A Harris County judge has sanctioned the law firm Lugenbuhl, Wheaton, Peck, Rankin & Hubbard, one of its partners and Transocean $500,000 for conduct in a multidistrict litigation proceeding that the judge said was “egregious” and defiled “the very temple of justice.”
Judge Rabeea Collier’s six-page order also disqualified the firm, though it was no longer actively representing Transocean in the litigation stemming from injuries 23 workers aboard the Deepwater Asgard drilling rig in the Gulf of Mexico allege they suffered during Hurricane Zeta in October 2020.
Judge Collier issued two other orders, one Wednesday and one Thursday, declining to disqualify Transocean’s new legal team from Ahmad, Zavitsanos and Mensing from defending it. Wednesday’s three-sentence order denied the disqualification motion brought on behalf of 13 of the plaintiffs. The judge did not explain the basis for the ruling in the order.
Thursday’s order denied the motion to disqualify AZA that was brought by 10 other plaintiffs. Judge Collier wrote in that two-page order that she disagreed with the law firm representing the plaintiffs, Arnold & Itkin, that its prior employment of a law clerk who now is an associate at AZA, and her involvement with a firm client, a doctor who provided treatment to some plaintiffs in this litigation and will be an expert witness, mandated AZA’s disqualification.
“The court finds that, in September 2022, an attorney-client relationship existed between Dr. Henry Small and attorney Roland Christensen of the law firm Arnold & Itkin,” she wrote. “Furthermore, the court finds that Karina Sanchez, in her capacity as a law clerk, performed work for Dr. Small under the direction of Roland Christensen. … The court finds that the plaintiffs failed to establish that the prior representation of Dr. Small involved a matter that is substantially related to this litigation. Additionally, plaintiffs have not demonstrated that they would suffer prejudice if disqualification were not granted.”
An email seeking comment from a trio of Arnold & Itkin lawyers representing the plaintiffs was not responded to Thursday.
AZA partner John Zavitsanos, who represents Transocean, told The Lawbook Thursday that the rulings on the disqualification motions were “a sensational Christmas present.”
“We’re all elated over here because our firm’s name was under attack, and more importantly, Karina’s name was under attack,” he said. “I’m so happy for her.”
Lugenbuhl, Transocean Sanctions
Todd Crawford, a shareholder with the Lugenbuhl firm working in its New Orleans, Houston and Gulfport, Mississippi offices, was the only lawyer from the firm directly named in the sanctions order. He did not respond to an email seeking comment Thursday.
Judge Collier wrote that the disqualification of the Lugenbuhl firm “is not merely justified but required” and went on to detail the conduct that formed the basis of her ruling. The crux was the decision by the firm and Transocean to use Paulisha A. Harris, a former partner of one of the plaintiffs in the litigation, Kent Bates, “to access privileged information.”
“In July and August 2022, Ms. Harris contacted the Lugenbuhl law firm and offered to share evidence related to Mr. Bates’ lawsuit,” the order reads. “The Lugenbuhl law firm encouraged and facilitated her transmission of this information.”
That information was privileged, confidential attorney-client work product, Judge Collier found, and it included settlement letters from Arnold & Itkin, financial documents, correspondence with the law firm and text messages between Bates and others.
“Ms. Harris also falsified text messages from Mr. Bates stating that his claims were fraudulent, that he was not injured, and that he sought treatment only to increase a potential settlement or jury verdict.”
According to the order, in exchange for the information Harris provided, the law firm and Transocean agreed to hire an attorney to represent her in a child support and custody dispute with Bates. The cost of hiring that attorney was “at least $3,750,” the order states.
Judge Collier called that arrangement “highly disturbing, unethical and inappropriate.”
“The Court finds that Mr. Crawford and the Lugenbuhl firm did not act independently, but did so with the knowledge and approval of their client, Transocean,” Judge Collier wrote. “Mr. Crawford and his team, along with the Lugenbuhl firm and Transocean, have willfully and vindictively invaded privileged information, tampered with a witness, and lied to the court to conceal and mischaracterize their conduct.”
The amount of the award, $500,000, represents the attorney fees plaintiffs incurred “in discovering this situation, responding to it, controlling the damage it has done, and the time taken away from working on other aspects of the case that would have advanced the litigation instead of thwarting it.”
Should Transocean, Crawford or the firm appeal the order all the way to the Texas Supreme Court, the sanctions award could be increased by as much as $250,000, the order states.
The Lugenbuhl attorneys who were working on the case were also “referred to the appropriate disciplinary authorities in Texas and Louisiana” under the order.
The sanctioned parties were given 30 days to pay up.
