87S10232 MWC-F
By: Oliverson H.B. No. 124
A BILL TO BE ENTITLED
AN ACT
relating to the Texas Free Enterprise and Antitrust Act of 1983.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 15.03, Business & Commerce Code, is
amended by adding Subdivision (2-a) to read as follows:
(2-a) The term "investigative file" means any
documentary materials or information collected, assembled, or
maintained by or on behalf of the attorney general with respect to
an investigation or litigation conducted under this chapter. The
term includes:
(A) interagency or intra-agency communications
or memoranda;
(B) notes;
(C) reports;
(D) products of discovery;
(E) records of internal or external meetings;
(F) civil investigative demands; and
(G) other documents and communications with the
attorney general that are relevant to the investigation or
litigation.
SECTION 2. Section 15.10, Business & Commerce Code, is
amended by amending Subsections (b), (c), (e), (g), (h), (i), and
(k) to read as follows:
(b) Authority to Issue Demand. Whenever the attorney
general has reason to believe that any person may be in possession,
custody, or control of any documentary material or may have any
information relevant to a civil antitrust investigation, the
attorney general may, prior to the institution of a civil
proceeding, issue in writing and serve upon such person a civil
investigative demand requiring the person to produce or make
available such documentary material for inspection and copying, to
answer in writing written interrogatories, to give oral testimony,
or to provide any combination of such material, answers, and
testimony; provided, however, that the attorney general may not
issue and serve a demand for documentary material upon a
proprietorship or partnership whose annual gross income does not
exceed $5 million.
(c) Contents of Demand.
(1) Each demand shall describe the nature of the
activities that are the subject of the investigation and shall set
forth each statute and section of that statute that may have been or
may be violated as a result of such activities. Each demand shall
advise the person upon whom the demand is to be served that
objections [the person has the right to object] to the demand may be
made in accordance with [as provided for in] this chapter
[section].
(2) Each demand for production of documentary material
shall:
(A) describe the class or classes of material to
be produced with reasonable specificity so that the material
demanded is fairly identified;
(B) prescribe a return date or dates which will
provide a reasonable period of time within which the material is to
be produced; and
(C) identify the individual or individuals
acting on behalf of the attorney general to whom the material is to
be produced or made available for inspection and copying.
(3) Each demand for answers to written interrogatories
shall:
(A) propound the interrogatories with
definiteness and certainty;
(B) prescribe a date or dates by which answers to
interrogatories shall be submitted; and
(C) identify the individual or individuals
acting on behalf of the attorney general to whom the answers should
be submitted.
(4) Each demand for the giving of oral testimony
shall:
(A) prescribe a reasonable date, time, and place
at which the testimony shall begin; and
(B) identify the individual or individuals
acting on behalf of the attorney general who will conduct the
examination.
(5) No demand for any product of discovery may be
returned until 20 days after the attorney general serves a copy of
the demand upon the person from whom the discovery was obtained.
(e) Service; Proof of Service.
(1) Service of any demand or of any petition filed
under Subsection (f) or (h) of this section may be made upon any
natural person by delivering a duly executed copy of the demand or
petition to the person to be served or by mailing such copy by
registered or certified mail, return receipt requested, to such
person at his or her residence or principal office or place of
business.
(2) Service of any demand or of any petition filed
under Subsection (f) or (h) of this section may be made upon any
person other than a natural person by delivering a duly executed
copy of the demand or petition to a person to whom delivery would be
appropriate under state law if the demand or petition were process
in a civil suit.
(3) A verified return by the individual serving any
demand or any petition filed under Subsection (f) or (h) setting
forth the manner of service shall be proof of such service. In the
case of service by registered or certified mail, the return shall be
accompanied by the return post office receipt of delivery of the
demand or petition.
(4) Service of any demand may be made upon any person
by e-mail or other electronic means if the person being served has
consented to the electronic service in writing. Electronic service
is complete upon sending, but electronic service is not effective
if the attorney general learns that the demand did not actually
reach the person to be served. Written confirmation of receipt
through electronic service by the person being served constitutes
proof of the service.
(g) Compliance With Demand.
(1) A person on whom a demand is served shall comply
with the terms of the demand unless otherwise provided by court
order.
(2) The time for compliance with the demand in whole or
in part shall not run during the pendency of any petition filed
under Subsection (f) of this section; provided, however, that the
petitioner shall comply with any portions of the demand not sought
to be modified or set aside.
(3) Documentary Material.
