This is some Holy Grail stuff right here.
Still a crook any way you look
Democratic U.S. Senate nominee James Talarico’s campaign on Wednesday asked a court to unseal transcripts of a pair of years-old depositions given by his opponent, Attorney General Ken Paxton, as part of a messy securities fraud dispute.
The petition, filed in Collin County, targets depositions Paxton sat for in 2019 and 2022 as part of a legal clash that ensnared the attorney general, his financial adviser and his former business associates.
North Texas businessman Charles Loper III, who oversees Paxton’s blind trust, in 2016 accused an energy company called Unity Resources and two of its investors, Byron Cook and Joel Hochberg, of defrauding him. The case centered in part on alleged securities fraud, with Loper accusing Cook and Hochberg of launching a scheme to profit off a Unity investment fund. Cook and Hochberg in turn accused Loper and Paxton of conspiring to sully their names because they were set to serve as key witnesses in a separate criminal securities fraud case against Paxton.
The attorney general previously served as a lawyer and board member for Unity and invested in the company.
In Paxton’s separate criminal securities fraud case, Cook and Hochberg accused Paxton of misleading them into investing in a McKinney technology company without disclosing he’d be paid a commission for the recruitments. Paxton was indicted in 2015, the year before Loper brought his lawsuit. Federal prosecutors dropped the charges against Paxton before trial in 2024, under a deal that required him to pay restitution and take legal ethics courses.
The depositions mark exceedingly rare occasions of Paxton being forced to answer questions about his conduct under oath. Through numerous since-resolved legal and ethical scandals, Paxton has avoided giving sworn testimony.
“The right of Texans to see these depositions matters more than ever,” lawyers for Talarico’s campaign wrote in their court filing. “Existing public reporting suggests that Paxton’s testimony raises substantial ethical questions. Texans have the right to know what Paxton said under oath in these proceedings and see the whole story before they go to the polls in November.”
The lawyers argued that the issue is “of immense public importance given Paxton’s candidacy in a sharply competitive election for U.S. Senate.” That part of their argument hinged largely on a Wall Street Journal report earlier this year that found, according to the 2019 deposition, that Paxton may have violated attorney-client privilege.
See here for some background, and click over to the story to see the motion. There’s a lot more to the whole Paxton/Servergy story, but as John Mulaney says we don’t have the time to unpack all of that right now. On the one hand, I might consider this to be a fishing expedition if the team colors were rearranged. On the other hand, I’m not sure what’s so sacred about any of this that it requires secrecy – it made sense when there were unresolved criminal charges, but all of that is long past. And look, I’m sure I’m not the only person out there who’d trade a kidney to see these transcripts. Give us this gift, whoever the judge is, we all deserve it.
TRULY WORTH IT OR MERELY A STUNT?
I doubt that much political hay can be made from a Paxton deposition unveiling.
There is already a massive amount of information available on the securities fraud matter. The underlying litigation record (Cause No. 417-04885-2016 in Collin County) consists of more then 400 docket items and there were multiple mandamus proceedings in the Fifth Court of Appeals (which granted mandamus relief 12:1) and the Texas Supreme Court (which declined to get involved). In re Cook, 629 S.W.3d 591 (Tex.App.-Dallas 2021)(en banc)[No. 05-20-00205-CV]. Justice Leslie Osborne wrote the majority opinion; Justice Craig Smith wrote a concurring opinion; Justice David Schenck filed the lone dissent. The opinion (dealing primarily with the responsible third-party designation issue) is here: https://scholar.google.com/scholar_case?case=7054541680630341610&hl=en&as_sdt=6,44
With sealed material, of course, you don’t know for sure what’s in it, so that’s an inherent problem in trying to decide whether it’s even worth filing an intervention and motion to unseal under rule 76a of the Texas Rules of Civil Procedure (assuming that’s necessary). Based on the massive material that was never sealed in this multiparty litigation, what do you expect to find that’s not already known (or findable) and still of interest years later?
BEYOND PAXTON: HOW MUCH ACCESS TO OLD DEPOS?
There is nevertheless an interesting jurisprudential question involved here, leaving aside the political motives and the potential of uncovering dirt on a political opponent:
Should – as a general proposition – a deposition be subject to a different standard for unsealing (if filed with the court)? Note that when a person is subpoenaed, they have to answer questions under penalty or perjury if they want to or not (and run the risk of being held in contempt or sanctioned). What if the questioning by the opposing party’s counsel (arguably) crossed the line and ventured into matters that should have been probed and violate the right to privacy of the deponent/witness or an uninvolved non-party?
Shouldn’t the deponent (or otherwise affected individual) have an opportunity to resist the disclosure of previously sealed testimony, regardless of whether or not the affected individual was a party to the case? Or at least have an opportunity to provide input by way of explanation or contextualization. There would also be good cause for such an individual to be granted a special right of access before any other nonparty to be in a better position to assess their stake in the matter and articulate a position on a motion to unseal (a procedure that is currently not provided for by rule 76a).
Another problem is that the deponent may have later reached the conclusion that he or she misspoke or remembered something incorrectly, or that the transcript contains error made by the court reporter. While such inaccuracies can be corrected once the court reporter provides the transcript of a deposition, it may not have been done. A factually false statement may then persists as court-filed “evidence” with no easy way to correct it.
If a deposition transcript is and remains sealed, errors or outright falsities may not matter, but if it is un-sealed, and perhaps even filed in the court of appeals, it can become problematic. A particular falsity may not even have been relevant to the underlying dispute between the parties. It may nevertheless become consequential for other reasons. Even accurate information might violate privacy or other rights if broadcast to the public, and the affected invidual would likely have no legal remedy if the improper disclosure is made by the court or clerk because of various immunity doctrines.
Also worth considering is a scenario where a deponent lies on purpose. His or her false testimony will also be perpetuated, and could not easily be challenged (or corrected) years after the litigation has concluded. Nor may any of the parties have an incentive to do so (if they settled, for example). Even if a nonparty were harmed by false testimony and had an incentive to bring a criminal perjury complaint, the statute of limitations may have run in the interim.
Personal privacy concerns may not figure prominently in the Calco Land Development case, but they are often a countervailing interest when the public’s right to know is asserted.
Still, it will be interesting to watch where this is going, if anywhere:
District Judge Cynthia Wheless signed the attorney-eyes-only protection order in the underlying case. She has now recused herself (as she did in the Paxton divorce case last year), and the case was transferred to the 199th district court. The new trial court case number has thus changed to 199-04885-2016. As shown by the last four digits, the case is ten (10) years old.
A hearing date for Talerico’s motion to unseal does not yet appear on the docket.