622 S.W.3d 254
Tex.2021Background
- HouseCanary licensed appraisal/valuation technology to TitleSource; TitleSource later sued for breach and HouseCanary counterclaimed for trade-secret misappropriation.
- The parties entered a stipulated protective order issued under Tex. R. Civ. P. 192.6(b) and TUTSA §134A.006 that allowed designations (confidential / highly confidential), required secure handling, and functioned as a temporary sealing mechanism consistent with Rule 76a(5).
- After a jury verdict favoring HouseCanary on misappropriation, HouseCanary filed a Rule 76a motion to seal 30 trial exhibits; the trial court denied that motion after a hearing.
- HouseCanary then filed a motion for reconsideration relying solely on the Texas Uniform Trade Secrets Act (TUTSA) §134A.006; the trial court granted reconsideration and signed an order sealing 14 exhibits (including six not then moved).
- TitleSource and two media intervenors appealed under Rule 76a(8). The court of appeals reversed the sealing order; the Texas Supreme Court granted review and held that TUTSA displaces some of Rule 76a’s substantive standards but does not create an independent procedural pathway to seal records, vacating the trial court’s order and remanding for proceedings under the combined standard.
Issues
| Issue | HouseCanary's Argument | TitleSource's Argument | Held |
|---|---|---|---|
| Whether TUTSA provides an independent, self-contained path to seal court records | TUTSA’s presumption in favor of protective orders supersedes Rule 76a and thus alone authorizes sealing | Rule 76a and its procedures still apply; TUTSA is complementary and does not eliminate Rule 76a’s procedural safeguards | TUTSA displaces some substantive parts of Rule 76a (the openness presumption) but does not provide a separate procedural pathway; Rule 76a’s non-displaced procedures remain required |
| Whether TUTSA conflicts with Rule 76a’s presumption of public access | TUTSA’s presumption for protective orders means trade-secret secrecy need not meet Rule 76a’s specific-serious-substantial test | Rule 76a’s openness presumption should control; TUTSA cannot be read to eliminate Rule 76a procedures | TUTSA’s presumption in favor of protective orders displaces Rule 76a’s general presumption of openness for alleged trade secrets in misappropriation actions |
| Whether the trial court abused its discretion by granting reconsideration based solely on TUTSA | The court may rely on TUTSA alone on reconsideration and need not apply Rule 76a’s procedural requirements | The court must apply Rule 76a’s non-displaced procedures (notice, motion requirements, limits on reconsideration) even when TUTSA is invoked | The trial court abused its discretion because it applied only TUTSA and failed to apply Rule 76a’s non-displaced procedural provisions; sealing order reversed in part and remanded |
| Whether admission of exhibits and open-court discussion conclusively destroyed trade-secret status | HouseCanary argued the disclosures were limited and additional protective measures preserved secrecy | TitleSource argued public use at trial and failure to follow the protective-order motion timeline waived secrecy | The question is fact-intensive; open-court use is a factor but not conclusive—trial court must decide on remand under the proper legal standard |
Key Cases Cited
- Gen. Tire Inc. v. Kepple, 970 S.W.2d 520 (Tex. 1998) (abuse-of-discretion review; courts need not be overturned for conflicting evidence)
- Walker v. Packer, 827 S.W.2d 833 (Tex. 1992) (failure to analyze or apply correct law is an abuse of discretion)
- In re Silver, 540 S.W.3d 530 (Tex. 2018) (courts may abuse discretion when legal decision is incorrect)
- In re Continental Gen. Tire, Inc., 979 S.W.2d 609 (Tex. 1998) (trade-secret status is a factor in Rule 76a sealing analysis)
- Sunstate Equip. Co. v. Hegar, 601 S.W.3d 685 (Tex. 2020) (distinguishing reconcilable from irreconcilable statutory provisions)
- Nixon v. Warner Commc’ns, Inc., 435 U.S. 589 (1978) (common-law public right of access to judicial records)
- Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555 (1980) (First Amendment protection for public access to trials)
- Le v. Exeter Fin. Corp., 990 F.3d 410 (5th Cir. 2021) (discussing balancing public access and sealing measures)
- In re M-I, L.L.C., 505 S.W.3d 569 (Tex. 2016) (access to courts subject to reasonable limitations to protect trade secrets)
- Eli Lilly & Co. v. Marshall, 829 S.W.2d 157 (Tex. 1992) (trade-secret considerations in sealing analysis)