Court Opinion

ID: 4105462
Source: CourtListenerOpinion
Date Created: 2016-12-07 21:14:17.097014+00
Date Added: 2024-06-11T07:46:06.492683
License: Public Domain

Opinion issued December 6, 2016

                                   In The

                            Court of Appeals
                                   For The

                        First District of Texas
                          ————————————
                            NO. 01-16-00187-CV
                          ———————————
  INTERNATIONAL ASSOCIATION OF DRILLING CONTRACTORS,
                       Appellant
                                      V.
    ORION DRILLING COMPANY, LLC AND INTEGRATED DRIVE
                   SYSTEMS, LLC, Appellees

                  On Appeal from the 190th District Court
                           Harris County, Texas
                     Trial Court Case No. 2015-73975

                                OPINION

     This is an appeal from a trial court’s order authorizing a deposition under

Texas Rule of Civil Procedure 202. See TEX. R. CIV. P. 202. Orion Drilling

Company, LLC and Integrated Drive Systems, LLC requested the deposition of a
corporate representative of the International Association of Drilling Contractors.

Orion and Integrated seek disclosure of the identity of the person who reported an

incident to the Association, so that Orion and Integrated might investigate potential

claims based on allegedly false statements made in the published report.

      The Association contends that (1) discovery into the identity of its informant

violates the First Amendment to the United States Constitution, (2) the Texas Free

Flow of Information Act protects the identifying information from disclosure;

(3) the petition fails to satisfy the requirements of Rule 202, and (4) the order

circumvents the Texas Citizens’ Participation Act. We hold that the requested

discovery does not violate the First Amendment, the Association waived any

challenge under the Free Flow of Information Act, and the trial court acted within

its discretion in ordering the deposition. We further hold that the order does not

circumvent the TCPA, because the Association did not move to dismiss the

proceeding under the TCPA. We therefore affirm.

                                 BACKGROUND

      The Association is a non-profit organization based in Houston. Its members

are participants in the global oil and gas drilling industry. Both Orion and

Integrated are Association members.

      The Association distributes reports of mishaps and accidents via emails that

link recipients to the Association’s safety alerts, which are hosted on its website.

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Since the program began in 1998, the Association has published nearly 700 safety

alerts. To report an incident, a person completes a “Drilling Near-Miss/Hit Report”

form, also found on the Association’s web site. Among other information, an

informant must provide: (1) the informant’s name, email address, supervisor, and

safety manager; (2) the date and time of the incident; and (3) the company,

division, and drilling rig where the incident occurred.

      The form asks, “May we use this information anonymously for an

[Association] Safety Alert?” Immediately below this question, the form states,

“Company name and information WILL NOT be used in Safety Alert (emphasis

original).

      In November 2015, the Association received an incident report.            The

reported incident occurred on an Orion rig that at the time was using Integrated’s

control systems. The Association issued a safety alert describing the reported

incident via its email distribution list. The alert recounted that equipment had

dropped to the rig floor while workers were present.         The drop resulted in

equipment damage and a “near miss to personnel.”          The alert attributed the

incident to a problem with Integrated’s software and hardware configuration and

Integrated’s safety processes.

      Although the Association typically redacts company names and identifying

information from its safety alerts, this alert contained the name of the rig and its

                                          3
location, and named Integrated. Just over an hour after the Association distributed

the email, Integrated called the Association to complain about the alert’s contents.

The Association then took the alert permanently offline.

        Orion and Integrated requested that the Association identify the person who

had reported the incident. The Association refused, citing its desire to maintain the

confidentiality of its sources. Orion and Integrated then filed the Rule 202 petition.

After a hearing, the trial court ruled that the petition had merit and “the likely

benefit of allowing . . . the requested deposition to investigate their potential claims

outweighs the burden or expense of the procedure.” The trial court limited the

scope of the deposition to “[t]he identity of the source of the information provided

to [the Association] that is included in [the] Safety Alert” and “[a]ll

communications with the informant . . . concerning the information in [the] Safety

Alert . . . .”

                                   DISCUSSION

I.      Texas Rule of Civil Procedure 202

        Texas Rule of Civil Procedure 202 authorizes pre-suit discovery to

investigate a claim in limited circumstances, when ordered by a trial court. TEX. R.

