Shell Oil Co. v. Writt

Decision Date15 May 2015
Docket NumberNO. 13–0552,13–0552
Citation464 S.W.3d 650
PartiesShell Oil Company and Shell International, E & P, Inc., Petitioners, v. Robert Writt, Respondent
CourtTexas Supreme Court

Macey Reasoner Stokes, Michelle Stratton, Baker Botts LLP, 910 Louisiana Street, One Shell Plaza, Houston, TX, for Petitioners Shell Oil Company and Shell International, E & P, Inc.

Kenneth David Hughes, The Hughes Law Firm, 1001 Fannin Street, Suite 1925, First City Tower, 19th Floor, Robert B. Dubose, Alexander Dubose Jefferson & Townsend LLP, 1844 Harvard Street, Houston, TX, for Respondent Robert Writt.

James C. Ho, Gibson, Dunn & Crutcher LLP, 2100 McKinney Avenue, Suite 1100, Dallas, TX, for Amicus Curiae Chamber of Commerce of the United States of America.

Michael Mukasey, Debevoise & Plimpton LLP, 919 Third Avenue, New York, NY, for Amicus Curiae Benjamin R. Civiletti, Edwin Meese III, Richard L. Thornburgh, William P. Barr, Alberto R. Gonzales and Michael B. Mukasey.


JUSTICE JOHNSON delivered the opinion of the Court.

In this defamation action we consider whether the providing of a report regarding possible criminal activity to a government agency was an absolutely privileged communication or a conditionally privileged one.

Shell Oil Company and Shell International, E & P, Inc. (collectively, Shell) received an inquiry from the Department of Justice (DOJ) regarding possible violations of the Foreign Corrupt Practices Act by one of its contractors. Shell met with the DOJ, agreed to perform an internal investigation and report the results to the DOJ, and then did so. Robert Writt, who was employed by Shell until his employment was terminated following the investigation, sued Shell for wrongful termination and for defamation. Writt's defamation claim was based on Shell's furnishing the DOJ its report that contained allegedly defamatory statements about him. Shell asserted that it was absolutely privileged to provide the report to the DOJ and moved for summary judgment. The trial court granted Shell's motion; the court of appeals reversed.

We conclude that Shell's statements were made preliminarily to a proposed judicial proceeding and were absolutely privileged. Accordingly, we reverse the judgment of the court of appeals.

I. Background

In February 2007 a Shell contractor, Vetco Gray, entered into a plea agreement with the DOJ under which Vetco Gray was criminally convicted and fined $26 million for violating the Foreign Corrupt Practices Act (FCPA). 15 U.S.C. §§ 78dd–1 to –2 (1998). Vetco Gray pled guilty to paying bribes to Nigerian customs officials through Panalpina, Inc., a freight forwarding and customs clearing company used to import equipment for Shell's Bonga Project, a deepwater oil and gas project off the coast of Nigeria. In July 2007, approximately five months after Vetco Gray was convicted, the DOJ sent Shell a letter notifying it that the DOJ had become aware that Shell engaged Panalpina “to provide freight forwarding and other services ... and that certain of those services may violate the [FCPA].” In its letter, the DOJ requested that Shell meet with it to discuss Shell's engagement of Panalpina. Shell complied with the request. At the meeting Shell agreed to conduct an internal investigation into its dealings with Panalpina and to report its findings to the DOJ, with the understanding that the report would be treated as confidential. The investigation was to be done pursuant to a plan approved by the DOJ, and Shell agreed to produce additional documents and information requested by the DOJ. The DOJ subsequently identified several individuals as potential witnesses and persons of interest regarding its investigation and requested Shell to produce information related to them. One person identified was a Shell employee named Robert Writt. Writt's duties as to the Bonga Project included serving as the holder of the contract between Shell and Vetco Gray and being responsible for approving Vetco Gray's reimbursement requests.

Shell hired outside counsel and investigators to assist in the investigation. During the course of the investigation, Writt was interviewed several times about his knowledge of possible illegal payments made by Panalpina. In February 2009, Shell provided the investigators' findings and its report to the DOJ. Among other matters, the report set out that the impetus for it was the meeting between Shell and DOJ representatives regarding allegations of criminal violations. The report also contained information, analyses, and conclusions as to Shell's relationship with, and Writt's actions as they related to, Panalpina. The report stated that Writt was aware of “several red flags” concerning Panalpina's customs clearance process and that he provided inconsistent information about his knowledge of Panalpina's questionable acts. In addition to providing the report to the DOJ, Shell terminated Writt's employment. In its termination letter, Shell stated that Writt's conduct in connection with the Bonga Project was a “significant, substantial and unacceptable” violation of Shell's General Business Principles and Code of Conduct.

