Judge used wrong standard to disqualify law firm in major case, top state court says
After initially agreeing with a trial judge and an intermediate appeals court that Bickel & Brewer should be disqualified from representing the plaintiff in a $60 million case between business partners, the Texas Supreme Court reversed course.
It conditionally granted a petition for a writ of mandamus on Friday, ruling that the trial court used the wrong standard in booting the law firm from representing RSR Corporation, reports the Texas Lawbook in an article reprinted by the Dallas Morning News (sub. req.). The law firm is now known as Brewer, following the retirement of a longtime partner.
The trial court erred, the supreme court explained in its written opinion (PDF), by treating the central issue in the disqualification matter—the hiring of a former chief financial manager for defendant Inppamet S.A. as a $1,600-a-day consultant—as equivalent to “a side-switching paralegal” in a 1998 case decided by the state’s top court. That case was In re American Home Products Corp., 985 S.W.2d 68.
Unlike the legal assistant in American Home Products, consultant Hernan Sobarzo, who took more than two gigabytes of data with him when he left the Chile-based Inppamet company, did not primarily work for lawyers. Plus, he was not hired directly by Brewer, but by Chilean counsel for RSR, the opinion notes.
Thus, instead of finding that Brewer violated a screening requirement imposed by American Home Products, the trial court should have followed a roadmap provided by a different case, In re Meador. Also decided in 1998 by the state’s top court, Meador would treat Sobarzo as a fact witness and impose a multi-factor analysis, the opinion says.
Meador involved the executive assistant to a company president, who took a copy of a letter from the company’s counsel concerning a litigation matter when she quit her job.
“Meador provides a flexible, fact-oriented standard so that trial courts may reach a just result,” focusing on issues such as the significance of the privileged information; whether opposing counsel knew or should have known it was privileged; and the impact of disqualification, the court wrote.
It sent the RSR matter back to the trial court for further evaluation under the Meador standards and said a writ of mandamus “will issue only if the trial court does not vacate its order granting Inppamet’s motion to disqualify.”
Both sides proclaimed victory after the ruling, the Texas Lawbook reports.
“The firm at all times acted in an appropriate and ethical manner in obtaining facts relevant to the case,” said attorney Harriet O’Neill, who represents Brewer. “The court today vindicated our position that the firm was wrongly disqualified.”
But Mike Lynn of Lynn Tillotson Pinker & Cox said he will try again to get Brewer disqualified in the case. “The supreme court did not do Bickel & Brewer any favors by recounting facts that would support Meador,” he said. “The rabbit can run but will eventually be caught and disqualified.”
