extent to which the information is known outside of his 

business; (2) the extent to which it is known by employees and others involved in his 

business; (3) the extent of the measures taken by him to guard the secrecy of the 

information; (4) the value of the information to him and to his competitors; (5) the 

amount of effort or money expended by him in developing the information; and (6) the 

ease or difficulty with which the information could be properly acquired or duplicated by 

others. In re Union Pac. R.R., 294 S.W.3d at 592; In re Bass, 113 S.W.3d at 739. 

Because trade secret materials may not always “fit neatly into each factor every time” 

and because other factors may also be relevant depending on the circumstances of a 

particular case, we will weigh the factors in the context to determine whether the 

materials qualify as trade secret. In re Bass, 113 S.W.3d at 740. 

 In a situation factually similar to the instant case, our sister court weighed the 

factors of the balancing test to determine whether similar requested information was 

trade secret. See John Paul Mitchell Sys. v. Randalls Food Mkts., Inc., 17 S.W.3d 721, 

726 (Tex. App.—Austin 2000, pet. denied). Paul Mitchell involved the same context at 

issue here: diversion of hair care products outside the manufacturer’s preferred closed 

distribution chain. Id. at 726. In that case, Jade Drug Company sold Paul Mitchell 

products to Randalls grocery stores, which are non-salon locations. Id. As was and did 

Rockafellow, Jade was called on to provide its list of suppliers and resisted on the basis 

of trade secret. Id. Jade established by affidavit that there was restricted access to its 
6 

supplier list, it took time and money to develop the list, the list was valuable to the 

company, and the list was not readily obtained or duplicated. Id. at 738. The Austin 

court concluded that Jade established that the list was “carefully compiled and closely 

guarded” and met its burden of showing that its supplier list was trade secret. Id.

 Here, by affidavit, Rockafellow explained that he has been in this business for 

twenty-five years and that it was “through substantial effort and expertise” that he 

developed his “vast network of industry contacts and sources.” He also stated that his 

contacts and suppliers are “not readily known to the public, and to a large extent, not 

readily known in the industry itself.” Rockafellow explained the confidential nature of his 

relationship with the suppliers and how MTBC’s network of contacts and sources is the 

“most valuable part of its business” without which MTBC could not compete. 

Rockafellow went on to explain that only he communicates with MTBC’s suppliers and, 

apart from him, only the office manager and the warehouse manager have access to 

information that would enable them to determine the identities of MTBC’s suppliers. 

Both managers had been advised of the importance of keeping such information 

confidential. Rockafellow’s affidavit also described the ramifications of having to divulge 

suppliers’ identities which, according to Rockafellow, would quickly culminate in MTBC 

going out of business. In light of the relevant factors, we conclude that Rockafellow 

showed that access to the information sought is strictly limited and is not readily 

accessible, the information sought is highly valuable to MTBC, and the information 

sought is the product of a great deal of time and effort on Rockafellow’s part and is not 

easily accessible or duplicated. See In re Union Pac. R.R., 294 S.W.3d at 592. 
7 

 Seeing no compelling distinction between the instant case and that examined by 

our sister court in Paul Mitchell, we find our sister court’s similar application of the 

balancing test in this context persuasive and conclude that Rockafellow carried his 

burden of showing that the supplier list and information related to the identities of 

MTBC’s suppliers are trade secret. In doing so, he successfully shifted the burden to 

SalonQuest to establish that such information was necessary. 

Is the Information Necessary or Essential to Fair Adjudication?

 We now address the second prong of the test in which we must determine if 

discovery of this trade secret material is “necessary for a fair adjudication” of 

SalonQuest’s claims. In re Cont’l Gen. Tire, 979 S.W.2d at 615. Necessity depends on 

whether the trade secret’s production is “necessary or essential to the fair adjudication 

of the case.” In re Union Pac. R.R., 294 S.W.3d at 592. 

 The Texas Supreme Court has acknowledged that it has not “state[d] 

conclusively what would or would not be considered necessary for a fair adjudication, 

indicating instead that the application of the test would depend on the circumstances 

presented.” Id. (quoting In re Bridgestone/Firestone, Inc., 106 S.W.3d 730, 732 (Tex. 

2003)). Although Rule 202 does not require a potential litigant to expressly state a 

viable claim, it appears that, when the requested deposition and disclosure involve 

disclosure of trade secret information, the requesting party’s burden is heightened. See

In re Cont’l Gen Tire, 979 S.W.2d at 613–14. With this in mind, we examine the general 

principles from cases on this subject. 
8 

 It does appear to be generally accepted that, in order for trade secret production 

to be material to a claim or defense, a claim or defense must first exist.3

 See In re 

Bass, 113 S.W.3d at 743. That is, it is not sufficient that a requesting party use Rule 

202 to discover trade secret information to determine if it has a claim.4

 See In re 

Hewlett Packard, 212 S.W.3d at 362. Nor is it an adequate showing of necessity when 

the requesting party makes general assertions of unfairness.5 In re Union Pac. R.R., 

294 S.W.3d at 592–93; In re Bridgestone/Firestone, 106 S.W.3d at 734 (concluding that 

“the mere possibility of unfairness is not enough to warrant disclosure” of trade secret). 

