Haynes and Boone and partner Patrick Hughes are defendants in a negligence, gross negligence, negligent misrepresentation and breach of fiduciary duty suit set to go to trial on Aug. 13 in Houston. Legendary Texas lawyers lead the legal teams: Joe Jamail for the plaintiffs and David Beck for the defendants.
The plaintiffs in RX.com Inc., et al. v. John M. O’Quinn & Associates, et al. settled in June with a number of high-profile defendants who were dismissed from the suit. Those defendants are John M. O’Quinn & Associates, which does business as The O’Quinn Law Firm in Houston; John M. O’Quinn & Associates; O’Quinn, Laminack & Pirtle; and Laminack, Pirtle & Martines and its partners Richard N. Laminack and Thomas W. Pirtle.
In their April 4 second amended petition, online pharmacy RX.com and its founder Joe S. Rosson allege they hired the defendants in 2003 to file antitrust litigation in federal court against pharmacy benefit managers (PBMs). The plaintiffs allege the defendants “delayed the filing of the litigation” until October 2004, but they “reassured” the plaintiffs that the statute of limitations was not a problem. However, U.S. District Judge David Folsom of the Eastern District of Texas granted summary judgment in the antitrust litigation on March 11, 2008, in favor of the PBMs “on the basis of limitations.”
“Following the granting of the summary judgment, Defendants continued to assure Plaintiffs that the limitations ruling was incorrect and that the summary judgment would be reversed on appeal,” the RX.com plaintiffs allege.
As alleged, the defendants represented RX.com and Rosson in an unsuccessful appeal to the 5th U.S. Circuit Court of Appeals, and the U.S. Supreme Court denied their petition for writ of certiorari.
The RX.com plaintiffs seek unspecified actual and punitive damages, costs and interest from Dallas-based Haynes and Boone and from Hughes of Houston. The case is in 80th District Judge Larry Weiman’s Harris County court.
Plaintiffs’ attorney Fred Hagans, a partner in Hagans, Burdine, Montgomery & Rustay, says the crux of the plaintiffs’ allegations is simple: The defendants failed to meet a statute of limitations when filing the underlying antitrust suit in 2004, he alleges. “They should have filed by February  but didn’t file until October.”
Hagans says actual damages total about $118 million, which was the value of Austin-based RX.com at the time the alleged antitrust violations occurred.
Doug Bedell, a spokesman for Haynes and Boone, refers comment on behalf of the firm and Hughes to Beck, a partner in Beck, Redden & Secrest.
Beck declines to comment on the merits of the case.
In their third amended answer, filed on June 1, Haynes and Boone and Hughes deny the allegations, and among other affirmative defenses, allege the plaintiffs’ claims against them are barred by lack of privity. The defendants also allege the plaintiffs’ injuries were caused by their own negligence and/or fault or negligence and/or conduct or by “persons other than these defendants.” The defendants claim the plaintiffs lacked authority to sue the PBM defendants in the underlying antitrust suit because until April 2004 any claim held by RX.com was under a court-appointed receiver, and the defendants never had an attorney-client relationship with RX.com’s receiver.
Haynes and Boone and Hughes also allege Rosson is “not entitled to recover in the capacity in which he sues” and any claims are exclusively those of RX.com.
The defendants seek a take-nothing judgment.
On Aug. 3, the defendants filed a petition for writ of mandamus with the Texas Supreme Court. Haynes and Boone and Hughes argued that the high court should decide a jurisdictional issue before a trial in state court. On Aug. 6, they also filed a motion seeking a stay.
“We don’t mind trying the case, but we don’t want to try it twice, and if for some reason it’s ultimately determined the Texas state courts had no jurisdiction, if we win the case, the plaintiffs may want to try it over,” Beck says.
In an Aug. 6 response, the plaintiffs alleged there is “no legitimate reason” to stay the trial, which has been set for Aug. 13 since June 2011.
On Aug. 9, the Supreme Court denied the defendants’ mandamus petition and motion for stay.
Beck says, “We finally got a resolution with respect to the question of jurisdiction, so we’re good to go.”
Hagans and Beck each say the trial may last three to four weeks.
The plaintiffs’ team includes Jamail and Frank Staggs Jr. of Jamail & Kolius in Houston; Hagans, partner Kendall Montgomery and attorney Paula Mathers of Hagans, Burdine in Houston; and Vincent “Tripp” Marable III of Paul Webb PC in Wharton.
The defense team includes Beck, partner Michael Richardson, and associates Alex Roberts and Andrea Paterson of Beck, Redden in Houston.
Those Who Settled
In a July 9 order, Weiman granted the plaintiffs’motion to dismiss the O’Quinn firms as well as Richard Laminack, Thomas Pirtle and their firm Laminack, Pirtle & Martines from RX.com. Laminack and Pirtle both practiced at O’Quinn, Laminack & Pirtle before forming Laminack, Pirtle & Martines in 2006.
The O’Quinn Law Firm, in wind-down mode since the death of founder John M. O’Quinn in October 2009, formerly was known as John M. O’Quinn & Associates and O’Quinn, Laminack & Pirtle.
Hagans and Craig Smyser, a partner in Houston’s Smyser, Kaplan & Veselka of Houston, represented the O’Quinn defendants. “I can’t discuss the terms other than to say they were a satisfactory conclusion,” says Smyser.
Laminack and Billy Shepherd, a partner in Shepherd, Scott, Clawater & Houston in Houston who represented Laminack, Pirtle and their firm, each did not return a telephone call seeking comment. Pirtle, speaking on behalf of himself, Laminack and their firm, says, “We didn’t pay any money.”