Opinion
NO. 2017 CA 0309
02-07-2018
Gustave J. LABARRE, Jr., et al v. TEXAS BRINE COMPANY, LLC and Georgia Gulf Chemicals & Vinyls, LLC
James M. Garner, Darnell Bludworth, Matthew M. Coman, Rebekka C. Veith, New Orleans, Louisiana, Todd A. Rossi, Mark D. Mese, Troy J. Charpentier, Esteban Herrera, Jr., James R. Chastain, Jr., Michael J. deBarros, Baton Rouge, Louisiana, James E. Kuhn, Ponchatoula, Louisiana, Travis J. Turner, Gonzales, Louisiana, Counsel for Defendant Texas Brine Company, LLC Luis A. Leitzelar, New Orleans, Louisiana, Counsel for Defendants/Appellants Axiall, LLC and Axiall Corporation Timothy E. Pujol, Barbara Lane Irwin, Gonzales, Louisiana, Michael H. Rubin, Juston O'Brien, Baton Rouge, Louisiana, Paula M. Wellons, New Orleans, Louisiana, M. Keith Moskowitz, John Grossbart, Anders C. Wick, Chicago, Illinois, Counsel for Appellee Indian Harbor Insurance Company
James M. Garner, Darnell Bludworth, Matthew M. Coman, Rebekka C. Veith, New Orleans, Louisiana, Todd A. Rossi, Mark D. Mese, Troy J. Charpentier, Esteban Herrera, Jr., James R. Chastain, Jr., Michael J. deBarros, Baton Rouge, Louisiana, James E. Kuhn, Ponchatoula, Louisiana, Travis J. Turner, Gonzales, Louisiana, Counsel for Defendant Texas Brine Company, LLC
Luis A. Leitzelar, New Orleans, Louisiana, Counsel for Defendants/Appellants Axiall, LLC and Axiall Corporation
Timothy E. Pujol, Barbara Lane Irwin, Gonzales, Louisiana, Michael H. Rubin, Juston O'Brien, Baton Rouge, Louisiana, Paula M. Wellons, New Orleans, Louisiana, M. Keith Moskowitz, John Grossbart, Anders C. Wick, Chicago, Illinois, Counsel for Appellee Indian Harbor Insurance Company
BEFORE: McCLENDON, WELCH, AND THERIOT, JJ.
THERIOT, J. Appellants, Axiall, LLC and Axiall Corporation, appeal a judgment rendered by the Twenty-Third Judicial District Court denying the appellants’ Motion for Protective Order and granting appellee's, Indian Harbor Insurance Company's, Motion to Compel. For the following reasons, we vacate and remand with instructions.
FACTS AND PROCEDURAL HISTORY
On December 7, 2007, Gustave J. LaBarre Jr., et al ("Plaintiffs") filed a Petition for Eviction, Damages, and Attorneys’ Fees against Texas Brine Company, LLC ("Texas Brine") and Georgia Gulf Chemicals & Vinyls, LLC ("Georgia Gulf"). Georgia Gulf is now known as Axiall, LLC. Axiall, LLC is a subsidiary of Axiall Corporation, which is incorporated in Delaware and has its principal place of business in Georgia. Axiall, LLC is also registered to do business in Louisiana and has a registered office in Louisiana.
The full list of plaintiffs is as follows: Gustave J. LaBarre Jr., Ramona H. Talbot, Howard J. Dupre III, Gail D. Boudreaux, Floyd A. LaBarre, Marlene L. Folse, Cheryl D. Daigle, Henry R. Lawes Jr., Sidney J. Hernandez, June D. Bouchereau, Louis P. Leblanc Jr., Pierre F. V. DeLaBarre IV, Mary G. DeLaBarre, Katherine D. Labarre, Andre P. V. DeLaBarre, Gilbert J. Dupre Jr., Grant J. Dupre, Grantlyn D. Wheeler, Elena R. Leblanc, Helen H. Shaw, Anita H. Williams, Gertrude L. Landry, Lydia L. Shavers, Merrill L. Comay, Harry J. Simoneaux Sr., Harry J. Simoneaux Jr., Amy Simoneaux, Lyle T. Simoneaux, Joie A. Simoneaux, Simone S. Lawson, Christopher A. Simoneaux, Gregory J. Dupre, Augusta L. Riffert, Albert H. LeBlanc Jr., Maria Carmen DeLaBarre, and Lizarraga Enterprises, LLC.
