IN THE SUPREME COURT OF TEXAS
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No. 06-0385
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In Re SCI Texas =
Funeral=20
Services, Inc., SCIT Holdings, Inc., SCI Funeral Services, Inc., and =
Service=20
Corporation International, Relators
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52;══════════=
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552;═
On Petition for Writ of =
Mandamus
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PER =
CURIAM
=20
The trial court here ordered class-wide discovery and =
class-wide=20
sanctions long before it certified the class. In two separate appeals, =
the court=20
of appeals upheld the discovery and sanctions but then reversed =
certification,=20
rendering the class-wide discovery superfluous and the class-wide =
sanctions=20
incongruous. We conditionally grant the writ and order the trial court =
to vacate=20
its orders in light of the decertification. See In re Allstate =
County Mut. Ins.=20
Co., 227 S.W.3d 667, 668=9669 (Tex. 2007)=20
(per curiam) (granting mandamus to correct =
overbroad=20
discovery); Walker v. Packer, 827 S.W.2d 833, 843 (Tex. 1992) =
(stating=20
mandamus is available to correct interlocutory sanctions orders that =
preclude=20
trial on the merits).
=20
Three plaintiffs brought individual and class =
claims=20
against several SCI entities for violating federal and state =
disclosure requirements applicable to funeral providers. See 16 =
C.F.R. =A7=20
453.3(f); 22 Tex. Admin. Code =A7 203.8(d). In =
connection with=20
those claims, the plaintiffs sought broad discovery including every SCI =
contract=20
for funeral services in Texas between 1998 and 2004 (reportedly =
200,000), and=20
documents concerning every item SCI purchased to provide those services=20
(reportedly 2.5 million).
=20
After granting a series of motions to compel based on asserted =
gaps in=20
SCI=92s production, the trial court entered a sanctions order that =
deemed SCI had=20
breached the class members=92 contracts due to inadequate disclosures, =
and barred=20
SCI from contesting their method of calculating damages. After the court =
of=20
appeals denied mandamus relief, 198 S.W.3d 14 (Tex. App.=97El Paso =
2006), SCI=20
filed this mandamus proceeding.
=20
One year later, the court of appeals reversed the trial court=92s =
certification order, finding no private cause of action under either the =
federal=20
or state funeral disclosure rules, and barring the plaintiffs=92 damage =
claims as=20
their contracts were not illegal. SCI Tex. Funeral Servs., Inc. v. Hijar, 214=20
S.W.3d 148, 154=9657 (Tex. App.=97El Paso 2007, pet. denied). The court =
decertified=20
the class and dismissed all claims except the named plaintiffs=92 claim =
for=20
injunctive relief. Id. at=20
157. Thus, what was once a damages claim on behalf of potentially =
hundreds of thousands of consumers is now a claim by three of them for=20
injunctive relief alone. Obviously, much of =
the=20
class-wide discovery is no longer relevant =97 precisely as SCI =
unsuccessfully=20
argued in the trial court and throughout this appeal.
=20
In In re Alford =
Chevrolet-Geo, we=20
rejected a blanket rule that all class-wide discovery=20
should be abated until after certification. 997 =
S.W.2d 173,=20
185 (Tex.=20
1999). But we also rejected the opposite rule (full class-wide =
discovery=20
before certification), noting the special risk in class actions that one =
party=20
might seek to improve its bargaining position by heaping massive =
discovery on=20
the other. Id.=20
at 180=9681 (quoting Frank H. Easterbrook, Comment, Discovery as =
Abuse,=20
69 B.U. L. Rev. 635, =
636=20
(1989)). Instead, we held the proper rule was for trial courts to =
limit=20
pre-certification discovery to the particular issues governing =
certification in=20
each case, considering factors such as the importance, benefit, burden, =
expense,=20
and time needed to produce the proposed discovery. Id.=20
at 182.
=20
The discovery orders here do not comply with this rule. SCI=92s =
primary=20
objection to both discovery and certification was that private parties =
have no=20
standing to assert violations of the funeral disclosure rules. This =
question of=20
law did not require production of several hundred thousand contracts and =
millions of invoices. While the plaintiffs could have made a strong case =
for=20
discovery related to the size of the class and representative samples of =
how SCI=20
did business (necessary to establish numerosity,=20
typicality, and so on), these issues did not justify the burden and =
expense of=20
producing every plaintiffs=92 contract and every SCI invoice =97 =
discovery perhaps=20
necessary to prove the ultimate issues but not tailored to the =
certification=20
question before the court. We hold the trial court abused its discretion =
by=20
compelling discovery that was not narrowly tailored to the relevant =
dispute.=20
Id. at 180; see also =
In re=20
Graco Children=92s Prods., Inc., 210 =
S.W.3d 598, 601=20
(Tex.=20
2006).
=20
In an alternate holding, the court of appeals denied mandamus =
relief=20
based on laches. SCI filed its mandamus =
petition a=20
little less than six months after the trial court=92s final sanctions =
order. SCI=20
explained the delay by establishing that it took three months to get the =
reporter=92s record of the numerous discovery hearings, and the =
remaining time to=20
brief both the discovery and the certification appeals so they could be =
filed=20
together (although in separate proceedings). This can hardly be faulted, =
given=20
the related nature of the two proceedings and the incongruous results =
produced=20
when the court of appeals decided them separately. As a matter of law, =
these=20
explanations were sufficient to establish that SCI had not =
=93slumber[ed] on [its]=20
rights.=94 Rivercenter =
Assocs. v.=20
Rivera, 858 S.W.2d 366, 367 (Tex. 1993).
=20
As to the trial court=92s sanctions, this order was not =
necessarily wrong=20
just because the discovery orders were; a party=92s recalcitrance is not =
entirely=20
justified by winning on the merits on appeal. But a just sanctions order =
(1)=20
=93must be directed . . . toward remedying the prejudice caused the =
innocent=20
party,=94 and (2) =93should fit the crime.=94 TransAmerican =
Natural Gas=20
Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 1991). Here, the =
plaintiffs were=20
neither prejudiced nor entirely innocent, as the massive discovery they =
sought=20
was based on damage claims they had no standing to assert and evidence =
they did=20
not need for the certification hearing. Moreover, an order deeming =
contracts=20
breached and proscribing damage calculations no longer fits a case in =
which all=20
contract and damage claims have been dismissed.
=20
Accordingly, without hearing oral argument, see Tex. R. App. P. 52.8(c), we=20
conditionally grant the writ of mandamus and direct the trial court to =
vacate=20
its deemed factual findings and discovery orders in light of the court =
of=20
appeals=92 decertification. We are confident that the trial court will =
comply and=20
our writ will only issue if it does not.
OPINION=20
DELIVERED: October 12, 2007