Texas Justices Consider Trial Court’s Continuing Jurisdiction Over Sealed Russell Budd Testimony

April 18, 2018
Houston, Texas

On April 18, 2018, Justices Keyes, Jennings, and Higley of the First Court of Appeals in Houston, Texas heard arguments in Biederman v. Brown (No. 01-17-00263-CV). The appeal arises from Christine Biederman’s intervention in the Brown case which was originally filed in 1993 in Travis County, Texas. Biederman, an attorney and freelance journalist, intervened pursuant to Texas Rule of Civil Procedure 76a seeking to unseal a 20-year old deposition transcript of Russell Budd’s testimony regarding the Baron & Budd law firm’s creation and use of the infamous “Terrell Memo.” 

Texas Rule 76a provides trial courts continuing jurisdiction to vacate sealing orders entered by them. TEX. R. CIV. P. 76a(7). Specifically, the Rule allows any person to intervene “as a matter of right at any time before or after judgment to seal or unseal court records.” Id. For purposes of Rule 76a and this appeal, court records include (1) all documents of any nature filed in connection with a civil court matter (except documents filed in camera solely for the purpose of obtaining a ruling on the discoverability of such documents), and (2) unfiled discovery concerning matters that have a probable adverse effect on general public health or safety. TEX. R. CIV. P. 76a(2). At issue in the appeal is whether the trial court erred in granting Baron & Budd’s plea to the jurisdiction, and dismissing the case without allowing Biederman to present evidence that the Budd deposition transcript was, in fact, a court record subject to Rule 76a.

The deposition at issue was ordered by the Brown trial court in 1997 for the purpose of ruling on the discoverability of the “Terrell Memo.” The Order stated that the deposition “shall be sealed,” and restricted dissemination of the transcript to attorneys of record in the Brown case. The “Terrell Memo” has been said to have coached Baron & Budd’s asbestos litigation clients on how to identify products and asbestos exposures that they might not actually remember. The memo was inadvertently produced by a Baron & Budd associate in an unrelated asbestos lawsuit. Subsequently, the Brown defendants conducted discovery into the creation and use of the Memo. Following Budd’s deposition, the trial court ruled that the Terrell Memo was discoverable. But, that decision was reversed by the Third Court of Appeals after a mandamus proceeding (In re Brown, No. 03-97-00609-CV, 1998 WL 207793 (Tex. App.-Austin 1998, orig. proceeding)). 

There is currently no evidence showing that the Budd transcript was ever filed as a court record, and the records from Brown and the related mandamus action have been destroyed in accordance with statutory document retention policies. Biederman nevertheless asserts that copies of the Budd deposition transcript “are out there,” but states the sealing order has prevented her from accessing copies of the transcript. She also asserts that even if it was not filed, the transcript is a court record because it relates to the use of the “Terrell Memo” to make fraudulent claims and deplete settlement funds set aside by bankrupt trusts to compensate injured parties (a matter of public health and safety). 

Justice Keyes was the most vocal during oral argument. She voiced concerns related to the destruction of the Brown court records and the hypothetical nature of Biederman’s claims that copies of the transcript still exist. Without evidence to establish that the desired document actually exists, Keyes wondered whether holding that Rule 76a provides continuous jurisdiction would constitute an advisory opinion. She further asked whether extending continuous jurisdiction to consider unsealing a destroyed court record would result in “free floating jurisdiction.” 

Biederman’s counsel responded that whether the transcript is a court record under Rule 76a is not a jurisdictional fact that the trial court should have considered when it granted Baron & Budd’s plea to the jurisdiction. Rather, Biederman need only to have established that she was a post-judgment intervenor seeking to vacate a sealing order. Those facts were not disputed. Therefore, the trial court should only have considered the undisputed jurisdictional facts to resolve the issue of jurisdiction. The plea to the jurisdiction should have been denied, and the court should have allowed Biederman to show evidence that the Budd transcript qualified as a court record under Rule 76a. 

Justice Jennings appeared to recognize the difficulty Biederman and others like her would face when copies of court records, which have since been destroyed, exist outside of court but cannot be disclosed because of a continuing sealing order. Justice Jennings asked counsel for Baron & Budd, in this instance, how he would suggest that a party prove a document was a court record. Counsel did not directly answer the question. Instead, he pointed out that Biederman was involved in the underlying Brown litigation in the late 1990s (through her connection with the Dallas Morning News), and had adequate time and notice to intervene and challenge the sealing order before the records were destroyed. 

The same policy concern voiced by Justice Jennings was echoed in the amicus brief filed by Ken Paxton (Texas Attorney General) on behalf of the State of Texas. Because “Texas court records are presumed to be open to the general public,” the Attorney General asserts that the trial court erred in granting the plea to the jurisdiction and denying Biederman the opportunity to put on evidence that the transcript was a court record. Like Biederman, the Texas Attorney General suggests a remand to the trial court to afford Biederman the opportunity to meet her evidentiary burden. In this regard, Justice Jennings brought the argument back to continuing jurisdiction under Rule 76a by stating that an appellate court cannot remand a case that a trial court does not have jurisdiction to hear. 

It is unclear at this time which way the First Court of Appeals will rule, or when the panel will issue its opinion. The appeal was transferred from the Third Court of Appeals in Austin, Texas pursuant to a Texas Supreme Court Order to assist with the Third Court of Appeals’ backlog of appellate cases. Appellant, Christine Biederman, was represented by Paul Watler of Jackson Walker LLP. Appellees, Baron & Budd and Beverly Jean Brown (Individually and as Personal Representative of the Estate and Heirs of Glenn Edward Brown, Sr.), were represented by Kevin Dubose of Alexander Dubose Jefferson & Townsend LLP.  Copies of all appellate briefs may be obtained at http://www.search.txcourts.gov/Case.aspx?cn=01-17-00263-CV&coa=coa01.

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