CIV. P. 202.1(b). A Rule 202 petition must: (1) be verified; (2) be filed in the

proper county in the name of the petitioner; (3) state that petitioner seeks to

investigate a claim; (4) state the subject matter of the claim and the petitioner’s

                                           4
interest in it; (5) identify the parties that the petitioner expects to have interests

adverse to petitioner’s; and (6) identify the person to be deposed, the areas of

inquiry, and need for the testimony. In re Anand, No. 01-12-01106-CV, 2013 WL
1316436, at *2 (Tex. App.—Houston [1st Dist.] Apr. 2, 2013, orig. proceeding)

(mem. op.) (per curiam) (citing TEX. R. CIV. P. 202.2).

      To authorize a deposition, the trial court must find that taking the deposition

“may prevent a failure or delay of justice in an anticipated suit” or “the likely

benefit . . . outweighs the burden or expense of the procedure.” TEX. R. CIV.

P. 202.4(a).

      We review a trial court’s order granting a deposition under Rule 202 for an

abuse of discretion. In re Bailey-Newell, 439 S.W.3d 428, 431 (Tex. App.—

Houston [1st Dist.] 2014, orig. proceeding) (citing In re Hewlett Packard, 212
S.W.3d 356, 360 (Tex. App.—Austin 2006, orig. proceeding)); see also eBay Inc.

v. Mary Kay Inc., No. 05-14-00782-CV, 2015 WL 3898240, at *3 (Tex. App.—

Dallas June 25, 2015, pet. denied) (mem. op.) (citing Patton Boggs LLP v.

Moseley, 394 S.W.3d 565, 568–69 (Tex. App.—Dallas 2011, orig. proceeding)).

A trial court abuses its discretion when its decision is arbitrary and capricious. In

re Bailey-Newell, 439 S.W.3d at 431.          A trial court has no discretion in

determining what the law is; thus, if the ruling interprets or applies the law

incorrectly, a party is entitled to relief under an abuse-of-discretion standard. Id.

                                          5
The Texas Supreme Court has directed courts to “strictly limit and carefully

supervise pre-suit discovery to prevent abuse of the rule.” In re Wolfe, 341 S.W.3d
932, 933 (Tex. 2011).

II.   Jurisdiction

      As a threshold matter, we consider our jurisdiction to hear this appeal. M.O.

Dental Lab v. Rape, 139 S.W.3d 671, 673 (Tex. 2004) (citing N.Y. Underwriters

Ins. Co. v. Sanchez, 799 S.W.2d 677, 678 (Tex. 1990)). An order authorizing pre-

suit discovery incident to an anticipated lawsuit is not an appealable order. In re

Bailey-Newell, 439 S.W.3d at 431; see In re Hewlett Packard, 212 S.W.3d at 360

(“[A]n order pursuant to rule 202 allowing pre-suit discovery incident to a

contemplated lawsuit against the party from whom the discovery is sought is not a

final, appealable order.”). By contrast, an order granting a pre-suit deposition is

appealable “if [the deposition is] sought from someone against whom suit is not

anticipated.” In re Jorden, 249 S.W.3d 416, 419 & n.7 (Tex. 2008) (citing Ross

Stores, Inc. v. Redken Labs., Inc., 810 S.W.2d 741, 742 (Tex. 1991)); Ross Stores,
810 S.W.2d at 742 (holding that pre-suit discovery order is final and appealable

when discovery proceeding was brought “against third parties against whom suits

are not contemplated”).

      The parties agree that Orion and Integrated do not anticipate bringing a suit

against the Association, but seek the deposition to discover the identity of a

                                        6
potential defendant—namely, the person who reported the incident to the

Association. Thus, the order requiring the deposition is final and appealable. See

In re Jorden, 249 S.W.3d at 419 & n.7; Ross Stores, 810 S.W.2d at 742.

Accordingly, we hold that we have jurisdiction over this appeal.

III.   Privilege from Disclosure

       A.    The First Amendment does not protect from disclosure the
             information that the informant provided to the Association.

       The Association contends that requiring it to disclose the author of the

incident report to two of its members violates the First Amendment to the United

States Constitution. The Association contends that the person who reported the

incident has a right to speak anonymously in these circumstances and that forcing

disclosure would chill its publication of safety information that is beneficial to its

members and to the public.

       Orion and Integral respond that this case does not implicate a First

Amendment right to speak anonymously, because a reasonable person under the

circumstances would not understand the report to be made anonymously and the

Association does not proffer any evidence that the reporting individual subjectively

believed that the report would be anonymous.