(A) Any person upon whom any demand for the
production of documentary material has been duly served under this
section shall produce or make such material available to the
attorney general for inspection and copying during normal business
hours on the return date specified in the demand at the person's
principal office or place of business or as otherwise may be agreed
upon by the person and the attorney general. The attorney general
shall bear the expense of any copying. The person may substitute
copies for originals of all or part of the requested documents so
long as the originals are made available for inspection. The person
shall indicate in writing which if any of the documents produced
contain trade secrets or confidential information.
(B) The production of documentary material in
response to any demand shall be made under a sworn certificate in
such form as the demand designates by a natural person having
knowledge of the facts and circumstances relating to such
production to the effect that all of the requested material in the
possession, custody, or control of the person to whom the demand is
directed has been produced.
(4) Interrogatories.
(A) Each interrogatory in any demand duly served
under this section shall be answered separately and fully in
writing, unless it is objected to, in which case the basis for the
objection shall be set forth in lieu of an answer. The person shall
indicate in writing which if any of the answers contain trade
secrets or confidential information.
(B) Answers to interrogatories shall be
submitted under a sworn certificate in such form as the related
demand designates by a natural person having knowledge of the facts
and circumstances relating to the preparation of the answers to the
effect that all of the requested information in the possession,
custody, control, or knowledge of the person to whom the demand is
directed has been set forth fully and accurately.
(5) Oral Examination.
(A) The examination of any person pursuant to a
demand for oral testimony duly served under this section shall be
taken before any person authorized to administer oaths and
affirmations by the laws of Texas or the United States. The person
before whom the testimony is to be taken shall put the witness on
oath or affirmation and shall personally or by someone acting under
his or her direction and in his or her presence record the witness's
testimony. At the expense of the attorney general, the testimony
shall be taken stenographically and may be transcribed.
(B) The oral testimony of any person taken
pursuant to a demand served under this section shall be taken in the
county where the person resides, is found, transacts business, or
in such other place as may be agreed upon by the person and the
attorney general.
(C) Any person compelled to appear under a demand
for oral testimony under this section may be accompanied,
represented, and advised by counsel. Counsel may advise such
person in confidence, either upon the request of such person or upon
counsel's own initiative, with respect to any question arising in
connection with the examination.
(D) The individual conducting the examination on
behalf of the attorney general shall exclude from the place of
examination all other persons except the person being examined, the
person's counsel, the counsel of the person to whom the demand has
been issued, the person before whom the testimony is to be taken,
any stenographer taking the testimony, and any persons assisting
the individual conducting the examination.
(E) During the examination, the person being
examined or his or her counsel may object on the record to any
question, in whole or in part, and shall briefly state for the
record the reason for the objection. An objection may properly be
made, received, and entered upon the record when it is claimed that
such person is entitled to refuse to answer the question on grounds
of any constitutional or other legal right or privilege, including
the privilege against self-incrimination. Neither such person nor
his or her counsel shall otherwise object to or refuse to answer any
question or interrupt the oral examination. If the person refuses
to answer any question, the attorney general may petition the
district court in the county where the examination is being
conducted for an order compelling the person to answer the
question.
(F) If and when the testimony has been fully
transcribed, the person before whom the testimony was taken shall
promptly transmit the transcript of the testimony to the witness
and a copy of the transcript to the attorney general. The witness
shall have a reasonable opportunity to examine the transcript and
make any changes in form or substance accompanied by a statement of
the reasons for such changes. The witness shall then sign and
return the transcript, unless he or she is ill, cannot be found,
refuses to sign, or in writing waives the signing. If the witness
does not sign the transcript within 15 days of receiving it, the
person before whom the testimony has been given shall sign it and
state on the record the reason, if known, for the witness's failure
to sign. The officer shall then certify on the transcript that the
witness was duly sworn and that the transcript is a true record of
the testimony given by the witness and promptly transmit a copy of
the certified transcript to the attorney general.
(G) Upon request, the attorney general shall
furnish a copy of the certified transcript to the witness.
(H) The witness shall be entitled to the same
fees and mileage that are paid to witnesses in the district courts
of Texas.
(h) Failure To Comply With Demand.
(1) Petition for Enforcement. Whenever any person
fails to comply with any demand duly served on such person under
this section, the attorney general may file in the district court in
Travis County or in the county in which the person resides, is
found, or transacts business and serve on the person a petition for
an order of the court for enforcement of this section. [If the
person transacts business in more than one county, the petition
shall be filed in the county of the person's principal office or
place of business in the state or in any other county as may be
agreed upon by the person and the attorney general.]
(2) Deliberate Noncompliance. Any person, who, with
intent to avoid, evade, or prevent compliance in whole or part with
a demand issued under this section, removes from any place,
conceals, withholds, destroys, mutilates, alters, or by any other
means falsifies any documentary material or otherwise provides
inaccurate information is guilty of a misdemeanor and on conviction
is punishable by a fine of not more than $5,000 or by confinement in
county jail for not more than one year or by both.
