As seems to be happening a little too frequently in recent times, the Texas Supreme Court has granted a temporary stay of a Travis County probate judge’s discovery order while it considers the Relator’s petition for writ of mandamus.
In re Terry Richardson (No. 24-0086; granted February 5, 2024) arose from a breach of fiduciary duty action brought by beneficiaries of an estate of which Relator, Terry Richardson, has served as executor since 2003. The estate includes numerous business interests (including four automobile dealerships) organized as the Richardson Businesses. In 2017 Richardson and others discovered that the CFO of the Richardson Businesses embezzled millions of dollars from the business over the past seven years. While the CFO and his wife went to the federal penitentiary for their crimes, beneficiaries of the estate sued Richardson for breach of fiduciary duty. The plaintiffs made extensive discovery requests involving 127,000 emails and 65,000 documents stored on Richardson’s hard drives. An effort to negotiate a more narrowly-tailored discovery request failed. The probate court ordered Richardson to turn over the hard drives whether they contained privileged or irrelevant information or not. Richardson’s attorneys and paralegals spent 260 billable hours at a cost of $80,000 in an attempt to review the documents, ultimately producing about 58,000 of them. Unsatisfied, plaintiffs moved to compel production of all documents, including those from the Richardson Businesses themselves. The probate court denied Richardson’s motion for a protective order. Richardson sought mandamus relief from the Austin Court of Appeals, which denied it. This petition and request for emergency relief followed.
In In re Weekley Homes, L.P., 295 S.W.3d 309, 317 (Tex. 2009) (orig. proceeding), SCOTX held that “[p]roviding access to information by ordering examination of a party’s electronic storage device is particularly intrusive and should be generally discouraged, just as permitting open access to a party’s file cabinets for general persual would be.” Richardson argues that the probate court did just that here. He argues further that the probate court’s order to compel production of the Richardson Business’s themselves violates the Rule 11 agreement entered into between the parties and deprives him of the right to review those documents for privileged content. In an additional twist to the case, the Richardson Business documents are being produced by a third-party controlled by the plaintiffs, even though they don’t own the documents and have no incentive to assure that privileged information is protected. Finally, the probate court ordered the production of 20 years of documents pertaining to the operation of the four automobile dealerships, a fishing expedition par excellence.
We applaud the Court for slowing down this train. Something is seriously amiss, if Relator has accurately represented the situation. Whatever reasons the very experienced probate judge in Travis County had for his kitchen-sink order, now is the time to tell SCOTX, which has requested a response to Relator’s petition for writ of mandamus by March 6.