AUSTIN – For the past year, an appeal brought by State Farm Lloyds has been before the Texas Supreme Court, in which the insurer’s allies contend trial lawyers are abusing discovery to force settlements in storm lawsuits.
On Nov. 14, the U.S. Chamber of Commerce and the Texas Association of Business filed an amended brief on the merits of amici curiae in the litigation, arguing justices should grant State Farm’s petition to prevent “wasteful and irrelevant discovery” for the purposes of leveraging “higher settlements.”
Last November, State Farm Lloyds filed two petitions for writ of mandamus with the high court, seeking to overturn a district judge’s decision to impose a protocol for the production of electronically stored information (ESI for short) in a hailstorm lawsuit brought against it by the Mostyn Law Firm in Houston.
Mostyn Law has filed thousands upon thousands of lawsuits against Texas insures, advertising heavily following every major storm strike with the Lone Star State for the past several years.
When a court has jurisdiction over a civil case, during the discovery process the plaintiff can request the court to order defendants, like State Farm, to fork over ESI in formats not used by the company.
The Chamber argues the process is “prohibitively expensive” and unnecessary.
“This Court should grant the mandamus petition on order to actively curb the discovery gamesmanship at play in this case, and that imposes great harm on Amici’s members in other cases throughout Texas,” the Chamber’s brief states.
“Granting this mandamus petition will send a clear message to litigants and to lower courts that the Texas discovery rules should not be abused to create hydraulic pressure to settle claims regardless of the underlying merits.”
The State Farm case before the Texas Supreme Court
Court records show that on Sept. 30, 2014, District Judge Rose Reyna, who is presiding over the hailstorm MDL in Hidalgo County, granted plaintiffs Alejos and Ofelia Ramirez’s amended motion for entry of judgment of production protocol.
The plaintiffs are represented by Steve Mostyn, who made hundreds of millions suing insurers in the aftermath of Hurricane Ike.
State Farm maintains Judge Reyna’s order violates Texas Rules of Civil Procedure 192.4 and 196.4, as well as Rule 13 of Texas Rules of Judicial Administration.
The civil rules compel courts to require the production of ESI only in reasonably usable formats that are less intrusive and less burdensome means of meeting the defendant’s discovery obligations.
“In short, (Reyna’s) order allows the Plaintiffs to dictate the entire manner and method by which State Farm, as the responding party, must collect, process, review, and produce electronic documents and data based solely on what the Plaintiffs want,” the petition states.
The Chamber (which owns the Record) is represented by Shook, Hardy & Bacon attorneys Patrick Oot and Daniel Lim.
State Farm is represented in part by Brian Chandler, attorney for the Houston law firm Ramey, Chandler, Quinn & Zito.
Case Nos. 15-0903 and 15-0905