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  • ELITE RACING DEVELOPMENT LLC vs. K&K INSURANCE GROUP Debt/Contract - Consumer/DTPA document preview
  • ELITE RACING DEVELOPMENT LLC vs. K&K INSURANCE GROUP Debt/Contract - Consumer/DTPA document preview
  • ELITE RACING DEVELOPMENT LLC vs. K&K INSURANCE GROUP Debt/Contract - Consumer/DTPA document preview
  • ELITE RACING DEVELOPMENT LLC vs. K&K INSURANCE GROUP Debt/Contract - Consumer/DTPA document preview
  • ELITE RACING DEVELOPMENT LLC vs. K&K INSURANCE GROUP Debt/Contract - Consumer/DTPA document preview
  • ELITE RACING DEVELOPMENT LLC vs. K&K INSURANCE GROUP Debt/Contract - Consumer/DTPA document preview
  • ELITE RACING DEVELOPMENT LLC vs. K&K INSURANCE GROUP Debt/Contract - Consumer/DTPA document preview
  • ELITE RACING DEVELOPMENT LLC vs. K&K INSURANCE GROUP Debt/Contract - Consumer/DTPA document preview
						
                                

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CAUSE NO. 2019 ELITE RACING DEVELOPMENT, LLC, IN THE DISTRICT COURT OF And ASHTON AINSWORTH, Individually And as Sole Owner of ELITE RACING DEVELOPMENT, LLC Plaintiffs, HARRIS COUNTY, TEXAS NATIONAL CASUALTY COMPANY, et al. Defendants. JUDICIAL DISTRICT RESPONSE IN OPPOSITION TO DEFENDANTS MOTION FOR PROTECTIVE ORDER Plaintiffs Elite Racing Development, LLC and Ashton Ainsworth file this Response in Opposition to Defendants’ Motion for Protective Order and would ask that said motion be in all things denied and that Defendants’ be ordered to produce any and all responsive documents in accordance with their discovery obligations. UMMARY OF ESPONSE A request for entry of protective order is governed by Texas Rule of Civil Procedure 192.6 which permits the trial court to order that “the results of discovery be sealed or otherwise protected but only subject to the provisions of Rule 76a. 192.6(b)(5). Because Defendants have complied with Rules 76a and 192.6, their Motion for Protective Order (“the Motion”) should be denied. With the request for protective order denied, Defendants should be compelled to produce documents they admit are responsive to Plaintiffs’ discovery requests ACKGROUND This is an insurance dispute. On February 5, 2021, after taking the deposition of Andrew Van Gessel, Plaintiffs served Defendants with requests for production specifically seeking documents referenced by Van Gessel in his deposition.1 Defendants’ counsel emailed Plaintiffs counsel with a draft protective order that they contended was necessary because of “the disclosure of confidential materials” in response to the production requests, and invited Plaintiffs’ counsel to provide “any proposed changes or edits.”2 Plaintiffs’ counsel at the time, Brett Wagner, declined to use the protective order proposed by Defendants because it “place[d] the burden of sealing on the party wanting to use a document” instead of on the party who designated the document confidential in the first place.3 Wagner proposed using a protective order that was “more equitable and fair to the parties” and which placed the burden of sealing “on the party claiming confidentiality.”4 Wagner noted that such an order would make “the party claiming confidentiality really examine the strength and necessity of that claim and if itis truly confidential and truly important to that party to protect the document from public disclosure, then that party can undertake that burden of proof and meet the procedural steps needed to get something filed under seal.”5 Defendants rejected that request, declined to produce responsive documents, and demanded that Plaintiffs agree to a form protective order used by the federal court for the Western District of Texas, which (unsurprisingly) completely ignores Texas Rule of Civil Procedure 76a.6 When Plaintiffs would not agree to that order either, Defendants filed the instant Motion, which itself violates Rule 76a and fails to comply with Rule 192.6. For those reasons and the reasons stated herein, the Motion should be denied. 