Lex Mundi Global Attorney-Client Privilege Guide |
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USA, Texas |
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(United States)
Firm
Baker Botts L.L.P.
Contributors
Ty Buthod |
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| Is the ACP recognized in your jurisdiction? | Yes. Texas recognizes the attorney-client privilege under Texas Rule of Evidence 503(b)(1). |
| If the ACP is not recognized in your jurisdiction, are there rules of professional confidentiality or other rules that would enable a lawyer or a client to withhold attorney-client communications or work product prepared by counsel from disclosure... | Not applicable. Texas recognizes the attorney-client privilege.
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| Is a distinction made in applying the ACP or professional confidentiality rules in civil and criminal proceedings? May government authorities require disclosure of attorney-client communications and legal work product? | Yes. Texas law distinguishes between applying the attorney-client privilege in civil and criminal proceedings. Texas Rule of Evidence 503(b)(1) provides the general rule for civil and criminal cases. Rule 503(b)(2) applies only to criminal cases. Under that rule, a client can prevent a lawyer or a lawyer’s representative from disclosing any fact that the lawyer (or the lawyer’s representative) learned through the attorney-client relationship. |
| In the corporate context, what test is applied to determine who within a corporation is considered the client for the purposes of the ACP? (e.g., in the U.S.: the Upjohn approach, control group test, etc.) | Texas courts apply the subject-matter test to determine which people within a corporation count as the “client” for the purposes of the attorney-client privilege. Under that test, a corporate employee is the client (and the attorney-client privilege applies) where: (1) the employee communicates at the direction of his or her corporate superiors; (2) the communication deals with the employee’s job duties; and (3) the corporation seeks legal advice from the attorney on the subject matter of the employee’s communication. In re E.I. DuPont de Nemours & Co., 136 S.W.3d 218, 225 n.3 (Tex. 2004) explains the contours of this test. |
| Is in-house counsel expected to meet a higher burden than outside counsel in order to establish that privilege applies to in-house counsel’s communications? | No. Both in-house and outside counsel must meet the same burden to establish that the attorney-client privilege (as set out in Texas Rule of Evidence 503(b)(1)) applies to their respective communications. Under Texas Rule of Civil Procedure 193.3, a party resisting discovery has the burden to assert that the privilege applies. |
| Civil Law Jurisdictions: May in-house counsel assert privilege or professional confidentiality? | Not applicable. Texas is a common-law jurisdiction. |
| Civil Law Jurisdictions: Is in-house counsel allowed to be active members of your jurisdiction’s bar? | Not applicable. Texas is a common-law jurisdiction. |
| Is the common interest doctrine recognized in your jurisdiction? | Yes. Texas recognizes two doctrines that may allow a client to disclose confidential information to a third party without waiving privilege. The first, known as the “common interest doctrine,” applies relatively broadly. In re JDN Real Estate-McKinney L.P., 211 S.W.3d 907, 922 (Tex. App.—Dallas 2006, orig. proceeding). The second, known as the “allied litigant rule” applies narrowly. In re XL Specialty Ins. Co., 373 S.W.3d 46, 50 (Tex. 2012). |
| How is the doctrine articulated in your jurisdiction? | First, under the “common interest doctrine,” the attorney-client privilege may extend to privileged communications shared with a third person if that person “has a common legal interest with respect to the subject matter of the communication.” In re JDN Real Estate-McKinney L.P., 211 S.W.3d at 922. For example, in one case, a court determined that evidence was privileged when it documented discussions between an insured and its insurer and dealt with the decision-making process about the claim and how to defend it. In re Tex. Health Res., 472 S.W.3d 895, 903–04 (Tex. App.—Dallas 2015, orig. proceeding). Second, Texas Rule of Evidence 503(b), or the “allied litigant rule,” extends to confidential communications when multiple parties to a lawsuit, each represented by different attorneys, communicate among themselves for the purpose of forming a common defense strategy. It only applies during litigation. The Supreme Court of Texas outlines the rule’s contours in In re XL Specialty Ins. Co., 373 S.W.3d at 51. |
| Must a common interest agreement be in writing? | Texas courts have not addressed whether a written agreement is required to determine whether the attorney-client privilege can reach a third party under the allied litigant rule. |
| Is litigation funding permitted in your jurisdiction? Are there any professional rules in this respect? | Yes. Texas courts have upheld litigation funding agreements. Certain professional rules govern these agreements. For example, because Rules 5.04(a) of the Texas Disciplinary Rules of Professional Conduct prohibits lawyers from sharing fees with non-lawyers, that rule may implicate litigation funding. Because it would amount to fee-splitting, the Texas Center for Legal Ethics explains that a lawyer cannot agree to pay a lending company owned by nonlawyers a funding fee that is tied to a percentage of the recovery. Additionally, for any litigation funding arrangement, the lawyer must: (1) obtain the client’s consent; (2) safeguard his or her own independence of professional judgment and the attorney-client relationship, and (3) protect the client’s confidential information. |