Writt sued Shell for defamation and wrongful termination. His defamation claim was based on allegations that in the report provided to the DOJ, Shell falsely accused him of approving bribery payments and participating in illegal conduct. Shell sought a traditional summary judgment as to the defamation claim on the grounds of absolute privilege.

While Shell's motion for summary judgment was pending, the DOJ filed an information charging Shell with conspiracy to violate the FCPA and aiding and abetting the making of false books and records. Shell and the DOJ then executed a Deferred Prosecution Agreement—a type of agreement used by the DOJ when a corporation cooperates with an FCPA investigation. See Robert J. Sussman & Gregory S. Saikin, Corporate Crimes: The Penalties and the Pendulum, 43 The Advoc. (Tex.) 39, 41–42 (2008). In the Agreement, the DOJ acknowledged that Shell had (1) cooperated in the DOJ's investigation, (2) agreed to cooperate in any ongoing investigation, and (3) agreed to pay a monetary penalty. Shell's willingness to conduct an internal investigation, admit misconduct, and cooperate with the investigation was an important factor in the DOJ's decision to offer Shell the opportunity to enter into the Deferred Prosecution Agreement. The terms of the Agreement, which are more favorable than the criminal penalties that could have resulted from an FCPA prosecution, required Shell to continue to cooperate with the DOJ and other law enforcement agencies, pay a $30 million criminal fine, and implement an extensive FCPA compliance and reporting program. The Agreement provides that if Shell fully complies with its terms, then the criminal charges will be dropped. However, if Shell fails to abide by the Agreement's terms, the DOJ will resume the criminal prosecution.

The district court granted Shell's motion for summary judgment, concluding that Shell was absolutely privileged to provide the investigative report to the DOJ. Writt's wrongful termination claim proceeded to trial and the jury found against him. As a result, the trial court rendered a take-nothing judgment in favor of Shell. Writt appealed only from the summary judgment on his defamation claim.

The court of appeals reversed. Writt v. Shell Oil Co., 409 S.W.3d 59, 76 (Tex.App.–Houston [1st Dist.] 2013). It held that the summary judgment evidence did not conclusively establish that at the time Shell provided its report to the DOJ a criminal judicial proceeding against either Shell or Writt was ongoing, actually contemplated, or under serious consideration by either the DOJ or Shell. Id. at 76. Therefore, the report was only conditionally, not absolutely, privileged. Id. The court reasoned that Shell cooperated with the DOJ during an ongoing investigation and created the report as a part of its own voluntary internal investigation, but that those actions were not enough to conclusively establish that Shell provided the report under a serious threat of prosecution; nor was the fact the DOJ eventually initiated a criminal proceeding against Shell conclusive evidence that such a proceeding was actually contemplated or under serious consideration by the DOJ as of the time Shell provided the report. Id. at 72.

Shell contends that an absolute privilege extends to the report and the statements in it because it was furnished to the DOJ preliminarily to a proposed judicial proceeding.1 It argues that the information contained in its report, including information about Writt, was solicited by the DOJ during an ongoing FCPA investigation; Shell compiled and provided the report under serious and good faith contemplation of a judicial proceeding; and those circumstances are sufficient for an absolute privilege to apply. In the alternative, Shell argues that its statements are absolutely privileged because they were made as part of a quasi-judicial proceeding.2 Shell also argues that this Court's decision in Hurlbut v. Gulf Atlantic Life Insurance Co., 749 S.W.2d 762, 768 (Tex.1987), is consistent with its position because the DOJ essentially told Shell that it was a target of a criminal investigation and solicited the report and information provided by Shell, whereas in Hurlbut the alleged defamatory statements were unsolicited statements and not instigated by a government investigation involving the party making the statement.

Writt does not assert that Shell's providing the report to the DOJ was not privileged; he simply urges that the court of appeals was correct in classifying Shell's communication as being conditionally privileged. He argues that Shell's report was provided during an ongoing investigation, but not as a communication preliminary to a judicial proceeding or as part of a quasi-judicial proceeding. He further maintains that the court of appeals' application of Hurlbut is consistent with the...

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