Trade Secret Privilege Waived When Not Asserted Before Discovery Ruling Under Rule 193.3
Read the Court's Opinion (PDF)
Judge Melissa Davis Andrews
In SafeLease Insurance Services LLC v. Storable, Inc., the Business Court of Texas denied reconsideration of a discovery order compelling production of a customer list, holding that Storable failed to preserve its trade-secret privilege under Texas Rule of Civil Procedure 193.3(a) by raising it for the first time in post-ruling motions. The memorandum opinion addresses whether parties must affirmatively assert privilege claims in discovery responses rather than after an adverse ruling, and whether trade secrets may be discoverable when necessary for antitrust claims and protected by agreed protective orders.
Court Staff Summary
Denying a motion for reconsideration of a discovery order arguing that the material sought was a trade secret.
Background: Antitrust Claims in the Self-Storage Insurance Market
SafeLease Insurance Services provides tenant insurance for self-storage facilities, relying on access to customer tenant data maintained on facility-management software (FMS). Many of SafeLease's customers license their FMS from Storable, Inc., which also operates subsidiaries that compete with SafeLease in providing tenant insurance. After business relationship discussions broke down in late 2024, Storable removed SafeLease's access to their mutual customers' FMS data, citing security concerns. SafeLease sued in December 2024, alleging Storable violated Texas antitrust law by leveraging its FMS market position to obtain monopoly power in the tenant-insurance market.
The Discovery Dispute
During discovery, SafeLease served Request for Production No. 10 seeking the names and addresses of Storable's customers. After the parties filed discovery-dispute letters under Business Court Local Rule 4(d), the Court ordered production of the customer information in its May 28, 2025 discovery order, noting that Storable had not argued the customer list was a trade secret. Only after that adverse ruling did Storable move to stay the production deadline and file a motion for reconsideration, asserting for the first time that its customer list constituted a protected trade secret.
The Court's Ruling
On June 23, 2025, the Court denied the Motion for Reconsideration. The Court's memorandum opinion, issued as 2025 Tex. Bus. 28, stated that Storable had not shown it satisfied Rule 193.3(a)'s requirements for preserving the privilege. The Court further indicated that even if the customer list is a trade secret, production would be appropriate because SafeLease needs it for a fair adjudication of its antitrust claim and the information is protected from disclosure by the Agreed Protective Order and related rulings in the case.
Two Principal Questions
The Court framed the dispute around two principal questions: (1) Did Storable preserve its new trade-secret-privilege argument? (2) If so, does the trade-secret privilege bar production of Storable's customer list? The Court noted that if the answer to either question is "no," the motion should be denied. The memorandum opinion indicates the Court's analysis would address both the procedural preservation issue under Rule 193.3(a) and the substantive question of whether trade-secret protection would bar discovery even if properly asserted.