Highland Capital Management v. Looper Reed & McGraw, P.C.

Dallas Court of Appeals, No. 05-15-00055 (January 14, 2016)

Justices Lang, Brown, and O’Neill (Opinion)

The Dallas Court of Appeals confirmed that “attorney immunity” gives attorneys wide latitude to zealously represent their clients without fear of liability to the opposing party. Looper Reed represented a former employee of Highland Capital in an employment dispute. In the midst of that representation, Highland Capital sued the firm, alleging it had wrongfully copied and analyzed confidential documents it knew to be stolen by the employee and had engaged in extortion by threatening to disclose the confidential information and disparage Highland Capital unless Highland paid the client a certain amount of money.

Looper Reed filed a Rule 91a Motion to Dismiss on the grounds of attorney immunity, and the trial court dismissed Highland’s claims for theft, breach of the duty of confidentiality, conversion, tortious interference, and conspiracy to commit theft, extortion, slander, and disparagement. The court denied the motion to dismiss as to the claim for aiding and abetting breach of fiduciary duty, but later granted Looper Reed summary judgment on that claim.

Highland Capital appealed, arguing that Looper Reed’s conduct “went well beyond” discharging its duties in representing its client and that, therefore, attorney immunity did not apply. The Court of Appeals disagreed, however, relying on the recent Texas Supreme Court opinion in Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477, 481 (Tex. 2015). The Court noted that if “the type of conduct alleged falls squarely within the scope” of the attorney’s representation of a client, then the conduct is protected, regardless of the merit or propriety of the conduct. “[E]ven wrongful or fraudulent conduct may fall within the scope of client representation,” the Court said. Conduct unrelated to client representation, such as engaging in a fraudulent business scheme or assaulting opposing counsel, would not be protected. Here, the type of conduct alleged—acquiring and reviewing documents, making settlement demands, and threatening consequences if demands were not met—fell squarely within Looper Reed’s representation of its client. The doctrine of attorney immunity therefore barred Highland Capital’s claims.

The Court did note, however, that where attorneys engage in misconduct, remedies exist to discourage and remedy such conduct, including sanctions, contempt, and attorney disciplinary proceedings. But the Court made no comment on whether such measures would have been appropriate here.