X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Attorney General John Cornyn’s effort to depose the five plaintiffs’ lawyers who sued tobacco companies for Texas got a little more complicated on Aug. 13 when a visiting judge ruled that three of the five lawyers have the right to be deposed where they live, rather than in Houston. Visiting Judge Ross Sears of Missouri City, a retired judge on the 14th Court of Appeals in Houston, granted change of venue motions filed by Walter Umphrey and Wayne Reaud, both of Beaumont, Texas, and Harold Nix, who practices in Daingerfield, Texas, in a Rule 202 suit that Cornyn filed against the tobacco lawyers in state court in Houston. Sears agreed that provisions of Rule 202 of the Texas Rules of Civil Procedure give the three lawyers the right to have the suit heard in the counties where they live. Cornyn wants to depose the lawyers for his long-running investigation into how the five plaintiffs’ lawyers acquired the tobacco suit, which ended with a $17.3 billion settlement with the tobacco industry in 1998. Sears was quick to issue a ruling on the venue motions and said he will rule by this week on a motion for continuance filed by the Tobacco Five. They want a show-cause hearing on the Rule 202 suit delayed until after the Nov. 5 election, alleging that Cornyn, the Republican nominee for U.S. Senate, is proceeding with the litigation for political reasons. Jeffrey Boyd, the deputy attorney general for litigation who is handling the Rule 202 suit for the attorney general’s office, asked Sears to schedule the show-cause hearing as quickly as possible. He pointed out that Cornyn’s successor may not want to carry on the investigation, so time is of the essence. “All we’ve wanted for 2 1/2 years is to take depositions,” Boyd told Sears. “We’re ready to go.” Sears promised a hearing date with his ruling. Cornyn is running against Democrat Ron Kirk, former mayor of Dallas and a partner in Dallas-based Gardere Wynne Sewell. Republican Greg Abbott, a former justice on the Texas Supreme Court, and Democrat Kirk Watson, a former mayor of Austin, Texas, are vying to succeed Cornyn as attorney general. Sears is the third judge in recent weeks to preside over the litigation. On July 10, 61st District Judge John Donovan held a hearing on the motion for continuance and on a related motion for sanctions filed by the attorney general’s office, but he later recused himself without giving a reason and before ruling. The suit was transferred that day to 280th District Judge Tony Lindsay, but she recused herself on July 23 at the request of the tobacco lawyers, who alleged she should remove herself because her husband, state Sen. Jon Lindsay, R-Houston, has made critical comments about the fees paid to the tobacco lawyers. Sears’ ruling on the venue motions means the suit will be transferred to Jefferson County for Umphrey, of Provost & Umphrey, and Reaud, a partner in Reaud, Morgan & Quinn, and to Camp County for Nix, a partner in Nix, Patterson & Roach. Sears granted the motion while noting that it would be easier on the parties and less time-consuming to have one judge decide if the lawyers should be deposed. Now three, and possibly four, judges will decide if the attorney general’s office should take the deposition of the tobacco lawyers. “It defies the whole purpose of the rule to go to separate counties,” Boyd told Sears. Umphrey, Reaud and Nix were not present for the hearing in Houston, although the two lawyers who live in Houston, John Eddie Williams, a partner in Houston’s Williams Bailey Law Firm, and John O’Quinn, a partner in Houston’s O’Quinn, Laminack & Pirtle, attended. AT THEIR DISPOSAL Cornyn filed the Rule 202 suit against the five private lawyers in April 2000 in state court in Houston, but the defendants removed In Re: The State of Texas, No. 2000-21598, to federal court. After appeals, the suit made it back to state court in March. After settlement talks failed, Boyd asked for a show-cause hearing to take the depositions. The attorney general alleges in the suit that he needs to take the depositions of the tobacco lawyers to investigate potential claims of conversion and breach of fiduciary duty and whether the private counsel engaged in the “improper exchange of consideration” to obtain the continent-fee contract for the tobacco suit. Under Arce v. Burrow, which was upheld by the Texas Supreme Court in 1999, the lawyers could be forced to forfeit some or all of their attorney fees for a breach of fiduciary duty. Boyd said in court he has no evidence the private lawyers paid former Attorney General Dan Morales, a Democrat, directly, but he says he does have reason to investigate whether they paid money to benefit Morales to obtain the contract. The tobacco litigation settled in January 1998 and became final six months later. The five prominent plaintiffs’ lawyers signed a contingent-fee contract with the state entitling them to 15 percent of the state’s recovery, or roughly $2.3 billion. But in 1999 they renounced their rights in the contract, opting instead for a $3.3 billion fee awarded by an arbitration panel in December 1998. Sears heard brief argument on the motion for continuance from Boyd and Michael Tigar, a lawyer for the Tobacco Five. Boyd wanted Sears to rule on the record from the earlier hearing before Donovan, but Tigar, of Tigar Law Firm of Washington, D.C., wanted the opportunity to add to the record. Sears reminded the lawyers more than once during the hearing that he was at their disposal and had time to hear argument. Tigar told Sears that the suit should be delayed until after the election because Cornyn made the tobacco litigation a political issue from the moment he took the oath of office. Cornyn succeeded Morales, who hired the plaintiffs’ lawyers to handle the tobacco suit. But as he winds down his four-year term as attorney general, Cornyn is engaged in the Senate race. “When an issue to be decided in court is also the center of a hotly contested election … there is that risk to the appearance of the fair administration of justice,” Tigar told Sears. But Boyd said Cornyn is “duty bound” to pursue allegations that the tobacco lawyers may have paid money to Morales or to his benefit in return for the tobacco contract. At the July 10 hearing before Donovan, Boyd introduced into evidence sworn statements from three other prominent Texas plaintiffs’ lawyers, Joseph Jamail, Ronald Krist and Wayne Fisher, who allege Morales told them in 1995 that each of the lawyers hired for the tobacco litigation would have to give $1 million to Morales’ campaign fund. Jamail, of Jamail & Kolius of Houston, said in the statement, given in 1999 to Andrew Taylor, Cornyn’s former first assistant, that he interpreted Morales’ request as “bribery, or solicitation to bribe,” a view he maintains today. Morales denies he made that request, and says that when he was talking about contributions, he was referring to the need for a pot of money to counteract public relations efforts by the tobacco industry. Tigar says the cost of public relations was a legitimate expense in the litigation, and ethics consultant Charles Silver, a professor at the University of Texas School of Law, reviewed all the billings. Tigar says he doesn’t know exactly how much of the $40 million the lawyers put into the case went to marketing. “The tobacco industry spent hundreds of millions of dollars. Most of what we spent was defensive,” says Austin’s George Shipley, whose firm, Shipley & Associates, was hired to do media work for the litigation.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.