Center Economic Justice v. American Ins Ass'n

• Decision Date: 08 February 2001
• Parties: (Tex.App.-Austin 2001) Center for Economic Justice and David "Birny" Birnbaum, Appellants v. American Insurance Association, et al., Appellees NO. 03-00-00522-CV
• Court: Texas Court of Appeals

Page 337

39 S.W.3d 337 (Tex.App.-Austin 2001)

Center for Economic Justice and David "Birny" Birnbaum, Appellants v. American Insurance Association, et al., Appellees

NO. 03-00-00522-CV

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

February 8, 2001

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT NO. 97-09206, HONORABLE W. JEANNE MEURER, JUDGE PRESIDING

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Before Chief Justice Aboussie, Justices B.A. Smith and Patterson.

Bea Ann Smith, Justice.

In 1996, David "Birny" Birnbaum filed an open-records request seeking disclosure of Quarterly Market Reports that Texas automobile insurers had filed with the Texas Department of Insurance.¹ A group of insurers sought and obtained a temporary injunction prohibiting release of the reports of all Texas insurers. On appeal this Court upheld that injunction on the basis that the reports were subject to trade-secret protection pending a trial on the merits as to the named insurance companies. Birnbaum v. Alliance of Am. Insurers, 994 S.W.2d 766, 770 (Tex. App.--Austin 1999, pet. denied) (Birnbaum I). We modified the temporary injunction, however, to exclude its protection of reports filed by insurers who were not parties to the suit. Birnbaum subsequently requested the unprotected reports of the insurance companies² named as appellees in this suit (collectively, the insurance companies), who in turn, sued the Department of Insurance for a temporary injunction. The trial court granted the temporary injunction and Birnbaum and the Center for Economic Justice (collectively Birnbaum) appeal that order.³ We consider on appeal whether changes made to the Public Information Act after Birnbaum I apply to the requests at issue here, and if so, whether they compel a different result in this appeal. See Tex. Gov't Code Ann. §§ 552.001-.353 (West 1994 & Supp. 2001).

DISCUSSION

Although Birnbaum asks this Court to consider the same issue decided in Birnbaum I, he contends that subsequent amendments to the Public Information Act (the Act) force us to reach a different result. Birnbaum asserts that the amended Act deprived the trial court of jurisdiction to order the Department of Insurance to withhold the Quarterly Market Reports. Birnbaum argues that even if the trial court had jurisdiction, granting the injunction was an abuse of discretion because the insurance companies failed to prove the reports were entitled to trade-secret protection. Birnbaum contends that, in any event, the amended Act now mandates that the reports be disclosed. Finally, he claims that the trial court erred as a matter of law in overruling his Robinson challenge to the testimony of the insurance companies' expert witness, and that the trial court abused its discretion by excluding evidence. We first consider whether the amended Act applies to the requests at issue here.

I. Applicability of the 1999 Public Information Act Amendments

The legislature amended the Public Information Act during the 76th Legislative Session. E.g., Act of June 18, 1999, 76th Leg., R.S., ch. 1319, §§ 5, 7, 1999 Tex. Gen. Laws 4500, 4501-03 (codified at Tex. Gov't Code Ann. §§ 552.022, .110 (West Supp. 2001)). The amendments at issue here became effective September 1, 1999. See id. The insurance companies maintain that the amended Act does not affect this dispute because Birnbaum's open-records requests were made prior to the effective date of the amendments.

We note initially that the open-records requests are not in the appellate record. Only a brief excerpt from a request dated July 18, 1999, appears in the record. Based on the pleadings, we can discern that there was more than one request. Several plaintiffs' petitions refer to requests made on July 19 and 20, 1999. The evidentiary hearing was held July 27, 1999.

The insurance companies rely on City of Garland v. Dallas Morning News, in which the supreme court considered the version of the Act that existed when the open-records request was filed. See City of Garland v. Dallas Morning News, 22 S.W.3d 351, 354, 356, 368 (Tex. 2000). This decision does not clearly direct a court to look only to the date that the open-records request was filed to determine the applicable statute. While the date of the request provides a starting point, the nature of the request and the language of the injunction may implicate the amended statutory provisions.