       The Supreme Court of the United States has held that “an author’s decision

to remain anonymous, like other decisions concerning omissions or additions to the

content of a publication, is an aspect of the freedom of speech protected by the

                                          7
First Amendment.” McIntyre v. Ohio Elections Comm’n, 514 U.S. 334, 342, 115
S. Ct. 1511, 1516 (1995). In McIntyre, the Court explained that this freedom

applies “at least in the field of literary endeavor,” as well as “beyond the literary

realm,” in areas like publication of unsigned handbills, political rhetoric, and the

secret ballot. Id. at 342–43, 115 S. Ct. at 1516–17. The Court therefore held that a

State    could   not   “punish   fraud   indirectly”   by   prohibiting   anonymous

pamphleteering regarding a ballot proposal. Id. at 337, 357, 115 S. Ct. at 1514,

1524; see also Buckley v. Am. Const. Law Found., 525 U.S. 182, 199–200, 119 S.

Ct. 636, 646 (1999) (recognizing that circulators of political petitions have a

protected “interest in anonymity”).

        But not every speaker’s identity is cloaked from disclosure through

invocation of the First Amendment.        The Supreme Court has observed “the

fundamental principle that the public has a right to every man’s evidence,”

cautioning that any privilege from disclosure in discovery must “promote[]

sufficiently important interests to outweigh the need for probative evidence” and

“must be strictly construed.” Univ. of Pa. v. E.E.O.C., 493 U.S. 182, 189, 110 S.

Ct. 577, 582 (1990) (internal punctuation and citations omitted). In the University

of Pennsylvania case, for example, the Supreme Court refused to recognize a First

Amendment privilege against disclosure of peer-review materials in the context of

tenure decisions in academic institutions, even though the authors of the materials

                                          8
did not know that their statements would eventually become part of the public

record. Id. The Court observed that the chilling effect that the university feared

would result was “remote,” “attenuated,” and “speculative.” Id. at 200, 110 S. Ct.

at 588. The Court also refused to recognize a First Amendment privilege from

disclosure asserted by a news reporter who sought to avoid revealing the identity of

a confidential source of information about criminal activity. Branzburg v. Hayes,

408 U.S. 665, 692, 698, 92 S. Ct. 2646, 2662, 2665 (1972). Thus, a promise of

anonymity or confidentiality by a private actor does not automatically protect

information from disclosure in litigation. See Univ. of Pa., 493 U.S. at 196–98, 110

S. Ct. at 586–87 (declining to recognize First Amendment privilege, despite

university’s “express or implied assurances of confidentiality” to “ensure[] candor

and enable[] an institution to make its . . . decisions on the basis of valid . . .

criteria”).

       Because the “author’s decision to remain anonymous” is at the heart of the

assertion of a First Amendment right that would be balanced against the need for

disclosure in litigation, we examine whether the Association’s informant reported

the incident in circumstances that demonstrate that decision. See McIntyre, 514
U.S. at 341–42, 115 S. Ct. at 1516. The evidence adduced at the Rule 202 hearing

supports the trial court’s implied finding that the incident report was not made by

an informant who had decided to remain anonymous.

                                         9
      First, the incident report requires the informant to disclose the informant’s

name and other identifying information. The form also requests information about

the informant’s employer and job function, and specific facts about the incident.

The web form that the Association used to collect reports for its safety alerts makes

no assurance of confidentiality of the information provided in the form beyond its

anonymous use in a safety alert.        Nothing in the report promises complete

anonymity of the informant, particularly from other members of the Association.

      The Association stresses that it attempts to maintain the confidentiality of

both its sources and the companies identified in the alert. But no evidence in the

record demonstrates that the informant made the report with an intention of

remaining anonymous or received any assurances that the informant’s identity

would be kept secret. As the Association’s Vice President for Onshore Operations

averred: “[i]n practice . . . because individuals and third parties are present at the

reported events, or become aware of such events, complete confidentiality is never

certain.”   The form refers to anonymity in the question, “May we use this

information anonymously for an [Association] Safety Alert?” But the form does

not express whether the informant’s identity may be disclosed in other

circumstances.    Though the form represents that the Association will redact

identifying information in the release of the safety alert, there is no evidence that

                                         10
the source for the alert in question had any expectation of personal anonymity

beyond that described.

      Second, the Association’s form does not provide a method for an

anonymous informant to report an incident, and the informant in this case did not

anonymously report the incident. Unlike the professors in the University of

Pennsylvania case, the informant who made the report to the Association had no

assurances of anonymity from disclosure to the Association’s members. See Univ.

of Pa., 493 U.S. at 196, 110 S. Ct. at 586.

      Finally, the Association proffered no evidence at the hearing from the

informant that the informant intended that the communication be anonymous when

it was reported. We hold that the Association has not demonstrated that a Rule 202

deposition to discover the identity of the source of the incident report violates the

First Amendment.

      B.     The Texas Free Flow of Information Act does not protect the
             identifying information from disclosure because the Association
             did not invoke the Act in the trial court.

