Court of Appeals of Texas,

Corpus Christi–Edinburg.

In re INTERNATIONAL PAPER COMPANY and Gilbert Alaniz.

No. 13–98–351–CV.

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Aug. 20, 1998.

Attorneys & Firms

Richard R. Brann, Shira R. Yoshor, David J. Bernal, and David C. Hricik, for In re International Paper Company.

Before Chief Justice SEERDEN and Justices HINOJOSA and CHAVEZ.

OPINION

Opinion by Justice CHAVEZ.

*1 Relators, International Paper Company and Gilbert Alaniz, seek a writ of mandamus compelling respondent, the Honorable Edward G. Aparicio, to withdraw his present order which (1) denies relators’ motion to disqualify the law firm representing the real party in interest, Daniel Morales, plaintiff in the underlying case, and (2) overrules a previous order which initially disqualified the law firm.

Background

Kathleen Henley was an attorney with the law firm of Aaron Peña & Associates (the “Peña firm”) until February 27, 1998. The Peña firm represents plaintiff Daniel Morales in the underlying suit against Morales’s former employer, International Paper Company (“International Paper”), and his former supervisor, Gilbert Alaniz. Plaintiff claims, among other things, that International Paper terminated his employment in violation of his rights under the Texas Workers’ Compensation Act, section 451.001 of the Texas Labor Code.

Before joining the Peña firm, Henley was employed with the law firm of Willette & James.¹ This firm defended International Paper in a prior lawsuit brought by a former employee, Bernardo Salas, who also claimed that he had been terminated by International Paper in violation of his rights under Article 8307c of the Texas Revised Civil Statutes (now codified under section 451.001 of the Texas Labor Code).

In the Salas case, billing statements to International Paper from Willette & James reveal that Henley prepared for and handled depositions of International Paper personnel, interviewed their employee witnesses, discussed defense strategies with International Paper managers and in-house counsel, and participated in mediation discussions with the Peña firm who represented Salas.

In the present case, Morales’s response to International Paper’s first set of interrogatories identified Henley as a person who answered the interrogatories or supplied information used in the answers. Henley was also identified as having knowledge of facts relevant to the claims or defenses in the case. Additionally, Henley was listed as a potential witness.

On April 10, 1997, Relators moved to disqualify the Peña firm from representing Morales because Henley’s prior representation of International Paper while she was with Willette & James posed “a genuine threat” that confidential information would be divulged to Morales and failure to disqualify would create a clear appearance of impropriety. The trial court agreed and signed an order disqualifying the Peña firm on May 27, 1997.

On June 13, 1997, the Peña firm filed a motion for reconsideration of the order granting the motion to disqualify, claiming they did not receive notice of the hearing on the motion. Plaintiff’s motion for reconsideration was not set for hearing until April 1, 1998, shortly after Henley left the Peña firm. At the April 1 hearing, Aaron Peña, Jr., on behalf of the Peña firm, asked the court to reconsider its previous order disqualifying the firm. Peña did not contest Henley’s prior representation of International Paper or whether Henley had knowledge of confidential information about International Paper. Instead, he argued that Henley had no knowledge of the Morales case and her only involvement in the case came about when he was out of town and Henley signed on the interrogatories. He explained that the only reason she was identified as a witness was due to the firm’s common practice of placing all attorneys involved in the case on a witness list in case the issue of attorneys’ fees arose at trial. Aside from this explanation, the Peña firm offered no written response or affidavits in support of its opposition to relator’s motion. After the court heard arguments from both sides, it decided to overrule its May 27, 1997 order as long as Henley was “de-designated” as a witness in the case. Relators then filed with this Court their petition for writ of mandamus and a supporting brief. On July 8, 1998, this Court requested a response by July 20th from the real parties in interest. See Tex.R.App. P. 52.4. No responses were received.

Standard of Review

*2 In a mandamus proceeding, relators must show that the district court’s refusal to disqualify the Peña firm as plaintiff’s counsel in the pending litigation was an abuse of discretion for which there is no adequate remedy by appeal. National Medical Enter. v. Godbey, 924 S.W.2d 123, 128 (Tex.1996); Walker v. Packer, 827 S.W.2d 833, 842 (Tex.1992). When a trial court must make a determination of the legal principles controlling an issue, the court has no discretion in determining what the law is or in applying the law to the facts. Walker, 827 S.W.2d at 840. Thus, “a clear failure by the trial court to analyze or apply the law correctly will constitute an abuse of discretion, and may result in appellate reversal by extraordinary writ.” Id.

The initial inquiry is whether relators have an adequate remedy by appeal. We hold that they do not. In disqualification cases, the Texas Supreme Court has recognized the obvious inadequacy of appellate relief and has favored the use of mandamus proceedings as a “workable review mechanism for orders on motions to disqualify.” Godbey, 924 S.W.2d at 133.

