In re Master Flo Valve Inc.

485 S.W.3d 207, 2016 Tex. App. LEXIS 721, 2016 WL 316491
CourtCourt of Appeals of Texas
DecidedJanuary 26, 2016
DocketNO. 14-15-00956-CV
StatusPublished
Cited by8 cases

This text of 485 S.W.3d 207 (In re Master Flo Valve Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Master Flo Valve Inc., 485 S.W.3d 207, 2016 Tex. App. LEXIS 721, 2016 WL 316491 (Tex. Ct. App. 2016).

Opinion

[212]*212OPINION

Ken Wise, Justice

On November 17, 2015, relators Master Flo Valve Inc. and Master Flo .Valve (USA), Inc. (“Master Flo”) filed a petition for' writ of mandamus in this court. See Tex. Gov’t Code Ann. § 22.221 (West 2004); see also Tex.R.App. P. 52. In the petition, Master Flo asks this court to compel the Honorable Larry Weiman, presiding judge of the 80th District Court of Harris County, to vacate a discovery order he signed on November 6, 2015.

As discussed below, we grant the petition for writ of mandamus in part and deny in part.

Background

Master Flo is a manufacturer of-oilfield products that engages distributors to market its products to end users.- On December 1, 2006, Master Flo engaged Alpha to be its--exclusive distributor for certain regions of the Mexican market as defined by Petróleos Mexicanos (“PEMEX”), Mexico’s national oil company.

During Alpha’s preparations to submit a major bid to supply choke valves for PE-MEX’s Samaria field, on May 25, 2012, Alpha’s general manager, Francisco Hernandez (“Hernandez”) resigned, as did several other Alpha personnel. These former Alpha employees started their own distribution company, Valvetecnia, S.A. de C.V. (“Valvetecnia”).

On June 27, 2012, Master Flo modified its distributor relationship with Alpha from exclusive to nonexclusive.

Master -Flo then agreed to supply chokes required for the Samaria bid to Valvetecnia instead of Alpha. Valvetecnia brought in a third party, Commercializado-ra Industrial y de Servicios Mallark, S.A. de C.V. (“Mallark”), to assist in bidding the project. On August 7, 2012, Mallark won the Samaria bid; under which it contracted to supply Master Flo chokes to PEMEX.

On March 15, 2013, Master Flo terminated its agreement and relationship with Alpha. ' On April 1, 2013, Master Flo entered into an exclusive distributor relationship with Valvetecnia.

On January 7, 2014, Alpha filed suit against Master Flo, alleging that Master Flo breached the distribution contract.by supporting Valvetecnia on the Samaria bid. Alpha’s petition alleges that Master Flo conspired- with Hernandez, Valvetecnia, and Mallark to defeat Alpha’s bid for the Samaria contract so that Master Flo could win the bid with its new distributor, Valve-tecnia. Alpha’s petition alleges that, as part of a conspiracy, Master Flo (1) secretly supported Hernandez in starting a competing business, (2) actively sabotaged Alpha’s efforts to win the $3-plus million Samaria bid, and (3) wrongfully.changed its .contract with Alpha to “nonexclusive.” Alpha also alleges Mallark, Valvetecnia, and Hernandez have generated millions of dollars by improperly usurping and trading on the foundation and relationships established'by Alpha and by using confidential information stolen from Alpha. Alpha claims Master Flo’s misconduct cost it the loss of the Samaria project and other future projects.

The cause was originally set for trial on September 21, 2015, but was not reached. On September 25, 2015, - Alpha filed a Motion to Compel Collection & Production of Documents, in which it requested the trial court to overrule Master Flo’s objections to over thirty requests for production and to order Master Flo to perform keyword searches of all, email and electronic file systems.

On November 6, 2015, the trial court heard and granted the motion. The order states;

[213]*213The Court has considered Plaintiffs’ Motion to Compel filed September 25, 2015 (the “Motion”) and is of the opinion it should be GRANTED. The Defendants’ objections to the specific-discovery requests cited in the Motion are OVERRULED. Defendants shall fully respond those requests. Within two weeks of this order, Defendants shall also perform an electronic keyword search across all email systems and electronic files for responsive documents, and shall produce all responsive documents. The keywords will be agreed by the parties, or will be supplied by the Court separately if an agreement was not reached at the. hearing on the Motion. Without limiting the foregoing, Defendants shall produce all communications with Francisco Hernandez or any of his associated entities, and any of those entities’ agents or representatives. .Without limiting the foregoing, Defendants shall produce all phone records reflecting calls and texts between (a) Pablo Chiaraviglio and (b) Francisco Hernandez or any of his associated entities or any of those entities’ agents or representatives.

The parties did not agree on the keywords to be used in the searches, so, per the' discovery order, the keywords are to be supplied by the trial court.

Mandamus Standard

While the scope of discovery is generally within,the trial court’s discretion, the trial court must impose reasonable discovery limits. In re Graco Children’s Prods., Inc., 210 S.W.3d 598, 600 (Tex.2006) (per curiam). An order that compels discovery well outside the bounds of proper discovery is an abuse of- discretion for which-mandamus is the proper remedy. Id.

The scope of discovery largely rests within the discretion of the trial court. Ginsberg v. Fifth Court of Appeals, 686 S.W.2d 105, 108 (Tex.1985) (orig.proceeding). For , that reason, in considering whether a trial court has clearly abused its discretion with regard to a discovery order, the reviewing court may not substitute its judgment for the judgment of the trial court. See Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex.1992) (orig.proceeding). “Even if the reviewing court would have decided the issue differently, it cannot disturb the trial court’s decision unless it is shown to be arbitrary and unreasonable.” Id. at 840.

However, discovery requests must be reasonably tailored to include only matters relevant to the case. See In re CSX Corp., 124 S.W.3d 149, 152 (Tex.2003) (orig.proceeding) (per curiam); In re Am. Optical Corp., 988 S.W.2d 711, 713 (Tex.1998) (orig.proceeding) (per curiam). Discovery may not be used as a fishing expedition. Id. at 713. Discovery requests must be limited to the relevant time, place and subject matter. See In re Xeller, 6 S.W.3d 618, 626 (Tex.App.—Houston [14th Dist.] 1999, orig. procéeding); In re CNA Holdings, Inc., 01-03-01271-CV, 2004 WL 1944967, at *5 (Tex.App.—Houston [1st Dist.] Sept. 2, 2004, orig. proceeding) (holding that the discovery requests at issue are overbroad as written because they are not appropriately limited in time and subject matter),

The , various categories of Alpha’s requests for production and whether Master Flo’s objections thereto were incorrectly overruled are discussed below.

Alpha’s Requests for Communications

The discovery order overrules Master Flo’s objections to and requires it to fully respond to the following requests pertaining to communications:

[214]*214 REQUEST FOR PRODUCTION NO. U:

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485 S.W.3d 207, 2016 Tex. App. LEXIS 721, 2016 WL 316491, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-master-flo-valve-inc-texapp-2016.