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Click here for the full text of this decision FACTS:Attorney Harry Jones represented three former employees of American Flood Research Inc. (AFR) in a trade secrets suit. The discovery proceedings in the case and a parallel federal proceeding were contentious. Both sides resisted discovery and filed multiple motions seeking to compel or limit discovery. The parties disputed which party would get to take depositions first. After attempting to schedule the former employees’ depositions in December 2002, AFR filed a motion to compel the depositions. On Dec. 20, 2002, at the hearing on the motion, the trial court stated that AFR would depose the employees on Jan. 6, 2003. The trial court did not enter a written order on the motion. The former employees later filed a motion for reconsideration and a motion to recuse the trial judge. Jones notified AFR that his clients would not appear for depositions on Jan. 6, 2003, because of the pending motions. True to Jones’ statement, they did not appear on Jan. 6, 2003. They later withdrew the motion to recuse and abandoned the motion for reconsideration. On Jan. 13, 2003, AFR filed a motion for contempt and for sanctions seeking to hold the former employees and Jones in contempt for not appearing at depositions beginning Jan. 6, 2003. On Jan. 15, 2003, Jones notified the court and parties that he had been terminated by his clients and withdrew as counsel. On Jan. 20, 2003, the former employees, represented by new counsel, appeared for their depositions and asserted their Fifth Amendment privilege against self-incrimination in response to most questions. In February, AFR moved for sanctions against the former employees and Jones based in part on its position that “the prosecution and defense of this case would be overburdensome and unfair if the Defendants were to plead the Fifth Amendment protections during depositions.” AFR asserted the case was reinstated after the agreed abatement based on Jones’ representation to the trial court that his clients would not assert the Fifth Amendment privilege in discovery. The sanctions motion sought sanctions against the former employees and Jones for AFR’s attorneys’ fees and expenses spent on discovery since the reinstatement, an amount of over $80,000. The motion asserted AFR was entitled to sanctions under ��9.011 and 10.001 of the Texas Civil Practice & Remedies Code and under Texas Rules of Civil Procedure 13, 215.2 and 215.3. After a hearing, a visiting judge entered a $15,000 sanction award against Jones for “egregious discovery abuse.” The order did not cite any particular rule as a basis for sanctions, but the trial court’s conclusions of law determined that the actions described in the fact findings constituted an abuse of the discovery process under Rule 215.3 by Jones. On original submission, Dallas’ 5th Court of Appeals reversed, because Rule 215.3, the only ground for sanctions set forth in the trial court’s conclusions of law, dealt with a party’s abuse of the discovery process, and the trial court specifically found that Jones’ clients did not abuse the discovery process. AFR appealed, and the Texas Supreme Court reversed. The Texas Supreme Court concluded there was evidence to support a sanction against Jones under Rule 215.2(b), a provision cited in the motion for sanctions but not in the sanctions order or the trial court’s conclusions of law. The Texas Supreme Court remanded the matter to the 5th Court to consider whether the $15,000 sanction was excessive. HOLDING:Reversed and dismissed. Discovery sanctions, the court stated, serve three legitimate purposes: 1. to secure compliance with discovery rules; 2. to deter other litigants from similar misconduct; and 3. to punish violators. The court stated that its role was to “ensure that the sanctions are appropriate or just.” There must be a direct relationship, the court stated, between the improper conduct and the sanction imposed. The court stated that it “must also make certain that less severe sanctions would not have been sufficient to promote compliance.” The court stated that it reviewed the record but could find no explanation for how the trial court arrived at the $15,000 amount of the sanction. The court noted that the trial court was not presented with evidence showing the amount of fees and expenses caused by the employees’ failure to appear at the Jan. 6, 2003, depositions. The employees appeared for depositions on Jan. 20, 2003, 14 days later. The record did not indicate how much this delay cost AFR. The court concluded that the record did not show a direct relationship between the alleged improper conduct � failure to appear at depositions � and the $15,000 sanction. The court concluded that the $15,000 sanction against Jones for the failure of his clients to appear for depositions was excessive and an abuse of the trial court’s discretion. It also dismissed the case, because the only remaining element of the suit was the sanctions order, which could not stand alone as an independent suit. OPINION:Moseley, J.; Moseley, Bridges and Lang-Miers, J.J.

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