Conditionally Grant and Opinion Filed June 29, 2018




                                         S   In The
                                Court of Appeals
                         Fifth District of Texas at Dallas
                                      No. 05-18-00400-CV

                          IN RE PRG DALLAS, ASC., L.P., Relator

                  Original proceeding from the 95th Judicial District Court
                                   Dallas County, Texas
                            Trial Court Cause No. DC-17-04958

                             MEMORANDUM OPINION
                         Before Justices Bridges, Brown, and Boatright
                                  Opinion by Justice Bridges
       In this original proceeding, we must decide whether a trial court may deny a motion to

quash a deposition where a party seeks to depose a potentially responsible third party in a case

involving a health care liability claim when the party seeking the deposition has not yet served an

expert report under Chapter 74 of the civil practice and remedies code. We conclude the denial of

the motion to quash under these circumstances is improper as a matter of law and conditionally

grant the writ of mandamus to quash the deposition until such time as a Chapter 74 expert report

is served.

       Relator PRG Dallas, ASC, L.P. is an ambulatory surgical center and concedes it is a health

care provider pursuant to section 74.001(12)(A)(vii) of the civil practice and remedies code. The

underlying case involves a personal injury action brought by Anne Looney (plaintiff) and Jerry

Shipley (intervenor) against Professional Compounding Centers of America, Inc. (“PCCA”) for

eye injuries sustained during cataract surgery at relator’s facility where Looney and Shipley were
injected with a Tri-Moxi medication provided by Guardian Pharmacy Services. The medication

included a formula provided to Guardian by PCCA. Looney and Shipley maintain the PCCA

formula was defective. Looney sent relator two “notices” of health care liability claims alleging

damages as a result of “medical, surgical, or other health care” provided by relator. However,

relator has not yet been sued as a defendant.

       PCCA sought leave to designate relator as a responsible third party, and PCCA, Looney,

and Shipley served relator with deposition notices for Daniel Chambers, relator’s executive

director. Relator moved to quash the deposition and, after a hearing, the trial court denied the

motion to quash. Relator seeks a writ of mandamus directing the trial court to quash the deposition.

Relator argues PCCA is a claimant under Chapter 74 because it seeks to apportion responsibility

between it and a responsible third party and relator is a healthcare provider under Chapter 74 and,

as such, all discovery is stayed until the plaintiffs provide relator with the required Chapter 74

expert report.

       PCCA argues here, as it did in the trial court, that it is not a claimant under Chapter 74

because it has not asserted a health care liability claim against relator and, therefore, discovery

related to a responsible third party designated by PCCA is not subject to the Chapter 74 stay.

PCCA maintains that it is entitled to depose relator without providing a Chapter 74 expert report

and the writ should be denied.

       Looney and Shipley each filed a response to the mandamus petition, and each included a

cross-petition for writ of mandamus. Initially, Looney argues PCCA must file a Chapter 74 expert

report before designating a healthcare provider as a responsible third party. Looney asks the Court

to order PCCA to produce a Chapter 74 expert report if the deposition is not permitted to take

place. Alternatively, Looney asks that the deposition be permitted to take place if the responsible

third party designation is permitted to stand and PCCA is not required to produce an expert report.

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Looney argues that such discovery is necessary under Chapter 33 to allow her to investigate

PCCA’s allegations against relator.

       In contrast, Shipley argues that discovery is not stayed here because neither PCCA nor

Shipley is a claimant under Chapter 74, Shipley has not asserted a healthcare liability claim against

relator, and no liability can be imposed on relator as a responsible third party. Shipley also argues

that Chapter 33 mandates discovery regarding a responsible third party designation, and Chapter

33 trumps Chapter 74. Alternatively, Shipley argues in the cross-petition that PCCA should be

required to produce a Chapter 74 expert report if the Chapter 74 discovery stay applies.