Next, we address relator’s claims by looking to the Texas Disciplinary Rules of Professional Conduct for guidance in determining whether the Peña firm should be disqualified. Henderson v. Floyd, 891 S.W.2d 252, 253 (Tex.1995); Spears v. Fourth Court of Appeals, 797 S.W.2d 654, 656 (Tex.1990). Rule 1.09 provides in relevant part:

(a) Without prior consent, a lawyer who personally has formerly represented a client in a matter shall not thereafter represent another person in a matter adverse to the former client:

(3) if it is the same or a substantially related matter.

(b) Except to the extent authorized by Rule 1.10 [successive government and private employment], when lawyers are or have become members of or associated with a firm, none of them shall knowingly represent a client if any one of them practicing alone would be prohibited from doing so by paragraph (a).

(c) When the association of a lawyer with a firm has terminated, the lawyers who were then associated with that lawyer shall not knowingly represent a client if the lawyer whose association with that firm has terminated would be prohibited from doing so by paragraph (a)(1) or if the representation in reasonable probability will involve a violation of Rule 1.05.

Tex. Disciplinary R. Prof’l Conduct 1.09, reprinted in Tex. Gov’t Code Ann., tit. 2, subtit. G app. A (Vernon Supp.1998) (Tex. State Bar R. art. X, § 9).

Relators, as the moving parties, are required to prove the existence of a prior attorney-client relationship in which the factual matters involved were so related to the facts in the pending litigation that it creates a genuine threat that confidences revealed to a former counsel will be divulged to a present adversary. Texaco, Inc. v. Garcia, 891 S.W.2d 255, 256 (Tex.1995) (citing NCNB Texas Nat’l Bank v. Coker, 765 S.W.2d 398, 400 (Tex.1989)). Sustaining this burden requires evidence of specific similarities capable of being recited in the disqualification order. Coker, 765 S.W.2d at 400. If this burden is met, the moving party is entitled to a conclusive presumption that confidences and secrets were imparted to the former attorney. Id.

*3 Our first consideration is whether Henley would be disqualified from representing Morales. If she would be, then the Peña firm would be also. It is undisputed that Henley’s employment with Willette & James created an attorney-client relationship between Henley and International Paper. Furthermore, there is no question that the allegations in this case involve similar liability issues and similar defenses and strategies as were present in the Salas case. Salas involved a claim by an hourly employee at International Paper’s Edinburg plant, the same type of job Morales held at the same plant. Both cases arise from the same statutory provision under the Texas Workers’ Compensation Act providing for a cause of action if employment is terminated in retaliation for exercising certain rights under the Act. Thus, the two lawsuits undisputably involve a similar cause of action against the same plant.

Additionally, both the Salas and Morales lawsuits against International Paper involve many of the same personnel, including the plant manager Ron Rogers, whose deposition Henley prepared for and attended in the Salas case. The two lawsuits also implicate the same personnel policies, practices, and procedures of International Paper’s Edinburg plant. Finally, there is no indication that International Paper ever consented to the Peña firm’s representation of Morales after discovering Henley’s involvement. Relators have established that Henley’s prior representation of International Paper creates a genuine threat that confidences revealed to Henley will be divulged to Morales. By proving a substantial relationship between Henley’s two representations, relators have established as a matter of law that an appearance of impropriety exists. See Coker, 765 S.W.2d at 400. We conclude that Henley would be unable to represent Morales in the underlying case.

Because Henley would be disqualified, the Peña firm is also. See Tex. Disciplinary R. Prof’l Conduct 1.09(b). Henley’s knowledge of International Paper’s confidences is imputed, as a matter of law, to every other attorney in the firm, thus disqualifying the entire Peña firm. Godbey, 924 S.W.2d at 131. There is an irrebuttable presumption that an attorney in a law firm has access to the confidences of the clients and former clients of other attorneys in the firm. Id. The fact that Henley has now left the Peña firm does not change our decision. Rule 1.09(c) addresses this situation and prevents Henley’s former partners or associates from representing Morales if Henley herself would have been prohibited from doing so or if the representation in reasonable probability would involve a violation of rule 1.05 concerning confidentiality of information. Merely ordering the Peña firm to de-designate Henley as a witness was not the proper procedure to support the district court’s decision to deny disqualification of the Peña firm.

Accordingly, we conclude that the Peña firm must be disqualified in the pending litigation. Without hearing oral argument, we conditionally grant relators’ writ of mandamus and direct the district court to vacate its present order denying relator’s motion for disqualification and to order the Peña firm disqualified from representing Morales. Tex.R.App. P. 52.8(c). The writ will issue only if the district court fails to act in accord with this opinion.

	Footnotes
1		Formerly Kathleen Burguete while employed with Willette & James.