The Houston trial boutique Ahmad Zavitsanos & Mensing will get to proceed with its defense of Transocean and others in multidistrict litigation stemming from offshore workers’ injuries, after a Houston appellate court Thursday denied a petition seeking the firm’s disqualification.
The five-sentence per curiam opinion leaves in place a December ruling from County District Judge Rabeea Collier. Plaintiff firm Arnold & Itkin, which is representing the 23 workers who allege they were injured during Hurricane Zeta in October 2020 while aboard the Deepwater Asgard drilling rig in the Gulf of Mexico, had argued AZA must be disqualified from defending Transocean because the firm employs as an associate attorney Karina Sanchez-Peralta, who formerly was an A&I law clerk. A&I argued that knowledge she gained as an A&I clerk about its client — a doctor who provided treatment to some of the plaintiffs in this litigation and will serve as an expert witness at trial — mandated the firm’s disqualification.
Kurt Arnold of Arnold & Itkin, who represents the plaintiffs, told The Lawbook he and the rest of the legal team are considering next steps as it relates to possible appeals.
“We are currently assessing all options on the Court’s ruling and will have our next step decided next week,” he said. “We look forward to representing our clients at trial.”
Shahmeer Halepota of AZA, who represents the defendants, told The Lawbook the appellate panel got it right in this case.
“We believe justice has prevailed and look forward to trying the merits of this dispute,” he said. “We are unwavering in the support of our colleague and thoroughly denounce the efforts to scapegoat her.”
In its petition for writ of mandamus filed in January, A&I told the justices the Texas Disciplinary Rules of Professional Conduct require AZA be disqualified.
“Imagine that a lawyer learns confidential, potentially damaging information about a client,” the petition begins. “But after the client representation ends, the lawyer turns around and seeks to weaponize that information for the benefit of a new client at a new firm. How? By using that confidential information to impeach the credibility of that former client, who is not a critical adverse witness in the new litigation.”
In separate orders issued in December, Judge Collier first denied the motion to disqualify AZA brought by 13 of the plaintiffs but did not explain the basis for her ruling in that order. In the subsequent order, Judge Collier declined the motion to disqualify AZA brought by the other 10 plaintiffs, writing in a two-page order that she disagreed with A&I that its prior employment of Sanchez-Peralta required the firm’s disqualification.
A&I argued on appeal that under the Disciplinary Rules of Professional Conduct, a lawyer is barred from representing a new client against an old client if there’s a “reasonable probability” that the lawyer will use confidential information in a way that gives either side an advantage or disadvantage, or if the prior representation is “substantially related” to the second representation.
“Both apply here,” A&I argued in the petition. “Beyond a mere ‘threat,’ it is overwhelmingly ‘probable’ that Sanchez and AZA will use — indeed, they likely already have used — Dr. [Henry] Small’s confidential information to his and plaintiffs’ detriment, and to Transocean’s advantage. And the representations’ similarities — both centering on his reputation as a treating physician — readily meet the ‘substantial relation’ test. Under Rule 1.09(b), Sanchez’s conflict is conclusively imputed to AZA, thus disqualifying AZA.”
A&I has twice moved to disqualify AZA in this case.
AZA alleged in September 2024 filings that it had discovered an improper relationship between Advanced Diagnostics, A&I and its medical expert witnesses and a company allegedly providing some funding for the litigation. AZA accused A&I of orchestrating “at least two cleverly designed-for-litigation billing schemes” that were intended to inflate the plaintiffs’ medical costs and “obscure the providers’ interests and incentives by routing payments and stakes in the outcome of this litigation through middleman entities.”
After news outlets reported on those publicly filed documents, A&I sought sanctions against and the disqualification of AZA. A&I moved to disqualify AZA on different grounds, the employment of Sanchez-Peralta, in separate filingslater in September 2024.
AZA filed a response to the motions to disqualify in October 2024, arguing they were made without merit and lodged in an attempt to distract from the allegations defense made about the billing relationship between the healthcare provider and A&I.
At the hearing in February, attorneys for AZA told Judge Collier they believed the arrangement between A&I and Advanced Diagnostics is that bills and proposed treatment plans flow from doctors to an “unknown person” at Advanced Diagnostics who acts as an “attorney liaison” and who plays a role in allegedly inflating the cost of care. Once the lawsuit is over, Advanced Diagnostics and A&I work together to determine how much Advanced Diagnostics will get paid, they told the judge.
Judge Collier seemed displeased with the allegation, asking “How is that different than any cases involving a personal injury in Harris County?”
“I see it over and over again,” she said. “A settlement amount is reached and afterward the lawyer negotiates a lower amount for those medical bills. This is not something new or something that’s not being done. … Is this the billing scheme that you’re alleging? This is it?”
John Zavitsanos addressed the court to explain how this alleged billing scheme differs from what the court described.
“This is not going on after the fact for the benefit of the client to reduce the bill,” he said. “Rather, it is a scheme because the plaintiff lawyers, through this intermediary, are directly inflating these charges, not reducing them after the fact. The lawyers are participating in the amount being charged to extract a high recovery and then lower the amount paid later.”
“Well, that’s completely different,” Judge Collier said.
Roland Christiansen of A&I rebuffed those allegations during the hearing, telling Judge Collier that the defense attorneys in the case had a “fundamental misunderstanding” of the rules governing a Jones Act case like this one.
“In these cases, with that provider group, we have the agreement right here signed by Transocean that they paid all of it,” he said. “… They went and negotiated with them and paid them. … How can there be a billing scheme if Transocean agreed contractually to pay this rate?”
Judge Collier granted AZA’s request to access some information regarding the relationship between A&I and Advanced Diagnostic Healthcare System and to take the deposition of one of its employees, whom AZA alleges to be the liaison between doctors and lawyers.
AZA and A&I were involved in a similar discovery dispute in a case the Eleventh Court of Appeals in Eastland decided in August. A three-justice panel instructed Midland County District Judge Leah G. Robertson to conduct a new hearing and reopen discovery in a personal injury lawsuit against MBC Energy Services where the company is seeking certain information related to the cost of medical care provided to the plaintiff.
In the lawsuit, Daniel Sunde is suing the company seeking damages for injuries he suffered in an April 2023 motor vehicle crash he alleges was caused by an MBC employee. After Judge Robertson rejected MBC’s motion to compel depositions of certain witnesses the company alleged had knowledge of the cost of care and funding arrangement, it sought relief in the appellate court in March.
Justices Amparo “Amy” Guerra, Kristin Guiney and Andrew Johnson sat on the panel.
The defendants are also represented by John Zavitsanos, Daryl L. Moore, Kelsi Stayart White and David Metzgerof Ahmad Zavitsanos & Mensing.
The plaintiffs are also represented by Roland T. Christensen, Brian M. Christensen and Parker J. Cragg of Arnold & Itkin and Misty A. Hataway-Coné of Coné PLLC.
The case number is 01-25-00075-CV.