Prior to this lawsuit, Plaintiffs were successors to a lease with Texas Brine. The property subject to the lease is located in Assumption Parish, Louisiana. The lease, which was executed on March 31, 1965 and recorded in Assumption Parish, primarily allowed Texas Brine to drill and mine the property for the production of salt brine. Texas Brine and Georgia Gulf (now known as Axiall, LLC) worked together in this salt brine mining operation.
In their original petition, Plaintiffs alleged that Texas Brine and Georgia Gulf had used the leased premises beyond the scope of the lease by disposing of waste materials "in the caverns or jugs on the premises." Plaintiffs further alleged that Texas Brine and Georgia Gulf failed to "quit the premises" after being given notice and demand on November 2, 2006. Plaintiffs sought to have the premises returned to them or, in the alternative, to have Texas Brine and Georgia Gulf remove the materials disposed of in the caverns and to pay any damages caused to the premises. Plaintiffs later filed a supplemental and amending petition alleging property damage and pollution.
In 2012, Texas Brine filed a third party demand against Indian Harbor Insurance Company ("Indian Harbor"). Specifically, Texas Brine, as a third-party plaintiff, alleged that Indian Harbor (the third-party defendant) had previously provided insurance coverage to Texas Brine that included coverage for a pollution condition, remediation expenses and related legal expenses resulting from any pollution condition, and legal defense expenses. Indian Harbor filed an answer to Texas Brine's third party demand, denying coverage. The dispute between Indian Harbor and Texas Brine has not been resolved.
Texas Brine also filed a third party demand against National Union Fire Insurance Company ("National Union"), alleging that National Union was obligated to defend and indemnify Texas Brine in regard to the principal demand. These claims were ultimately dismissed pursuant to a compromise agreement between Texas Brine and National Union.
In 2013, Plaintiffs entered into a settlement agreement with Texas Brine and Axiall, LLC (formerly known as Georgia Gulf). In this settlement, Texas Brine agreed to pay $12,500,000 to Plaintiffs, while Axiall, LLC agreed to pay $7,500,000 to Plaintiffs. Plaintiffs agreed to sell the property in question to Axiall, LLC. Texas Brine and Axiall, LLC also entered into a separate settlement agreement, in which Texas Brine agreed to reimburse Axiall, LLC for $5,000,000 of the amount that Axiall, LLC paid to Plaintiffs. As a result of these settlement agreements, the trial court dismissed all of Plaintiffs’ claims against Texas Brine and Axiall, LLC. Accordingly, while Texas Brine and Indian Harbor are still engaged in a legal dispute, Axiall, LLC is no longer a party to this lawsuit.
As the litigation between Texas Brine and Indian Harbor continued, Indian Harbor served several subpoenas on Axiall Corporation and Axiall, LLC. The subpoenas included the following: (1) Notice of Taking Video Deposition of J.F. Accardo, an employee of Axiall filed on March 15, 2016; (2) Notice of 1442 Video Deposition of Axiall Corporation filed on March 28, 2016; (3) Notice of 1442 Video Deposition of Axiall Corporation dated April 11, 2016; and (4) Notice of Records Deposition (For Subpoena Duces Tecum) to Axiall Corporation filed on June 16, 2016. In response to these discovery requests, Axiall, LLC filed a Motion for Protective Order against Indian Harbor on July 28, 2016. Axiall, LLC specifically alleged that Indian Harbor had "engaged in a campaign of unreasonable and unduly burdensome discovery" against Axiall's parent company (Axiall Corporation) and representatives in violation of La. Code Civ. P. art. 1426. On August 2, 2016, Indian Harbor filed a Motion to Compel responses from Axiall Corporation.
