Tom Melsheimer is Superman

by Mark Curriden, Senior Legal Affairs Writer
mark.curriden@texaslawbook.net

January 11 — Tom Melsheimer was enjoying lunch last summer at the Capital Grille in Dallas when his iPhone buzzed. CNN wanted an interview. Two minutes later, MSNBC and Fox News called.

Then, every few seconds, there were more: The Wall Street Journal, American Lawyer, CNBC, ESPN, and the Huffington Post.

Melsheimer has handled some pretty big cases during the past two decades. He defended former Dallas City Councilman Al Lipscomb against federal criminal charges. He’s represented Burger King, Tom Hicks, Barclays Bank and Bank of America.

Right now, Melsheimer is the lead lawyer representing a whistleblower in a high profile battle against pharmaceutical giant, Johnson & Johnson, in a Medicaid fraud lawsuit with more than $1 billion at stake. The trial started Monday in Austin and is likely to last a month.

But none of these cases come close to the media attention the University of Texas Law School graduate garnered last June 22. That’s the day he filed his motion for summary judgment asking a Texas judge to rule for his client, Dallas Mavericks owner Mark Cuban, in a lawsuit against Ross Perot Jr., who has a five percent stake in the basketball team.

Perot sued claiming that Cuban has mismanaged the NBA team.

Most lawyers pray that the judges in their cases read their legal briefs.

Melsheimer’s four-page motion immediately went viral. Page two featured a large photograph taken 10 days earlier of Maverick’s star Dirk Nowitzki hoisting the NBA championship trophy over his head in celebration.

“Within a couple hours of filing the motion, my phone was blowing up,” says Melsheimer, who is a former federal prosecutor. “Even ESPN and TMZ wanted to talk with me.”

By making the photo the centerpiece of the motion, Melsheimer said he was demonstrating the stupidity of Perot’s argument. The fact that his client is the flamboyant Cuban, he says, certainly aided in the public attention. But he adamantly denies that the motion was a publicity stunt.

“It was definitely high risk, because if we had lost, we would have been very embarrassed,” he says. “I have no regrets about it. I only wish I had done it earlier. It has been universally applauded.”

Not everyone found it amusing.

“It was funny, but a bit unprofessional,” says Figari & Davenport named partner Mark Davenport, who represents Perot in the litigation. “The motion was simply an attempt to use the media to pressure Mr. Perot to settle, but the effort failed.”

Texas District Judge Craig Smith granted Cuban’s motion on Nov. 3, rejecting all of Perot’s claims. The case is now on appeal.

“The motion was vintage Tom,” says prominent Dallas litigator Mark Werbner. “He is bold, brash and willing to step outside the box to take a risk. And he has a client who trusts him.”

Even Davenport describes Melsheimer as a “worthy advocate,” but not unbeatable.

Melsheimer represented Cuban when the Mav’s owner refused to pay former coach Don Nelson more than $6 million in deferred compensation. Cuban lost.

“Nelson is the only person I’ve ever deposed who insisted we go out to dinner and drinks afterward,” says Melsheimer. “He’s a very nice guy and we didn’t have a very strong case.”

Despite the loss, Cuban stuck with Melsheimer, who has had success so far battling the U.S. Securities and Exchange Commission’s pursuit of the dot-com billionaire on allegations of insider trading.

The SEC claims that Cuban sold hundreds of thousands of shares of Momma.com stock after receiving insider information, which allowed Cuban to avoid $750,000 in losses.

And Melsheimer is representing Cuban in a more recent dispute with Perot over premium parking spaces at American Airlines Arena. Cuban sued Perot in December when one of Perot’s businesses, which controls some parking near the arena, refused to allow Cuban’s company to use the spots. This litigation is still pending, although Melsheimer won a temporary restraining order giving Cuban use of the spaces.

“There are a lot of smart lawyers, but Tom has the ability to combine smarts with the ability to get results,” Cuban said in an email. “That’s a combination I look for in a legal partner.”

Melsheimer’s courtroom talents were on display in 2009 when he won a $179 million jury verdict against Dallas billionaire Harold Simmons and NL Industries. Melsheimer’s clients were a group of investors who alleged that Simmons conspired to lessen the value of their stake in the business.

“Tom’s nickname around the firm is Superman, because he has a skill set that is unmatched and because he can do anything,” says Steve Stodghill, who is Melsheimer’s partner at Fish & Richardson, a Boston-based firm.

“Tom is the best oral advocate I’ve ever seen,” says Stodghill, who met Melsheimer when the pair were summer associates together in 1985 at Akin Gump. “It’s like watching Laurence Olivier in Shakespeare’s Hamlet.”

Paul Coggins, who worked with Melsheimer at the U.S. Attorney’s Office in Dallas and again later at Fish & Richardson, says Melsheimer’s love of Broadway and theater are evident in how he handles himself in court.

“Tom has this big booming voice and has a great sense of timing,” says Coggins, who is now a partner at Locke Lord in Dallas. “He has a quick mind and an even quicker tongue.”

The courtroom successes have certainly paid off financially. Fish & Richardson recently raised Melsheimer’s hourly billable rate to $995, which is among the highest in Dallas.

“The firm wanted me to charge $1,000 an hour, but that figure made me blush,” he says.

Lawyers at three different major law firms told The Texas Lawbook that Melsheimer is on their list to target as a possible lateral hire in 2012.

“Law firms want him because there are a lot of clients lined up who think Tom is worth every penny,” says Coggins.

But it is the case he is trying now in Austin that has the potential to give Melsheimer his greatest financial success. He represents a whistleblower who filed a civil Medicaid fraud lawsuit against Johnson & Johnson claiming the drug company fraudulently marketed its antipsychotic drug Risperdal to medical providers.

The whistleblower and Texas Attorney General Greg Abbott, who has joined the lawsuit, contend that Johnson & Johnson made improper financial payments and various perks to key Texas officials who were in a position to help the drug company have Risperdal accepted by Texas Medicaid officials for additional off-label treatments – a charge Johnson & Johnson denies.

The lawsuit seeks more than $1 billion in damages and penalties. The whistleblower could be eligible to claim up to 25 percent of the final judgment. Melsheimer is handling the case on a contingency fee basis and could see a fee of tens of millions of dollars if he is successful.

“This case certainly has the biggest potential fee in my career,” he says. “But it also could have the biggest impact and foundation for change, too.”

Mark Curriden is senior writer for The Texas Lawbook and Writer in Resident at the SMU Dedman School of Law. More of this story can be found at www.texaslawbook.net