1 Motion, at Exhibits A-C. 2 Motion, at Exhibit D. 3 Motion, at Exhibit E. 4 Motion, at Exhibit E. 5 Motion, at Exhibit E. 6 Motion, at Exhibit F. 2 III ARGUMENT & AUTHORITIES A request for entry of protective order is governed by Texas Rule of Civil Procedure 192.6. See In re Dallas Morning News, 10 S.W.3d 298, 298 n.2 (Tex. 1999) (orig. proceeding) (per curiam); Clear Channel Commc'ns, Inc. v. United Servs. Automobile Ass'n, 195 S.W.3d 129, 134 (Tex. App.—San Antonio 2006, no pet.). Under that rule, “[a] person from whom discovery is sought … may move … for an order protecting that person from the discovery sought.” TEX. R. CIV. P. 192.6(a). “To protect the movant from … invasion of … property rights, the court may make any order in the interest of justice and may-among other things-order that … the results of discovery be sealed or otherwise protected, subject to the provisions of Rule 76a.” TEX. R. CIV. P. 192.6(b)(5). Therefore, to be entitled to the protective order they seek, Defendants must comply with Rules 76a and 192.6. See id. Because Defendants have complied with neither, their Motion should be denied, and Defendants should be ordered to produce the documents they are wrongfully withholding. A. Defendants’ have failed to comply with Rule 192.6. To obtain relief under Rule 192.6, the movant assumes the burden of establishing its privilege, immunity, or other objection to the discovery request. See McKinney v. Nat'l Union Fire Ins. Co. of Pittsburgh, Penn., 772 S.W.2d 72, 75 (Tex. 1989). Defendants request protection pursuant to Texas Rule of Evidence 507, which governs the trade secret privilege.7 Under that rule, “the party resisting discovery must establish that the information is a trade secret.” In re Cont'l Gen. Tire, 979 S.W.2d 609, 613 (Tex. 1998) (emphasis added). Here, Defendants have failed to produce any evidence to support their contention that the documents responsive to 7 Motion, at ¶ 7. 3 Plaintiffs’ discovery requests “contain sensitive, internal information protected by the privilege against disclosing trade secrets.”8 Therefore, Defendants have failed to meet their initial burden to demonstrate that the documents at issue are deserving of a protective order. See In re Brookfield Infrastructure Grp., LLC, No. 13-17-00486-CV, 2018 WL 1725467, 2018 Tex. App. LEXIS 2492, at *12 (Tex. App.—Corpus Christi—Edinburg Apr. 9, 2018, orig. proceeding) (mem. op.) (although relator contended that the trial court abused its discretion by compelling it to produce documents containing trade secrets and other confidential information, relator did not meet its burden to establish that the documents were precluded from discovery based on their alleged confidentiality, so the trial court acted appropriately). B. Defendants’ have failed to comply with Rule 76a. Discovery may only be “sealed or otherwise protected” pursuant to a protective order “subject to the provisions of Rule 76a.” TEX. R. CIV. P. 192.6(b)(5). The federal court protective order proposed by Defendants requires any document designated “Classified Information” to be filed under seal and directs the clerk to maintain the documents under seal “consistent with the sealing requirements of the court.”9 But there are no “sealing requirements of the court” other than those governed by Rule 76a, which all Texas state courts must follow. See Gen. Tire v. Kepple, 970 S.W.2d 520, 523 (Tex. 1998) (“Rule 76a provides the standard and procedures for sealing court records.”). Rule 76a requires, among other things, that all “court records” to be open to the public unless the party seeking to seal court records can show a “specific, serious, and substantial interest” which clearly outweighs the general presumption of openness, and that there are no less restrictive means than sealing records that would adequately and effectively protect the movant. 8 Motion, at ¶ 2. 9 Motion, at Proposed Protective Order, ¶¶ 12-13. 