Indian Harbor's subpoenas also sought various documents from Axiall Corporation, including: (1) Operation agreements between Georgia Gulf and Texas Brine; (2) Monthly or yearly invoices sent by Texas Brine to Georgia Gulf; (3) Documents involving fees and prices paid by Georgia Gulf; (4) Documents relating to various measures and analyses of minerals, cavern formations, and savings accrued; (5) Documents relating to the value of the property at issue; (6) Documents relating to Georgia Gulf's contingency plans for replacing brine production; (7) Communications between the parties of the LaBarre suit regarding the settlement of that suit; (8) Notices of violations, demands, and inspection relating to any environmental condition or pollution at the property at issue; (9) Documents relating to applications regarding brine precipitates disposal, valuation of the original Plaintiffs’ royalty claims, any agreement by which Georgia Gulf agreed to pay legal fees for Texas Brine, the cost basis of the property at issue; and (10) Tax returns and audited financial statements for Georgia Gulf from 2013 and 2016.
Louisiana Code of Civil Procedure article 1426 states in relevant part that "[u]pon motion by a party ... from whom discovery is sought, and for good cause shown, the court ... may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense."
On September 29, 2016, Axiall Corporation filed a Memorandum in Opposition to Indian Harbor's Motion to Compel. In this memorandum, Axiall Corporation argued that because of its status as a nonresident nonparty corporation, Indian Harbor had no right to subpoena or compel discovery against Axiall Corporation. Axiall Corporation based this argument on Phillips Petroleum Co. v. OKC Ltd. P'ship , 93-1629 (La. 4/11/94), 634 So.2d 1186, 1189, in which the Supreme Court of Louisiana held that "a Louisiana court cannot order a nonresident nonparty witness to appear and/or produce documents at a deposition in Louisiana, even if that nonresident nonparty is subject in another context to the personal jurisdiction of the court." Axiall Corporation further argued that even if the subpoenas had been directed to a Louisiana company, Indian Harbor violated La. Code Civ. P art. 1354, which states in pertinent part that "[a] party or an attorney requesting the issuance and service of a subpoena shall take reasonable steps to avoid imposing undue burden or cost on a person subject to that subpoena." Finally, Axiall Corporation argued that a Motion to Compel was an improper procedural mechanism given the circumstances.
On October 4, 2016, Indian Harbor filed a Reply Brief in Support of its Motion to Compel responses from Axiall Corporation. Indian Harbor argued that Phillips was inapplicable because both Axiall, LLC and Axiall Corporation have a substantial business presence in Louisiana. Indian Harbor further pointed out that Axiall, LLC now owned the land at issue in Indian Harbor's case with Texas Brine per the terms of the settlement agreement with the original Plaintiffs. Accordingly, Indian Harbor argued that the facts of this case better resembled Bernard v. State Farm Mutual Automobile Ins. Co ., 98-2509 (La. App. 4 Cir. 6/30/99), 742 So.2d 609. In Bernard , the Fourth Circuit held that a non-resident witness, who was once a Louisiana resident and who continued to practice medicine in Louisiana, could be compelled to attend a deposition in Louisiana. Bernard , 742 So.2d at 612. Indian Harbor argued that Bernard ’s holding should be applied to Axiall Corporation, thus making Axiall Corporation subject to subpoena in Louisiana.
Axiall Corporation responded, arguing that Indian Harbor had no right to subpoena Axiall Corporation, which had never been a party to any proceedings involving Texas Brine or the Plaintiffs (as opposed to Axiall, LLC, who had been a party to those proceedings). Axiall Corporation also reiterated that Phillips governed this case.
