When a paralegal goes to work for the opposing counsel...
In Re Guaranty Ins. Services, Inc. (Tex 2011) (orig. proceeding).
No. 10-0364 (Tex. Jul. 1, 2011)(per curiam opinion) (mandamus granted to reverse trial court's disqualification
of lawfirm based on paralegal's work for opposing side) (practice of law, conflicts of interest involving paralegal
working for both sides in same lawsuit, disqualification)
THE GIST: What happens when a law firm’s efforts to screen a conflict fail, permitting a nonlawyer
who worked on one side of a case at one firm to work on the other side of the same case at the
opposing firm? Here, the trial court disqualified the second firm, reasoning there was a conclusive
presumption that the nonlawyer had shared confidential information, despite evidence he had not. A
divided court of appeals denied mandamus relief. 310 S.W.3d 630, 634. Given our prior decisions on
the subject—particularly our recent decision in In re Columbia Valley Healthcare System, L.P., 320 S.
W.3d 819 (Tex. 2010) (orig. proceeding), issued four months after the court of appeals’ decision
below—we conclude disqualification was not warranted. Further, because the improper
disqualification was a clear abuse of discretion for which there is no adequate remedy by appeal,
mandamus relief is warranted. See In re Prudential Ins. Co., 148 S.W.3d 124, 135–36 (Tex. 2004)
(orig. proceeding) (describing when mandamus relief may issue); NCNB Tex. Nat’l Bank v. Coker,
765 S.W.2d 398, 400 (Tex. 1989) (orig. proceeding) (granting mandamus in context of improper
We conditionally grant mandamus relief and direct the trial court to vacate its disqualification order.
Conclusion:For these reasons, and without hearing oral argument, see Tex. R. App. P. 52.8(c), we
conditionally grant mandamus relief and direct the trial court to vacate its order granting the motion to
disqualify. We are confident the trial court will comply, and the writ will issue only if it does not.
CASE DETAILS: IN RE GUARANTY INSURANCE SERVICES, INC.;
from Travis County; 3rd district (03-09-00640-CV, 310 SW3d 630, 04-16-10)
Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court conditionally
grants the writ of mandamus.
Per Curiam Opinion [pdf]
Here is the link to e-briefs in case no. 10-0364 IN RE GUARANTY INSURANCE SERVICES, INC.
DOCKET DB CASE DETAILS AND PROCEDURAL HISTORY INFORMATION: Case 10-0364
In Re Guaranty Insurance Services, Inc. (Tex. 2011)(per curiam)
TEXT OF OPINION [ coming soon ] or go to Court's website by clicking "hot" cause number above.
OPINION IN THE COURT OF APPEALS BELOW
In re Guar. Ins. Services, Inc., 310 S.W.3d 630 (Tex. App. -- Austin 2010)
310 S.W.3d 630 (2010)
In re GUARANTY INSURANCE SERVICES, INC.
Court of Appeals of Texas, Austin.
April 16, 2010.
Larry Parks, Mitchell Williams Long Burner, Austin, TX, Ronald G. Bankston, Kane Russell Coleman & Logan,
PC, Houston, TX, for real party in interest.
Amy J. Schumacher, Strasburger & Price, LLP, Dallas, TX, for relator.
Before Chief Justice JONES, Justices WALDROP and HENSON.
DIANE M. HENSON, Justice.
Relator Guaranty Insurance Services ("Guaranty Insurance") has filed a petition for writ of mandamus seeking
to vacate the trial court's order disqualifying its counsel. On October 12, 2009, the trial court granted a motion
to disqualify Guaranty Insurance's counsel, Strasburger & Price ("Strasburger"), on the ground that a paralegal
who had performed work on behalf of Guaranty Insurance while working for Strasburger had also performed
work on behalf of the opposing party, Trans-Global Solutions, Inc. ("Trans-Global"), during his previous
employment at the law firm of Godwin Pappas Langley Ronquillo, LLP ("Godwin").
632*632 The Texas Supreme Court has held that when a paralegal works on a case at one firm, and then
moves to another firm on the opposing side of that litigation, two presumptions come into play. See Phoenix
Founders, Inc. v. Marshall, 887 S.W.2d 831, 834-35 (Tex.1994). First, there is a conclusive presumption that
the paralegal acquired confidential information during his work on the case at the first firm. Id. at 834. Second,
there is a rebuttable presumption that the paralegal shared confidential information about the case with the
members of the new firm. Id. at 835. This second presumption may be rebutted by a showing "that sufficient
precautions have been taken to guard against any disclosure of confidences." Id.