| Have the courts in your jurisdiction addressed whether communications with litigation funders may be protected by the ACP or the work-product protection | No. Texas courts have not addressed whether communications with litigation funders may be protected by the attorney-client privilege or work-product protection. |
| Is the crime-fraud exception recognized in your jurisdiction? | Yes. Texas Rule of Evidence 503(d)(1) recognizes the crime-fraud exception to the attorney-client privilege. |
| What statutes or key court decisions articulate the crime-fraud exception in your jurisdiction? | Texas Rule of Evidence 503(d)(1) sets out the crime-fraud exception. Under that exception, the attorney-client privilege does not apply “[i]f the lawyer’s services were sought or obtained to enable or aid anyone to commit or plan to commit what the client knew or reasonably should have known to be a crime or fraud.” Granada Corp. v. Hon. First Ct. App., 844 S.W.2d 223, 227–28 (Tex.1992) recognizes that the crime-fraud exception applies only if the party seeking discovery makes a prima facie case of contemplated fraud. In re USA Waste Mgmt. Res., L.L.C., 387 S.W.3d 92, 98 (Tex. App.—Houston 2012, orig. proceeding) summarizes the exception’s contours. |
| Is there a statute or rule that protects information obtained or prepared in anticipation of litigation from disclosure in legal proceedings? (In the U.S.: What state rule is your jurisdiction’s analog to FRCP 26(b)(3)?) | Yes. Texas Rule of Civil Procedure 192.5 protects certain information obtained or prepared in anticipation of litigation from disclosure in legal proceedings. |
| What are the elements of the protection in your jurisdiction? | In Texas, “work product” includes material prepared, mental impressions developed, and communications made in anticipation of litigation or for trial. Tex. R. Civ. P. 192.5(a). Rule 192.5(b)(1) shields “core work product” from discovery. Core work product is “the work product of an attorney or an attorney’s representative that contains the attorney’s or the attorney’s representative’s mental impressions, opinions, conclusions, or legal theories[.]” Under Rule 192.5(b)(2), all other work product is shielded from discovery unless the party seeking discovery shows a substantial need of the materials in the preparation of its case and it is unable, without undue hardship, to obtain the substantial equivalent of the material by other means. Rule 192.5(c) provides five exceptions to the work product doctrine. |
| Does your jurisdiction recognize an accountant-client privilege? | Yes. Texas recognizes an accountant-client privilege as set out in Chapter 901 of the Texas Occupations Code. Tex. Occ. Code Ann. § 901.457. However, courts can order accountants to disclose information protected by the accountant-client privilege. Tex. Occ. Code Ann. § 901.457(b)(3). Section 901.457(b) provides the other applicable exceptions. |
| Does your jurisdiction recognize a mediation privilege? | Yes. Texas recognizes a mediation privilege under § 154.053 of the Texas Civil Practice and Remedies Code. The privilege only extends to those matters that occur during the mediation process. |
| Does your jurisdiction recognize a settlement negotiation privilege? | Yes. Texas Rule of Evidence 408(a) bars parties from using certain evidence (e.g., settlement offers as well as conduct or statements made during negotiations) to prove or disprove the validity or amount of a disputed claim. Additionally, Section 154.073 of the Texas Civil Practice and Remedies Code sets out the parameters for confidentiality of certain records and communications regarding alternative dispute resolution. Three notable exceptions include that a communication may be discoverable if: (1) it does not relate to the subject matter of the dispute or does not relate to, or arise out of, the matter in dispute; (2) it is admissible or discoverable regardless of its use in an alternative dispute resolution procedure; and (3) other legal requirements mandate disclosure. |
Lex Mundi Global Attorney-Client Privilege Guide
Yes. Texas recognizes the attorney-client privilege under Texas Rule of Evidence 503(b)(1).
Not applicable. Texas recognizes the attorney-client privilege.
Yes. Texas law distinguishes between applying the attorney-client privilege in civil and criminal proceedings. Texas Rule of Evidence 503(b)(1) provides the general rule for civil and criminal cases. Rule 503(b)(2) applies only to criminal cases. Under that rule, a client can prevent a lawyer or a lawyer’s representative from disclosing any fact that the lawyer (or the lawyer’s representative) learned through the attorney-client relationship.
Texas courts apply the subject-matter test to determine which people within a corporation count as the “client” for the purposes of the attorney-client privilege. Under that test, a corporate employee is the client (and the attorney-client privilege applies) where: (1) the employee communicates at the direction of his or her corporate superiors; (2) the communication deals with the employee’s job duties; and (3) the corporation seeks legal advice from the attorney on the subject matter of the employee’s communication. In re E.I. DuPont de Nemours & Co., 136 S.W.3d 218, 225 n.3 (Tex. 2004) explains the contours of this test.
No. Both in-house and outside counsel must meet the same burden to establish that the attorney-client privilege (as set out in Texas Rule of Evidence 503(b)(1)) applies to their respective communications. Under Texas Rule of Civil Procedure 193.3, a party resisting discovery has the burden to assert that the privilege applies.
Not applicable. Texas is a common-law jurisdiction.
Not applicable. Texas is a common-law jurisdiction.
