Procedure for Obtaining Electronic Data During a Lawsuit

How does one obtain electronic data during the course of a lawsuit in Texas?

In many cases today, electronic data is critically important.  In most of these cases, each side will want to request electronic data and must also be prepared to provide electronic data that is requested by the opposing party.  The primary rule of civil procedure governing the discovery of "information that exists in electronic or magnetic form" is Tex. R. Civ. P. 196.4, which dictates that "the requesting party must specifically request production of electronic or magnetic data and specify the form in which the requesting party wants it produced."

The Texas Supreme Court has laid out the following steps the parties should follow under Rule 196.4:

1.    Prior to promulgating requests for electronic information, parties and their attorneys should share relevant information concerning electronic systems and storage methodologies so that agreements regarding protocols maybe reached or, if not, trial courts have the information necessary to craft discovery orders that are not unduly intrusive or overly burdensome.

2.  The party seeking to discover electronic information must make a specific request for that information and specify the form of production.  (The request is reasonably specific if the responding party understands the scope of the request before the trial court intervenes.  See In re Weekley Homes, L.P., 295 S.W.3d 309, 314-15 (Tex. 2009)).

3.    The responding party must then produce any electronic information that is "responsive to the request and . . . reasonably available to the responding party in its ordinary course of business."

4.    If "the responding party cannot -- through reasonable efforts -- retrieve the data or information requested or produce it in the form requested," the responding party must object on those grounds.

5.    The parties should make reasonable efforts to resolve the dispute without court intervention.

6.    If the parties are unable to resolve the dispute, either party may request a hearing on the objection at which the responding party must demonstrate that the requested information is not reasonably available because of undue burden or cost.

7.    If the trial court determines the requested information is not reasonably available, the court may nevertheless order production upon a showing by the requesting party that the benefits of production outweigh the burdens imposed, again subject to Rule 192.4's discovery limitations.

8.    If the benefits are shown to outweigh the burdens of production and the trial court orders production of information that is not reasonably available, sensitive information should be protected and the least intrusive means should be employed.  See Tex. R. Civ. P. 192.6(b).  The requesting party must also pay the reasonable expenses of any extraordinary steps required to retrieve and produce the information.  See Tex. R. Civ. P. 196.4.

9.    Finally, when determining the means by which the sources should be searched and information produced, direct access to another party's electronic storage devices is discouraged, and courts should be extremely cautious to guard against undue intrusion.

See In re Weekley Homes, L.P., 295 S.W.3d 309, 322 (Tex. 2009).

Proof Needed for a Temporary Injunction in a Federal Court in Texas

What must be proved to obtain a temporary injunction in a Texas federal court?

A preliminary injunction is an extraordinary remedy that should only issue if the movant establishes:  (1) a substantial likelihood of success on the merits, (2) a substantial threat of irreparable injury if the injunction is not issued, (3) that the threatened injury if the injunction is denied outweighs any harm that will result if the injunction is granted, and (4) that the grant of an injunction will not disserve the public interest.  A district court’s decision whether to grant or deny a preliminary injunction is reviewed only for abuse of discretion; however, a decision grounded in erroneous legal principles is reviewed de novo.  When a preliminary injunction turns on a mixed question of law and fact, it is reviewed de novo.   Byrum v. Landreth, 566 F.3d 442, 445 (5th Cir. 2009).

Purpose & Proof for Temporary Injunctions in Texas

What is the purpose of a temporary injunction, and what must be proved to obtain a temporary injunction in Texas?

“A temporary injunction's purpose is to preserve the status quo of the litigation's subject matter pending a trial on the merits.  A temporary injunction is an extraordinary remedy and does not issue as a matter of right.  To obtain a temporary injunction, the applicant must plead and prove three specific elements: (1) a cause of action against the defendant; (2) a probable right to the relief sought; and (3) a probable, imminent, and irreparable injury in the interim.  An injury is irreparable if the injured party cannot be adequately compensated in damages or if the damages cannot be measured by any certain pecuniary standard.  Whether to grant or deny a temporary injunction is within the trial court's sound discretion.  A reviewing court should reverse an order granting injunctive relief only if the trial court abused that discretion.  The reviewing court must not substitute its judgment for the trial court's judgment unless the trial court's action was so arbitrary that it exceeded the bounds of reasonable discretion.”  Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002)(citations omitted).

Covenants Not to Compete Must be Reasonable

Unreasonable covenants not to compete are not enforceable.

"Whether a covenant not to compete is an unreasonable restraint of trade is a question of law . . ..  Courts generally disfavor covenants not to compete ‘because of the public policy against restraints of trade and the hardships resulting from interference with a person's means of livelihood.’ Zep Mfg. Co. v. Harthcock, 824 S.W.2d 654, 658 (Tex. App. – Dallas 1992, no writ).  A covenant not to compete is a restraint of trade and unenforceable as a matter of public policy unless it meets a reasonableness standard.  Covenants not to compete are unreasonable if they are broader than necessary to protect the legitimate interests of the employer."  M-I LLC v. Stelly, 733 F. Supp. 2d 759, 793 (S.D. Tex. 2010)(citations omitted).

Texas's Covenant Not to Compete Statute

Does Texas have a statute that governs the enforcement of agreements not to compete?

The following section from the Texas Business and Commerce Code governs the enforceability of agreements not to compete:
 
§ 15.50.  Criteria for Enforceability of Covenants Not to Compete

    (a) Notwithstanding Section 15.05 of this code [which generally makes every contract, combination, or conspiracy in restraint of trade or commerce unlawful], and subject to any applicable provision of Subsection (b), a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee.

    (b) A covenant not to compete relating to the practice of medicine is enforceable against a person licensed as a physician by the Texas Medical Board if such covenant complies with the following requirements:

        (1) the covenant must:

            (A) not deny the physician access to a list of his patients whom he had seen or treated within one year of termination of the contract or employment;

           (B) provide access to medical records of the physician's patients upon authorization of the patient and any copies of medical records for a reasonable fee as established by the Texas Medical Board under Section 159.008, Occupations Code; and

          (C) provide that any access to a list of patients or to patients' medical records after termination of the contract or employment shall not require such list or records to be provided in a format different than that by which such records are maintained except by mutual consent of the parties to the contract;

       (2) the covenant must provide for a buy out of the covenant by the physician at a reasonable price or, at the option of either party, as determined by a mutually agreed upon arbitrator or, in the case of an inability to agree, an arbitrator of the court whose decision shall be binding on the parties; and

      (3) the covenant must provide that the physician will not be prohibited from providing continuing care and treatment to a specific patient or patients during the course of an acute illness even after the contract or employment has been terminated.

  (c) Subsection (b) does not apply to a physician's business ownership interest in a licensed hospital or licensed ambulatory surgical center.

Tex. Bus. & Com. Code § 15.50.