© 2012 The Texas Lawbook.
By Mark Curriden
Senior Writer for The Texas Lawbook
A Dallas judge has booted Bickel & Brewer from a big dollar international civil lawsuit because the firm and its Chilean co-counsel hired a former executive from the opposing side who claims the law firms agreed to pay him $1 million over three years to provide insider privileged information about the case.
State District Judge Carlos Cortez disqualified the hard-charging Dallas lawyers from representing RSR Corporation, a Dallas-based lead smelter, which has sued a Chilean business partner alleging fraud, theft and breach of fiduciary duty and is seeking up to $60 million in damages.
The case has been fiercely disputed by two of Dallas’ premier trial lawyers for more than four years. It has been litigated on three continents. Legal fees and expenses for the two sides have likely exceeded $1 million. There have been allegations back and forth of witness bribery, withholding evidence and fabrication of testimony.
In a 26-page ruling, Judge Cortez said that “there is without question a genuine threat” that Bickel & Brewer lawyers have knowledge of confidential documents and privileged information that give the law firm an unfair and improper advantage going forward in the litigation.
The judge, however, denied requests by defense lawyers to financially sanction Bickel & Brewer.
In a statement, the firm denied that it improperly obtained privileged information and said it plans to appeal.
“We respectfully disagree with Judge Cortez’s order, and our clients will pursue appropriate relief in the Court of Appeals,” said James S. Renard, partner at Bickel & Brewer in Dallas. Renard points out that a former Texas Supreme Court judge reviewed the same evidence and came to the opposite conclusion.
The dispute arose last fall when prominent Dallas trial lawyer Michael Lynn, who represents the defendant, Inppamet Ltda, filed a motion claiming that Bickel & Brewer and its Chilean co-counsel, Jorge Bofill, had hired Inppamet’s former chief financial officer as a consultant providing information on the case.
According to court records, the executive, Hernan Sobarzo, “secretly copied and retained approximately 2.3 gigabytes of company e-mail and files containing Inppamet’s confidential business and privileged information.” The emails included communications with the lawyers representing Inppamet in the case against RSR.
Sobarzo left Inappamet in 2010 and approached RSR officials about providing them insider information in return for compensation. He testified that in meetings with Bofill and Bickel & Brewer, he was promised $1 million in payments over three years.
Court records show that Sobarzo charged RSR $1,600 a day as a consultant, which is four times his salary as CFO. He earned 4,226,702 Chilean pesos, or $7,800, a month with Inppamet.
Sobarzo testified that Bickel & Brewer lawyers, in a meeting at the firm’s New York office, told Sobarzo that they wanted him to provide documents he had taken from Inppamet and be a witness in the Dallas case.
“In a meeting with… Bill Brewer, Mr. Sobarzo indicated he would only do so if RSR agreed in writing to compensate him for his efforts, provide him with indemnity and immunity from ‘legal harm’ that could result from his conduct… and provide what Sobarzo called ‘job loss insurance’,” according to the court opinion.
“Brewer assured Sobarzo that each of these conditions would be met. He said, don’t worry about that.”
Two months later, Sobarzo was back in Brewer’s New York office with his laptop and a pen drive, which contained privileged emails he had taken while at Inppamet, according to court records.
A lawyer working with Bofill’s law firm in Chile performed a review of every document. Whenever the lawyer came across the names of lawyers he knew were representing Inppamet, the lawyer says he “immediately closed that document on the computer and moved on to the next.”
“RSR, Bickel & Brewer and [Bofill’s law firm] vehemently denied that they had any Inppamet privileged documents in their possession, including specifically on the pen drive,” Judge Cortez wrote in his opinion. “Subsequent analysis of a copy of pen drive, however, revealed it contained scores of Inppamet privileged communications, including communications with its litigation counsel in this case.”
Judge Cortez found that Sobarzo met with Bickel & Brewer and Bofill’s firm 19 times covering more than 150 hours total.
“It is undisputed that neither the Bofill firm nor Bickel & Brewer enacted any screening mechanisms to prevent Sobarzo from working on this case,” the court stated. “Indeed, just the opposite, working on this case was precisely the reason RSR retained Sobarzo as a consultant.
“Because Sobarzo and Bickel & Brewer worked so closely together on the same case, there is a substantial likelihood that confidential information was shared,” Judge Cortez said.
Lynn, a partner at Lynn Tillotson Pinker & Cox, said that he has “never seen such a well reasoned written decision by a state district court” in his 38 years of practice.
“Trial lawyers and other courts, I believe, will find the facts found here to be very troubling,” he said.
Lawyers for Bickel & Brewer point out that former Texas Supreme Court Justice Deborah Hankinson, who Judge Cortez appointed as the Special Master in the RSR litigation, spent a year reviewing the allegations and rejected calls that Bickel & Brewer be disqualified. Hankinson’s two-page opinion , which was filed in October, did not explain the reasoning behind her decision.
“Judge Hankinson… not only agreed with our client’s position, but actually denied Inppamet’s motion for reconsideration,” said Renard. “We firmly believe that Judge Hankinson’s view will ultimately prevail in the Court of Appeals and, if necessary, the Supreme Court of Texas.”
Another former Texas Supreme Court justice, Harriett O’Neill, is representing RSR in the disqualification dispute.
“I am confident that Bickel & Brewer acted ethically in its representation of its client,” she said. “Bickel & Brewer played it by the book. They weren’t even close to the line.”
© 2012 The Texas Lawbook. Content of The Texas Lawbook is controlled and protected by specific licensing agreements with our subscribers and under federal copyright laws. Any distribution of this content without the consent of The Texas Lawbook is prohibited.