In Re American Home Products Corp.

985 S.W.2d 68, 1999 WL 2531
CourtTexas Supreme Court
DecidedDecember 31, 1998
Docket97-0654, 97-0655
StatusPublished
Cited by68 cases

This text of 985 S.W.2d 68 (In Re American Home Products Corp.) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re American Home Products Corp., 985 S.W.2d 68, 1999 WL 2531 (Tex. 1998).

Opinions

Justice OWEN

delivered the opinion of the Court,

in which Chief Justice PHILLIPS, Justice GONZALEZ, Justice HECHT, Justice ENOCH, Justice ABBOTT and Justice HANKINSON joined.

In these consolidated original proceedings, Relators seek to disqualify two law firms that jointly represent plaintiffs in the underlying suits because one of those firms retained a legal assistant who had previously worked with counsel for the defendants in this litigation. We hold that disqualification of the Herrera firm is required because plaintiffs did not rebut the presumption that the legal assistant shared confidential information with Herrera or members of his firm. It is undisputed that the legal assistant was not isolated from this litigation but instead worked with Herrera on the underlying litigation.

I

Approximately 3,000 plaintiffs have sued American Home Products Corporation, Wyeth-Ayerst Laboratories Division of American Home Products, Wyeth Laboratories, Inc., and Wyeth-Ayerst Laboratories, Inc., (collectively Wyeth) in five separate cases in Hidalgo, Bexar, Starr, and Zavala counties. The plaintiffs used the Norplant contraceptive distributed by Wyeth. The Law Offices of Frank Herrera and Cherry, Davis, Harrison, Montez, Williams & Baird, P.C. are co-counsel for approximately 1,000 claimants. Wyeth seeks to disqualify those firms.

The mandamus proceedings before us arose out of two of the five suits, one pending in Hidalgo County and the other in Bexar County. However, the facts leading to this controversy primarily occurred in Zavala County. Because the dissent maintains that there is a material fact issue that should preclude mandamus, we will relate the undisputed facts from the record in some detail.

Wyeth retained Jesse Gamez as its local counsel in Zavala County. Shortly thereafter, Gamez introduced Diana Palacios to other counsel for Wyeth. Although it is disputed whether Gamez described Palacios as a “legal assistant,” an “investigator,” or a “consultant,” it is undisputed that Palacios, Ga-mez, and Wyeth all thought that Wyeth had hired Palacios to work on the Norplant litigation. It is also undisputed that Palacios worked at the direction of counsel for Wyeth in connection with that litigation. She interviewed potential fact and expert witnesses, met with Wyeth’s counsel, coordinated meetings between Wyeth’s counsel and prospective consulting and testifying experts, investí-[72]*72gated individual plaintiffs at the request of Wyeth’s counsel, wrote memoranda to Gamez on how to best utilize potential witnesses, and examined the jury selection process in Zavala County. Palacios also observed various unrelated proceedings in the trial court assigned to preside over the Norplant litigation in Zavala County and reported back regarding verdicts rendered in that court. The record reveals that she prepared 24 memoranda for Wyeth.

Palacios lives in Crystal City and maintains an office located within Jesse Gamez’s Crystal City law office. Palacios uses Ga-mez’s facilities and his secretarial staff and has also used Gamez’s secretarial staff in his San Antonio office. Nevertheless, plaintiffs contend, and we accept as true for the purposes of this opinion, that Palacios was never employed by Gamez and that she was a “freelance consultant.” The evidence also showed that Palacios had no legal training and had never before worked as a paralegal, legal assistant, or legal secretary. However, both Palacios and Gamez testified without contradiction that she actually performed work for Wyeth in the underlying litigation through the summer of 1996.

Sometime during October 1996, Palacios approached Frank Herrera, counsel for the plaintiffs, about employment. She revealed to him that she had worked with Wyeth in some capacity on the Norplant litigation but said that her work was not related to “legal” matters. Herrera was concerned that Palac-ios might have been employed by Gamez and called him. Gamez told Herrera that Palac-ios had never worked for him and that Palac-ios did not have access to any of Wyeth’s privileged information in Norplant matters. Herrera hired Palacios on October 15. Fourteen days later, Gamez moved to withdraw as counsel for Wyeth. Wyeth claims that it did not learn of Gamez’s intent to withdraw until after the trial court granted his motion, which was on November 4, 1996. However, Gamez testified that he informed Wyeth of his decision on September 23. Since his withdrawal as counsel, Gamez has been instrumental in arranging public appearances by Frank Herrera in Zavala County, an area in which Herrera had not practiced prior to the Norplant litigation.

Before Gamez withdrew as counsel for Wyeth, Palacios had submitted a bill to him in the amount of $3,625 for her time, reflecting 72.5 hours of work for Wyeth through June. That bill was never paid. Palacios’s statement for services contains the following reference to the Norplant case in Zavala County:

Cause No. 95-07-09143-CV
Maria Estella Ortiz, Plaintiff vs.
American Home Products Corp., et al., Defendants

After counsel for plaintiffs retained Palac-ios, she continued to work out of Jesse Ga-mez’s offices. When Wyeth discovered that Palacios had gone to work for the Herrera firm, it filed motions tó disqualify that firm and its co-counsel. A hearing was held in the Bexar County case, and the motion to disqualify was denied. By agreement, the parties submitted the record of that hearing to the Hidalgo County trial court, which also denied a motion to disqualify. Wyeth unsuccessfully sought mandamus relief from the court of appeals and then initiated mandamus proceedings in this Court. In addition to its complaints about the relationship between Palacios and counsel for plaintiffs, Wyeth seeks to disqualify plaintiffs’ counsel because they engaged as an expert a physician who allegedly had been a consulting expert for defendants in this litigation.

We conclude that the trial court did not abuse its discretion by declining to disqualify counsel for plaintiffs based on their retention of an expert that Wyeth had previously attempted to retain as a consulting expert. We hold, however, that the trial court did abuse its discretion in failing to disqualify the Herrera firm because of that firm’s failure to screen Diana Palacios from this litigation. With regard to Herrera’s co-counsel, Stephen Harrison and his firm, the record was not fully developed, and we cannot say that the trial court abused its discretion.

II

We first consider the contention that Wyeth waived any right to disqualify counsel [73]*73for plaintiffs based on their contact with Diana Palacios. It is undisputed that Wyeth first learned that Palacios was working with plaintiffs’ counsel when Wyeth deposed Dr. Salvador Gonzalez, who had treated several plaintiffs. Gonzalez was designated as an expert witness by plaintiffs on February 8, 1997, and his deposition occurred less than two months later. Wyeth filed a motion to disqualify two days after this deposition.

Plaintiffs argue that Wyeth could have deposed Gonzalez sooner and that during the weeks intervening between his designation as an expert and his deposition, Wyeth participated in 48 other depositions, nine hearings, 823 depositions on written questions, and accepted 99 sets of interrogatory responses. Plaintiffs contend that Wyeth waived any complaint about the relationship between Pa-lacios and plaintiffs’ counsel.

We are not persuaded by this argument.

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Bluebook (online)
985 S.W.2d 68, 1999 WL 2531, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-american-home-products-corp-tex-1998.