Yes. Texas recognizes two doctrines that may allow a client to disclose confidential information to a third party without waiving privilege. The first, known as the “common interest doctrine,” applies relatively broadly. In re JDN Real Estate-McKinney L.P., 211 S.W.3d 907, 922 (Tex. App.—Dallas 2006, orig. proceeding). The second, known as the “allied litigant rule” applies narrowly. In re XL Specialty Ins. Co., 373 S.W.3d 46, 50 (Tex. 2012).
First, under the “common interest doctrine,” the attorney-client privilege may extend to privileged communications shared with a third person if that person “has a common legal interest with respect to the subject matter of the communication.” In re JDN Real Estate-McKinney L.P., 211 S.W.3d at 922. For example, in one case, a court determined that evidence was privileged when it documented discussions between an insured and its insurer and dealt with the decision-making process about the claim and how to defend it. In re Tex. Health Res., 472 S.W.3d 895, 903–04 (Tex. App.—Dallas 2015, orig. proceeding).
Second, Texas Rule of Evidence 503(b), or the “allied litigant rule,” extends to confidential communications when multiple parties to a lawsuit, each represented by different attorneys, communicate among themselves for the purpose of forming a common defense strategy. It only applies during litigation. The Supreme Court of Texas outlines the rule’s contours in In re XL Specialty Ins. Co., 373 S.W.3d at 51.
Texas courts have not addressed whether a written agreement is required to determine whether the attorney-client privilege can reach a third party under the allied litigant rule.
Yes. Texas courts have upheld litigation funding agreements. Certain professional rules govern these agreements. For example, because Rules 5.04(a) of the Texas Disciplinary Rules of Professional Conduct prohibits lawyers from sharing fees with non-lawyers, that rule may implicate litigation funding. Because it would amount to fee-splitting, the Texas Center for Legal Ethics explains that a lawyer cannot agree to pay a lending company owned by nonlawyers a funding fee that is tied to a percentage of the recovery. Additionally, for any litigation funding arrangement, the lawyer must: (1) obtain the client’s consent; (2) safeguard his or her own independence of professional judgment and the attorney-client relationship, and (3) protect the client’s confidential information.
No. Texas courts have not addressed whether communications with litigation funders may be protected by the attorney-client privilege or work-product protection.
Yes. Texas Rule of Evidence 503(d)(1) recognizes the crime-fraud exception to the attorney-client privilege.
Texas Rule of Evidence 503(d)(1) sets out the crime-fraud exception. Under that exception, the attorney-client privilege does not apply “[i]f the lawyer’s services were sought or obtained to enable or aid anyone to commit or plan to commit what the client knew or reasonably should have known to be a crime or fraud.” Granada Corp. v. Hon. First Ct. App., 844 S.W.2d 223, 227–28 (Tex.1992) recognizes that the crime-fraud exception applies only if the party seeking discovery makes a prima facie case of contemplated fraud. In re USA Waste Mgmt. Res., L.L.C., 387 S.W.3d 92, 98 (Tex. App.—Houston 2012, orig. proceeding) summarizes the exception’s contours.
Yes. Texas Rule of Civil Procedure 192.5 protects certain information obtained or prepared in anticipation of litigation from disclosure in legal proceedings.
In Texas, “work product” includes material prepared, mental impressions developed, and communications made in anticipation of litigation or for trial. Tex. R. Civ. P. 192.5(a). Rule 192.5(b)(1) shields “core work product” from discovery. Core work product is “the work product of an attorney or an attorney’s representative that contains the attorney’s or the attorney’s representative’s mental impressions, opinions, conclusions, or legal theories[.]” Under Rule 192.5(b)(2), all other work product is shielded from discovery unless the party seeking discovery shows a substantial need of the materials in the preparation of its case and it is unable, without undue hardship, to obtain the substantial equivalent of the material by other means. Rule 192.5(c) provides five exceptions to the work product doctrine.
Yes. Texas recognizes an accountant-client privilege as set out in Chapter 901 of the Texas Occupations Code. Tex. Occ. Code Ann. § 901.457. However, courts can order accountants to disclose information protected by the accountant-client privilege. Tex. Occ. Code Ann. § 901.457(b)(3). Section 901.457(b) provides the other applicable exceptions.
Yes. Texas recognizes a mediation privilege under § 154.053 of the Texas Civil Practice and Remedies Code. The privilege only extends to those matters that occur during the mediation process.
Yes. Texas Rule of Evidence 408(a) bars parties from using certain evidence (e.g., settlement offers as well as conduct or statements made during negotiations) to prove or disprove the validity or amount of a disputed claim.
Additionally, Section 154.073 of the Texas Civil Practice and Remedies Code sets out the parameters for confidentiality of certain records and communications regarding alternative dispute resolution. Three notable exceptions include that a communication may be discoverable if: (1) it does not relate to the subject matter of the dispute or does not relate to, or arise out of, the matter in dispute; (2) it is admissible or discoverable regardless of its use in an alternative dispute resolution procedure; and (3) other legal requirements mandate disclosure.