       A discovery order that compels production beyond the rules of procedure is an abuse of

discretion for which mandamus is the proper remedy. In re Nat’l Lloyds Ins., 507 S.W.3d 219,

223 (Tex. 2016) (orig. proceeding). A trial court clearly abuses its discretion when it compels

discovery from a healthcare provider in circumstances where the healthcare provider is entitled

first to be served with a section 74.351(a) expert report and curriculum vitae. See In re McAllen

Anesthesia Consultants, P.A., No. 13-17-00584-CV, 2017 WL 6492002, at *5 (Tex. App.—

Corpus Christi Dec. 18, 2017, orig. proceeding) (mem. op.) (citing In re Jorden, 249 S.W.3d 416,

420 (Tex. 2008) (orig. proceeding), In re Sandate, 544 S.W.3d 9, 11 (Tex. App.—Dallas 2017,

orig. proceeding) (pet. filed and response requested No. 18-0102, In re Comanche Turner), and In

re Lumsden, 291 S.W.3d 456, 462 (Tex. App.—Houston [14th Dist.] 2009, orig. proceeding)).

Section 74.351(s) provides that all discovery in a health care liability claim, save for three

exceptions, is stayed until the claimant has served the required expert report:

       (s) Until a claimant has served the expert report and curriculum vitae as required
       by Subsection (a), all discovery in a health care liability claim is stayed except for
       the acquisition by the claimant of information, including medical or hospital
       records or other documents or tangible things, related to the patient’s health care
       through:

               (1) written discovery as defined in Rule 192.7, Texas Rules of Civil
               Procedure;
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               (2) depositions on written questions under Rule 200, Texas Rules of Civil
               Procedure; and

               (3) discovery from nonparties under Rule 205, Texas Rules of Civil
               Procedure.

TEX. CIV. PRAC. & REM. CODE § 74.351(s). Chapter 74 defines “claimant” as:

       a person, including a decedent’s estate, seeking or who has sought recovery of
       damages in a health care liability claim. All persons claiming to have sustained
       damages as the result of the bodily injury or death of a single person are considered
       a single claimant.

TEX. CIV. PRAC. & REM. CODE § 74.001(a)(2).

       Here, PCCA is not a “claimant” because it does not seek recovery of damages in a health

care liability claim. PCCA and Looney argued below that they are entitled under Chapter 33 of

the civil practice and remedies code to seek discovery from relator in order to discover the relator’s

responsibility for Looney’s and Shipley’s damages. Looney argued such discovery is necessary

under Chapter 33 because Looney has the right to move to strike the responsible third party

designation if there is no evidence that relator is responsible for any portion of her alleged injury

or damage. See TEX. CIV. PRAC. & REM. CODE § 33.004(l) (a party may move to strike the

designation of a responsible third party on no evidence grounds “[a]fter adequate time for

discovery”). Relator argues Chapter 33 cannot trump Chapter 74’s discovery stay because relator

is a health care provider protected by Chapter 74, and Looney has asserted a health care liability

claim against relator through Looney’s two notices.

       No authority has addressed this exact fact scenario or the impact of a responsible third party

designation on the Chapter 74 discovery stay. The Texas Supreme Court has, however, applied

the Chapter 74 discovery stay to Rule 202 proceedings. See In re Jorden, 249 S.W.3d at 418

(“Because the statute prohibits ‘all discovery’ other than three exceptions—and Rule 202

depositions are not listed among them—we hold the statute prohibits such depositions until after

an expert report is served.”). The plaintiff in Jorden filed a Rule 202 petition in which he named

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the doctors, the medical practice, and the hospital as “potentially adverse parties” in a future action

and requested leave to depose them. Id. at 418–19. The trial court denied leave and held that Rule

202 depositions are not allowed for health care claims. Id. at 419. Plaintiff then petitioned the

court of appeals for a writ of mandamus, which the court granted. Id. at 416. The intended

deponents then petitioned the supreme court for a writ of mandamus. Id.

       In its analysis, the supreme court noted section 74.351(s) applies to all discovery in a

“health care liability claim.” Id. at 421. The statute defines a “health care liability claim” as:

       a cause of action against a health care provider or physician for treatment, lack of
       treatment, or other claimed departure from accepted standards of medical care, or
       health care, or safety or professional or administrative services directly related to
       health care, which proximately results in injury to or death of a claimant, whether
       the claimant’s claim or cause of action sounds in tort or contract. The term does not
       include a cause of action described by Section 406.033(a) or 408.001(b), Labor
       Code, against an employer by an employee or the employee’s surviving spouse or
       heir.

