TCJL today filed an amicus brief with the Texas Supreme Court in In Re State Farm Lloyds (No. 15-0903). This is a mandamus action seeking to invalidate a discovery order issued by Hidalgo County District Judge Rose Guerra in hailstorm litigation brought by, among others, Steve Mostyn against State Farm and other insurers. The order mandates that State Farm produce electronic discovery in native format, although State Farm can produce the same information in a different format compatible with its existing electronic data retention system. In our view, there is little question that the only rationale for the order is to require State Farm to incur the substantial costs involved in reprogramming its data systems to produce the information in the requested format. The plaintiffs want to make discovery so expensive for the company that it would rather settle nuisance claims than seek the justice to which it is entitled.
The brief argues that the trial court’s order enables an abuse of the discovery process that raises serious concerns not just for State Farm, but for all litigants, large and small alike. Abuses of the system in one litigation setting adversely affect the civil trial system as a whole. They also lend credence to public perceptions that the system can be gamed for the benefit of certain private interests at the expense of public ones. Moreover, as we have seen in the last three mass litigation crises that have triggered a legislative response–workers’ compensation in 1989, medical liability in 2001, and asbestos litigation in 2005–the enormous transaction costs involved in litigating literally thousands of relatively small dollar claims (or claims closed without reimbursement, in the case of medical liability) resulted in the unsustainability of the system and, ultimately, legislative intervention to eliminate abuses and restore balance to the system. Now the current hail litigation crisis is having the same detrimental effect on Texas businesses, policyholders, and the civil justice system. As we put it in the brief, “Who is holding whom hostage here? Is it really the law of Texas that a litigant can compel a litigation opponent to change its business operations (however “antiquated” one may think they are) merely because the litigant says so? If Real Parties think Relator is hiding something, they should say so. But they don’t, and Relator isn’t. This case is about getting the upper hand in the litigation, pure and simple.”
Indicating its importance, this is the third brief we have filed in this case. Other amici in support of State Farm include the Texas Association of Defense Counsel, Lawyers for Civil Justice, and the U.S. Chamber of Commerce.