# In re Netspend Corp. Supreme Court of Texas, No. 25-0433 **In re Netspend Corp., No. 25-0433, is before the Supreme Court of Texas. Key issue: Whether a trial court abused its discretion by ordering a party either to produce its contracts and communications with nonparty customers within seven days or be barred from offering evidence on that subject at trial, relief the opposing party did not seek until a de novo appeal from an associate judge's order and which was entered without findings.** Practice areas: civil procedure, financial services ## Key issues - Whether a trial court abused its discretion by ordering a party either to produce its contracts and communications with nonparty customers within seven days or be barred from offering evidence on that subject at trial, relief the opposing party did not seek until a de novo appeal from an associate judge's order and which was entered without findings. - Whether the trial court could overrule a party's privilege objections to its communications with its former parent company's lawyers before the party made a withholding statement under Rule 193.3, whether parent and subsidiary communications can be privileged, and whether the relator lacks an adequate remedy by appeal. ## Factual History Populus Financial Group, Inc. and Netspend Corporation (now Ouro Global, Inc. f/k/a Netspend) have been business partners and competitors for over a decade, with Netspend administering three card programs for Populus under several contracts. Populus sued Netspend for breach of contract, alleging that Netspend miscalculated commissions owed on "interchange revenue" and violated non-solicitation provisions, claims Populus says it discovered in a contractual audit (Petition for Writ of Mandamus, PDF pp. 8, 12; Response to Petition for Writ of Mandamus, PDF pp. 7, 11). Populus moved to compel two groups of documents: Netspend's contracts and communications with other commercial customers about interchange revenue (the "Other Customer Documents"), and Netspend's communications with its then-parent, Global Payments, Inc., about Populus's audit (the "Global Payments Communications"), which Netspend withheld as privileged (Response to Petition for Writ of Mandamus, PDF pp. 9-11). ## Procedural History Associate Judge Rachel Craig granted the motion to compel on March 7, 2025. Netspend appealed de novo to Judge Gena Slaughter of the 191st District Court of Dallas County under Government Code section 54A.111, and after an April 23, 2025 hearing she denied the appeal and modified the order on May 14, 2025, ordering Netspend to produce the Other Customer Documents within seven days or be precluded from using evidence on that subject at trial, and overruling its privilege objections (Petition for Writ of Mandamus, PDF p. 8; Response to Petition for Writ of Mandamus, PDF p. 7). Netspend petitioned the Fifth Court of Appeals on May 19, 2025 and filed in this Court on May 20, 2025, asking for a stay. The Fifth Court denied relief on April 20, 2026 (Goldstein, Breedlove and Jackson, JJ.), In re Netspend Corp., No. 05-25-00590-CV, 2026 WL 1070127 (Tex. App.—Dallas Apr. 20, 2026, orig. proceeding) (mem. op.). This Court ordered a response on May 8, 2026, Populus responded July 8, 2026, Netspend replied July 13, 2026, and the Court requested briefs on the merits on September 11, 2026; Netspend's brief is due in October 2026. ## Issues Presented 1. Whether the trial court abused its discretion by ordering Netspend to produce its contracts and communications with all nonparty partners where Populus allegedly admitted it intended to use them as inadmissible propensity evidence, and where the court granted an "alternative" discovery penalty unsupported by findings that Populus first sought on de novo appeal contrary to section 54A.111. 2. Whether the trial court abused its discretion by overruling Netspend's privilege objections by holding that a subsidiary's communications with its parent's lawyers can never be privileged and by ruling before Netspend made a withholding statement as Rule 193.3 requires (Petition for Writ of Mandamus, PDF p. 10). Populus frames the issues as whether the order, which let Netspend either produce or refrain from using the evidence, was within the court's broad discovery discretion, and whether the privilege objections were properly overruled for lack of any evidence supporting them (Response to Petition for Writ of Mandamus, PDF p. 8). ## Legal Arguments **Relator (Netspend Corporation):** Netspend's contracts and dealings with third parties are irrelevant, and Populus allegedly said it meant to use them to argue Netspend habitually breaches its contracts. Requiring production of documents covering nearly its entire business within seven days or else facing a one-sided limine-like sanction, which Populus first requested in a de novo appeal response and the court imposed without findings, is an abuse of discretion. On privilege, the court skipped Rule 193.3's three-step process by ruling on objections before Netspend searched for and withheld documents and made a withholding statement, and it wrongly held that a parent and its subsidiary can never share privileged communications, so Netspend did not waive privilege. Netspend says there is no adequate remedy by appeal because an order compelling irrelevant discovery warrants mandamus and a sanction for failing to produce voluminous irrelevant discovery in under a week does so doubly (Petition for Writ of Mandamus, PDF pp. 4-5, 11-12; Reply to Petition for Writ of Mandamus, PDF pp. 2, 15). **Real Party in Interest (Populus Financial Group, Inc.):** Both rulings are routine discovery decisions that two judges found supported. The Other Customer Documents are relevant because Netspend's witnesses testified at deposition that its other customers have similar contracts and agree with its interpretation, yet Netspend refused to produce the documents or stipulate that it would not offer such evidence, and the order, which lets Netspend choose between producing and refraining from using the evidence, imposes at most an evidentiary restriction remediable on appeal. As to the Global Payments Communications, the trial court did not hold that parent-subsidiary communications can never be privileged; it held that Netspend offered no evidence that Global Payments' in-house lawyers represented it, and a privilege objection without evidence must be overruled, citing Weisel Enterprises, Inc. v. Curry. Populus adds that Netspend's boilerplate objections were properly overruled and that its own delay forfeits any complaint about sequencing (Response to Petition for Writ of Mandamus, PDF pp. 2-3, 9-11). ## Stated Reasons the Court Should Take the Case Netspend's petition does not frame a separate reason for review beyond the asserted errors, but it argues the privilege ruling is inconsistent with the law and would contravene the business community's settled expectations about communications between parents and subsidiaries, and that the sanction was entered in violation of the discovery rules and section 54A.111's limits on de novo appeals from associate judges (Petition for Writ of Mandamus, PDF pp. 10-12). ## Practice Area Tags civil-procedure, financial-services ## Procedural Posture/Vehicle Original proceeding for writ of mandamus in the Supreme Court after the Fifth Court of Appeals denied mandamus relief from a Dallas County discovery order in a breach-of-contract suit. The Court requested briefs on the merits on September 11, 2026 but has not yet granted or denied the petition. ## Amicus Involvement None --- Source: The SCOTX Report, https://scotxreport.com/cases/25-0433. AI-generated summary of the Court's opinion, orders and the parties' briefs, with pin cites to the page of each document; verify against the Court's own documents at search.txcourts.gov.