TEX. CIV. PRAC. & REM. ANN. § 74.001(a)(13) (West Supp. 2016). The supreme court further

noted the statute itself confirms that the term “a cause of action” is used in the more general sense

relating to underlying facts rather than being limited to filed lawsuits. In re Jorden, 249 S.W.3d

at 422. Thus, the supreme court reasoned that “[b]ecause the statute here specifically applies to ‘a

cause of action against a health care provider,’ it applies both before and after such a cause of

action is filed.” Id. Based on this reasoning, the supreme court concluded, “[t]o the extent a pre-

suit deposition is intended to investigate a potential claim against a health care provider, it is

necessarily a ‘health care liability claim’ and falls within the coverage of section 74.351(s).” Id.

       Last year, this Court applied Jorden in a healthcare liability action in which the plaintiff

sought to depose a potentially liable doctor to investigate whether that doctor should be added as

a defendant and sought the deposition without first providing an expert report. In re Sandate, 544

S.W.3d at 11-14. The plaintiff in that case argued that the potential deponent was a non-party

under Rule 205 and, therefore, the deposition of that deponent fell under one of the exceptions to
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the Chapter 74 discovery stay. TEX. CIV. PRAC. & REM. CODE § 74.351(s) (discovery from

nonparties under Rule 205 is permitted). We disagreed, holding that the potential deponent was

not a “non-party” under Rule 205 because the plaintiff’s stated reason for seeking discovery from

Dr. Sandate was to determine whether or not to sue him. In re Sandate, 544 S.W.3d at 13.

Accordingly, Dr. Sandate was “not [a] ‘nonpart[y]’ from whom depositions were allowed by Rule

205.” See id. We reiterated the supreme court’s analysis in Jorden, that the statute distinguishes

between “third parties to a dispute and those directly threatened by it” and those who are directly

threatened by a lawsuit are “not ‘nonparties’ from whom depositions were allowed by Rule 205.”

Id. (quoting In re Jorden, 249 S.W.3d at 422).

        While Dr. Sandate is a non-party in the sense that he has not been named as a
        defendant in the pending litigation, the supreme court expressly interpreted the
        protection of section 74.351(s) to include depositions to investigate a potential
        health care liability claim against a health care provider. Id. Turner is seeking Dr.
        Sandate’s deposition to determine whether Turner should join Dr. Sandate as a
        defendant in the existing lawsuit for the alleged negligent medical care that she
        received during the labor and delivery of her son. As Turner is seeking to
        investigate a health care liability claim against a health care provider even though
        he has not yet been named in the lawsuit, we conclude, under this particular set of
        facts, that Dr. Sandate’s deposition would fall within the protection of section
        74.351(s) as explained in Jorden. Accordingly, the trial court abused its discretion
        in ordering Dr. Sandate to appear for his deposition and provide the documents
        requested in the subpoena duces tecum without having been served with Turner’s
        section 74.351(a) expert report and curriculum vitae.

Id. at 14.

        The Corpus Christi Court of Appeals has since applied Jorden and Sandate to a claimant’s

request for Rule 202 depositions of a named defendant’s corporate representative and others to

determine whether those parties should be joined in the underlying lawsuit for the alleged negligent

medical care that the plaintiff received during her labor and delivery. In re McAllen Anesthesia

Consultants, P.A., 2017 WL 6492002, at *7. That court held that the discovery was unavailable

under section 74.351(s) because “[u]nder this particular set of facts, where Sanchez is seeking to

investigate a health care liability claim against health care providers, even though those providers
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have not been named in the lawsuit, the requested discovery falls within the protection of section

74.351(s) as explained in Jorden.” Id. (citing In re Jorden, 249 S.W.3d at 422). The court held

that the trial court abused its discretion in ordering relator’s corporate representative to appear for

a deposition and provide the documents requested under Rule 205 without first having been served

with a section 74.351(a) expert report. Id. The McAllen Anesthesia court further determined that

relator was not a non-party against which discovery could be sought under Rule 205 because the

supreme court expressly held that “nonparties” as used in section 74.351(s) means only “third

parties” and does not include “those directly threatened” by the dispute. Id. (citing In re Jorden,

249 S.W.3d at 422 (noting that “if everyone qualifies as a ‘nonparty’ until suit is filed, then the

statute places no restriction on presuit discovery whatsoever” which would be “plainly contrary to

the statute’s purpose”)).

