Supreme Court of Texas
AUSTIN – A little over six hours that paralegal Clyde Williams billed in a lawsuit on a prior job don't disqualify his current firm from the other side of the case, the Supreme Court of Texas decided on July 1.
The Justices ruled that Guaranty Insurance Services agency can continue to rely on the Strasburger and Price firm in seeking to recover fees from a firm that sued it.
"We have never required perfection in screening conflicts," the Justices wrote.
"The failure of a screening method to actually screen a tainted party will not translate into disqualification where the practical effect of formal screening has been achieved," they wrote.
"That effect was achieved here because there is no evidence the supervising attorney reasonably should have known about the conflict," they wrote.
They instructed Travis County District Judge Scott Jenkins to vacate an order that disqualified Strasburger and Price from litigation against Trans-Global Solutions Inc.
They overturned appellate judges in Austin, who affirmed Jenkins.
When Williams joined Strasburger and Price, he told them he worked the other side in two of their cases while with the Godwin Pappas firm.
He didn't tell them about the Guaranty case, and he later swore he forgot.
The Justices believed him, finding support for his claim in the fact that he worked less than seven hours on the case.
They found further support in his willing disclosure of other potential conflicts.
"Williams never informed Strasburger that he had worked on the suit," they wrote.
"When Williams identified two closed matters on which he had worked and in which Strasburger had also been involved, Strasburger removed his access to those files," they wrote.
While Williams worked for Godwin Pappas, the firm represented Trans-Global in a suit alleging Guaranty failed to obtain appropriate insurance.
Guaranty prevailed and started a suit seeking defense costs from Trans-Global.
Attorneys for Trans-Global left Godwin Pappas and joined the Kane Russell firm in 2008, taking the Guaranty case with them.
Williams started working at Strasburger and Price in 2009, and his supervisor asked him to organize pleadings and discovery against Trans-Global.
Williams billed about 27 hours, until a Kane Russell lawyer spotted his name in email.
"Strasburger immediately instructed Williams to discontinue working on the matter, not to view or access any documents related to the case, and not to disclose any information he had obtained during his employment with Godwin Pappas," the Justices wrote.
Trans-Global moved for disqualification and Jenkins granted it, though a Trans-Global lawyer conceded at a hearing that no confidences were shared.
Guaranty sought a writ of mandamus at the Third District, and two judges denied it.
Justice Diane Henson wrote that "where a paralegal has actually been allowed to work on both sides of the same litigation, even the most exhaustive attempts at screening cannot be deemed effective."
The Supreme Court decided her rule applied to lawyers but not to others.
They explained that if a lawyer worked on a matter at a prior firm, a judge must presume that confidences were shared with the second firm.
They wrote that a firm may rebut the presumption where non lawyers are concerned.
"A simple, informal admonition to a non lawyer employee not to work on a matter on which he worked before is not enough," the Justices wrote.
Reasonable measures must render the possibility of the non lawyer having contact with a file less likely, they wrote.
"Thus, effective screening methods may be used to shield the employee from the matter in order to avoid disqualification," they wrote.
"But we have never said that ineffective screening measures merited automatic disqualification for non lawyers," they wrote.
Gary Siller, John Spiller, Amy Schumacher and Randy Roach represented Guaranty.
Ronald Bankston, Misty Hataway, Reagan Simpson and Myrna Salinas represented Trans-Global.