      The Association next contends that it is entitled to a statutory privilege

available to journalists under the Texas Free Flow of Information Act. See TEX.

CIV. PRAC. & REM. CODE ANN. §§ 22.021–.027 (West 2015). The Association did

not, however, raise this ground in the trial court as a basis for protection from

disclosure. We therefore cannot consider it as grounds for reversal. See TEX. R.

                                          11
APP. P. 33.1(a) (“As a prerequisite to presenting a complaint for appellate review,

the record must show that” appellant timely raised complaint in trial court and trial

court either ruled thereon or refused to do so.).

IV.   Compliance with Rule 202

      The Association contends that, even if there is not a privilege from

disclosure granted by the First Amendment, Orion and Integrated failed to

demonstrate in the trial court that the benefit of a deposition to determine the

identity of the informant outweighs the burden or expense of the procedure. See

TEX. R. CIV. P. 202.4(a)(2). The Association further contends that Orion and

Integrated failed to file the petition in their names, as required by Rule 202.2(c).

The trial court reasonably could have concluded, however, that the benefit of the

disclosure of identifying information was outweighed by the attendant burden or

expense of the procedure.

      A.     The record supports the trial court’s finding that the likely benefit
             of the deposition outweighs the burden or expense of the
             procedure.

      Rule 202.4 requires a trial court to order a deposition

      if, but only if, it finds that: (1) allowing the petitioner to take the
      requested deposition may prevent a failure or delay of justice in an
      anticipated suit[;] or (2) the likely benefit of allowing the petitioner to
      take the requested deposition to investigate a potential claim
      outweighs the burden or expense of the procedure.

                                          12
TEX. R. CIV. P. 202.4(a). The trial court found that the second of these two reasons

supported authorizing the deposition.

      The Association argues that the record lacks evidence to support the trial

court’s finding and that Orion and Integrated failed to meet their burden of

demonstrating that the benefit of disclosure outweighed the burden of providing

the information. See In re Contractor’s Supplies, Inc., No. 12-09-00231-CV, 2009
WL 2488374, at *5 (Tex. App.—Tyler Aug. 17, 2009, orig. proceeding) (mem.

op.) (petitioner bears burden to demonstrate entitlement to deposition); In re

Denton, No. 10-08-00255-CV, 2009 WL 471524, *3 (Tex. App.—Waco Feb. 25,

2009, orig. proceeding) (“trial court’s finding must coincide with the reason

requested for the Rule 202 deposition”).       It contends that disclosure would

undermine the Association’s ability to continue to publish safety alerts and that the

expense associated with the deposition is a burden that outweighs any potential

benefit. It further contends that Orion and Integrated have not demonstrated a

specific injury that resulted from the short period of time that the safety alert

appeared on the Association’s website.

      The Association points to the affidavit from its vice-president, in which he

avers that, “if [the Association] were unable to protect its sources, its ability to

publish Safety Alerts would essentially be extinguished.” The Supreme Court

rejected similar assertions in University of Pennsylvania. The Court explained that

                                         13
similar fears, if unsupported by evidence, are “remote,” “attenuated,” and

“speculative.” 493 U.S. at 200, 110 S. Ct. at 588. Moreover, the Association

admits that it is impossible to guarantee the anonymity of companies and

individuals involved in the incidents on which it reports. The trial court reasonably

could have concluded that “the ‘chilling effect’ [the Association] fears is at most

only incrementally worsened by the absence of a privilege.” See id.

      The trial court could have balanced the Association’s interests against Orion

and Integrated’s allegations that the safety alert at issue contains false statements,

and that false statements in safety alerts do not protect the public. Orion and

Integrated allege that they have requested the deposition “to determine whether the

information was provided intentionally, with knowledge of its falsity, such that

Petitioners would have a claim for business disparagement against the providing

party.” They also maintain that “[b]oth Orion and Integrated have already felt the

damaging effects of the false Safety Alert’s publication” to their reputations and

business. Thus, they have averred that they are investigating a claim for business

disparagement and need the name of the Association’s source to evaluate their

claim. See Forbes Inc. v. Granada Bioscis., Inc., 124 S.W.3d 167, 170 (Tex. 2003)

(discussing nature of business disparagement claims).         Because this showing

demonstrates the “likely benefit” of a Rule 202 deposition, the trial court did not

abuse its discretion on this basis. In any event, a Rule 202 petition need not plead

                                         14
a specific cause of action; instead, Rule 202 requires only that the petitioner “state

the subject matter of the anticipated action, if any, and the petitioner’s interest

therein.” City of Houston v. U.S. Filter Wastewater Grp., Inc., 190 S.W.3d 242,

245 n.2 (Tex. App.—Houston [1st Dist.] 2006, no pet.) (quoting TEX. R. CIV.

