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In re Union Pacific Railroad Co.

The trial court abused its discretion when it compelled a rail transportation company to produce confidential rate structures, which include formulas to determine shipping rates charged to customers, as the defendant met its burden of establishing that the information sought is protected by the trade secret privilege and the plaintiff failed to demonstrate how the information is necessary or essential to the fair adjudication of the case. Texas Supreme Court, No. 08-0740, 09-25-2009

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In this case, we consider whether a trial court abused its discretion when it compelled a rail transportation company to produce confidential “rate structures,” which include formulas to determine shipping rates charged to customers. We hold that it did, as the defendant met its burden of establishing that the information sought is protected by the trade secret privilege and the plaintiff failed to demonstrate how the information is “necessary or essential to the fair adjudication of the case.” In re Bridgestone/Firestone, Inc., 106 S.W.3d 730, 732 (Tex. 2003). We, therefore, conditionally grant the writ of mandamus.

A Union Pacific Railroad Company train collided with another train in Bexar County in 2004, after the Union Pacific train failed to stop at a signal. The Union Pacific train derailed, a fire resulted, and a loaded tank car (the 16th of 74 cars) was breached, resulting in the release of toxic chlorine gas. Union Pacific was transporting the gas for Occidental Chemical Corporation (OxiChem).

A number of nearby residents, including Kathleen Constanzo, claim to have been injured due to inhalation of the gas. Constanzo sued Union Pacific, alleging negligence and gross negligence.*fn1 She alleged that Union Pacific’s train failed to stop at the signal, a fact Union Pacific does not dispute. She also claims that Union Pacific should have positioned the chlorine car farther toward the rear of the train and that hazardous material should not have been placed next to steel cars.

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