the City of Houston, Texas v. Ken Paxton, Attorney General of Texas, 03-15-00093-CV

Background

The City of Houston’s Office of Inspector General (OIG) was established within the City Attorney’s Office by executive order; OIG attorneys conducted an internal investigation into alleged employee misconduct.
City policy requires employees to cooperate with OIG investigations and to treat interview statements as confidential, with statements collected by OIG attorneys incorporated into an investigative file/report.
A request under the Texas Public Information Act (TPIA) sought OIG investigative records; the Attorney General (AG) found most materials privileged but ordered disclosure of two employee interview statements.
The City sued the AG under Tex. Gov’t Code § 552.324 to withhold those two statements, and the trial court granted the AG’s summary-judgment motion, ordering disclosure.
The City appeals, arguing the two interview statements are protected by the attorney-client privilege (Tex. R. Evid. 503) because they were confidential communications made to City lawyers to facilitate legal advice, and that no waiver occurred.

Issues

Issue	Plaintiff's Argument (City)	Defendant's Argument (AG)	Held
Whether the two OIG employee interview statements are privileged under Tex. R. Evid. 503	Statements were confidential communications to City attorneys made at the City’s direction as part of an internal investigation to obtain legal advice; therefore privileged	Selected portions can be disclosed because they are factual statements or involve employees who were subjects/targets, so privilege does not cover them	Trial court held the two statements are not privileged and must be disclosed (City appeals)
Whether an investigative report privileged in whole can be parsed piecemeal	The whole investigative report (including factual interviews) is privileged when prepared by attorneys to provide legal advice (Harlandale/Upjohn principles)	AG treated most of file as privileged but parsed out specific interviews as non-privileged factual materials	City contends parsing is improper; trial court accepted AG’s piecemeal approach; appeal challenges that ruling
Whether the City waived privilege by providing some materials (e.g., Brooks’s statement) to counsel for an interviewed employee	Disclosure of one employee’s statement to that employee’s counsel does not waive privilege for other employees’ statements; waiver requires disclosure of the privileged communications at issue	AG implies that making materials available to an interested attorney or potential referral to law enforcement may effect waiver	City argues no evidence of disclosure of these specific statements to third parties; no waiver shown
Whether factual information sought by requestor is available by other means, affecting balance between TPIA and privilege	Requestor can obtain factual information by interviewing witnesses directly; convenience doesn’t defeat privilege	AG emphasizes TPIA’s strong disclosure policy and that completed investigations are public unless expressly confidential	City asserts availability of other sources supports maintaining privilege for investigative file

Key Cases Cited

Upjohn Co. v. United States, 449 U.S. 383 (U.S. 1981) (corporate in-house counsel interviews of employees in internal investigations are privileged under the subject-matter test)
Harlandale Indep. Sch. Dist. v. Cornyn, 25 S.W.3d 328 (Tex. App.—Austin 2000) (attorney-prepared investigative report privileged in whole when prepared to provide legal advice)
In re E.I. DuPont de Nemours & Co., 136 S.W.3d 218 (Tex. 2004) (Texas Rule 503’s subject-matter test and scope of client representative concept)
In re City of Georgetown, 53 S.W.3d 328 (Tex. 2001) (Texas Rules of Evidence can render otherwise public records expressly confidential for TPIA purposes)
In re USA Waste Mgmt. Res., L.L.C., 387 S.W.3d 92 (Tex. App.—Houston [14th Dist.] 2012) (privilege applies to communications directed by employer and concerning employee’s duties; confidentiality protections sufficient)