In re Bp Products North America, Inc.

• Decision Date: 25 January 2008
• Docket Number: No. 07-0119.,07-0119.
• Parties: In re BP PRODUCTS NORTH AMERICA, INC., Relator.
• Court: Texas Supreme Court

244 S.W.3d 840

In re BP PRODUCTS NORTH AMERICA, INC., Relator.

No. 07-0119.

Supreme Court of Texas.

Argued October 18, 2007.

Decided January 25, 2008.

Katherine D. Mackillop, Otway B. Denny Jr., Stephen Fernelius, Julie Hardin, Fulbright & Jaworski L.L.P., David M. Gunn, Beck, Redden & Secrest, L.L.P., Kenneth Tekell, Tekell, Book, Matthews & Limmer, L.L.P., Houston, James B. Galbraith, McLeod, Alexander, Powel & Apffel, P.C., Galveston, TX, for Relator.

Brent Wayne Coon, Arturo J. Gonzalez, Brent Coon & Associates, David W. Holman, The Holman Law Firm, P.C., Robert E. Ammons, The Ammons Law Firm, Houston, James D. Nebout, Burwell Burwell & Nebout, LLP, Texas City, TX, for Real Party In Interest.

Lynne Liberato, Haynes and Boone, LLP, Houston, TX, for Amicus Curiae Texas Chemical Council, et al.

Justice GAULTNEY delivered the opinion of the Court.¹

This mandamus proceeding concerns the enforcement of a discovery agreement governing what is commonly referred to as an "apex" deposition. The discovery agreement was signed by the attorneys for the parties, and filed as provided by Rule 191.1 and Rule 11. We conclude the trial court abused its discretion in failing to enforce the agreement.

THE TRIAL COURT PROCEEDINGS

Fifteen people died and hundreds suffered injuries in an explosion at relator BP Products North America, Inc.'s Texas City oil refinery. The hundreds of resulting lawsuits against BP Products were consolidated for discovery in the 212th District Court in Galveston County. The parties conducted extensive discovery.

The plaintiffs served notices to take the depositions of two executives of relator's parent company, BP p.l.c.: John Manzoni, the head of refining and marketing, and John Browne, the chief executive officer. BP Products moved to quash the depositions and moved for protective orders. BP Products contended the plaintiffs had not met their burden under the apex doctrine.² The plaintiffs responded alleging that both Manzoni and Browne had unique or superior knowledge of relevant facts. The trial court initially struck BP Products' supporting affidavits as insufficient, and denied the motions. BP Products sought mandamus review, and the court of appeals granted relief requiring consideration of the affidavits. In re BP Products N. Am., Inc., 2006 WL 2192546, at *7, 2006 Tex.App. LEXIS 6898, at *20 (Tex.App.-Houston [1st Dist.] Aug. 4, 2006, orig. proceeding) (mem.op.). The trial court again denied BP Product's motions and allowed the depositions to proceed.

Instead of attempting further mandamus review, BP Products concluded a discovery agreement with the plaintiffs regarding the executives' depositions, and the parties filed the agreement with the trial court. See TEX.R. CIV. P. 11, 191.1. The agreement provided that the defendants would produce Manzoni for a four-hour deposition. In return, the plaintiffs promised they would withdraw the notice of deposition of Browne and would not request the deposition of any other executive officer or board member of BP p.l.c., with one exception: paragraph four of the agreement provided that if, during the Manzoni deposition, the plaintiffs developed new evidence that John Browne had "unique and superior personal knowledge" of relevant facts, the plaintiffs would be permitted to issue a new notice of deposition for Browne. The agreement also provided that BP Products retained its right to file a motion to quash and motion for protection "on this new notice," as well as its right to seek review of the trial court's ruling on these motions. In addition, the agreement provided that "if, following appeals referenced in paragraph 4, the deposition of John Browne is not protected, the deposition of John Browne will be limited to one hour by telephone."³

As plaintiffs' counsel explained to the trial court, the agreement was a "quid pro quo" negotiated to avoid delay in obtaining Manzoni's testimony:

[The agreement] was based on ... a quid pro quo.... Time was of the essence. As the court may recall, we were scheduled for trial in September, and because of BP's prior appeals that delayed the taking of him when I went to London to take him in August. We were concerned we would not be able to get a ruling from the Court of Appeals for the next mandamus allowing us to take it promptly then. So that was our concern and our willingness to restrict Mr. Manzoni for four hours instead of the six or more we may need to do a thorough job. And also to firmly restrict the deposition of Lord Browne to one hour which was unprecedented on our part.