(i) Disclosure and Use of Material and Information.
(1) No [Except as provided in this section or ordered
by a court for good cause shown, no] documentary material, answers
to interrogatories, or transcripts of oral testimony, or copies or
contents thereof, shall be available for examination or used by any
person other than by an authorized official, employee, or agent of
the attorney general, except:
(A) by court order for good cause shown;
(B) with [without] the consent of:
(i) the person who produced the material,
answers, or testimony; and
(ii) [,] in the case of any product of
discovery, [of] the person from whom the discovery was obtained;
(C) to an agency of this state, the United
States, or another state or territory for official law enforcement
purposes; or
(D) as provided elsewhere in this section.
(2) The attorney general may make available for
inspection or prepare copies of documentary material, answers to
interrogatories, or transcripts of oral testimony in his or her
possession as he or she determines may be required by the state in
the course of any investigation or a judicial proceeding in which
the state is a party.
(3) The attorney general may make available for
inspection or prepare copies of documentary material, answers to
interrogatories, or transcripts of oral testimony in his or her
possession as he or she determines may be required for official use
by any officer of the State of Texas, [or of] the United States, or
another state or territory charged with the enforcement of the laws
of the State of Texas, [or] the United States, or that state or
territory, as applicable; provided that any material disclosed
under this subsection may not be used for criminal law enforcement
purposes.
(3-a) The attorney general may make available for
inspection or prepare copies of documentary material, answers to
interrogatories, or transcripts of oral testimony in the attorney
general's possession as may be required for official use by any
authorized official, employee, or agent of the attorney general.
(4) Upon request, the attorney general shall make
available copies of documentary material, answers to
interrogatories, and transcripts of oral testimony for inspection
by the person who produced such material or information and, in the
case of a product of discovery, the person from whom the discovery
was obtained or by any duly authorized representative of the
person, including his or her counsel.
(5) Not later than 15 days prior to making public
[disclosing] any documentary material or answers to written
interrogatories designated as containing trade secrets or
confidential information under this subsection, the attorney
general shall notify the person who produced the material of the
attorney general's intent to make the information public [such
disclosure]. The person who produced the documentary material or
answers to written interrogatories may petition a district court in
any county of this state in which the person resides, does business,
or maintains its principal office for a protective order limiting
the terms under which the attorney general may use the [disclose
such] trade secrets or confidential information in public,
including in public court filings.
(6) Upon written request, the attorney general shall
return documentary material produced under this section in
connection with an antitrust investigation to the person who
produced it whenever:
(A) any case or proceeding before any court
arising out of the investigation has been completed; or
(B) the attorney general has decided after
completing an examination and analysis of such material not to
institute any case or proceeding before a court in connection with
the investigation.
(k) Nonexclusive Procedures. Nothing in this section shall
preclude the attorney general from using procedures not specified
in the section in conducting an antitrust investigation; provided,
however, that in conducting such an investigation, the attorney
general shall use the procedures set forth in this section in lieu
of those set forth in Article 1302-5.01 through Article 1302-5.06,
Texas Miscellaneous Corporation Laws Act. Information, documentary
materials, and communication with the attorney general provided
under a procedure not specified in this section is confidential but
may be used in a judicial proceeding at the attorney general's
discretion.
SECTION 3. Section 15.12, Business & Commerce Code, is
amended to read as follows:
Sec. 15.12. ADDITIONAL PROCEDURES. (a) In addition to the
procedures set forth in this subchapter, the attorney general and
any other party to a suit brought by the attorney general to enforce
any of the prohibitions in Section 15.05 of this Act may request
discovery and production of documents and other things, serve
written interrogatories, and subpoena and depose witnesses in
accordance with the applicable provisions of the Texas Rules of
Civil Procedure and other state law relating to discovery.
(b) Documents and other information discovered or produced
under Subsection (a) are confidential.
SECTION 4. Subchapter B, Chapter 15, Business & Commerce
Code, is amended by adding Section 15.14 to read as follows:
Sec. 15.14. CONFIDENTIALITY OF INVESTIGATIVE FILES AND
OTHER INFORMATION. The attorney general's investigative file,
wholly or partly, and any other information or documentary material
provided to the attorney general under this chapter are
confidential and not subject to disclosure under Chapter 552,
Government Code.
SECTION 5. The changes in law made by this Act apply only to
a cause of action that accrues on or after the effective date of
this Act. A cause of action that accrues before the effective date
of this Act is governed by the law applicable to the cause of action
immediately before that date, and that law is continued in effect
for that purpose.
SECTION 6. This Act takes effect on the 91st day after the
last day of the legislative session.