Texas Business Court Decision – July 18, 2025
No. 25-BC03-0001 SafeLease Insurance Services, LLC v. Storable, Inc., et al (Third Division, Judge Andrews)
Discovery – Trade Secrets. Details of this dispute can be found in the Court’s earlier order of March 11, 2025, which can be found on this site at https://www.dowdbennett.com/news/texas-business-court-decision-march-11-2025/
This order arises over a discovery dispute concerning SafeLease’s request for production of Storable’s customer list. In May 2025, the parties filed discovery-dispute letters under Business Court Local Rule 4(d) regarding whether Storable should have to produce the names and addresses of its customers. The court ordered production of that information, and Storable filed a motion for reconsideration, asserting for the first time that its customer list is a trade secret. The court denies the motion because; (1) Storable has not shown that it satisfied Rule 193.3(a)’s requirements for preserving the privilege and (2) even if the customer list is a trade secret, production is appropriate because SafeLease needs the information for a fair adjudication of its antitrust claim and the information is protected from improper disclosure by the Agreed Protective Order and related rulings in the case.
(1) Storable had a duty to preserve its trade-secret privilege in compliance with Rule 193.3(a), and the court rejects its argument that Rule 193.2(f) applies for the proposition that it could assert the privilege at any time and did not have to assert the privilege until SafeLease requested a privilege log; the first step under Rule 193.3(b) is the responding party’s assertion of the privilege, with the request for the log being the second step; here, Storable did not take the first step required under Rule 193.3(a) by meeting its obligation to inform SafeLease that it intended to withhold the customer list based on the trade-secret privilege; Storable’s response to the request for production of the lists (that it objected because the request sought “confidential, proprietary, and commercially sensitive information of the highest degree” was insufficient to raise the trade-secret privilege and satisfy Rule 193.3(a); Storable’s post-ruling motions after the court ordered production did not satisfy Rule 193.3(a); Local Rule 4(d)’s word limits on discovery-dispute letters did not prevent Storable from raising the issue in its letter; in sum, Storable failed to show it complied with Rule 193.3(a) or took any action to assert a trade-secret privilege before the court’s ruling in May 2025 – or even that it has satisfied Rule 193.3(a) at this time, and it has not shown any valid justification for its failure to comply;
(2)Even if the issue is not waived, the court would deny the motion for reconsideration on the merits because whether or not the customer list is a trade secret, the information is necessary for the fair adjudication of SafeLease’s claims; SafeLease has shown a need for the information to support its theory that Storable is attempting to leverage its monopoly in the storage facility-management software business to gain a monopoly in the tenant-insurance industry; a party’s position in one market is often an important part of the attempt to show attempted monopolization of another market, and Storable’s customer information is relevant to defining the relevant market in the insurance market; Storable’s offer to provide the total number of its software customers is not a legally satisfactory alternative to disclosure of the customer lists; nor is Storable’s offer to let SafeLease’s expert or a neutral third party review the list while it remains in Storable’s possession; Storable has moved for summary judgment on the anti-trust claim, but the court rejects its argument that the court should wait to order production until it has ruled on the summary judgment motion; this is the kind of summary judgment motion that implicates disputed facts, and SafeLease needs the information to present its best arguments in opposition; the court’s Agreed Protective Order (Outside Counsel’s Eyes Only) adequately protects the list from improper access and viewing.