Court Opinion

ID: 4415562
Source: CourtListenerOpinion
Date Created: 2019-07-11 08:48:01.190237+00
Date Added: 2024-06-11T14:51:14.997062
License: Public Domain

Fourth Court of Appeals
                                              San Antonio, Texas
                                         CONCURRING OPINION

                                   Nos. 04-18-00509-CV & 04-18-00844-CV

                                          TITLE SOURCE, INC., et al.,
                                                 Appellants

                                                      v.

                            HOUSECANARY, INC. f/k/a Canary Analytics, Inc.,
                                           Appellee

                         From the 73rd Judicial District Court, Bexar County, Texas
                                      Trial Court No. 2016-CI-06300
                               Honorable David A. Canales, Judge Presiding

Opinion by: Rebeca C. Martinez, Justice
Concurring Opinion by: Sandee Bryan Marion, Chief Justice

Sitting:            Sandee Bryan Marion, Chief Justice
                    Rebeca C. Martinez, Justice
                    Irene Rios, Justice

Delivered and Filed: July 10, 2019

           I agree this court has jurisdiction to consider the first appeal. I also agree the trial court

erred in sealing the exhibits but for different reasons than those provided in the majority’s

analysis. 1 Accordingly, I concur in the judgment reversing the trial court’s order in the first appeal

for the reasons briefly stated below.

           Section 134A.006 of the Texas Uniform Trade Secrets Act (“TUTSA”) provides:

                  In an action under this chapter, a court shall preserve the secrecy of an
           alleged trade secret by reasonable means. There is a presumption in favor of
           granting protective orders to preserve the secrecy of trade secrets. Protective orders

1
    I also agree the second appeal is moot.
Concurring Opinion                                                   04-18-00509-CV & 04-18-00844-CV

        may include provisions limiting access to confidential information to only the
        attorneys and their experts, holding in camera hearings, sealing the records of the
        action, and ordering any person involved in the litigation not to disclose an alleged
        trade secret without prior court approval.

TEX. CIV. PRAC. & REM. CODE ANN. § 134A.006(a). The Texas Supreme Court has stated a trial

court’s duty under TUTSA is to “take reasonable measures to protect trade secrets.” In re M-I

L.L.C., 505 S.W.3d 569, 578 (Tex. 2016). In my opinion, when the trial court signed the stipulated

protective order (“SPO”), it satisfied its duty to take “reasonable measures” to “preserve the

secrecy of trade secrets.” Accordingly, I believe we must look to the SPO to determine if the trial

court abused its discretion in granting HouseCanary’s motion to seal.

        The SPO contains specific provisions protecting “Confidential Information” which

extended “through the conclusion of the litigation.” The term “Confidential Information” was

specifically, and properly, defined as not including “information, documents, or tangible things

that have been publicly disclosed.” Although the SPO provides procedures for protecting trial

testimony from public disclosure, it also states “the protections conferred by this Order do not

cover . . . any information that . . . becom[es] part of the public record through trial.” While I

disagree that exhibits are “filed” when they are offered and admitted into evidence during trial,

once exhibits are admitted into evidence and discussed in open court, the exhibits have been

“publicly disclosed” and have become “part of the public record.” And, “[i]t is well established

that the release of information in open court ‘is a publication of that information and, if no effort

is made to limit its disclosure, operates as a waiver of any rights a party had to restrict its future

use.’” Littlejohn v. Bic Corp., 851 F.2d 673, 680 (3d Cir. 1988) (quoting Nat’l Polymer Prods. v.

Borg-Warner Corp., 641 F.2d 418, 421 (6th Cir. 1981)).

        The SPO further provides “[A]ny use of Protected Material at trial shall be governed by a

separate agreement or order.” Here, the exhibits offered and admitted into evidence were, in my

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Concurring Opinion                                                  04-18-00509-CV & 04-18-00844-CV

opinion, “used” at trial. “TUTSA expressly requires that a trade secret owner take ‘reasonable

measures under the circumstances to keep the information secret.’” BCOWW Holdings, LLC v.

Collins, No. SA-17-CA-00379-FB, 2017 WL 3868184, at *15 (W.D. Tex. Sept. 5, 2017) (quoting

TEX. CIV. PRAC. & REM. CODE ANN. § 134A.002(6)). Accordingly, when HouseCanary used the

exhibits at trial, it was required to take reasonable measures to keep the information secret by

obtaining a separate agreement or order.

        HouseCanary argues the exhibits were not publicly disclosed because they were

temporarily sealed during trial. Thus, HouseCanary contends that the trial court (without signing

a written order or even telling the parties) temporarily sealed the exhibits. It relies for this

argument on statements by the trial court at the hearing on HouseCanary’s post trial Motion to

Seal. I disagree with HouseCanary’s interpretation of the trial court’s statements.

        The trial court’s actual explanation to the parties was that it limited public access to all

exhibits during trial because the court was unsure what exhibits were covered by sealing orders

previously entered by other judges in the case. Given the large number of trial exhibits, the trial

court did not want to risk permitting public access to something that was already sealed. However,

the trial court also stated that it did not want to prevent access to anything that the public had a

right to see. Clearly, the trial court had not given individual consideration to any of the exhibits,

but rather placed a blanket “hold” on them all. I do not believe this can be construed to be a

temporary sealing order even under section 134A.006. Instead, I believe the trial court’s action

was a matter of expediency, understandably undertaken in an abundance of caution.

        Similarly, after denying HouseCanary’s motion to seal, the trial court stated that it would

segregate the exhibits HouseCanary sought to seal and would not release them to the media or

public while HouseCanary considered whether to seek mandamus review and emergency relief.

But, the trial court expressly stated it was not sealing those records. This demonstrates the trial

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Concurring Opinion                                                    04-18-00509-CV & 04-18-00844-CV

court did not consider its temporary protection of exhibits, either during trial because of uncertainty

about prior sealing orders, or after denying the motion to seal because of a potential mandamus

stay, to be a sealing of those exhibits.

        Because HouseCanary used the exhibits at trial without obtaining a separate agreement or

order to protect their secrecy and because the exhibits were “publicly disclosed” in open court, I

believe the trial court erred in sealing the exhibits some six weeks after the trial. For these reasons,

I concur in the judgment.

                                                    Sandee Bryan Marion, Chief Justice

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