Today the Texas Supreme Court granted review in HouseCanary, Inc. v. Title Source, Inc. (No. 19-0673), which involves the interaction of of a stipulated protective order (SPO) executed by the parties prior to trial and a subsequent trial or post-trial motion to seal records allegedly containing trade secrets under the Texas Uniform Trade Secrets Act (TUTSA). The case is on appeal from the San Antonio Court of Appeals.

While the facts are somewhat complex, the central issue appears to be whether a party can get a trial or post-trial sealing order from the trial court under the direct authority of TUTSA rather than by following TRCP Rule 76a, which governs procedures for sealing and unsealing court records. After conducting the trial according to the SPO, the trial court granted HouseCanary’s post-trial motion to seal additional records that HouseCanary alleges contain trade secrets protected by TUTSA. The trial court’s order does not refer to Rule 76a, and HouseCanary argues that it need not because TUTSA pre-empts application of the rule in this case. HouseCanary further argued that the court of appeals had no jurisdiction to hear the appeal because the trial court’s sealing order was not a final, appealable order under Rule 76a.

Court of Appeals first rejected HouseCanary’s argument that it had no jurisdiction, holding that TUTSA does not pre-empt Rule 76a(8), which provides that “[A]ny order (or portion of an order or judgment) relating to sealing or unsealing court records shall be deemed to be severed from the case and a final judgment which may be appealed by any party or intervenor who participated in the hearing preceding issuance of such order.” While agreeing that TUTSA controls in the event of a conflict with Rule 76a, the court reasoned that since TUTSA is silent on the issue, Rule 76a(8) controls the appealability of a sealing order. Having gotten over the jurisdictional question, the court of appeals determined that the SPO, which is governed by Rule 76a, is enforceable against a party’s attempt to seal additional discovery at trial or beyond without following the procedures set down in Rule 76a. The trial court thus abused its discretion by ordering the sealing of certain trial exhibits without complying with Rule 76a. The court of appeals reversed and rendered in favor of Title Source. HouseCanary sought SCOTX review.

This case will likely draw significant interest from business and media organizations (Reporters Committee for Freedom of the Press and the Houston Forward Times are aligned with Title Source and are parties to the case). We will closely monitor its progress.


Pin It on Pinterest

Share This