After the agreement was concluded, Browne made numerous public statements regarding the Texas City explosion, including giving interviews to Fortune and the Financial Times, providing information packets to investors, and hosting several "town hall" meetings for employees, at least one of which plaintiffs contend appeared on the internet.

Plaintiffs took Manzoni's deposition and then issued a new notice to take Browne's deposition. Despite the provision of the agreement that any deposition take place "by telephone," the notice provided that the deposition would take place in Galveston, Texas. BP Products filed a motion for protection, complaining that the deposition could not be set in Galveston, that plaintiffs could still not show that Browne had unique or superior knowledge of relevant facts as required under Crown Central, 904 S.W.2d at 128, and that Manzoni's deposition had not produced "new evidence" Browne had "unique and superior personal knowledge" of relevant facts as required under the parties' discovery agreement. Plaintiffs responded, asserting they could satisfy both the apex standard and the standard provided in the agreement.

On October 9th, the day of the hearing on BP Products' motion for protection, plaintiffs filed a supplemental response arguing that, at the time the parties entered the agreement, "it was not anticipated" new information demonstrating Browne's knowledge would become available from Browne's public statements. Plaintiffs initially stood by the Rule 11 agreement. At the hearing itself, plaintiffs argued:

[W]e are abiding by the contract. The contract we're relying is under paragraph four of the Rule 11 agreement.... In fact, we could probably come to this court with a straight face and say we think all bets are off because they misrepresented things. They waited until we entered that agreement and then they put Lord Browne all over the Internet after the fact and then try to King's X us, and we're not even arguing that. So, we will still stick with one hour and we'll still stick with the teleconference....

The trial court ended the first day of the hearing with the statement that it was not convinced "based on how Mr. Browne likes to interject himself, that he doesn't want to be deposed." The trial court continued the hearings until October 11th, to give BP Products an opportunity to examine plaintiffs' new exhibits.

BP Products argued in its written response before the trial court that Browne's public statements did not demonstrate Browne had unique or superior knowledge, and, in any event, did not justify setting aside the parties' discovery agreement. At the October 11th hearing, plaintiffs argued:

[T]here was fraud inducement in the execution of Rule 11. And we are asking the court to dissolve the Rule 11 agreement and to allow us to proceed with the deposition of Lord Browne. Not just for the one-hour telephonic conference, but for the four to six hours individually we were originally intending to take the deposition.

BP Products responded that plaintiffs had not alleged fraud, had not made allegations attacking the Rule 11 agreement, there was no evidence of fraud, and BP Products was entitled to time "to develop it, discover it, and they have to provide some evidence which they have not."

The trial court denied BP Products' motions, and ordered Browne's deposition to proceed at a place of the parties' choosing, "without limitations and the Rule 11." In its order of October 11, 2006, the trial court found that "new circumstantial evidence developed during Mr. John Manzoni's deposition shows that Mr. Browne has unique or superior knowledge of relevant facts." In addition, the court explained its refusal to enforce the parties' Rule 11 agreement:

The Court further finds that the parties' Rule 11 Agreement concerning the depositions of Mr. Manzoni and Mr. Browne does not prevent the deposition of Mr. Browne going forward because:

(1) After the effective date, Mr. Browne personally injected himself into the case with public comments that present new evidence of his unique or superior knowledge of relevant facts;

(2) The Rule 11 Agreement was based on circumstances that have changed;

(3) BP made misrepresentations that induced Plaintiffs to enter into the rule 11 Agreement;

(4) BP is estopped to rely on the Rule 11 Agreement; and/or

(5) BP's public comments appear to be part of a continuing effort by BP to taint the jury pool.

The Court orders the deposition of Mr. Browne to proceed, without limitations and the Rule 11, at a time and place within the United States to be determined by agreement of the parties, or if in London, with costs/expenses to be paid by the defendants.

Relator filed a petition for writ of mandamus with the court of appeals, and, after the court of appeals denied that petition, relator filed a petition with this Court. We granted a stay of the trial court's order pending our review of the issues.

During the pendency of this mandamus proceeding, Browne resigned from BP p.l.c., and retired. The plaintiffs then filed a motion to dismiss BP Products' petition as moot, contending that apex protections do not apply to retired officials.

THE MANDAMUS STANDARD

A writ of mandamus may issue to correct a clear abuse of discretion by a trial court. Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992). A failure by the trial court to apply the law correctly...