An opinion from the U.S. Court of Appeals for the Fifth Circuit slamming two Texas trial attorneys for employing “Rambo tactics” during the closing arguments of a fraud trial is a welcomed message to lawyers who have lamented an uptick of aggressive ploys.
The three-judge panel including Chief Judge Priscilla Richman reversed a trial court judgment, finding attorneys Stephen A. Khoury and C. Gregory Shamoun made “numerous improper and highly prejudicial statements” in the trial for David M. Clapper et al. v. American Realty Investors Inc. et al.
“Together, they employed nearly every category of what we have previously held to be improper closing argument,” the judges wrote.
Khoury and Shamoun did not respond to requests for comment.
The judges referred to standards mandated in 1988 by a full panel of U.S. District Court for the Northern District of Texas judges in Dondi Properties Corp. v. Commerce Savings & Loan Association, which is required reading for lawyers to be admitted to the Northern District, said Christopher D. Kratovil, the Dykema firm lawyer who argued on behalf of Clapper before the panel in 2022.
Among the Dondi standards, lawyers are to extend courtesy and cooperation to opposing counsel, always conduct themselves in a professional manner and refrain from “antagonistic or obnoxious behavior.”
“(The judges) took their time with it and were very careful with this because I think about once every five to 10 years you get one of these opinions … where they really, I think, try to draw some strong ethical and professional responsibility lines,” Kratovil said. “I think this is one of those cases that may end up being taught in law school professional responsibility classes.”
The standards set by the district judges in Dondi were supposed to settle incivility among lawyers, said Dylan O. Drummond, equity shareholder at Langley & Banack and a longtime appellate lawyer. A recent resurgence of improper tactics has exasperated lawyers, Drummond said, and the appellate judges seem to be aware.
“We recognize that such unprofessional practices as those that occurred in this case continue to appear in our courtrooms, despite many attempts to eradicate such practices,” they wrote. “We remind all practitioners in our court that zealous advocacy must not be obtained at the expense of incivility.”
The Fifth Circuit’s clear message is “a win for the bar,” Drummond said. A complete reversal on the grounds of improper jury argument is “extremely rare,” he added.
“For the Fifth Circuit to say this with a panel featuring the chief, for it to be per curiam, is even more impactful than Dondi was,” Drummond said.
In the Clapper case, Clapper accused American Realty and other entities of violating the Texas Uniform Fraudulent Transfers Act and the alter ego liability doctrine by transferring assets to get out of paying a judgment from a previous lawsuit. Clapper argued four points in his appeal, but the judges only addressed the prejudicial remarks claim.
The judges specifically noted the following behaviors:
- At the start of his closing argument, Shamoun threw a box of tissues at plaintiff attorney Andrew W. Mychalowych and said, “I know y’all have a potentiality of crying, y’all might need Kleenex during my [closing.]”
- Shamoun told jurors he would have “kicked his butt” if Mychalowych accused him of perjury in the street instead of the courtroom. Shamoun also said, “I don’t care if I was half-blind and half-lame, I would have found the strength to whoop his a–.”
- Shamoun said he would have “spanked” Mychalowych for asking so many leading questions if he were Shamoun’s child.
- Shamoun called Mychalowych “an embarrass[ment] for the profession,” accused him of attempting to hide evidence, suggested he thought each juror was “an idiot” and accused him of acting “low-class,” “classless,” “ruthless” and “disgusting.”
- Shamoun said: “[Mychalowych] defied this judge. He defied the instructions of the Judge. … He treated us all here with disrespect. He tried to hide evidence. … Judge had to scold him. I have never seen anything like this in the over 30 years that I have practiced in this town. Never have I seen what y’all witnessed. I am embarrassed for the profession, ma’am. I’m embarrassed.”
- Khoury implied Clapper paid a witness to testify.
- Khoury also called one of Clapper’s expert witnesses a “paid prostitute from Michigan.”
- Khoury called Mychalowych a “dishonest broker,” “deceitful and deceptive.”
- “Where I come from, we don’t listen to another germ that comes out of that person’s mouth,” Khoury said of Mychalowych.
- Shamoun also directed “personal attacks” at Clapper, characterizing him as a “billionaire” with a 70-foot yacht in pursuit of the estate of defendant Gene Phillips, who had recently died and was survived by a widow and six children.
- Khoury called Clapper a “financial pimple.”
- Shamoun called Clapper’s case “insulting to everybody’s intelligence” and “insulting to everybody’s position as a juror.”
- Shamoun tried to talk about matters not before the jury and referred to the judge as “[t]he man up there with the robe.”
- The lawyers tried to appeal to jurors’ “local bias” by repeatedly saying Clapper was from Michigan and suggesting people from that state had lower moral standards.
- Shamoun said he hoped anyone who filed a lawsuit like Clapper’s would “understand that they are going to meet their maker.”
- Shamoun said Clapper “can cry, cry like he did in the first trial, he can cry like he did here. I’m not going to tell you, I don’t like him because it don’t matter what I do or what I don’t. But he’s not a credible person.”
In defending the judgment, the defendants said Shamoun’s comment about kicking Mychalowch’s butt was “hyperbolic” and that several remarks about Mychalowch were prompted by his accusation of perjury.
The defendants sought to persuade the judges that the accusation Mychalowych tried to hide evidence was not dishonest because he’d received a curative instruction from the court over his misrepresentation of an exhibit.
Khoury was quick to walk back his statement that Clapper paid a witness and the lawyer was admonished twice for calling Clapper’s witness a “paid prostitute,” the defendants pointed out.
The jury received the judge’s instruction to focus on evidence and not on the lawyers’ arguments, the defendants added.
But the Fifth Circuit rejected the defendants’ explanations, saying: “There is no doubt that these remarks, considered collectively, extend far beyond permissible hyperbole or ‘expressive language,’ and were designed to bias the jury against Clapper and his counsel. Khoury’s and Shamoun’s improper statements pervaded closing argument.”
The judges’ dismay was evident during oral arguments. Judge Patrick Higginbotham called the lawyers’ back-and-forth “extraordinary,” and Judge Elrod called it “shocking.”
“I’ve been around a long time. … The tone of that trial is something I don’t think I’ve ever witnessed,” Higginbotham said.
The opinion created a small buzz on X, the platform formerly known as Twitter, where lawyers have created an online community dubbed “Appellate Twitter.”
“Oohh #appellatetwitter something you don’t see every day! Brand new 5th Circuit opinion reversing a trial court judgment following a jury trial based on improper jury argument by defense counsel, Case 21-10805, Clapper v. American Realty Investors ,” wrote Kelley Clark Morris, partner at Wright Close & Barger.
“This is very much the exception that proves the rule — reversal on these grounds is almost, but not entirely impossible,” wrote Raffi Melkonian, partner at Wright Close & Barger. “The lawyers that did all this only get an admonition however.”