Motions to Disqualify AZA
Arnold & Itkin sought sanctions against AZA in September, claiming that a “false and inflammatory” pretrial filing, which alleged an improper arrangement between the plaintiff firm and medical doctors who examined and treated the plaintiffs, “tainted the jury pool” and “deprived plaintiffs of their right to an impartial jury.”
In an 18-page brief that included 200 pages of attachments, Transocean’s legal team alleged that all the plaintiffs had been funneled to two medical facilities where providers had a financial incentive to inflate the cost of medical care the plaintiffs received. AZA had argued it should be allowed to present evidence of the arrangement during trial, while Arnold & Itkin argued that would impinge upon the attorney-client privilege.
Arnold & Itkin alleged in its motion to sanction and disqualify AZA that the firm violated the pretrial publicity provisions of the Texas Disciplinary Rules of Professional Conduct by pointing members of the news media — specifically The Texas Lawbook and Law360 — to publicly filed documents in the litigation in an effort to taint the jury pool.
Arnold & Itkin filed a subsequent motion for sanctions based on an alleged conflict of interest, based on the AZA’s current employment of associate attorney Sanchez-Peralta, who formerly worked as a law clerk for Arnold & Itkin.
Sanchez worked at Arnold & Itkin as a law clerk from Aug. 29, 2022, until Oct. 4, 2022. She graduated from the University of Houston Law Center in May 2023 and started working at AZA in September of that year.
In March 2024, Sanchez was “enrolled as one of AZA’s attorneys of record representing Transocean in this case and just recently in September 2024 took a prominent role in Transocean’s defense and trial preparation,” the motion alleges.
The motion alleges the firm “just learned” that Sanchez “gained knowledge of a substantial amount of privileged and confidential information related to this lawsuit and even emailed some of it to her personal email account in direct violation of her employment agreement with Arnold & Itkin and without the firm’s knowledge or permission.”
Arnold & Itkin alleges it has recently become “clear” that AZA “intends to utilize Ms. Sanchez as its lead attorney on all issues related to medical damages, witnesses, and records.”
According to her firm bio and LinkedIn, prior to attending law school, Sanchez worked as a registered nurse in the pediatric emergency room at Children’s Memorial Hermann Hospital.
The motion to disqualify zeroes in on Sanchez’s involvement with Dr. Small, an orthopedic surgeon who provided treatment to some plaintiffs in this case and whom AZA “intends to cross-examine at trial.” The firm alleges that Sanchez, while at Arnold & Itkin, worked closely with firm attorney Roland Christiansen in researching a Texas Medical Board report related to Dr. Small.
“Specifically, Ms. Sanchez performed work related to Dr. Small and his prior anticipated testimony regarding a Texas Medical Board complaint — the same documents that Transocean now includes on its exhibit list for this case,” the motion argues.
According to Texas Medical Board records, Dr. Small and the board entered an agreed order in March 2022 requiring that his practice temporarily be monitored by another doctor and that he complete certain continuing education courses after the board found he “did not properly assess a patient and document adequate medical rationale for a surgery, was issued a warning by the Food and Drug Administration for marketing of umbilical cord blood-developed cellular product not supported by evidence, and failed to document informed consent for procedures performed on a patient.”
Arnold & Itkin claims Sanchez “has not only personally utilized the information about Dr. Small in her trial preparation for this case, but also directly imparted that knowledge to AZA to be used adversely against Plaintiffs during trial.”
“Dr. Small was never deposed in this litigation, and there is no other reasonable explanation for the TMB documents being on Transocean’s exhibit list for impeachment purposes, other than Ms. Sanchez’s direct knowledge of A&I’s privileged information,” the motion argues. “Regardless, confidential work product related to Dr. Small was disclosed to Ms. Sanchez, and AZA intends to use that information against A&I’s clients at the trials in this case.”
In response to the motion to disqualify, AZA accused the plaintiffs’ firm of basing its second motion to disqualify on “facts that do not exist.”
“It is based on untrue statements, misstatements, and overstatements, but not facts,” the response reads.
AZA questioned the timing of the motion to disqualify in a response, pointing out that it took Arnold & Itkin more than a year after Sanchez began working at AZA and more than six months after she filed an appearance in this case to move to disqualify the firm.
“Why the delay? Why the untimely urging of a second disqualification motion based on alleged facts A&I has been sitting on for more than a year? The answer is simple,” the response reads. “A&I’s second motion is like its first: it is being used as a tactical weapon. The first was to delay the trial setting. The second is to avoid discovery the Court has ordered: discovery that will reveal the true nature of the relationship between A&I and its stable of go-to medical providers who provided treatment to the plaintiffs in this MDL just as they do to all of A&I’s plaintiffs, to avoid the effect of the paid-or incurred statute and to improperly inflate plaintiff’s damages by advancing grossly excessive medical charges.”
The case number is 2022-36264.
Mark Curriden contributed to this report.