In re Fairway Methanol LLC, 515 S.W.3d 480

Background

Worker Jose Salazar suffered severe electrical injuries at Celanese’s Clear Lake facility; Celanese’s legal department promptly directed an internal investigation and labeled communications privileged.
Plaintiffs sued related Celanese entities and Fairway Methanol; Plaintiffs served broad discovery seeking investigation reports, statements, and interview materials.
Celanese withheld ~452 pages as attorney-client and work-product; trial court ordered production after in camera review and compelled Fairway to produce documents it did not physically possess.
Relators (Celanese Ltd. and Fairway) petitioned this court for mandamus to vacate the trial court’s October 12, 2016 order compelling production.
The appellate court conducted de novo review of privilege claims, performed its own in camera review, and evaluated (1) whether communications were attorney-client privileged, (2) whether they were work product prepared in anticipation of litigation, (3) whether plaintiffs showed substantial need for non-core work product, and (4) whether Fairway had possession, custody, or control.
Court concluded many documents are protected, plaintiffs failed to show substantial need for non-core work product, and Fairway was wrongly ordered to produce documents not in its possession; mandamus conditionally granted.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether withheld communications are protected by the attorney‑client privilege	Communications were primarily for business/safety, not legal advice; investigatory employees lacked authority to be client representatives	Investigation was directed by in‑house counsel, team worked under counsel’s supervision, communications made to facilitate legal services	Celanese made a prima facie showing; many documents protected by attorney‑client privilege; trial court abused discretion in ordering production
Whether withheld materials are protected work product (anticipation of litigation)	No outward manifestations of imminent litigation; workers’ comp exclusivity precluded litigation for Celanese Ltd.	Severity of injuries and counsel’s direction created a substantial chance of litigation; investigation was conducted in good‑faith anticipation of litigation	Brotherton/Flores test met objectively and subjectively; documents were work product; trial court abused discretion
Whether plaintiffs established substantial need for non‑core work product (Rule 192.5(b)(2))	Plaintiffs need root‑cause analyses and reports for case‑in‑chief; scene altered and witnesses’ memories may have faded	Plaintiffs already obtained extensive discovery, photos, witness identities and could obtain substantial equivalent without undue hardship	Plaintiffs failed to meet the heavy burden to show substantial need and undue hardship; non‑core work product not producible; plus attorney‑client privilege has no substantial‑need exception
Whether Fairway could be compelled to produce documents	Plaintiffs sought production from all defendants including Fairway	Fairway had no physical possession, custody, or control of Celanese documents; access alone insufficient	Trial court abused discretion in compelling Fairway to produce documents it did not possess; only Celanese ordered (and only for limited non‑privileged docs)

Key Cases Cited

In re E.I. DuPont de Nemours & Co., 136 S.W.3d 218 (Tex. 2004) (mandamus proper when trial court orders disclosure of privileged information)
In re Prudential Ins. Co., 148 S.W.3d 124 (Tex. 2004) (mandamus standards: clear abuse of discretion and lack of adequate appellate remedy)
Nat'l Tank Co. v. Brotherton, 851 S.W.2d 193 (Tex. 1993) (two‑prong Flores test for anticipation of litigation explained and applied)
Flores v. Fourth Court of Appeals, 777 S.W.2d 38 (Tex. 1989) (test for work‑product anticipation of litigation; later refined by Brotherton)
Huie v. DeShazo, 922 S.W.2d 920 (Tex. 1996) (attorney‑client privilege extends to entire communication, including factual content)
Walker v. Packer, 827 S.W.2d 833 (Tex. 1992) (no adequate appellate remedy justifies mandamus relief)