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
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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
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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.
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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
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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
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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
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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.
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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
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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.
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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.
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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
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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
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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
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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).
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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.
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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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