The trial court ultimately disagreed with Axiall, LLC and Axiall Corporation and granted Indian Harbor's Motion to Compel. The trial court found that the facts of this case were more akin to Bernard than to Phillips. Specifically, the trial court stated that "Axiall is registered to do business in the state of Louisiana, has substantial business operations in Louisiana, has employees and executives here, (and) has prior involvement in this action as Georgia Gulf." As a result, the trial court held that Axiall's continuing contacts with Louisiana were more analogous to the continuing contacts of the witness in Bernard , which meant that Axiall Corporation and Axiall, LLC were subject to Louisiana's subpoena power. A judgment pursuant to the trial court's ruling was signed on October 28, 2016, and it is from this judgment that Axiall, LLC and Axiall Corporation appeal. ASSIGNMENTS OF ERROR
Axiall, LLC and Axiall Corporation appeal the trial court's decision, raising the following assignments of error:
1. The trial court committed legal error by: (1) failing to follow Supreme Court of Louisiana precedent, which holds that a nonresident, nonparty corporation is not subject to the subpoena power of a Louisiana court, making the subpoenas null and void, (2) failing to quash the subpoenas which, in addition to being null and void, were issued in breach of the duty owed not to impose an undue expenses on a nonparty in derogation of the strict requirements of La. Code Civ. Proc. art. 1354, and (3) granting a Motion to Compel when such a motion is not a procedural mechanism enforceable against a nonparty.
2. The trial court committed legal error in failing to grant Axiall's Motion for Protective Order and request for costs and attorney's fees when: (1) the subpoenas issued to nonresident, nonparty Axiall are null and void as a matter of law, and (2) the subpoenas were issued in breach of the duty owed pursuant to La. Code Civ. Proc. art. 1354 and constitute an abuse of subpoena power by Indian Harbor and its counsel.
STANDARD OF REVIEW
The trial court has broad discretion in regulating pretrial discovery. Bell v. Treasure Chest Casino, L.L.C. , 2006-1538 (La. 2/22/07), 950 So.2d 654, 656. Absent a clear abuse of discretion, the trial court's decision will not be disturbed on appeal. Id. Axiall, LLC and Axiall Corporation contend that the trial court committed legal error by failing to follow Supreme Court precedent. Appellate review of questions of law is simply a review of whether the trial court's decision is legally correct or incorrect. Dunn v. Bryant , 96-1765 (La. App. 1 Cir. 9/19/97), 701 So.2d 696, 698-99, writ denied , 91-3046 (La. 2/13/98), 709 So.2d 752. If the trial court's decision was based on its erroneous interpretation or application of law, rather than on a valid exercise of discretion, its decision is not entitled to deference by the reviewing court. Kem Search, Inc. v. Sheffield , 434 So.2d 1067, 1072 (La. 1983).
DISCUSSION
1) Louisiana's Subpoena Power
The primary basis of each of Axiall, LLC and Axiall Corporation's (collectively referred to as "Axiall") assignments of error is based on the assertion that the subpoenas issued by Indian Harbor are null and void as a matter of law by virtue of the Supreme Court of Louisiana's holding in Phillips Petroleum Co. v. OKC Ltd. P'ship , 93-1629 (La. 4/11/94), 634 So.2d 1186. In Phillips , the Supreme Court of Louisiana held that "a Louisiana court cannot order a nonresident nonparty witness to appear and/or produce documents at a deposition in Louisiana, even if that nonresident nonparty is subject in another context to the personal jurisdiction of the court." Id. at 1189. This holding was based on the following reasoning:
The concepts, and/or underlying purposes, of personal jurisdiction and subpoena power are simply different. Personal jurisdiction is based on conduct which subjects the nonresident to the power of the Louisiana court to adjudicate its rights and obligations in a legal dispute, sometimes arising out of that very conduct. On the other hand, the subpoena power of a Louisiana court over a "person" which is not a party in a lawsuit is based on the power and authority of the court to compel the attendance
at a deposition of that person in a legal dispute between other parties. Whereas the long-arm statute extends Louisiana's personal jurisdiction over persons or legal entities beyond Louisiana's borders, there is no similar authority for extending the subpoena power of a Louisiana court beyond state lines to command in-state attendance of nonresident nonparty witnesses.
Id. at 1187-88.
Axiall argues that the Phillips holding unquestionably governs the facts in the present case. More specifically, Axiall argues that this holding means that Indian Harbor cannot compel depositions or other discovery from Axiall, LLC or Axiall Corporation, because they are both nonresident nonparties. Texas Brine, which is still a party to the original lawsuit, concurs with this assertion. Indian Harbor, however, argues that the Phillips holding is inapplicable to the present case, and that the reasoning provided in Bernard v. State Farm Mutual Automobile Ins. Co. should govern.
