in Re Haynes and Boone, LLP and Patrick L. Hughes

376 S.W.3d 839, 2012 Tex. App. LEXIS 6078, 2012 WL 3068787
Court of Appeals of Texas·Decided July 26, 2012·No. 01-12-00341-CV·Published·Cited by 2 cases

Opinions

OPINION

MICHAEL MASSENGALE, Justice.

This original proceeding concerns a legal malpractice claim relating to the handling of an antitrust matter.1 The relators, [841] Haynes and Boone, LLP and Patrick L. Hughes, are defendants in the malpractice suit. The real parties in interest, Rx.com, Inc. and its founder Joe S. Rosson, filed the suit alleging that the relators (and others) harmed them by failing to timely file an antitrust suit within the limitations period.

The relators contend that the suit presents embedded federal issues in the form of Sherman Act claims which must be proved to prevail on the malpractice cause of action and thus constitute a “case within the case.” These federal issues are the basis for relators’ invocation of exclusive federal subject-matter jurisdiction over the malpractice claim. They thus argue that Texas state courts lack subject-matter jurisdiction to entertain such claims. These arguments were presented in a plea to the jurisdiction, which the trial court denied. The relators then filed a petition for writ of mandamus to seek review of that ruling.

We conclude that the trial court correctly denied the plea and that Texas courts may exercise jurisdiction over legal malpractice claims related to antitrust matters. Accordingly, we deny the petition.

Background

Prior to the filing of the malpractice suit at issue in this original proceeding, Rx.com filed an antitrust complaint in federal district court against various pharmacy benefit manager defendants. In addition to state-law claims that were later abandoned, the complaint included three causes of action under the Sherman Act: agreement in restraint of trade in violation of Section 1; conspiracy to monopolize in violation of Section 2; and attempted monopolization in violation of Section 2. See 15 U.S.C. §§ 1, 2. The antitrust suit was dismissed on limitations grounds, and the Fifth Circuit Court of Appeals affirmed that judgment on appeal. See Rx.com v. Medco Health Solutions, Inc., 322 Fed.Appx. 394 (5th Cir.2009).

The real parties in interest sued Rx.. corn’s former lawyers, including the rela-tors, for legal malpractice in connection with the failure to timely file the antitrust suit. The petition was originally filed in a Texas state district court. The defendants removed the case to federal court, arguing that federal-question jurisdiction applied to the legal malpractice claims because of embedded federal questions relating to the original antitrust claims. See RX.com, Inc. v. O’Quinn, 766 F.Supp.2d 790, 793 (S.D.Tex.2011). The federal district court analyzed the question of whether the legal malpractice claims were ones “arising under” federal law, 28 U.S.C. § 1331, applying the standard articulated by the United States Supreme Court in Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005), and considering whether the malpractice claims “necessarily raise a stated federal issue [that is] actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities.” RX.com, 766 F.Supp.2d at 794 (quoting Grable, 545 U.S. at 314, 125 S.Ct. at 2368). Relying in significant measure upon the Fifth Circuit’s application of the Grable standard to a legal malpractice claim in Singh v. Duane Morris LLP, 538 F.3d 334 (5th Cir.2008), the federal court concluded that two of the necessary elements — a substantial federal interest and a lack of disruption to the balance of federal. and state judicial responsibilities — were not present. Accordingly, the federal district court found that federal-question jurisdiction did not exist, and the case was remanded to state court. See RX.com, 766 F.Supp.2d at 797.

[842] Following the remand to state court, two new opinions were issued in other cases, which the relators contend provided supervening authority to support their contention that the case belongs in federal court. In USPPS, Ltd. v. Avery Dennison Corp. — a case in which federal subject-matter jurisdiction was apparently undisputed due to the diversity of the parties— the Fifth Circuit applied the Grable test to determine that a state-law legal malpractice claim arose under federal patent law so as to invoke the exclusive appellate jurisdiction of the Féderal Circuit.2 Accordingly, the USPPS appeal was transferred to the Federal Circuit.3

Then the Supreme Court of Texas held, in Minton v. Gunn, that the federal courts have exclusive subject-matter jurisdiction over a malpractice claim arising out of legal representation in a patent infringement action. See 355 S.W.3d 634, 646 (Tex.2011), petition for cert. filed, No. 11-1118 (U.S. Mar. 9, 2012). The Minton case originated in state court and was dismissed on a motion for summary judgment. See id. at 638. However, in addition to granting federal jurisdiction over cases arising under federal patent law, 28 U.S.C. § 1338(a) also specifically prohibits state courts from exercising jurisdiction over the same category of cases.4 The claimant thus raised a subject-matter jurisdiction objection on appeal, and that argument was ultimately vindicated by the Supreme Court, which concluded, “based upon the specific facts of this case,”5 that the embedded federal question “triggered exclusive federal patent jurisdiction,” requiring dismissal of the case without considering its merits. Minton, 355 S.W.3d at 646-47.

Relying primarily on USPPS and Min-ton, the relators re-urged their arguments in the trial court by filing a plea to the jurisdiction. As part of the argument pre[843] sented to the trial court, the relators contended that “determining whether Rx.com would have prevailed will entail litigation of the full panoply of factual and legal issues attending to a Sherman Act claim.” The trial court denied the plea,6 and the relators filed their mandamus petition, seeking relief from the trial court’s continuing exercise of subject-matter jurisdiction over the case.

Analysis

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in Re Haynes and Boone, LLP and Patrick L. Hughes, 376 S.W.3d 839, 2012 Tex. App. LEXIS 6078, 2012 WL 3068787 (Tex. Ct. App. 2012).

376 S.W.3d 839 (in Re Haynes and Boone, LLP and Patrick L. Hughes) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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