4 TEX. R. CIV. P. 76a(1). Defendants proposed confidentiality order circumvents Rule 76a, so it is improper as matter of law, and the Court would abuse its discretion by entering it. The recent case Kallergis v. Brupbacher, No. 14-19-00470-CV, 2021 Tex. App. LEXIS 1078 (Tex. App. – Houston [14th Dist.] Feb. 11, 2021, no pet.) is instructive on this point. In Kallergis, the defendant filed a motion for confidentiality requesting the trial court to enter a protective order related to her deposition. Id. at *3. The trial court granted the motion over the plaintiff’s objection and entered a confidentiality order requiring any motions or pleadings containing information designated by any party as “confidential” to be filed with the clerk under seal and also required the clerk to “maintain under seal such confidential documents, information, or testimony, which shall be made available only to the Court and to counsel for the parties in this cause number until further order of this Court.” Id. at *4-5. The plaintiff filed an interlocutory appeal pursuant to Rule 76a(8)10, arguing that the trial court abused its discretion when it entered the confidentiality order because the defendant “did not meet the requirements established by Rule 76a for the sealing of ‘court records.’” Id. at *9. The Fourteenth Court of Appeals agreed and reversed the trial court. Id. at *10. It recognized that “Rule 76a provides the standards and procedures for sealing court records” and “places the burden of proof on the party seeking to seal court records.” Id. at *9-10. That burden is only satisfied if “the party seeking to seal court records [can] show (1) a ‘specific, serious, and substantial interest’ which clearly outweighs the general presumption that court records are to be open to the general public and any probable adverse effect that sealing the court records would have upon the general public health or safety; and (2) that there are no less restrictive means than 10 “Any order (or portion of an order or judgment) relating to sealing or unsealing court records shall be deemed to be severed from the case and a final judgment which may be appealed by any party or intervenor who participated in the hearing preceding issuance of such order.” TEX. R. CIV. P. 76a(8). 5 sealing records that would adequately and effectively protect any interest that the party might assert.” Id. at *10. “Because [the defendant] did not present any evidence establishing the Rule 76a requirements,” the Kallergis court held that the defendant “failed to meet her burden under the rule and the trial court abused its discretion when it included section 4, the sealing order, within the May 28, 2019 Confidentiality Order.” Id. at *10. Like the confidentiality order in Kallergis, the one proffered by Defendants requires any pleading or motion that incorporates or references “Classified Information” to submit “the information solely for in camera review” or “file such information under seal with the court” and directs the clerk of the court “to maintain under seal all documents … filed under seal in this litigation[.]”11 But Defendants have not met any of the Rule 76a requirements, so the Court would abuse its discretion if it entered Defendants’ proposed protective order. See Kallergis, 2021 Tex. App. LEXIS 1078, at *10-11. Among other things, Defendants failed to demonstrate though testimony and evidence that they have “a specific, serious and substantial interest which clearly outweighs” the “presumption of openness” and “no less restrictive means than sealing records will adequately and effectively protect the specific interest asserted.” TEX. R. CIV. P. 76a(1); BP Prods. N. Am., Inc. v. Hous. Chronicle Publ'g Co., 263 S.W.3d 31, 34 (Tex. App.—Houston [1st Dist.] 2006, no pet.) (concluding that party failed to meet burden to establish there was no less restrictive means available to protect the specific interest asserted). Defendants have also failed to comply with the notice provisions of Rule 76a, which required Defendants to “post a public notice” providing certain and specific information and to “file a verified copy of the posted notice with the clerk of the court in which the case is pending and with the Clerk of the Supreme Court of Texas.” See TEX. R. CIV. P. 76a(3). The rule also 11 Motion, at Proposed Protective Order, ¶¶ 12-13. 