Of the two cases, we find Phillips applicable. As stated above, the primary issue in Bernard was whether a nonresident witness, who was once a Louisiana resident and who continued to practice medicine in Louisiana, could be compelled to attend a deposition in Louisiana. Bernard , 742 So.2d at 612. In that case, the Fourth Circuit held that because the witness was served while temporarily in Louisiana, the witness could be compelled to attend a deposition in Louisiana. Id. The facts of Bernard are very different than the facts of the present case. The facts in Phillips are more comparable because Phillips specifically addressed the issue of whether a nonresident nonparty corporation could be ordered by a Louisiana court to comply with discovery in Louisiana. Thus, the rule derived from Phillips is the proper rule to apply in this case.
As conceded by Axiall, the Phillips holding will apply if the entity over whom discovery is sought is (1) a nonparty and (2) a nonresident. We address each of these issues in turn. First, both Axiall, LLC and Axiall Corporation are nonparties to this litigation. Specifically, the claims of the original Plaintiffs against Texas Brine and Axiall, LLC were dismissed with prejudice as per the settlement agreement between Plaintiffs, Texas Brine, and Axiall, LLC. The current legal dispute is between Texas Brine and Indian Harbor. Accordingly, Axiall correctly asserts that neither Axiall, LLC nor Axiall Corporation is a party to the litigation.
Second, although Axiall, LLC and Axiall Corporation are nonparties, both are residents of Louisiana. Axiall essentially argues that because Axiall Corporation and its subsidiary, Axiall, LLC, are citizens of Delaware and Georgia, neither can be a resident of Louisiana. This is incorrect.
According to U.S.C.A. § 1332, for the purposes of diversity in citizenship, "[A] corporation shall be deemed to be a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business." A corporation's principal place of business is the corporation's "nerve center," which is "the place where a corporation's officers direct, control, and coordinate the corporation's activities." Hertz Corp. v. Friend , 559 U.S. 77, 92-93, 130 S.Ct. 1181, 1192, 175 L.Ed.2d 1029 (2010). In this case, Axiall Corporation was incorporated in Delaware. Further, Axiall Corporation's principal business office is located in Atlanta, Georgia. Accordingly, under U.S.C.A. § 1332 and Hertz Corp. v. Friend , Axiall Corporation is a citizen of Delaware and Georgia. In regard to unincorporated entities, the citizenship of that entity is based on the citizenship of its members. See Americold Realty Trust v. Conagra Foods, Inc ., 577 U.S. 378, 136 S.Ct. 1012, 1015, 194 L.Ed.2d 71 (2016). Because Axiall, LLC is a subsidiary of Axiall Corporation, Axiall, LLC maintains the same citizenship as Axiall Corporation. Therefore, Axiall, LLC is also a citizen of Delaware (as Axiall Corporation's state of incorporation) and Georgia (as the location of Axiall Corporation's principal place of business.).
Accordingly, both Axiall Corporation and Axiall, LLC are clearly citizens of Delaware and Georgia. Their respective citizenships, however, differs from their residences. In regard to residence, La Code Civ. P. art. 5251 states in relevant part:
Except where the context clearly indicates otherwise, as used in this Code: ... "Nonresident" means an individual who is not domiciled in this state, a foreign corporation which is not licensed to do business in this state, or a partnership or unincorporated association organized and existing under the laws of another state or a possession of the United States, or of a foreign country and includes a limited liability company which is not organized under the laws of and is not then licensed to do business in this state.
La. Code. Civ. P. art. 5251 (emphasis added).
Under this definition, neither Axiall, LLC nor Axiall Corporation are nonresidents. Axiall, LLC and Axiall Corporation are both registered to do business in Louisiana. Specifically, both Axiall, LLC and Axiall Corporation have listed Baton Rouge, Louisiana as the location of their registered office in Louisiana and Plaquemine, Louisiana as the location of their principal business establishment in Louisiana. As such, neither Axiall, LLC nor Axiall Corporation satisfy the definition of "nonresident" provided by La. Code Civ. P. art. 5251 and both must be treated as residents of Louisiana.