P. 202.2(e)); see also In re Emergency Consultants, Inc., 292 S.W.3d 78, 79 (Tex.

App.—Houston [14th Dist.] 2007, orig. proceeding) (per curiam) (“Rule 202 does

not require a potential litigant to expressly state a viable claim before being

permitted to take a pre-suit deposition.”).

      In this instance, the trial court narrowed the scope of the deposition to the

disclosure of the identity of the informant and the informant’s communications

with the Association about the incident, which may be answered on written

questions.   In the absence of any evidence regarding the significance of this

burden, we cannot say that the district court abused its discretion in ordering the

deposition for this reason.

      B.     The trial court did not err in denying the deposition based on the
             petition’s failure to be brought “in the name of the petitioner” or
             required the filing of a lawsuit.

      The Association also contends that the petition should have been in the

names of Orion and Integrated, but was not, and thus the petition fails to comply

with Rule 202.2(c). And, it contends, they should have sued the Association or at

                                          15
least alleged elements of the alleged claim, rather than availing themselves of Rule

202.

       Rule 202.2(c) requires the petition to “be in the name of the petitioner[s].”

The petition in this case was incorrectly captioned, “In re: International

Association of Drilling Contractors.” But the opening sentence of the pleading

reveals that Orion and Integrated are the petitioners. Because the Association does

not attempt to demonstrate that the caption of the petition “probably caused the

rendition of an improper judgment,” we will not reverse the trial court on this

basis. See TEX. R. APP. P. 44.1(a).

       We also reject the Association’s contention that the trial court abused its

discretion in concluding that Orion and Integrated should have filed a lawsuit

without conducting a Rule 202 investigation. Rule 202 expressly contemplates a

pre-suit investigation. Moreover, although a trial court may determine whether the

benefit of the procedure outweighs the burden of it, the Rule does not require the

petitioner to specifically plead a cause of action. TEX. R. CIV. P. 202.2(e); see In re

Emergency Consultants, 292 S.W.3d at 79; City of Houston, 190 S.W.3d at 245

n.2. Orion and Integrated have pleaded that the identity of the informant will reveal

whether a cause of action for business disparagement exists against that informant.

We hold that the Association has not demonstrated any reversible error in the

petition’s alleged defects. See TEX. R. APP. P. 44.1(a).

                                          16
V.    Texas Citizens Participation Act

      Finally, the Association argues that Orion and Integrated’s Rule 202 petition

circumvents the Texas Citizens’ Participation Act, found in Chapter 27 of the Civil

Practice and Remedies Code. See TEX. CIV. PRAC. & REM. CODE ANN. §§ 27.001–

.011 (West 2015). The purpose of the TCPA “is to encourage and safeguard the

constitutional rights of persons to petition, speak freely, associate freely, and

otherwise participate in government to the maximum extent permitted by law and,

at the same time, protect the rights of a person to file meritorious lawsuits for

demonstrable injury.” Id. § 27.002. Under the TCPA, “[i]f a legal action is based

on, relates to, or is in response to a party’s exercise of the right of free speech, right

to petition, or right of association, that party may file a motion to dismiss the legal

action.” Id. § 27.003(a).

      Our sister court of appeals has recently held that the TCPA applies to Rule

202 proceedings, when properly invoked through a motion to dismiss brought

under the Act.     In re Elliott, No. 03-16-00231-CV, --- S.W.3d ---, 2016 WL
5887349, at *7 (Tex. App.—Austin Oct. 7, 2016, orig. proceeding) (holding that

motion to dismiss invoking TCPA stays discovery in a Rule 202 proceeding until

the court rules on the motion to dismiss).

      We agree with the Association that a party “cannot obtain by Rule 202 what

it would be denied in the anticipated action.” See In re Wolfe, 341 S.W.3d at 933.

                                           17
But the TCPA requires a party to invoke it by moving to dismiss the proceeding on

the basis that the suit fails to meet its requirements. See In re Elliott, 2016 WL
5887349, at *7. The Association did not move to dismiss Orion and Integrated’s

petition under the TCPA. Because the Association did not move to dismiss the

proceeding by invoking the TCPA, we hold that the Association has not preserved

this argument for our review.

                                  CONCLUSION

      We affirm the order of the district court.

                                              Jane Bland
                                              Justice

Panel consists of Justices Bland, Massengale, and Lloyd.

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