LAW & LITIGATION NEWS DRIVE-BY DISCOVERY: REQUESTING AND AVOIDING PRE-SUIT DISCOVERY

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1 LAW & LITIGATION NEWS DRIVE-BY DISCOVERY: REQUESTING AND AVOIDING PRE-SUIT DISCOVERY Are you a company that is party to a dispute that may be litigated in Texas? If so, beware. You may find yourself in Court before a lawsuit is ever filed. INTRODUCTION Rule 202 of the Texas Rules of Civil Procedure authorizes prospective plaintiffs to file a Petition seeking discovery before a suit is filed in order to investigate a potential claim. Ironically, Rule 202 was passed in 1999 purportedly to prevent discovery abuse. It displaced the murky Rule 737, which permitted suits in the nature of bills of discovery in accordance with the usages of courts of equity. Bills of discovery can be traced back to Roman law and were traditionally used only to perpetuate testimony, such as the last words of a testator. By the 1990s, Texas plaintiffs were using bills of discovery to conduct surprise depositions on key witnesses without notice of anticipated claims. To address such abuse, Rule 202 was passed and provides specific requirements that must be satisfied before a pre-suit deposition can be authorized. On its face, however, Rule 202 does not set the bar too high. Rather, a plaintiff must show by petition and admissible evidence that the likely benefit of the requested discovery outweighs the burden of the pre-suit discovery sought. Initially, Courts granted Rule 202 petitions without detailed showings. According to a 2005 survey of 6000 litigators and 600 judges, over 60% of petitions were granted, half of them without any additional discovery limits. A string of appellate rulings, however, have since addressed the likely benefit standard, and placed stricter limits on Rule 202 petitions. 1

2 Basic Filing Requirements There are two types of Rule 202 petitions: (1) seeking discovery for use in an anticipated suit and (2) to investigate a potential claim. The first type has more onerous filing requirements. There is no bright line between what an anticipated and a potential claim are, and plaintiffs attorneys would be advised to assert the latter, if possible. When a suit is anticipated, the petition must: 1. Be verified; 2. State the names, addresses, and telephone numbers of adverse parties; or state that such information may not be ascertained through diligent inquiry and describe those persons; 3. State the subject matter of and the petitioner s interest in the anticipated suit; 4. Be filed in a court where venue of the anticipated suit may lie; and, 5. Be served 15 days before the hearing on the deponent, personally, and on adverse parties, personally or by publication. The court may not grant the petition without finding, generally after an evidentiary hearing, that the requested discovery may prevent a failure or delay of justice in the anticipated suit. Thus, the petition should allege facts to be shown at the hearing. When a suit is not yet anticipated, the petition must: 1. Be verified 2. Be filed in the county where the witness resides; and, 3. Be served 15 days before the hearing on the deponent. Again, the petition should allege facts to be shown at the hearing. In this case, the petitioner must show 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. 2

3 Responding to a Rule 202 Petition Unlike a petition filed in a lawsuit, a petition filed under Rule 202 does not require an answer. Unless respondents have no objection to the requested discovery, they should file an answer raising their objections in accordance with the due-order-ofpleading rules. First, the respondent should consider making a special appearance challenging personal jurisdiction, followed by a motion to challenge venue (both of which may be included, in order, in the answer). While it may seem premature for a potential plaintiff to raise such issues before suit, the Texas Supreme Court held in a 5-4 decision that an anonymous potential defendant could file a special appearance under Rule 120A, defeating a Rule 202 petition to obtain his real name. In re Doe, 444 S.W.3d 603 (Tex. 2014). Potential plaintiffs bear the burden of establishing personal and subject matter jurisdiction and proper venue. Id. Second, the respondent should include verified specific denials and allegations that contradict the petitioner s allegations. In the alternative, the respondent should request a protective order and limitations on discovery, such as restricting it to written questions and limited documents. Both parties should attach certificates of service, as described above, and affidavits and exhibits to be presented at the hearing. A Rule 202 hearing is conducted as an evidentiary hearing. Both parties may subpoena witnesses, present evidence and build a record. In fact, some appellate courts have held that a petitioner s failure to request and conduct an evidentiary hearing on a Rule 202 petition is reversible error. After the hearing, the judge must either deny the petition or order a deposition, in which case it may grant limited relief according to Rule 202. The order must include any protections the court finds necessary or appropriate. It must also specify whether it will be an oral deposition or written questions. Ordinary rules for depositions apply, including Rule 199 allowing the production of documents. 3

4 Tricks and Traps A driving purpose behind Rule 202 was to curtail the use of surprise depositions under bills of discovery to impeach key witnesses in subsequent litigation. Under Rule 202, petitioners must provide notice to expected adverse parties where discovery will be used for impeachment in an anticipated suit. Such notice is not required, however, if a suit is not anticipated. In that case, the petitioner must state that the discovery is intended to investigate a potential claim. In reality, there is no clear line between an anticipated and a potential claim. Thus, a plaintiff s attorney may try to avoid notice to adverse parties by not admitting that a lawsuit is anticipated. Interested parties who have not been given notice may nonetheless hear about the petition from the respondent and object at the hearing or in a motion to vacate. An interested party may also seek mandamus, as the courts generally recognize that once taken, a deposition cannot be untaken. Where the deponent is a third party who is not a potential defendant, the deponent may appeal directly. This creates some gamesmanship where petitioners suggest they are not anticipating a lawsuit so that the lite version of Rule 202 applies, but the truth quickly comes out. In one case where the petitioner refused to state clearly whether he might file suit, the appeals court actually telephoned the petitioner s attorney directly. After several inquiries, the attorney admitted [the petitioner] could not state with certainty that he would not file suit. He lost the appeal and was charged attorney s fees. In re Mora (Tex. App. San Antonio 2013, no pet.). Among the approximately 100 opinions on Rule 202 issued since it was passed in 1999, the most common result has been a mandamus order denying a petition. Most of these cases turned on the judge s failure to enter any required findings or the petitioner s failure to submit any evidence of the relative costs and benefits of discovery. Where both parties have submitted affidavits, the decisions are mixed, at times suggesting a review of the merits of the future, ostensibly unanticipated lawsuit. 4

5 Indeed, at least one court has denied a petition on grounds of a potential defense of immunity by the potential defendant. CONCLUSION If you are a company involved in a dispute that is subject to litigation in Texas, it is advisable to retain counsel well before suit is filed who are well-versed in the requirements, benefits, and detriments of a Rule 202 Petition. Properly employed, Rule 202 can be a dangerous weapon for plaintiffs. Properly defended, Rule 202 Petitions can be countered and managed by skilled defense counsel. This Article is a publication of Beirne, Maynard & Parsons, L.L.P (the "Firm"). By publishing or providing this Article, the Firm is not providing legal counsel or advice to, nor creating an attorney-client relationship or any other relationship with, any person(s), corporation(s) or other entity or entities. Any questions or comments about the specific subject matter of this article may be directed to: James Rogers, partner in the Firm's Houston office: ; jrogers@bmpllp.com and Cooke Kelsey, associate in the Firm s Houston office: ; ckelsey@bmpllp.com BEIRNE, MAYNARD & PARSONS, L.L.P. 5 AUSTIN DALLAS HOUSTON SAN ANTONIO NEW ORLEANS