Texas SC finds ‘proportionality is the polestar’ in e-discovery disputes

By David Yates | May 30, 2017

AUSTIN – Trial courts need to be balanced when it comes to their rulings in electronic discovery disputes, as the Texas Supreme Court recently found judges must recognize “proportionality is the polestar.”

The May 26 opinion stems from an appeal brought by State Farm Lloyds.

Several organizations and companies came to the insurer’s aid throughout the appeal, including the U.S. Chamber of Commerce, which argued justices should grant State Farm’s petition to prevent “wasteful and irrelevant discovery” for the purposes of leveraging “higher settlements.”

The Chamber owns the Record.

In November 2015, 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.

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 high court recognized that electronic discovery now “plays an increasingly significant role in litigation and, often, at significant expense.”

“Given the prevalence of discoverable electronic data, discovery disputes involving electronically stored information (ESI) are a growing litigation concern,” the opinion states.

“Today, we elucidate the guiding principles informing the exercise of discretion over electronic-discovery disputes, emphasizing that proportionality is the polestar.”

Although the Supreme Court denied the petitions for writ of mandamus, State Farm was given the “opportunity to reurge its discovery objections to the trial court” in light of the opinion.

Case history

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 argued 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.

State Farm is represented in part by the Houston law firm Ramey, Chandler, Quinn & Zito.

Case Nos. 15-0903 and 15-0905

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