In recent years there has been an uptick in what the legal community calls "nuclear verdicts" in personal injury cases. Nuclear verdicts are massive monetary judgments awarded to personal injury plaintiffs by juries.

With the proliferation of these types of judgments, it is not surprising that some have been appealed to the Texas Supreme Court, which held oral argument on Dec. 3 in a case titled Werner Enterprises Inc. v. Blake.

This case involves a verdict of approximately $100 million against a trucking company, Werner Enterprises, whose vehicle and driver were involved in a severe accident.

With the fear of nuclear verdicts like this looming over defendants' heads, it is now more important than ever for defense attorneys to be able to combat the exorbitant dollar amounts of plaintiffs' claims. An affirmative defense, showing how all or most of a plaintiff's medical expenses are not reasonable, is crucial for defendants.

A strategy that is often effective in proving this is showing how a plaintiff's medical expenses have been artificially inflated by the healthcare professionals providing treatment. To that end, letters of protection are useful pieces of evidence.

As explained by the Texas Supreme Court in 2021, in In re: K & L Auto Crushers LLC, letters of protection are communications sent from attorneys "to their clients' healthcare providers, in lieu of any immediate payment, to assure future payment from the proceeds of any recovery from the third party who allegedly caused the injuries."[1]

Specifically, letters of protection state that providers will be paid once a settlement or judgment has been reached in litigation. Some letters go a step further, and specify that the amount paid to providers will be determined by what the plaintiffs' attorneys deem reasonable.

Hence, letters of protection can be used to show juries that a plaintiff's healthcare providers are biased and incentivized to bill as much as possible. Indeed, the Texas Supreme Court has recognized the impeachment value of letters of protection. It recently issued three opinions acknowledging the relevance and discoverability of these documents:

• In re: K & L Auto Crushers LLC, in 2021;
• In re: ExxonMobil Corp., also in 2021; and
• In re: Central Oregon Truck Co. Inc., in 2022.

Despite these unambiguous opinions, plaintiffs are often still unwilling to produce letters of protection without being compelled by a trial court to do so. This article will address common objections and assertions of privileges offered by plaintiff attorneys when asked to produce these letters, and will discuss why they are groundless in light of the Texas Supreme Court's recent holdings. Plaintiffs' common objections include that:

• The letters are irrelevant;
• The letters are protected from discovery by attorney-client privilege;
• The letters are protected from discovery by work product privilege;
• Producing the letters would violate the collateral source rule; and
• Producing the letters would violate a plaintiff's privacy rights.

Letters of protection are relevant.

The most common objection asserted by plaintiffs when letters of protection are requested is that the documents are irrelevant.

However, these letters are relevant because they provide evidence of a plaintiff's healthcare providers' biases. Specifically, these letters give a plaintiff's medical provider a stake in the resolution of the case.[2]

In Central Oregon Truck Co. Inc., the Texas Supreme Court held that a discovery request specifically seeking letters of protection was proper.[3] Specifically, the request at issue was "inquiring about ... any letters of protection, contracts, liens, or other guarantees for payment."[4]

In doing so, the court reemphasized that "information about the billing practices of medical providers is relevant and, with properly tailored requests, discoverable in a personal-injury suit."[5] Hence, letters of protection are relevant discoverable evidence of both the biases and financial interests of a plaintiff's healthcare providers.[6]

Letters of protection are not protected by attorney-client privilege.

In addition to the Texas Supreme Court's holding in Central Oregon Truck Co. that letters of protection are discoverable, the Texas Rules of Civil Procedure also clearly provide that these communications are not protected from discovery by attorney-client privilege. Specifically, Rule 195.5(c) states the following:

(c) Expert Communications Protected. Communications between the party's attorney and any testifying expert witness in the case are protected from discovery, regardless of the form of the communications, except to the extent that the communications:

(1) relate to compensation for the expert's study or testimony;[7]

Letters of protection fit squarely into this categorical exception for protected communications, because they relate directly to how a medical provider will be compensated for treating a plaintiff.[8] Letters of protection provide that payment will be delayed, and come from any judgment or settlement in a lawsuit. Therefore, letters of protection are not protected by the attorney-client privilege.

Letters of protection are not protected by work product privilege.

Work product privilege is also inapplicable to letters of protection. Rule 192.5(a) of the Texas Rules of Civil Procedure defines work product as:

(1) material prepared or mental impressions developed in anticipation of litigation or for trial by or for a party or a party's representatives, including the party's attorneys, consultants, sureties, indemnitors, insurers, employees, or agents; or

(2) a communication made in anticipation of litigation or for trial between a party and the party's representatives or among a party's representatives, including the party's attorneys, consultants, sureties, indemnitors, insurers, employees, or agents.

Rule 192.5(b) states that work product is privileged and only discoverable in rare circumstances. However, Rule 192.5(c)(1) provides that the work product privilege does not apply to "information discoverable under Rule 192.3 concerning experts, trial witnesses, witness statements, and contentions."

Finally, Rule 192.3(e)(5) states that "any bias of [an expert] witness" is within the scope of discovery.

As previously explained, the Texas Supreme Court has specifically held, in In re: K & L Auto Crushers LLC, that "'letters of protection' give the [medical] providers a direct financial stake in the resolution of [a plaintiff]'s claims."[9]

In addition, a plaintiff's healthcare providers must be designated as experts to testify regarding the reasonableness and necessity of the incurred medical expenses. As such, letters of protection are not privileged under Rule 192.5(b), because evidence of an expert witness' bias is excluded from the definition of work product by Rule 192.5(c)(1).

Producing letters of protection does not violate the collateral source rule.

The collateral source rule does not protect letters of protection from discovery. The collateral source rule is a rule of admissibility, not discovery.

In Walker v. Missouri Pacific Railroad Co., the Texas 14th Court of Appeals explained in 1968 that the rule states that "evidence of receipt of payments from another source, such as insurance or other compensation, is inadmissible."[10]

Even if it is true that letters of protection are inadmissible, admissibility is not the standard for whether information is discoverable. Rather, Rule 192.3 of the Texas Rules of Civil Procedure dictates that discovery may be obtained "regarding any matter that is not privileged and is relevant to the subject matter of the pending action."

As discussed above, letters of protection are relevant and not privileged. Thus, the collateral source rule does not protect letters of protections from discovery.

Producing letters of protection does not violate a plaintiff's privacy rights.

A plaintiff's privacy rights are not violated by the production of letters of protection. In In re: Crestcare Nursing & Rehabilitation Center, the Texas 12th Court of Appeals stated in 2006 that "[t]he party who seeks to limit discovery by asserting a privilege has the burden of producing evidence to support its assertions."[11]

The court further held that "[t]his rule applies when a party asserts privacy rights as aground for limiting discovery,"[12] and that "[m]erely listing a specific privilege or exemption from discovery in a privilege log is insufficient."[13]

Rather, as explained in 1994 by the Texas 10th Court of Appeals in Kessell v. Bridewell, "the party resisting discovery must show 'a particular, articulated and demonstrable injury, as opposed to conclusory allegations.'"[14]

Letters of protections merely describe how a plaintiff's treating medical provider will be compensated for their services at a later time out of any recovery from a personal injury lawsuit.[15] Therefore, a plaintiff cannot articulate demonstrable injuries from having to produce letters of protection, because the documents do not contain personal information. And thus, privacy rights are not implicated in the production of letters of protection.

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