Based on Phoenix Founders, the paralegal at issue here is subject to a conclusive presumption that he
obtained confidential information about the case while working at Godwin. See id. at 834. This presumption
cannot be rebutted. See id. The primary issue in this proceeding is whether the trial court abused its discretion
in determining that Strasburger failed to rebut the second presumption — that the paralegal shared confidential
information about the case with his new employer. See id. at 835.
The presumption that confidential information will be imparted to a new employer can be rebutted by a showing
that certain precautions have been taken to safeguard client confidences:
Specifically, the newly-hired paralegal should be cautioned not to disclose any information relating to the
representation of a client of the former employer. The paralegal should also be instructed not to work on any
matter on which the paralegal worked during the prior employment, or regarding which the paralegal has
information relating to the former employer's representation. Additionally, the firm should take other reasonable
steps to ensure that the paralegal does no work in connection with matters on which the paralegal worked
during the prior employment, absent client consent after consultation.
At the hearing on the motion to disqualify, Strasburger presented evidence of the extensive conflict-screening
procedures it employed in hiring the paralegal, and opposing counsel concedes that Strasburger's conflict-
screening process is exemplary. Unfortunately, these precautions did not reveal the potential conflict related to
the paralegal's work for Trans-Global while at Godwin, leading him to eventually perform work on behalf of
Guaranty Insurance in connection with the same case.
A firm's screening procedures, however thorough, must actually be effective in order to rebut the presumption
of shared information. See Phoenix Founders, 887 S.W.2d at 833 ("[D]isqualification is not required if the
[second] firm is able to establish that it has effectively screened 633*633 the paralegal from any contact with
the underlying suit.") (emphasis added). Similarly, the precautions taken must be "sufficient... to guard
against any disclosure of confidences." Id. at 835.
According to Strasburger, performing a conflicts check and instructing a paralegal not to work on any matter on
which he worked during prior employment is sufficient to rebut the presumption of shared confidences, even if
the paralegal, after being so instructed, works on such matters anyway. We disagree. It is not merely the act of
instructing the paralegal to avoid working on both sides of the same litigation that serves to protect client
confidences. It is the implication that the paralegal will actually follow the instructions and refrain from doing so.
Unless the instructions are followed, they are of no benefit to the clients whose interests are meant to be
The supreme court held in Phoenix Founders that, in addition to giving the proper instructions, "the firm should
take other reasonable steps to ensure that the paralegal does no work in connection with matters on which the
paralegal worked during the prior employment." Id. (emphasis added). In this case, Strasburger's precautions
failed to ensure that the paralegal refrained from working on the same matters he had worked on at Godwin,
and thus failed to effectively guard against the disclosure of confidences.
In a case where, as here, a paralegal worked on both sides of the same litigation, the supreme court held that
disqualification was required because the hiring firm did not take "the necessary steps to isolate" the paralegal
from the litigation. In re American Home Prods. Corp., 985 S.W.2d 68, 75 (Tex.1998). While the firm in
American Home Products failed to take any screening measures whatsoever, we find that distinction from the
present case to be irrelevant for purposes of our analysis. When a paralegal actually performs work on a case
that he had previously worked on for opposing counsel, the necessary steps to isolate him from such litigation
were, by definition, not taken.
We recognize the difficult position in which Strasburger finds itself at this stage of the proceedings, and further
note the supreme court's warning against using a motion to disqualify as a dilatory tactic. See Phoenix
Founders, 887 S.W.2d at 836. Strasburger's conflict-screening procedures were nothing if not thorough, but
where a paralegal has actually been allowed to work on both sides of the same 634*634 litigation, even the
most exhaustive attempts at screening cannot be deemed effective.
Because Strasburger's screening procedure was ineffective to prevent the paralegal at issue here from actually
working on both sides of the same litigation, we hold that the trial court did not abuse its discretion in granting
the motion to disqualify. See id. at 835 (stating that absent client consent, "disqualification will always be
required... when screening would be ineffective").
Accordingly, the petition for writ of mandamus is denied. See Tex.R.App. P. 52.8(a).
Also see: Texas Causes of Action | 2011 Texas Supreme Court Opinions | 2011 Tex Sup Ct Per Curiams