Several thousand former clients of Houston attorney George Fleming and his law firm will get their chance to proceed with a lawsuit alleging Fleming wrongfully docked funds from their settlements stemming from litigation over the diet drug fen-phen.
The Texas Supreme Court, in a unanimous ruling issued Friday, decided Fleming was barred — or judicially estopped — from arguing the claims of his former clients were substantially similar after he earlier defeated class certification by arguing the claims were too distinct and therefore not suitable for class treatment. Fleming’s about-face on whether the claims of his former clients were similar or distinct came in the wake of his win in a bellwether trial against six former clients referred to in court documents as the Harpst plaintiffs.
Fleming then argued that his bellwether trial victory meant he had also prevailed against the remaining group of about 4,000 former client plaintiffs, referred to in court documents as the Wilson plaintiffs.
“We do not doubt the good faith of Fleming’s statements opposing class certification or his current contrary position. But the class certification representations were clear and purposeful, unambiguous and specific,” Justice Evan Young wrote for the court. “They were neither inadvertent nor misunderstood. The federal court relied on those representations to grant Fleming the relief that he sought — denial of class certification — which was far from nominal. Most importantly, the arguments on which the court relied to reject class certification directly conflict with Fleming’s current position, which is that the Wilson and Harpst plaintiffs’ factual and legal issues are materially identical.”
The court’s ruling in favor of the former clients was 7-0. Justices John Devine and Brett Busby did not participate in the decision.
Friday’s ruling marked the second time the case had come before the state’s high court. In 2020, the court reversed a ruling from the Fourteenth Court of Appeals in Houston that undid a trial court’s summary judgment order in favor of Fleming on technical grounds and ordered that court to reach the merits of the case.
The Fourteenth Court of Appeals held in the first appeal that the trial court’s judgment in the Harpst trial hadn’t been “authenticated” and couldn’t be the basis for Fleming’s summary judgment win.
On remand, the Fourteenth Court of Appeals determined there was no “privity” between the Harpst plaintiffs and the Wilson plaintiffs, meaning the result of the Harpst bellwether did not bind the thousands of Wilson plaintiffs.
“We granted the ensuing petition for review and now affirm, but for a reason different from the one stated by the court of appeals,” Justice Young wrote for the court. “Specifically, we conclude that petitioners are judicially estopped from establishing an essential component of their summary-judgment motion.”
According to court documents, Fleming spent about $20 million to medically screen more than 40,000 potential clients to determine if they had a claim against the manufacturer of fen-phen and ended up signing about 20 percent, or roughly 8,000, of them as clients. He filed suit in 2001 and the case settled in 2006 for $339 million.
With those settlement proceeds, Fleming reimbursed himself for the $20 million spent on medical screening and then distributed the remaining funds to his clients based on their respective contingency fee agreements with him.
“In other words, he charged his clients not just for their own medical-screening costs but also for those of approximately 32,000 people who never became his clients and who did not participate in the underlying case,” the Texas Supreme Court explained in its opinion. “This financial choice led to further litigation, now casting Fleming as the defendant in various actions brought by his former clients.”
Two clients, Sandra Karnes and Carol Tallant, sued Fleming in federal court and attempted to bring the case as a class action, but Fleming defeated class certification by arguing the claims of his former clients were too distinct to be treated as a class.
Defeating class certification also meant the case was dismissed because federal courts did not have jurisdiction to hear it.
After that, a group of about 650 former clients, called the Kinney plaintiffs, sued Fleming. In a bellwether trial involving 10 of those plaintiffs, a jury sided with the clients. That’s when the 4,000 Wilson plaintiffs in this case moved for summary judgment.
Fleming successfully argued — in part by citing the federal court’s denial of class certification in the Karnes case — that summary judgment was improper because of the differences between the claims of the Kinney plaintiffs and the Wilson plaintiffs and the trial court denied the Wilson plaintiffs’ motion for summary judgment without explanation.
A few years later, Fleming requested a trial setting in the Wilson case, and a group of six plaintiffs (the Harpst plaintiffs) were randomly selected by the court to proceed in a bellwether trial.
The jury in the Harpst trial returned a verdict in favor of Fleming, prompting him to move for summary judgment against the remaining thousands of plaintiffs.
Fleming and his firm are represented by David M. Gunn of Beck Redden and Murray Fogler, Jas Brar and Michelle Gray of Fogler, Brar, O’Neil & Gray.
The plaintiffs are represented by Paul S. Kirklin of The Kirklin Law Firm. The case number is 22-0166.