Shell Oil Co. v. Writt
Supreme Court of Texas, No. 13-0552 (May 15, 2015)
Opinion by Justice Johnson
The Texas Supreme Court held that Shell was entitled to the absolute privilege because Shell was the target of a DOJ investigation when it furnished the report, the information related to the DOJ’s inquiry, and the evidence conclusively established Shell provided the report with “serious contemplation” that it might be prosecuted by the DOJ. The Court emphasized the draconian penalties available under the FCPA, the rise in enforcement actions brought by the DOJ, and the fact that businesses that refused to cooperate with the DOJ were subjected to substantially greater penalties if the DOJ ultimately prevailed. The Court distinguished—but did not displace—its prior holding in Hurlbut v. Gulf Atlantic Life Insurance Co., where the Court concluded statements made to an Assistant Attorney General were only conditionally privileged because they were voluntarily made prior to a formal investigation of the company. Although the line between the absolute and conditional privilege is not always clear, the Court’s opinion provides guidance on the issue and an incentive for companies that are the target of an investigation to cooperate with law enforcement while minimizing the company’s exposure to a defamation suit.