Axelson, Inc. v. McIlhany
34 Tex. Sup. Ct. J. 56, 1990 Tex. LEXIS 132, 798 S.W.2d 550 (1990)
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Rule of Law:
A party cannot shield a witness from discovery regarding their factual knowledge, mental impressions, and opinions by designating them a 'consulting-only expert' if that individual was also an active participant in the events giving rise to the litigation.
Facts:
- In October 1981, a major gas well known as Key Well 1-11, operated by Apache Corporation, blew out and was not brought under control for over a year.
- Paul Douglas Storts was the petroleum engineer employed by Apache who was in charge of the well from its inception, working on it before, during, and after the blowout.
- Axelson, Inc. manufactured a relief valve that was installed on the well and which allegedly should have prevented the blowout.
- Apache hired other individuals, Richard Biel, Joe Fowler, and Tom Hill, to examine the wellhead equipment after the blowout, giving them specific factual knowledge about its condition and chain of custody.
- For reasons unrelated to the blowout litigation, Apache conducted an internal investigation concerning bribes and kickbacks from suppliers on numerous wells, including Key Well 1-11.
- Apache later designated Storts, Biel, Fowler, and Hill as 'consulting-only experts' in the litigation arising from the blowout.
Procedural Posture:
- Numerous lawsuits were filed against Apache Corporation and El Paso Exploration Company by mineral interest owners following a gas well blowout.
- Apache and El Paso, as defendants, brought third-party actions against their equipment suppliers, including Axelson, Inc. and its parent, U.S. Industries, Inc. (USI).
- In the trial court, Axelson sought discovery of an internal investigation and depositions of several witnesses Apache designated as consulting-only experts.
- The trial court judge, Judge McIlhany, denied Axelson's discovery requests.
- Axelson (as relator) petitioned the intermediate court of appeals for a writ of mandamus against Judge McIlhany (as respondent).
- The court of appeals partially granted the writ but upheld the trial court's denial of discovery concerning the 'dual capacity' witnesses and the kickback investigation.
- Axelson then petitioned the Supreme Court of Texas for a writ of mandamus to compel Judge McIlhany to vacate his discovery orders.
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Issue:
Can a party prevent the discovery of facts, mental impressions, and opinions known by a witness by designating that witness as a 'consulting-only expert,' when the witness possesses firsthand knowledge from active participation in the underlying events of the lawsuit?
Opinions:
Majority - Gonzalez, J.
No. A party cannot shield a witness from discovery by designating them a 'consulting-only expert' when that witness has direct knowledge from their participation in the events material to the lawsuit. The consulting expert privilege is intended to protect individuals retained or specially employed in anticipation of litigation, not to conceal the knowledge of fact witnesses. The court reasoned that the purpose of discovery is to seek the truth by revealing facts, not concealing them. The consulting expert exemption protects the identity, mental impressions, and opinions of experts whose only source of information was the consultation itself. An employee like Storts, who worked on the well before litigation was contemplated, cannot qualify as a consulting-only expert because his employment was not 'in anticipation of litigation.' Therefore, his factual knowledge, mental impressions, and opinions are discoverable. Similarly, the facts known by other experts like Biel, Fowler, and Hill about the chain of custody are discoverable because the privilege does not extend to underlying facts. The court further held that the trial court abused its discretion by denying discovery of the kickback investigation without first conducting an in camera inspection to determine its relevance.
Analysis:
This decision significantly clarifies and limits the scope of the consulting-expert privilege in Texas. It prevents parties from using the privilege as a shield to hide key fact witnesses, particularly employees who were involved in the events that led to the litigation. The ruling reinforces the principle that discovery rules are to be liberally construed to promote truth-seeking. By establishing that a witness's status is determined by the source of their knowledge (i.e., direct participation vs. litigation-focused consultation), the case makes it much more difficult for corporate parties to conceal relevant information known by their own personnel.
