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An intermediate appellate court justice must be disqualified and have her opinion reversed, because an attorney at the justice’s former firm � unbeknownst to the justice � participated in the case, according to a recent Texas Supreme Court decision. While the high court has made many calls on when trial court judges must be disqualified from presiding over a suit, its March 17 opinion in Tesco American Inc. v. Strong Industries Inc., et al.marks the first time the Supreme Court has addressed whether an intermediate appellate court justice can be disqualified post-disposition. [ See the court's opinion.] Strong Industries sued Tesco American and F.S. New Products Inc. (FSNP) alleging fraud, breach of contract and misappropriation of trade secrets. In its petition, Strong Industries alleged the defendants had marketed dump-truck trailing axles designed by the plaintiff, allegations Tesco American and FSNP denied. The jury returned a plaintiff’s verdict finding fraud on the part of Tesco American, and the trial judge entered a judgment ordering Tesco American to pay Strong Industries more than $2 million. The trial judge also ruled that FSNP pay more than $100,000 in damages to Strong Industries for breach of contract, according to the opinion. The defendants appealed, but Houston’s 1st Court of Appeals, in a 3-0 opinion written by Justice Laura C. Higley, affirmed the damages as to Tesco American but reversed and rendered a take-nothing judgment as to FSNP, according to the Supreme Court opinion. Shortly after the 1st Court issued its 2003 opinion, Tesco American filed a motion to disqualify Higley. The motion asserted that in 2001, she was a partner in Baker Botts in Houston at the same time another Baker Botts partner, Stephen Tipps, briefly was lead counsel for Strong Industries in the suit at issue. Tipps eventually withdrew from the case. None of the appellate briefs filed with the 1st Court mentioned Baker Botts’ limited involvement in the case, and Tesco American concedes there is no evidence that Higley was aware of any connection between her former firm and the case, according to the high court opinion. Baker Botts employs 680 lawyers firmwide, according to the firm. Sitting en banc, the 1st Court denied the disqualification motion, after which the original panel reissued substantially the same opinion, again authored by Higley. Tesco subsequently appealed to the Supreme Court. In an 8-1 decision, the high court found that tenets of the Texas Constitution and the Texas Rules of Civil Procedure must disqualify Higley from participating in the appeal. The high court remanded the case to the 1st Court for further proceedings. Justice Scott Brister found that the Texas Constitution dating back to 1845 has prevented judges from sitting on a case “wherein the judge may be interested.” And Rule 18(1)(a) of the Texas Rules of Civil Procedure requires judicial disqualification if “a lawyer with whom they previously practiced law served during such association as a lawyer concerning the matter. “However, Brister stopped short of voiding the 1st Court’s opinion. “The judgment below is not void, as the First Court of Appeals certainly had jurisdiction of the parties and the subject matter jurisdiction to enter judgment, and capacity to act as a court,” Brister wrote.
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“But the judgment must be reversed because the opinion on which it was based was authored by a justice who was constitutionally disqualified; it would be stretching the constitution too far to simply assume she was not involved,” Brister wrote. “In accordance with the appellate rules, the two remaining justices may decide this case, but must do so without the participation of the disqualified justice. “Texas Supreme Court Justice Nathan Hecht dissented, saying he saw no reason to remand the case to the 1st Court, where the opinion will likely be reaffirmed. “A remand sends the parties on what is almost certain to be a fool’s errand, wasting their time and resources and, though to a much lesser extent, those of the court of appeals,” Hecht wrote. Thomas C. Wright, a partner in Houston’s Wright Brown & Close who represents Tesco American, says the majority opinion reaffirms the principle that judges cannot hear cases in which their former law firms participated while the judge was a member of that firm “[While] getting the files out and preparing for the next step, it occurred to me that [Higley] had been at Baker Botts when one of her partners had taken the initial appellate steps,” Wright says of his discovery of the disqualification issue. Wright adds that he believes Higley had no idea her former firm had been involved in the case. Robert B. Dubose, a partner in Houston’s Cook & Roach who represents Strong Industries, says he understands the court’s reasoning even though the court disagreed with his arguments in the case. “We had argued that the constitution should be read more narrowly because the constitution says [Higley] should be disqualified if she was counsel in the case,” Dubose says. “And Justice Higley was not counsel in the case. But I can see some reasons for why the court held the way it held.” Lesson Learned But Tipps, head of the appellate section at Baker Botts who briefly was lead counsel for Strong Industries in the case, says the high court’s opinion serves as a good lesson to appellate lawyers. Tipps says he was unaware he had become an issue in the appeal until a colleague told him his name came up during oral arguments at the high court. “It seems to me that the lesson to be learned from this opinion is that appellate counsel should be very careful to make sure that they comply, or perhaps more than comply, with the appellate rule that requires that they identify all parties and counsel to the case,” Tipps says. Texas Rule of Appellate Procedure 38.1(a) requires appellate lawyers to include “the names and addresses of all trial and appellate counsel” in their appellate briefs. “There’s a natural tendency for lawyers to list only those lawyers who are currently involved in the appeal,” Tipps says. “But the rule technically provides that the names of all trial and appellate counsel should be listed.” “It did not occur to me to list everybody who had touched the case,” says Wright, who appealed the case on behalf of Tesco American. “I suppose that that’s one lesson of the case. “Appellate justices are beholden to lawyers for such information to determine whether they have a connection to a case, especially if they came from Texas’ largest firms, which employ hundreds of attorneys, says Rebecca Simmons, a justice on San Antonio’s 4th Court of Appeals. Simmons was a partner in Akin Gump Strauss Hauer & Feld before she took the bench in 2003. Simmons says large firms have computer programs that determine whether their lawyers have conflicts in representing clients in a case, but judges have no such program to determine if they are disqualified from hearing a case. “We have to completely rely on counsel,” Simmons says. Anne Gardner, a justice on Fort Worth’s 2nd Court of Appeals, agrees with Simmons. Gardner was a partner in Fort Worth’s Shannon Gracey Ratliff & Miller before she took the bench in 2000. She says the clerk’s office checks appellate briefs and makes sure she is not assigned to a panel that hears any appeals that her former firm handled while she was there. But disqualification checks at the court are only as good as the information lawyers provide, she says. “This is a wake-up call,” Gardner says of the Tesco American opinion.

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