Petition for Writ of Mandamus Denied and Majority, Dissenting, and

Concurring Opinion s filed June 5, 2014.

In The 

## Fourteenth Court of Appeals

NO. 14

- 1 4

- 00 365

- CV

IN RE EURECAT US, INC. , Relator

ORIGINAL PROCEEDING WRIT OF MANDAMUS 133rd District Court Harris County, Texas Trial Court Cause No. 2012

- 25700



### DISSENTING OPINION
Eurecat returns to us with this second petition for writ of mandamus arising
from the trial court’s Rule 192.4 protective order. Previously, as the dissenting2

justice , I urged that the trial court’s order 1 is a n impermissible discovery injunction. In re Eurecat US, Inc. , 425 S.W.3d 577, 584 (Tex. App.

— Houston [14th Dist.] 2014, orig. proceeding) (McCally, J ., dissenting). The panel majority
, on the other hand, found that it was not clear that the trial court’s order prohibited the subject customer discovery. See id. at 583 & n.2 (majority opinion). Therefore, the parties returned to the trial court where Eurecat sought
reconsideration of the order

. The trial court reaffirmed its order prohibiting the customer discovery

. Eurecat seeks mandamus relief arguing, once again, that Real Parties have supplied no evidence to support their request for an order for bidding customer discovery

— discovery that goes to the heart of Eurecat’s claims and
defenses

. 2 By the petition and response, the parties agree that the trial court has forbidden Eurecat from taking discovery from Eurecat customers

. 3 T oday, t he majority nonetheless denies Eurecat’s second petition for writ of mandamus,

1 The order provides that “Eurecat U.S., Inc. may not serve discovery on any customers or potential customers of catalyst activation services identified in the letter from Mr. Touchstone to Mr. Escobar dated September 18, 2013.”

2 Real Parties attempt to undercut the nature of the harm fro m an order prohibiting Eurecat’s discovery on customers by stipulating that they will not seek antitrust damages from Eurecat pertaining to those customers. Real Part ies do not state that they have dismissed their antitrust claims , nor does the record ref

lect such . As with Real Parties ’ assurances that they did not solicit Eurecat customers

— “ we promise ”

— Real Parties promise that Eurecat doesn’t need this discovery because when it comes time to offer evidence or ask the jury to fill in the damage blanks, t hey promise they will not include anyt h ing about other customers. Denial of discovery that goes to the heart of a case

— as pled

— renders an appeal inadequate. See Walker v. Packer , 827 S.W.2d 833, 843

– 44 (Tex. 1992). Thus, the “ we promise” handling of discovery defies established authority permitting discovery based upon pleadings , not promises.

3 My concurring colleague attempts to buttress the discovery injunction with reference to Real Parties ’ argument on trade secrets. Howe ver, to the extent that such argument previously had merit, it no longer does as the subject of the forbidden discovery is a list of customers of both Eurecat and Real Parties th at is known to both parties and, thus, not a secret. To the extent that Real Parties are concerned that Eurecat’s undrafted, unsent discovery might ultimately implicate Real Parties’ other trade secrets, a prospective injunction on discovery is not an appropriate prophylactic measure.3

finding that Eurecat has not established itself entitled to relief. Again, I respectfully disagree. In addition to the reasons I previously stated for my belief that Eurecat’s petition for writ of mandamus should be granted, see id. at 587

– 88 (McCally, J., dissenting), I add the following:

Real Parties have still provided no evidence to support a Rule 192.4 Protective Order

. Real Parties urge that the trial court’s Rule 192.4 p rotective order is supported by evidence. And, Real Parties urge that the trial court conducted an appropriate balanc e to support the order as reflected in the follow ing excerpt from the hearing after our decision on the prior petition :

MR. HOEG [ counsel for Eurecat] : [A]s Justice McCauley [sic] said, [we do] not have to take their word for it, especially once we have already seen that they haven’t been entirely forthcoming.
THE COURT: Well, but Mr. Hoeg, in all fairness, Justice McCauley [sic] di dn’t have maybe all the background of the letters and discussions that you actually had with Haldor Topsoe, which I think I maybe gently said to you may have been a little over the top.
MR. HOEG: Absolutely. You’re correct. Although, she did have some of that, but my point is that’s only

—

. . . . THE COURT: [W]hen you’ve got a whole big list and you’re talking about possible damage to either or both of you when you’re both countersuing each other basically, saying you’re going to damage my business. If you intimidate of threaten or at least insinuate that they’re [ Real P arties’ customers] going to be4

brought in or we’re going to have a lawsuit against them, and that’s when you have to do a covenant not to sue, then, you know that’s a whole other balancing act that the Court has to do, the harm versus the good, you k now, which is no enviable job for a judge; and I understand the Court of Appeals looks at the record and doesn’t get to see the inflection, the body language, the believability, the everything of all the witnesses and the attorneys arguing those points tha t the trial court has. Anyway, your motion is denied. This excerpt, say Real Parties, shows the balancing that the trial court performed

— this is the evidence considered

. Real Parties point to no other
evidence and there is none in this record.
Thus, we kn ow that the trial court balanc ed Eurecat’s alleged “threats and
intimidation” of a common customer against Eurecat’s right to request discovery
from other common customers . But, Rule 192.4(b) compels a trial court to balance “the burden or expense of the proposed discovery” against “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). Therefore, the trial court did not perform a balanc ing under Rule 19 2.4(b).

If Real Parties wanted the trial court to enter an order forbid ding Eurecat ’s discovery on common customers on the belief that Eurecat had threatened or
intimidated a potential witness, Real Parties should have sought relief for discovery abuse. Texas Rule of Civil Procedure 215.3 addresses abuses of the discovery process: “If the court finds a party is abusing the discovery process in seeking, making or resisting discovery . . . , then the court in which the action is pending may, after notice and hearing, impose any appropriate sanction authorized5

by p aragraphs (1), (2), (3), (4), (5) and (8) of Rule 215.2(b). ” Tex. R. Civ. P.
215 .3

. And, the very first sanction authorized is “(1) an order disallowing any further discovery of any kind or of a particular k ind by the disobedient party.”
Tex. R. Civ. P. 215.2(b)(1). However, before the trial court may issue such a discovery sanction, it must consider a sanction less than a total prohibition of discovery. See
, e.g. , Cire v. Cummings , 134 S.W.3d 835, 838 (Tex. 2004). Real
Parties did not invoke Rule 215 .3 and do not attempt to uphold the trial court order
on that basis. Therefore, I respectfully dissent to this court’s denial of Eurecat’s request
for mandamus relief.

_____________________________ Sharon McCally Justice

Panel co nsists of Justices Jamison
, McCally , and Busby. (Busby, J., concurring) (McCally, J., dissenting).