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Hail No: Supreme Court Reins in Overbroad Discovery

Written by Tate Hemingson on November 7, 2016

Texas Supreme Court recently confirmed that mandamus relief remains available for overbroad discovery orders. The Court reversed a trial court’s order compelling National Lloyds to produce “all emails, reports attached to emails, and any follow-up correspondence and information” because the order compelled National Lloyds to produce documents that had no relation to the two hail storms in Hidalgo County that were the subject of the  lawsuit. In re National Lloyds Ins. Co., No. 15-0452 (Oct. 28, 2016) (per curiam).

Policyholders claimed that National Lloyds underpaid them for hail damage resulting from Hidalgo County hail storms in March and April 2012. Plaintiffs initially requested documents related to those hail storms. When National Lloyds’ initial document production and depositions revealed the existence of additional management reports and associated emails, plaintiffs moved to compel production of those documents and sought sanctions. National Lloyds argued the reports, which were not limited to the Hidalgo County storms, exceeded the scope of the prior requests for production and reasserted objections as to the relevance, overbreadth and unduly burdensome nature of the requests. The trial court ordered production and assessed $15,726.25 in sanctions. National Lloyds asked for reconsideration and an in camera review. The trial court refused.

The Thirteenth Court of Appeals denied mandamus relief, holding that National Lloyds had waived its overbroad objections because it had withdrawn those objections to the initial discovery, and, even if it had not, the evidence was conflicting. As a result, the Court of Appeals found the trial court did not abuse its discretion.

The Supreme Court disagreed. First, it found that even though National Lloyds had withdrawn its objections to the initial narrow requests, it had timely re-asserted them in its response when Plaintiffs first sought the management reports and associated emails which were the subject of the order to compel.

The Supreme Court also found that the trial court abused its discretion by ordering National Lloyds to produce “all emails” from locations and dates other than the loss at issue. Without tailoring the request to the March and April 2012 hail storms in Hidalgo County, the trial court’s order was overbroad and an abuse of discretion. Neither the policyholders’ claim for punitive damages arising from bad faith, nor the fact that it was MDL litigation, entitled plaintiffs to broader discovery encompassing documents unrelated to the insurance event at issue.

Finally, the Court ordered the lower court to determine whether the attorney’s fees awarded as sanctions remained appropriate given the Court’s decision reversing the discovery order.