                              NUMBER 13-09-00519-CV

                             COURT OF APPEALS

                   THIRTEENTH DISTRICT OF TEXAS

                      CORPUS CHRISTI - EDINBURG

                     IN RE: ATLAS TUBULAR, L.P., ET AL.


                  On Relators’ Petition for Writ of Mandamus
                      and Motion for Temporary Relief.


                                     OPINION
     Before Chief Justice Valdez and Justices Rodriguez and Garza
                        Opinion by Justice Garza
       Relators, Atlas Tubular, L.P., Atlas Marketing, L.P., and Atlas Tubular Management

L.P. (collectively “Atlas”), filed a petition for writ of mandamus with this Court asking that

we compel respondent, the Honorable Mario E. Ramirez Jr., presiding judge of the 332nd

Judicial District Court of Hidalgo County, Texas, to vacate his September 10, 2009 “Order

Granting Request for Designated Findings Against Maharashtra Seamless, Ltd. In

Plaintiffs’ Second Motion for Sanctions for Discovery Abuse.” Atlas also filed a “Motion for

Temporary Relief” asking us to stay the underlying proceedings until such time as the

petition may be fully considered. On September 14, 2009, we requested that the real

parties in interest, Dewbre Petroleum Corp., et al. (“Dewbre”), file any answer to Atlas’s

petition on an expedited basis. Dewbre filed a response on September 17, 2009. Having

examined and fully considered Atlas’s petition and Dewbre’s response thereto, we deny
the petition and motion.

       The underlying suit arose from the failure of pipe casing used in an oil and gas well.

Dewbre brought suit against several defendants, including Atlas, who sold the casing, and

Maharashtra Seamless, Ltd. (“Maharashtra”), who manufactured the casing. Atlas argued

that the suit against it is barred pursuant to section 82.003 of the Texas Civil Practice and

Remedies Code. See TEX . CIV. PRAC . & REM . CODE ANN . § 82.003(a) (Vernon 2005).

Under that statute, a seller that did not manufacture a product cannot be held liable for

harm caused by that product unless the plaintiff proves one of several exceptions. Id. One

of the exceptions will apply when the plaintiff proves that the manufacturer of the product

is insolvent or not subject to the jurisdiction of the trial court. See id. § 82.003(a)(7).

       Maharashtra, an Indian corporation, initially appeared in the trial court to defend

against the suit but later discontinued its participation in the case. Noting that Maharashtra

had failed to respond to its propounded interrogatories and requests for admissions,

Dewbre moved for sanctions pursuant to Texas Rule of Civil Procedure 215.2(b)(3) and

(4). The trial court granted Dewbre’s motion and rendered an order on September 10,

2009, providing in part as follows:

       [T]he following factual findings are designated as being established as the
       responses of Maharashtra Seamless, Ltd. to the [Plaintiff’s] interrogatories:

              1.      Maharashtra Seamless Ltd., owns no assets in the United
                      States, including real and personal property, money or
                      securities or interests in domestic joint ventures, partnerships
                      or corporations; and

              2.      Maharashtra Seamless Ltd[.] owns no assets located in the
                      United States, including real and personal property, money or
                      securities or interests in domestic joint ventures, partnerships
                      or corporations and has no assets or property subject to the
                      jurisdiction of this Court or any United States court.

       It is ORDERED that these findings, Nos. 1 and 2 above, may be offered into
       evidence as interrogatory responses of Maharashtra Seamless, Ltd. and
       Maharashtra is prohibited from introducing evidence at trial which supports
       or opposes the for[e]going findings.

              ....

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        The Court ORDERS that the entry of the findings against Maharashtra
        Seamless, Ltd. in this Order do not prejudice the rights of any other party to
        offer evidence either supporting or opposing such findings.

        Atlas argues in its petition for writ of mandamus that the sanctions order constitutes

a clear abuse of discretion, leaving it without an adequate appellate remedy, because it (1)

“does not punish the offending party[, Maharashtra],” (2) “inhibits an innocent party’s

[Atlas’s] right to a merits determination on its dispositive statutory defense,” (3) is not

supported by the evidence, and (4) “shift[s the] statutorily mandated burden of proof [as

to the exceptions listed in section 82.003] from the plaintiffs to an innocent defendant.”

        Mandamus will issue to correct a clear abuse of discretion for which the remedy by

appeal is inadequate. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex.

2004). A trial court abuses its discretion when it acts in an unreasonable or arbitrary

manner; or, stated differently, when it acts without reference to guiding rules and principles.

See, e.g., Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991).

        Without determining whether Atlas has an adequate appellate remedy, we disagree

that the sanctions order constitutes an abuse of discretion.                         The “factual findings”

contained in the order do not conclusively establish that Maharashtra is insolvent or that

Atlas cannot avail itself of the protections of section 82.003. Rather, the order merely

establishes that Maharashtra is deemed to have answered Dewbre’s discovery requests

in the manner requested by Dewbre. This type of sanction is explicitly authorized by rule.

See TEX . R. CIV. P. 215.2(b)(3). The order provides that the deemed interrogatory answers

and admissions may be introduced as evidence at trial, but it also specifically states that

defendants other than Maharashtra may present evidence rebutting those deemed

answers and admissions.1 Accordingly, the order does not “inhibit” Atlas from invoking its


        1
          In its petition, Atlas points to deposition testim ony indicating that there are several accounts located
in United States banks that are payable to Maharashtra, and that under United States accounting principles,
those accounts are considered to be assets of Maharashtra. There is nothing preventing Atlas from
introducing sim ilar evidence at trial to rebut the interrogatory answers and adm issions deem ed to have been
provided by Maharashtra pursuant to the sanctions order.

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statutory defense and obtaining a determination as to the merits of that defense at trial.

       Moreover, we find no impermissible burden-shifting here. The sanctions order does

not change the fact that (1) the burden is on Dewbre to establish a statutory exception, and

(2) any defendant other than Maharashtra may introduce evidence indicating that the

statutory exceptions do not apply. The sanctions order merely provides, as authorized by

rule, that Dewbre may introduce the deemed interrogatory answers and admissions as

evidence at trial. See id. It will then be the jury’s responsibility to weigh those deemed

responses along with the other evidence presented at trial. It is true that, without the

sanctions order, Dewbre would likely not have any evidence indicating that Maharashtra

is insolvent, and Atlas would therefore not need to present any rebuttal evidence denying

the applicability of the insolvency exception. However, the deemed interrogatory answers

and admissions are as probative as any other piece of evidence, and there is no reason

that such deemed discovery responses cannot be utilized by Dewbre to meet its statutorily-

mandated burden. To hold otherwise would unjustly deprive Dewbre of the ability to invoke

the section 82.003 exception—ensuring that Atlas cannot be held liable as a non-

manufacturing seller—based solely on the fact that Maharashtra failed to answer the

propounded discovery requests.

       For the foregoing reasons, we conclude that the trial court did not abuse its

discretion by rendering the September 10, 2009 sanctions order. Atlas’s petition for writ

of mandamus and motion for temporary relief are therefore DENIED.




                                                 DORI CONTRERAS GARZA,
                                                 Justice


Opinion delivered and filed this
the 18th day of September, 2009.



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