       The issue here is whether the Chapter 74 discovery stay applies to the deposition of a

healthcare provider that has not been sued by a claimant but is sought to be designated as a

responsible third party by a defendant that is not a claimant under Chapter 74. This scenario is

analogous to the facts of In re McAllen Anesthesia Consultants, P.A. See id. The plaintiff in

McAllen Anesthesia had already sued a healthcare provider, and the plaintiff was the party seeking

pre-suit depositions of other healthcare providers, whereas Looney has not yet sued a healthcare

provider. However, Looney and Shipley, like the plaintiff in McAllen Anesthesia, seek discovery

from a healthcare provider. Although PCCA moved to designate relator as a responsible third

party, PCCA is not the only party seeking the corporate representative deposition. That deposition

is also sought by Looney and Shipley to investigate whether relator should be joined in the

underlying lawsuit for the alleged negligent medical care provided to Looney and Shipley. As in

McAllen Anesthesia, relator is directly threatened by the lawsuit and is, therefore, not a non-party




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under Rule 205 because Looney has already asserted healthcare liability claims against relator and

PCCA seeks to hold relator responsible. See id.

       As the supreme court made clear in Jorden, section 74.351(s) applies to all discovery in a

healthcare liability claim and, when “a pre-suit deposition is intended to investigate a potential

claim against a health care provider, it is necessarily a ‘health care liability claim’ and falls within

the coverage of section 74.351(s).” In re Jorden, 249 S.W.3d at 422. Relator is a healthcare

provider, and parties harmed by relator’s alleged medical negligence seek to depose relator. That

discovery concerns a healthcare liability claim, and relator may not be ordered to appear for a

deposition before receiving a Chapter 74 expert report. See id.

       Looney and Shipley further argue that Chapter 33 controls over Chapter 74 because Looney

is permitted to conduct discovery to determine the nature of PCCA’s allegations against relator to

determine “what is the responsibility of the responsible third party.” In making this argument,

Looney relies on Exxon v. Pagayon, 467 S.W.3d 36 (Tex. App.—Houston [14th Dist.] 2015), rev’d

sub nom. Pagayon v. Exxon Mobil Corp., 536 S.W.3d 499 (Tex. 2017), to support her argument

that “when there is a nonmedical practice defendant [identifying as a responsible party] a health

care provider, they are not claimants under the statute, and as a result, Chapter 74 doesn’t apply.”

The Pagayon case is distinguishable, however, because (1) Exxon had an expert that said the ER

doctor did something wrong, (2) the issue was whether Exxon’s evidence about the doctor’s

wrongdoing had to rise to the willful and wanton standard under section 74.153, and (3) the

Pagayon court did not address whether Exxon was a Chapter 74 claimant or whether Chapter 74

applied to discovery. Pagayon, 467 S.W.3d at 49–51. In this case, Looney has threatened relator

with a lawsuit under Chapter 74 and should not be permitted to avoid the discovery stay.

Moreover, section 74.202 says if there is a conflict between Chapter 74 and any other statute, then

Chapter 74 controls. TEX. CIV. PRAC. & REM. CODE § 74.202.

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       Even though PCCA is not a claimant under Chapter 74, Looney and Shipley are Chapter

74 claimants, and they seek Chambers’ deposition in order to determine if they should challenge

the responsible third party designation and whether to add relator as a defendant. In other words,

they seek discovery in order to determine whether to sue relator for a healthcare liability claim

Looney has already asserted against relator. Further, PCCA seeks to designate relator as a

responsible third party in order to spread liability between PCCA and relator and asserts relator is

a responsible third party because of alleged medical negligence. In other words, PCCA seeks to

hold a healthcare provider responsible, at least in part, for plaintiffs’ injuries because PCCA

maintains relator’s medical negligence caused the injuries.        Chapter 74 protects healthcare

providers from such discovery without first being provided an expert report.

       For these reasons, we conclude the trial court abused its discretion in denying relator’s

motion to quash Chambers’ deposition, and mandamus is the proper remedy. See In re Nat’l

Lloyds Ins., 507 S.W.3d at 223. Accordingly, we conditionally grant the writ of mandamus. We

direct the trial court to issue, within twenty-one (21) days of the date of this opinion, a written

order quashing Chambers’ deposition until a party seeking such a deposition serves a Chapter 74

expert report. We are confident the trial court will comply, but a writ will issue if the trial court

fails to comply.




                                                   /David L. Bridges/
                                                   DAVID L. BRIDGES
                                                   JUSTICE


180400F.P05




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