Opinion ID: 2427845
Heading Depth: 1
Heading Rank: 9

Heading: Interoffice Memo of July 12, 1993

Text: This is another document that highlights some of the problems with both the attorney-client privilege as currently embodied in Rule 503 of our Rules of Civil Evidence and the party-communication privilege in Rule 166b(3)(d) of our Rules of Civil Procedure. The trial court found that communications on or after March 11, 1993 were in connection with the prosecution, investigation, or defense of the Long Trusts' suit against Valero. This memorandum and the attachments were prepared after March 11, 1993, and once again, there can be no doubt from the face of the documents that they were prepared in the course of investigating potential claims by the Long Trusts and others. The affidavits submitted to the trial court also offer explicit evidence of that fact. The memorandum and attachments were sent by Travis Crow to Ron Clements. Clements explained in his affidavit that he had been asked by Marcy Collins, an attorney for Valero, to review all gas purchase contracts with take-or-pay clauses that could subject Valero to litigation. He further asserted that at the time he received this request from counsel, he personally felt there was a substantial chance that litigation would result in connection with some or all of these contracts. Further, Clements stated in his affidavit that he had authority to obtain and to act on advice rendered by counsel for Valero. In response to the request from Valero's counsel, Clements asked Travis Crow to prepare a document setting forth potential take or pay exposure that might be alleged under four contracts from January 1, 1989 forward. Crow did so, and his study analyzed not only two of the Long Trusts' wells, but 95 other wells operated by other producers. However, there is no evidence that Crow, as opposed to Clements, had the authority to seek and act on legal advice. Clements forwarded Crow's memo and the attached schedules to Valero's counsel, and Clements intended that the results of the study he had commissioned not be disclosed to third parties and that the memo and study be maintained as confidential information. Thus, we have a situation where Valero's counsel and a Valero representative that the trial court should have included in the control group asked for a study to be done so that Valero could analyze its potential exposure under four contracts. The fact that the leg work in gathering the relevant facts that were reported to counsel was done by someone who was not in the control group should not result in the waiver of the attorney-client privilege. Such a result promotes form over substance. It is not reasonable or good policy to require either lawyers or those who can seek and act on legal advice to do the detailed fact gathering in a large corporation that is often necessary to facilitate the rendition of legal advice. As already noted above, our current Rule 503 is unfair to corporate litigants and does not take reality into account. However, the party-communication privilege should apply to this document. The portions of Valero's calculations that deal with the Long Trusts are party communications because they relate to this specific suit. Calculations regarding other producer contracts should likewise be privileged. The Long Trusts should not be permitted to discover and share those calculations. The privilege would be meaningless. I would hold that a single document that contains party communications about several potential claims arising out of common facts is privileged under Rule 166b(3)(d). The Long Trusts contend that even if this study was otherwise privileged, they are entitled to its production because Valero has asserted that there were no contract deliverability tests and this document shows otherwise. Once again, these assertions by the Long Trusts are refuted by the document itself and by affidavits. The study is based on actual production, not contract deliverability tests that might have shown what the wells were capable of producing. No one contends that there is any dispute about what the wells actually produced. Valero's internal calculations of its potential damage exposure in litigation are not discoverable.