Suppose a manufacturer wants to designate one of its employees to provide expert testimony about the design process in a products liability case. Perhaps a bank wants one of its loan officers to give an expert opinion on lending practices. There can be many benefits to using a qualified expert who is already in-house, including that the employee-expert may be more familiar with the subject-matter of the litigation than a retained expert and is already on the payroll, eliminating the need to pay costly hourly fees. But can the company’s trial counsel help an employee-expert prepare for his or her testimony in the same way that they would for any other expert witness? Or will doing so risk waiving the attorney-client privilege? In federal court, the current discovery rules expressly allow for the withholding of expert materials “otherwise discoverable” on the basis of privilege. In Texas state courts, the answer was less clear until last month’s decision in the case of In re City of Dickinson.
That case involved a dispute between the City of Dickinson, Texas and Texas Windstorm Insurance Association over property damage caused by Hurricane Ike. In response to a motion for summary judgment, Texas Windstorm offered an affidavit from its senior claims administrator (and corporate representative) that offered both factual and expert opinion testimony. When the City subsequently learned that Texas Windstorm’s counsel helped the corporate representative revise his affidavit, it asked the trial court to require Texas Windstorm to turn over all email communications between counsel and the corporate representative as well as all other documents, tangible things, reports, models, or data compilations used by the representative in preparation for his expert testimony. Texas Windstorm resisted on the basis of attorney-client privilege. After the trial court ordered it to turn over the communications and other items under the rules of evidence governing discovery of expert materials, Texas Windstorm sought mandamus relief from the Fourteenth Court of Appeals. The appellate court ruled in favor of Texas Windstorm and instructed the trial court to vacate its order, holding that the materials were privileged communications between the insurance company and its counsel notwithstanding the corporate representative’s additional role as a testifying expert.
The Supreme Court of Texas ultimately agreed, noting that there are limited exceptions to the attorney-client privilege and the discovery rule for expert materials is not one of them. While Texas Rule of Civil Procedure 192.3 provides that a party may discover testifying materials provided to, reviewed by, or prepared by or for an expert witness in preparation for his testimony, “nothing in its language permits such discovery when the materials are attorney-client privileged.” Similarly, Rule 194.2 also uses permissive language and provides only that a party may request disclosure of documents and other materials used by experts in the case. While Rules 192.3 and 194.2 do not contain express exemptions for privileged information like the analogous federal rule, the Supreme Court of Texas reasoned that privileged material may still be withheld from otherwise permissible discovery because the Texas discovery rules do not prohibit experts from using attorney-client privileged information during their preparation and do not mandate a waiver of the privilege when such materials are used by experts.
This case is important for any company wishing to use an in-house expert to offer testimony at trial or in support of pre-trial motions. It clarifies that the Texas Rules of Civil Procedure implicitly recognize what the Federal Rules of Civil Procedure state expressly: that a party’s ability to obtain discovery of expert materials is subject to the sacrosanct attorney-client privilege. The case’s application to a non-employee representative of a client (such as a project architect designated as an “owner’s representative” in a construction case) remains questionable. But corporate parties can rest assured that designating one of their own employees to serve in the capacity of a testifying expert will not waive attorney-client privilege.