Further, there are cases that would suggest that we must also consider the availability 

of other means of acquiring the requested information.6 See In re Cont’l Gen. Tire, 979 

S.W.2d at 615 (adopting rule, pre-dating Texas Rule of Evidence 507, from Automatic 

Drilling Machs., Inc. v. Miller, 515 S.W.2d 256, 259 (Tex. 1974), that considers 

 3 As the Austin court pointed out “rarely, if ever,” will trade secrets be 

discoverable pursuant to Rule 202 because Rule 202 discovery will, by definition, be 

going on before any litigation has begun. In re Hewlett Packard, 212 S.W.3d at 364. 

4 By its own admission at the hearing on its petition, the existence and nature of 

SalonQuest’s claims, if any, are speculative at best. SalonQuest itself expressed 

uncertainty as to whether litigation would follow: “It is just discovery, and then we can 

make a decision, if, in fact, litigation is warranted from that point on.” 

5 So, SalonQuest’s assertions in its response to this Court that highlight alleged 

wrongdoing on Rockafellow’s part are inadequate to satisfy its burden of showing that 

the requested information is necessary to the fair adjudication of its claims, if any.

6

 The Texas Supreme Court most recently explained this consideration: “[T]rade 

secret information is generally discoverable when not allowing discovery would 

significantly impair a party’s ability to establish or rebut a material element of a claim or 

defense. A party’s ability is significantly impaired when the information is unavailable 

from any other source and no adequate alternative means of proof exist.” In re 

Bridgestone/Firestone, 106 S.W.3d at 736. Here, MTBC has no contractual relationship 

with SalonQuest; by SalonQuest’s own admission, it is MTBC’s supplier(s) who has or 

have contracts with SalonQuest regarding the distribution of SalonQuest products. 
9 

availability from other sources in determining whether disclosure of trade secret is 

warranted); see also In re Bridgestone/Firestone, 106 S.W.3d at 736. 

 So, it would appear that the burden that shifted to SalonQuest upon the showing 

that the information it requested was trade secret is a fairly great one. And it is one that 

SalonQuest ultimately failed to satisfy because SalonQuest submitted no evidence in 

support of its position that the trade secret information sought was necessary or 

essential to the fair adjudication of its claims. See In re Union Pac. R.R., 294 S.W.3d at 

592. The record before us is devoid of evidence on the issue of necessity. 

 SalonQuest’s assertions come from its amended Rule 202 petition and from 

arguments of counsel at the hearing on its petition. Generally, pleadings are not 

competent evidence to prove the facts alleged in them even if, as here, the pleadings 

are sworn or verified. See Laidlaw Waste Sys. (Dallas), Inc. v. City of Wilmer, 904 

S.W.2d 656, 660 (Tex. 1995); see also In re Contractor’s Supplies, Inc., No. 12-09-

00231-CV, 2009 Tex. App. LEXIS 6396, at *15–16 (Tex.App.—Tyler Aug. 17, 2009, 

orig. proceeding) (mem. op.) (concluding, in Rule 202 context, that pleadings are not 

evidence). Likewise, argument of counsel is not evidence. See Love v. Moreland, 280 

S.W.3d 334, 336 n.3 (Tex.App.—Amarillo 2008, no pet.). With that, we can only 

conclude that SalonQuest failed to show that the trade secret information sought was 

“necessary for a fair adjudication” of its claims. 

 In summary, Rockafellow met his burden of showing MTBC’s list of suppliers was 

trade secret and, thereby, shifted the burden to SalonQuest to show that disclosure of 

the information was necessary for a fair adjudication of its claims. SalonQuest failed to 
10 

make such a showing. Therefore, the trial court abused its discretion when it authorized 

the deposition of Rockafellow and compelled disclosure of trade secret information. 

Conclusion 

 Having concluded that the items in question were trade secrets and not 

discoverable as privileged information pursuant to Rule 507 and that Rockafellow, as a 

potential defendant, has no adequate remedy by appeal, we conclude that he has 

shown he is entitled to mandamus relief as requested. Accordingly, we conditionally 

grant the petition for writ of mandamus and direct the trial court to vacate its order dated 

January 21, 2011, authorizing the pretrial deposition of Michael Rockafellow and 

compelling disclosure of documents concerning MTBC’s acquisition of SalonQuest’s 

products. Because we are confident the trial court will comply with this directive, the 

writ will issue only if the court fails to do so. Our disposition of this case serves to lift the 

stay previously imposed by the Court. See TEX. R. APP. P. 52.10(b). 

 Mackey K. Hancock 

 Justice