In a decision that Texas businesses who retain national law firms should perhaps be aware of, the Fort Worth Court of Appeals has sided with the New York mega-firm Skadden, Arps in a dispute over discovery related to Skadden’s special appearance motion. In re Skadden, Arps, Slate, Meagher & Flom, LLP (No. 02-21-00393-CV) involves a lawsuit filed against Skadden by the Harold E. Riley Foundation, which is controlled by Baylor University and Southwest Baptist Theological Seminary. The Foundation’s suit seeks a copy of Skadden’s entire client file for the firm’s prior representation of the Foundation in a lawsuit in Colorado in connection with an ongoing dispute over Skadden’s demand for payment of outstanding legal fees ($94,000). Skadden filed a special appearance and, subject to the special appearance, a motion to transfer venue to Harris County, the location of the firm’s Texas office. The Foundation served a document request seeking the firm’s internal communications regarding representation of the Foundation and a motion to compel production. Skadden made a motion for protection. The trial court denied Skadden’s motion and granted the Foundation’s motion to compel. Skadden sought mandamus from the court of appeals.
The court of appeals reversed the trial court and conditionally granted Skadden’s petition. Under Rule 120a, TRCP, “a defendant who files a special appearance is entitled to have the issue of personal jurisdiction heard and decided before any other matter; thus, discovery is limited to matters directly relevant to the special appearance” (citations omitted). Consequently, the court of appeals’ analysis turned on whether Skadden specific contacts with Texas with regard to the Foundation’s discovery request met the “purposeful availment” test.
As the court of appeals noted, the “mere existence of an attorney-client relationship, without more, does not confer personal jurisdiction over a nonresident attorney in the forum state” (citations omitted). This extends to telephone calls and correspondence directed to the forum state, as well as work performed outside the forum state (citations omitted). Here Skadden attorneys worked on the Colorado lawsuit in Delaware, New York, and Colorado. They also communicated with Thompson & Knight in Dallas, which defended the Foundation in a lawsuit filed against it in Fort Worth by Baylor and the Seminary (that lawsuit resulted in Baylor and the Seminary gaining control of the Foundation). The Foundation’s specific discovery requests sought a broad array of internal communications and documents about the Texas litigation, as well as Skadden’s communications and analyses of whether the Colorado litigation presented a conflict of interest between the foundation and its trustees. It argues that these materials are relevant to “the breadth of Skadden’s involvement and its purposeful availment in participating in the . . . Baylor/[Seminary] [Tarrant County] litigation.”
But, according to the court of appeals, Skadden’s internal communications did not occur in Texas and were not directed at Texas. In fact, Skadden had already produced every communication with the Foundation and Thompson & Knight, as well as with lawyers who represented the Foundation’s former trustees. The Foundation’s discovery request thus sought materials “that were never sent to anyone in the parallel Texas litigation” [quoting Skadden’s mandamus reply]. Those materials, the court of appeals held, related to the merits of the dispute over Skadden’s fees, not whether the court has personal jurisdiction. The court of appeals further held that mandamus is the proper remedy because the trial court abused its discretion by allowing the Foundation to “engage in discovery unrelated to the defendant’s special appearance” (citations omitted). The court of appeals ordered the trial court to vacate its order directing Skadden to produce the requested discovery, grant Skadden’s motion for protection of the requested documents pending the special appearance, and deny the Foundation’s motion to compel pending the special appearance.
Though this case presents a somewhat unusual fact pattern—a former client that has been taken over by other entities, who then dispute the law firm’s bill for representation prior to the takeover—it is still instructive about the limits of Rule 120a discovery and the extent to which a national law firm’s contexts with a Texas client may or may not confer personal jurisdiction over the firm in a subsequent dispute.
