Year in review: Texas Business Court key discovery rulings

Texas Rule of Civil Procedure 360 requires Texas Business Court judges to issue a written opinion (1) in connection with a dispositive ruling, when requested by a party, and (2) on an issue important to the jurisprudence of the state, regardless of request. The Texas Business Court judges also have the discretionary authority to issue written opinions in connection with any order.

In its first year, the Texas Business Court has issued forty-two written opinions on a number of dispositive and discovery-related issues. While the majority of these written opinions involve analysis of the Texas Business Court’s own jurisdiction, a number of them have broader application, providing litigants in Texas with trial court guidance on important and practical issues for which little Texas case law exists, especially at the trial court level.

The forty-two opinions issued by the Texas Business Court in its first year include the following: twenty-nine opinions related to the Texas Business Court’s own jurisdiction;¹ four opinions resolving other jurisdictional issues, such as special appearances;² three opinions resolving motions for summary judgment;³ two opinions resolving Texas Rule of Civil Procedure 91a motions to dismiss;⁴ two opinions involving discovery-related issues;⁵ one opinion resolving a motion to transfer venue⁶; and one opinion involving a motion to reconsider previously granted temporary injunctive relief.⁷

The Texas Business Court’s two discovery-related opinions are of particular interest to litigants in Texas, as case law on these practical issues is limited given that most Texas trial courts don’t issue written opinions with as much detailed analysis as the Texas Business Court opinions discussed below.

Litigants must establish with evidence the necessity of an attorney’s eyes-only provision in a protective order

In Westlake Longview Solutions Permian v. Eastman Chemical, 2025 Tex. Bus. 19, the Eleventh Division Court of Appeals analyzed whether in-house counsel should be granted access to discovery that was designated as Attorney’s Eyes Only (AEO).

The Texas Business Court first found that the defendant demonstrated a sufficient basis to include an AEO provision in a protective order because (1) if discovery was shared with plaintiff’s in-house counsel it would have effectively been shared with a competitor and (2) the information the defendant was seeking to protect—customer and sales information—is the kind of commercially sensitive information that should have AEO protection.

In analyzing whether in-house counsel would be permitted access to discovery designated AEO, the Court balanced the risk of inadvertent disclosure if in-house counsel unconsciously took AEO documents into account when providing legal advice against the need for in-house counsel to see the AEO-designated information.  

Relevant to this analysis is whether in-house counsel is involved in a company’s competitive decision making. If so, the risk of inadvertent disclosure risk should be balanced against the hardship, if any, the non-designating party would suffer if its in-house counsel could not access the information while the case was being litigated.

Conflicting evidence was presented to the Texas Business Court as to whether in-house counsel was involved in the company’s competitive decision making but, fatally, no evidence was presented to the Texas Business Court regarding why in-house counsel needed access to AEO information or why outside-counsel-only access was inadequate.

Therefore, the Texas Business Court held that the evidentiary record did not support granting AEO access to plaintiff’s in-house counsel but left open the possibility that with proper evidence, a party could move to modify the protective order to allow specific in-house attorneys access to AEO material.

A party waives the trade secret privilege if it raises the argument for the first time in post-ruling motions

In SafeLease Ins. Services LLC v. Storable, Inc., Cause No. 2025 Tex. Bus 28, the Third Division of the Texas Business Court denied a Motion for Partial Reconsideration of a May 28, 2025 Discovery Order because it held (1) the defendant did not preserve its trade secret privilege argument and (2) even if it had the trade secret privilege did not bar production of the defendant’s customer list.

Texas Rule of Civil Procedure 193.3(a) requires a party to state that responsive material is being withheld and which privilege, including a trade secret privilege, the party is asserting when responding to a specific request for production (RFP). In seeking reconsideration of an order compelling production of its customer list, the defendant in SafeLease argued for the first time that its customer list was protected from disclosure by an applicable trade secret privilege. The Third Division held assertion of a trade secret privilege in post-ruling briefing was too late in the game to provide defendants with protection from disclosure.

The Third Division also held that even if defendant had timely asserted a trade secret privilege, production of the customer list was still appropriate because the information was essential to the fair resolution of the pending antitrust claim and defendant’s alternative suggestions of other information to share were not suitable alternatives. Further supporting this decision was the Third Division’s finding that any risk of disclosure was mitigated by the case’s protective order and an AEO designation for the customer list.