Black's Law Dictionary's definition of "residence" supports the definition adopted by the Louisiana legislature. Black's Law Dictionary defines the residence of a corporation as "[t]he place where a corporation or other enterprise does business or is registered to do business." Black's Law Dictionary (10th ed. 2014). As stated above, both Axiall, LLC and Axiall Corporation are licensed to do business in Louisiana and have a business establishment in Plaquemine, Louisiana. Thus, both fall under the Black's Law Dictionary definition of a resident corporation and the definition adopted by the Louisiana legislature in La. Code Civ. P. art. 5251. Accordingly, in addition to being citizens of Delaware and Georgia, Axiall, LLC and Axiall Corporation are also residents of Louisiana. As such, the Phillips holding does not apply.
Aside from the aforementioned definitions, Axiall's contacts with Louisiana are distinguishable from the contacts in Phillips , which was an important part of the Phillips analysis. When one party argued that the corporation in Phillips , CKB Petroleum ("CKB"), was the equivalent of a Louisiana "resident," the Supreme Court noted that CKB's only presence in Louisiana was its designation of an agent for service of process. Phillips , 634 So.2d at 1188. The Supreme Court also pointed out that CKB was not domiciled in Louisiana, nor did it maintain an office in Louisiana. Id.
Axiall's contacts with Louisiana are much more extensive. As previously stated, both Axiall, LLC and Axiall Corporation are both registered to do business in Louisiana. Additionally, each has designated a registered agent for service of process. Both Axiall, LLC and Axiall Corporation have Plaquemine, Louisiana listed as the location of their principal business establishments in Louisiana. Axiall Corporation has posted advertisements online for engineering jobs at the Plaquemine location. According to its own Facebook posts, Axiall Corporation has employees in Plaquemine and engaged in a joint venture to build a plant in Lake Charles, Louisiana. Further, Axiall, LLC now owns the property, which is located in Assumption Parish and is at issue in the lawsuit between Texas Brine and Indian Harbor. Based on this information, Axiall, LLC and Axiall Corporation's contacts with Louisiana are clearly more extensive than the contacts enumerated in Phillips.
This joint venture was also the subject of an article written on www.opportunitylouisiana.com.
Finally, it is important to note that the Supreme Court in Phillips declined to decide whether a corporation may be a resident of more than one state. Phillips , 634 So.2d at 1188 n.6. To this day, the Supreme Court of Louisiana has not addressed this issue. Thus, we conclude that, considering the definition of residence provided by the Louisiana legislature and the extensive contacts that Axiall, LLC and Axiall Corporation have with Louisiana, both Axiall, LLC and Axiall Corporation are residents of Louisiana. Therefore, Axiall, LLC and Axiall Corporation are subject to the subpoena power of Louisiana courts.
2) Discovery Requests
Axiall further argues that the subpoenas issued by Indian Harbor violated La. Code Civ. P. art. 1354, which states in relevant part that "[a] party or an attorney requesting the issuance and service of a subpoena shall take reasonable steps to avoid imposing undue burden or cost on a person subject to that subpoena." Axiall specifically argues that Indian Harbor's discovery requests are patently overbroad, unlawful, and defective. Axiall made a similar argument to the trial court. At the trial court's hearing on these issues, Axiall argued that Indian Harbor had violated its obligation to avoid imposing an undue burden and cost on nonparties.
