in Re American Fisheries, Inc.
01-15-00304-CV
Tex. App.Apr 6, 2015Background
- AFI sued National Honey, Inc. (NHI) and its principals for breach of contract and alter ego claims after NHI paid only part of invoices for shrimp deliveries; NHI asserted multiple counterclaims alleging fraud, warranty breaches, and RICO-style allegations tied to a company called Linghai (USA) and to AFI personnel.
- AFI amended to sue Chinese national Feng Shao (a former AFI U.S. representative) for breach of fiduciary duty, tortious interference, fraud, and conspiracy; Feng Shao is a central witness for AFI’s defenses and for disproving NHI’s Linghai-related allegations.
- The trial court authorized oral depositions in Hong Kong with a time limit (6 hours per side, or 7.5 if an interpreter was required). AFI noticed depositions and incurred substantial costs to conduct them.
- Zongdao Shao’s deposition consumed unexpected time; Feng Shao’s scheduled deposition was delayed and truncated because Feng Shao faced a Hong Kong visa/return deadline and left before full allotted time could be used. Counsel informally agreed on limited initial questioning time.
- NHI moved to strike the entire deposition transcript of Feng Shao, arguing time-limit violations and other objections. The trial court struck Feng Shao’s entire deposition and denied AFI’s motion to reconsider. AFI petitioned for mandamus, arguing the order was an unjust discovery sanction (a "death penalty" sanction) that deprived AFI of a critical defense and left no adequate remedy by appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court abused its discretion by striking the entire deposition of Feng Shao | Striking the deposition is a discovery sanction that is unjust: AFI did not control Feng Shao’s departure; counsel attempted less drastic alternatives; the testimony is critical to AFI’s defenses | The order is an evidentiary ruling tied to time-limit violations during the deposition and not an appealable sanction | AFI contends the trial court abused discretion and seeks mandamus to reverse the strike (petition alleges abuse; relief sought) |
| Whether the court’s order constitutes a discovery sanction under Tex. R. Civ. P. 215 | The order functionally prohibits AFI from introducing Feng Shao’s testimony, therefore it is a sanction under Rule 215.2 and requires findings and consideration of lesser sanctions | NHI says they did not request a Rule 215 sanction and framed their relief as evidentiary | AFI argues the court imposed a sanction without applying sanction standards (record asserted to lack findings) |
| Whether striking the entire deposition is a “death penalty” sanction and thus unjust/excessive | Exclusion of all testimony is effectively a death-penalty sanction because Feng Shao is central; trial court failed to consider lesser sanctions or the TransAmerican factors | NHI argues the time-limit breach justified exclusion | AFI argues the sanction is excessive and not appropriately linked to culpability; mandamus requested to remedy the alleged excessive sanction |
| Whether AFI has an adequate remedy by appeal | Without Feng Shao’s testimony AFI cannot present core defenses and cannot cure the evidentiary gap on appeal; appellate reversal would not restore trial evidence | NHI would rely on the trial court’s contemporaneous evidentiary rulings and later appealability | AFI argues lack of adequate appellate remedy supports mandamus jurisdiction |
Key Cases Cited
- In re Colonial Pipeline Co., 968 S.W.2d 938 (Tex. 1998) (mandamus is proper to correct certain discovery orders when no adequate appellate remedy exists)
- Walker v. Packer, 827 S.W.2d 833 (Tex. 1992) (mandamus standard: clear abuse of discretion and lack of adequate appellate remedy)
- In re Prudential Ins. Co. of Am., 148 S.W.3d 124 (Tex. 2004) (mandamus relief requires showing trial-court abuse and no adequate appellate remedy)
- TransAmerican Natural Gas Corp. v. Powell, 811 S.W.2d 913 (Tex. 1991) (two-prong test for just discovery sanctions: direct relation to misconduct and proportionality; lesser sanctions required before death-penalty sanctions)
- Chrysler Corp. v. Blackmon, 841 S.W.2d 844 (Tex. 1992) (party moving for sanctions must show inability to prepare for trial without requested discovery)