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Keywords

lawsuitplaintiffattorneylawyerappealmotiontrustwillclass actionantitrustwrit of mandamus

plaintiffdefendantlawyermotiontrustwillantitrustwrit of mandamus

Related Cases

In re Dresser Industries, Inc., 972 F.2d 540, 1992-2 Trade Cases P 69,952

Facts

This case arose from a consolidated class action antitrust suit against manufacturers of oil well drill bits, where Dresser Industries was charged with price-fixing and fraudulently concealing its conduct by its own lawyers. Stephen D. Susman, lead counsel for the plaintiffs, had signed an amended complaint against Dresser while concurrently representing Dresser in two other lawsuits. Despite being informed of the potential conflict, Dresser chose not to dismiss Susman Godfrey from its ongoing cases, leading to the motion to disqualify the firm from the class action.

Dresser Industries, Inc., (“Dresser”) is now a defendant in Drill Bits, charged—by its own lawyers—with conspiring to fix the prices of drill bits and with fraudulently concealing its conduct.

Issue

Whether a law firm may sue its own client, which it concurrently represents in other matters, without violating ethical standards.

Rule

A lawyer shall not represent a client if the representation will be directly adverse to another client unless both clients consent after consultation. Concurrent representation of clients with potentially conflicting interests is generally disallowed without consent.

A lawyer shall not represent a client if the representation will be directly adverse to another client unless both clients consent after consultation.

Analysis

The court determined that Susman Godfrey's representation of the plaintiffs in the antitrust suit against Dresser constituted a clear conflict of interest. The court applied the ethical standards governing attorney conduct, concluding that the firm's concurrent representation of Dresser in other matters created an appearance of impropriety and a potential for divided loyalties. The court found no exceptional circumstances that would justify allowing the firm to continue representing the plaintiffs against a current client.

The court determined that Susman Godfrey's representation of the plaintiffs in the antitrust suit against Dresser constituted a clear conflict of interest.

Conclusion

The Court of Appeals granted the writ of mandamus, directing the district court to disqualify Susman Godfrey from representing the plaintiffs in the class action suit against Dresser Industries.

We have thus granted the petition and have issued the writ of mandamus, directing the United States District Court for the Southern District of Texas to enter an order disqualifying Stephen D. Susman and Susman Godfrey from continuing as counsel to the plaintiffs in Red Eagle Resources et al. v. Baker Hughes, et al.

Who won?

Dresser Industries prevailed in the case because the court found that the law firm's concurrent representation created an undeniable conflict of interest that warranted disqualification.

We find, therefore, that Dresser's right to the grant of its motion to disqualify counsel is clear and indisputable.

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