The discovery statutes are to be liberally and broadly construed to achieve their intended objectives. Hodges v. Southern Farm Bureau Cas. Ins. Co ., 433 So.2d 125, 129 (La. 1983). A party generally may obtain discovery of any information which is relevant to the subject matter involved in the pending action. La. Code Civ. P. art. 1422. There are limitations to this rule, however, when justice requires that a party or other person be protected from annoyance, embarrassment, oppression, or undue burden or expense. La. Code Civ. P. art. 1426 ; Laburre v. East Jefferson Gen. Hosp. , 555 So.2d 1381, 1383 (La. 1990). Generally, a showing of relevancy and good cause for production has been required in cases where a party seeks production of records from a non-party. Stolzle v. Safety & Systems Assur. Consultants, Inc ., 2002-1197 (La. 5/24/02), 819 So.2d 287, 289. Accordingly, the trial court should make a determination as to whether the party seeking production made a showing of good cause to discover non-party records. See Id. In regard to Indian Harbor's request for documents, the trial court stated the following, "Georgia Gulf has a direct interest in resolution of the case ... Information has been brought to light herein by Indian Harbor since then that I do think that Axiall has information relative to that that would be grounds for responding to the discovery. So, the Motion to Compel is granted." The trial court did not address whether good cause existed for each of the discovery requests.
Some of the discovery requests made by Indian Harbor are of questionable relevance. See Stolzle , 819 So.2d at 289 ; see also Belonga v. Crescent City Dodge, L.L.C ., 2000-3419 (La. 3/9/01), 781 So.2d 1247, 1249. For example, in Indian Harbor's March 28, 2016 request for documents, the first request is for "[a]ll operating agreements, leases, contractors or other contracts or agreements between Georgia Gulf and Texas Brine and/or Texas United, including but not limited to the Operating Agreement (as defined above), and all assignments and amendments thereto." This request refers back to Indian Harbor's provided definition of an operating agreement, which defines operating agreement as "the Agreement made and entered into as of November 14, 1972 by and between Texas Brine Corporation and Georgia-Pacific Corporation." An operating agreement from 1972 appears unnecessary to determine the fair market value of the property at issue. Accordingly, such a request appears to be unduly burdensome. However, good cause may exist for this particular request, and for each of the other accompanying requests.
Indian Harbor also requested "[t]ax returns and audited financial statements for Georgia Gulf from 2013 through 2016." Courts have held that a person seeking to discover a party's income tax returns must make a showing of good cause, because income tax returns are confidential in nature and are of a personal character. See Stolzle , 819 So.2d at 289 ; See also Simon v. Fasig-Tipton Co ., 524 So.2d 788, 792 (La. App. 3rd Cir. 1988), writs denied , 525 So.2d 1048, 1049 (La. 1988) ; In re: Protest of Dow Chemical Co. , 458 So.2d 955, 959 (La. App. 1st Cir. 1984). The trial court failed to determine whether Indian Harbor has made a showing of good cause, nor did it make a finding as to whether Indian Harbor could discover this information in a less intrusive manner.
We recognize that the trial court has broad discretion in ruling on discovery matters. See, e.g., Adams v. Deaton, Inc. , 97-1237 (La. 6/30/97), 696 So.2d 997. However, under the facts presented, we must conclude the trial court abused its discretion by granting Indian Harbor's Motion to Compel and denying Axiall's Motion for Protective Order under La. Code. Civ. P. art. 1426. Therefore, this matter is remanded to the trial court to conduct a contradictory hearing on each of Indian Harbor's discovery requests in light of the concerns expressed in this opinion, and to rule upon Indian Harbor's motion to compel and Axiall's motion for protective order, supported by written reasons for judgment. See Stolzle , 819 at 289-90, ; see also Belonga , 781 So.2d at 1249.
DECREE
For the foregoing reasons, we vacate and set aside the October 28, 2016 judgment and remand this matter to the trial court to conduct further proceedings consistent with this opinion. One-half of the costs of this appeal are assessed to the appellants, Axiall, LLC and Axiall Corporation, and one-half of the costs of this appeal are assessed to the appellee, Indian Harbor Insurance Company.
VACATED AND REMANDED WITH INSTRUCTIONS.
Welch, J., concurs without reasons.
McClendon, J., concurs for reasons assigned.
McClendon, J., concurring. I would have addressed the trial court's ruling on Axiall's Motion for Protective Order and Texas Brine's Motion to Compel without remanding this matter to the trial court. However, because I find no legal error in doing so, I concur in the result reached.