6 requires “[a] hearing, open to the public, on a motion to seal court records” that is “held in open court as soon as practicable, but not less than fourteen days after the motion is filed and notice is posted.” Id. at 76a(4). There is no evidence that Defendants complied with this requirement either. In fact, Defendants set the motion for submission hearing to take place in private only eleven days after the Motion was filed.12 Circumvention of the public notice requirement is only permitted “upon a showing of compelling need from specific facts shown by affidavit or by verified petition that immediate and irreparable injury will result to a specific interest of the applicant before notice can be posted and a hearing held …” Id. at 76a(5). Defendants did not comply with that requirement either. Defendants argue that trade secret protection is warranted under the rules or statutes governing the trade secret privilege.13 But those rules and statutes do “not mandate protective orders or compel the sealing of alleged trade secrets in all instances” and they do not circumvent the requirements of Rule 76a. See Title Source, Inc. v. HouseCanary, Inc., 603 S.W.3d 829, 834, 840 (Tex. App.—San Antonio 2019, pet. granted). Because Defendants have failed to comply with Rule 76a, and because the protective order proposed by Defendants would violate that rule, the Court would abuse its discretion by entering it.See Kallergis, 2021 Tex. App. LEXIS 1078, at *10-11; HouseCanary, Inc., 603 S.W.3d at 841 (“the trial court abused its discretion when it sealed records without applying the Rule 76a standards and procedures”); Clear Channel Communs., 195 S.W.3d at 137 (trail court abused its discretion by entering a “protective order [that] orders the clerk to maintain documents under seal without first complying with the procedures mandated by Rule 76a”); Nguyen v. Dall. Morning News, L.P., No. 2-06-298-CV, 2008 WL 2511183, 2008 Tex. 12 See Defendants’ Notice of Submission, filed March 11, 2021. 13 Motion, at ¶¶ 6-7. 7 App. LEXIS 4606, at *2 n.3 (Tex. App.—Fort Worth June 19, 2008, no pet.) (per curiam) (mem. op.) (“To the extent the trial court ordered that the documents could only be ‘filed . . . under seal,’ it appears to have done so without regard to the procedures mandated by Texas Rule of Civil Procedure 76a.”); Chandler v. Hyundai Motor Co., 844 S.W.2d 882, 885 (Tex. App.—Houston [1st Dist.] 1992, no writ) (trial court abused its discretion by entering protective order because “the plain requirements of rule 76a were not met.”). C. Defendants’ should be ordered to produce responsive documents that they are wrongfully withholding under unsupported claims of confidentiality or privilege. Defendants agree that they are “not refus[ing] to produce information responsive to Plaintiffs’ most recent discovery requests.”14 Because Defendants’ requested protective order is improper as a matter of law, Defendants should be compelled to produce any responsive documents in accordance with their obligations under the Texas Rules of Civil Procedure. Defendants cannot hold responsive documents hostage simply because Plaintiffs will not agree to a protective order that patently violates Texas law. IV CONCLUSION & PRAYER For these reasons, Plaintiffs request the Court deny Defendants’ Motion for Protective Order and order Defendants to produce the responsive documents to Plaintiffs’ in accordance with their discovery obligations. 14 Motion, at ¶ 8. 8 Respectfully submitted, THE KASSAB LAW FIRM ________________________ Lance Christopher Kassab Texas State Bar No. 00794070 lance@kassab.law David Eric Kassab Texas State Bar No. 24071351 david@kassab.law Nicholas R. Pierce Texas State Bar No. 24098263 nicholas@kassab.law 1214 Elgin Street Houston, Texas 77004 Telephone: 713-522-7400 Facsimile: 713-522-7410 Electronic Service: eserve@kassab.law DOHERTY ✯WAGNER Larry J. Doherty Texas Bar No. 05950000 larry@dwlawyers.com 13810 Champion Forest Dr., Suite 225 Houston, Texas 77069 Telephone: 281-583-8700 Facsimile: 281-583-8701 ATTORNEYS FOR PLAINTIFFS CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the above and foregoing instrument has been forwarded to all known parties and/or counsel of record pursuant to the Texas Rules of Civil th Procedure on this, the 17 day of March, 2021. ____________________ David Eric Kassab 9