Unlike a one-time request for information, an open-ended, continuing request for data as it becomes available necessarily involves looking to the applicable statute each time the data is available for release. The language of the request here can be construed as asking for data that becomes available after September 1, 1999, continuing until the trial on the merits. See Independent Am. Real Estate, Inc. v. Davis, 735 S.W.2d 256, 261 (Tex. App.--Dallas 1987, no writ) ("A temporary injunction remains in force only until a final decree is rendered by the district court."). The excerpted request in the record states: "Pursuant to Gov't Code § 552.228(b), we request electronic copies of full detail QMR data filed by all companies in the following insurer groups, beginning with first quarter 1996 experience and continuing through the most recently available experience, which we believe to be fourth quarter 1998." (Emphasis added.) Some of the pleadings refer to reports filed through the first quarter of 1999, the most recent records available before the hearing. The injunction refers to threats by the Department of Insurance to release the records "for the first quarter of 1996, and any quarter subsequent thereto" and enjoins any release of the records "previously or hereafter filed with the Department by plaintiffs." The parties and the trial court interpreted Birnbaum's request to include all data filed with the agency as it became available, continuing through 1999 and thereafter.⁴

This open-ended request seeks release of the Quarterly Market Reports filed after the effective date of the amended Act and the injunction prohibits release of the reports after that date. We hold that the amended Act governs the release of reports as they become available after September 1, 1999, even if the request predated this effective date. We therefore consider the amended Act's impact on the temporary injunction, which protects the records from release pending trial on the merits. Birnbaum I controls the ability of the trial court to protect the release of data filed before September 1, 1999. Birnbaum I, 994 S.W.2d 766.

II. Purpose of the Temporary Injunction

The trial court, in a temporary injunction hearing, assesses whether the applicant has shown a probable right to recover at trial and a probable injury in the interim. Universal Health Servs., Inc. v. Thompson, 24 S.W.3d 570, 576 (Tex. App.--Austin 2000, no pet.). If the applicant meets this burden, the court may order a temporary injunction. Id. The purpose of a temporary injunction is to preserve the status quo. Id. "Status quo is defined as 'the last, actual, peaceable, noncontested status which preceded the pending controversy.'" Id. at 577 (quoting Transport Co. of Tex. v. Robertson Transps., Inc., 261 S.W.2d 549, 553-54 (Tex. 1953)). A temporary injunction is a remedial writ through which the court exercises its equity jurisdiction in order to maintain the status quo. GXG, Inc. v. Texacal Oil & Gas, Inc., 882 S.W.2d 850, 852 (Tex. App.--Corpus Christi 1994, no writ) (citing Rawlins v. Stahl, 329 S.W.2d 308, 311 (Tex. Civ. App.--Dallas 1959, no writ)). The temporary injunction is a part of the procedural machinery by which the court keeps control of the case pending trial on the merits. Rawlins, 329 S.W.2d at 311.

At this preliminary stage, the trial court does not determine that the information subject to an open-records request is a trade secret. Rather, the trial court ascertains whether the applicant has established that the information is entitled to trade-secret protection until the trial on the merits. See T-N-T Motorsports, Inc. v. Hennessey Motorsports, Inc., 965 S.W.2d 18, 23 (Tex. App.--Houston [1st Dist.] 1998, no pet.) ("[A]ppellee had shown a probability of success in proving that its confidential information deserved trade secret protection."). Further, an order granting trade-secret protection does not mean the protected information is in fact a trade secret. See Midland Bldg. & Loan Ass'n v. Sparks Chapel Colored M.E. Church, 35 S.W.2d 774, 775 (Tex. Civ. App.--Dallas 1931, no writ) (holding that the issuance of a temporary injunction does "not determine the issues of law or fact involved in the main suit, and they are left as they existed prior to the issuance of such writ").

The applicant seeking a temporary injunction does not have to prove that it will ultimately prevail in the litigation. Transport Co., 261 S.W.2d at 552. In an appeal from an order granting or denying a request for a temporary injunction, appellate review is confined to the validity of the order that grants or denies the injunctive relief. Universal Health Servs., 24 S.W.3d at 576. The decision to grant or deny the injunction lies within the sound discretion of the court, and we will not reverse that decision absent a clear abuse of discretion. Id. This Court may neither substitute its judgment for that of the trial court nor consider the merits of the lawsuit. Id. Rather, we view the evidence in the light most favorable to the trial court's order, indulging every reasonable inference in its favor, and determine whether the order was so arbitrary as to exceed the bounds of reasonable discretion. Id.

III. Effect of Section 552.022(b) on the Trial Court's Jurisdiction

Birnbaum contends that section 552.022(b) of the amended Act deprived the trial court of jurisdiction to order that the Department of Insurance withhold the Quarterly Market Reports from public inspection. See Tex. Gov't Code...