In re Sci Texas Funeral Services, Inc.

• Decision Date: 12 October 2007
• Docket Number: No. 06-0385.,06-0385.
• Parties: In re SCI TEXAS FUNERAL SERVICES, INC., SCIT Holdings, Inc., SCI Funeral Services, Inc., and Service Corporation International, Relators.
• Court: Texas Supreme Court

236 S.W.3d 759

In re SCI TEXAS FUNERAL SERVICES, INC., SCIT Holdings, Inc., SCI Funeral Services, Inc., and Service Corporation International, Relators.

No. 06-0385.

Supreme Court of Texas.

October 12, 2007.

Joseph L. Hood Jr., Windle Hood Alley Norton Brittain & Jay LLP, Jeffrey S. Alley, Scott Hulse Marshall Feuille Finger & Thurmond, PC, Mike A. Hatchell, Molly H. Hatchell, Locke Liddell & Sapp LLP, Austin, Thomas F. Loose, Kirsten M. Castaneda, Locke Liddell & Sapp LLP, Dallas, for relators.

Alan B. Rich, Steven D. Wolens, Frank E. Goodrich, Kevin Duane McHargue, Baron & Budd, P.C., Dallas, Enrique Moreno, Law Office of Enrique Moreno, El Paso, for real parties in interest.

PER CURIAM.

The trial court here ordered class-wide discovery and class-wide sanctions long before it certified the class. In two separate appeals, the court of appeals upheld the discovery and sanctions but then reversed certification, rendering the class-wide discovery superfluous and the class-wide sanctions incongruous. We conditionally grant the writ and order the trial court to vacate its orders in light of the decertification. See In re Allstate County Mut. Ins. Co., 227 S.W.3d 667, 668-69 (Tex.2007) (per curiam) (granting mandamus to correct overbroad discovery); Walker v. Packer, 827 S.W.2d 833, 843 (Tex.1992) (stating mandamus is available to correct interlocutory sanctions orders that preclude trial on the merits).

Three plaintiffs¹ brought individual and class claims against several SCI entities² for violating federal and state disclosure requirements applicable to funeral providers. See 16 C.F.R. § 453.3(f); 22 TEX. ADMIN. CODE § 203.8(d). In connection with those claims, the plaintiffs sought broad discovery including every SCI contract for funeral services in Texas between 1998 and 2004 (reportedly 200,000), and documents concerning every item SCI purchased to provide those services (reportedly 2.5 million).

After granting a series of motions to compel based on asserted gaps in SCI's production, the trial court entered a sanctions order that deemed SCI had breached the class members' contracts due to inadequate disclosures, and barred SCI from contesting their method of calculating damages. After the court of appeals denied mandamus relief, 198 S.W.3d 14 (Tex. App.-El Paso 2006), SCI filed this mandamus proceeding.

One year later, the court of appeals reversed the trial court's certification order, finding no private cause of action under either the federal or state funeral disclosure rules, and barring the plaintiffs' damage claims as their contracts were not illegal. SCI Tex. Funeral Servs., Inc. v. Hijar, 214 S.W.3d 148, 154-57 (Tex.App.-El Paso 2007, pet. denied). The court decertified the class and dismissed all claims except the named plaintiffs' claim for injunctive relief. Id. at 157. Thus, what was once a damages claim on behalf of potentially hundreds of thousands of consumers is now a claim by three of them for injunctive relief alone. Obviously, much of the class-wide discovery is no longer relevant — precisely as SCI unsuccessfully argued in the trial court and throughout this appeal.

In In re Alford Chevrolet-Geo, we rejected a blanket rule that all class-wide discovery should be abated until after certification. 997 S.W.2d 173, 185 (Tex.1999). But we also rejected the opposite rule (full class-wide discovery before certification), noting the special risk in class actions that one party might seek to improve its bargaining position by heaping massive discovery on the other. Id. at 180-81 (quoting Frank H. Easterbrook, Comment, Discovery as Abuse, 69 B.U.L. REV. 635, 636 (1989)). Instead, we held the proper rule was for trial courts to limit pre-certification discovery to the particular issues governing certification in each case, considering factors such as the importance, benefit, burden, expense, and time needed to produce the proposed discovery. Id. at 182.

The discovery orders here do not comply with this rule. SCI's primary objection to both discovery and certification was that private parties have no standing to assert violations of the funeral disclosure rules. This question of law did not require production of several hundred thousand contracts and millions of...