## Facts

- Lee M. Bass, Lee M. Bass, Inc., and Palladian Corporation owned the surface and mineral estate in La Paloma Ranch in Kenedy and Kleberg Counties, Texas.
- The McGills held a non-participating royalty interest that had been reserved when the property was sold to Bass’s predecessors.
- Bass did not lease or develop the minerals but obtained 3-D seismic data and related interpretations for the ranch.
- The McGills sued Bass, alleging (among other claims) breach of an implied duty to develop the mineral estate and sought the seismic data to show that development would have been profitable.
- Bass asserted the trade-secret privilege under Texas Rule of Evidence 507 and offered evidence of strict confidentiality measures and the data’s substantial economic value.
- The trial court ordered production under a protective order after finding the McGills had shown “necessity,” and the court of appeals denied mandamus relief.

## Issues

1. Whether the mineral-estate owner proved the requested 3-D seismic data qualified as trade secrets.
2. If the data were trade secrets, whether the non-participating royalty owners proved disclosure was necessary to a fair adjudication of their implied-duty-to-develop claim under Texas Rule of Evidence 507.

## Decision

- The Texas Supreme Court held that geological seismic data and their interpretations qualified as trade secrets on the record presented.
- The Court held the McGills failed to satisfy their burden to justify discovery of trade secrets because they did not establish a sufficient predicate claim warranting compelled disclosure and did not show the data were necessary to a fair adjudication.
- The Court conditionally granted mandamus relief and directed the trial court to vacate its order compelling production of the seismic data; the writ would issue if the trial court did not comply.

## Legal Principles

- Under Texas Rule of Evidence 507, trade secrets are privileged from discovery if recognizing the privilege will not tend to conceal fraud or otherwise work injustice.
- The party asserting the trade-secret privilege bears the burden to prove the information is a trade secret; once met, the burden shifts to the requesting party to prove the information is necessary to a fair adjudication of its claim.
- “Necessity” requires more than relevance or usefulness; the requesting party must show the information is essential to fairly adjudicate a viable claim.
- Seismic data may constitute trade secrets when evidence shows limited access, strong security measures, significant economic value, and difficulty or expense of duplication.

## Conclusion

The court protected confidential seismic information from discovery, holding it was a trade secret and that non-participating royalty owners could not compel disclosure without proving both a sufficiently supported underlying claim and that access to the trade secret was necessary to fairly adjudicate that claim.


In re Bass, 113 S.W.3d 735 (Tex. 2003)