Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘John O’Quinn’

November 26 roundup

All-automotive edition:

  • Court won’t unseal settlement arising from $105 million Aramark/Giants Stadium dramshop case for fear girl’s father will try to get his hands on money [NJLJ, NorthJersey.com, Childs; earlier]
  • Great moments in insurance defense law: you mean it wasn’t a good idea to infiltrate that church meeting to investigate the crash claim? [Turkewitz first, second posts]
  • Columnist Paul Mulshine rejoices: Ninth Circuit decision “if it stands, will lead to the end of the SUV as we know it” [Newark Star-Ledger]
  • Is it unfair — and should it be unlawful? — for insurers to settle crash victims’ claims too early? [Maryland Injury Lawyer Blog]
  • If Ron Krist prevails in shoot-out of Texas plaintiff titans, he vows to have sheriff seize John O’Quinn’s Batmobile [American Lawyer; see also Ted’s take earlier]
  • In much-watched case, Australian high court by 3-2 split upholds highway authority against claim defective bridge design was blameworthy after youth’s dive into shallow water [RTA NSW v. Dederer, Aug. 30]
  • Redesigning Toyota’s occupant restraint system? Clearly another job for the Marshall, Texas courts [SE Texas Record; Point of Law; more]
  • Bench trial results in $55 million verdict against U.S. government after Army employee on business runs red light and paralyzes small child [OC Register]
  • Vision in a purple Gremlin: her Yale Law days shaped Hillary in many ways [Stearns/McClatchy]
  • Zero tolerance for motorists’ blood-alcohol — are we sure we want to go there? [Harsanyi, Reason]
  • Driver falls asleep, so of course Ford must pay [two years ago on Overlawyered; much more on our automotive page]

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November 8 roundup

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Texas: “Public left in dark on accused attorneys”

How pathetic is the State Bar of Texas when it comes to protecting clients from rogue lawyers? This pathetic:

Dallas attorney Bruce Patton has a clean disciplinary record, according to the State Bar’s Web site, which provides profiles of the state’s 80,000 or more practicing attorneys. But consider this before you hire him to draft your will: Patton is in state prison after being convicted of a felony two years ago….

The Texas Legislature and Supreme Court, which share a role in establishing ethics rules for attorneys, have made it so that the public stays in the dark about thousands of lawyers accused of misconduct. Bar confidentiality rules ensure that many sanctions are private and that lawyers accused of felonies can continue practicing. The Bar doesn’t require attorneys to report their criminal record or malpractice suits.

The Fort Worth Star-Telegram’s disturbing investigation goes into considerable detail, and mentions a couple of cases that will be familiar to readers of this site: “San Antonio attorney Ted Roberts, charged with stealing $100,000 from his wife’s lovers, was recently convicted, two years after being indicted. He faces a five-year sentence. The Bar didn’t suspend him until June and is now recommending disbarment.” And: “The firm of John O’Quinn, one of the state’s wealthiest personal-injury lawyers, was ordered by an arbitration panel this summer to pay $35 million to former clients who say he overbilled them for expenses, but no mention of that order is on the Bar’s Web site.” (Yamil Berard, Fort Worth Star-Telegram, Aug. 19; “Panel seeks changes in Bar’s disciplinary system for lawyers”, Aug. 19). More: GruntDoc wonders whether doctors can expect a similar concern for confidentiality.

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“Lawyer cannibalism”

The Houston Chronicle has more on Joe Jamail’s defeat of John O’Quinn in the expense-ethics battle earlier detailed in this space (Jul. 19, etc.). Several of the experts quoted seem at pains to minimize the seriousness of O’Quinn’s ethical lapse, but there’s a good quote at the end from Dallas legal-malpractice lawyer Randy Johnston: “When John O’Quinn goes up against Joe Jamail, I promise you, it isn’t all about the money.” Why? Because it’s about the ego too. (Mary Flood, “Legal trend of leveling suits against fellow litigators likened to cannibalism”, Houston Chronicle, Jul. 21)(via ShopFloor).

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Breaking: Wood v. John O’Quinn ruling

Courtesy of one of the winning attorneys, Overlawyered is the first to have the July 18 arbitration ruling on-line, which, as we reported earlier, rejected O’Quinn’s affirmative defenses and finds that O’Quinn’s overbilling and breach of fiduciary duties to his clients requires him to pay $35.7 million in damages plus interest and attorneys’ fees. Not a great number of surprises in this if you’ve been following our previous coverage (Apr. 15, Jun. 9, Jul. 19), but there is one interesting disclosure: note how O’Quinn used $3 million of plaintiffs’ money to surreptitiously fund a “Baylor study” on breast implants and make it seem like it was something other than a litigation-generated study.

Once again, let us note the irony that trial lawyers recognize the value of mandatory arbitration agreements, even as they wish to deprive other professions of the ability to use them.

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Breaking: John O’Quinn ordered to refund $35 million

Houston plaintiff lawyer John O’Quinn has been ordered to refund at least $35.7 million to more than 3,000 former breast implant litigation clients, according to an arbitration panel decision released today.

With interest and attorneys’ fees, O’Quinn could owe almost $60 million.

O’Quinn required his former clients to agree to mandatory arbitration (a money-saving option the plaintiffs’ bar wishes to preclude other businesses from using). “[I]mproper general expense deductions included professional association dues, flowers, fundraising, other lawyer’s fees, and overhead, the arbitrators said.” A dissenting arbitrator suggested that O’Quinn should also be liable for using money to fund a public relations campaign on his work. (Mary Flood, Houston Chronicle, Jul. 19).

Overlawyered broke this story Apr. 15, and had a followup post June 9.

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John O’Quinn scandal update

As we reported in April, trial lawyer John O’Quinn is subject to a potential contempt hearing for allegedly improperly withholding $18.9 million of settlement money from his breast implant clients. It turns out that this wasn’t the first mention of the scandal in Overlawyered. In August 1999, Walter reported:

As one of the wealthiest and most successful plaintiff’s lawyers ever, Houston’s John O’Quinn has been known to call press conferences at which he’s leveled charges highly damaging to his opponents’ reputations, accusing them (for example) of conspiring to “remain silent, conceal or suppress information” about problems with their products and operations. So what happened June 4 when O’Quinn was himself sued by a group of unhappy former breast-implant clients seeking class-action status against him? As Brenda Jeffreys reported in the June 14 Texas Lawyer, O’Quinn “didn’t hesitate before pummeling the class action lawyers with a libel suit” charging the lawyers with “encourag[ing] the news media to disseminate false, slanderous and libelous comments about Plaintiff” — said encouragement consisting of their press release about the lawsuit, and the press conference they were planning that would have explained it further.

Had the lawyers challenging O’Quinn succeeded in holding their press conference, interesting questions might have been aired. Their suit charges that a group of women numbering at least 2,000 were wrongfully overcharged tens of millions of dollars in claimed expenses, and that the firm of O’Quinn and Laminack breached its fiduciary duty to them; it sought a fee forfeiture totaling $580 million. But O’Quinn’s firm rushed to court to ask for a temporary restraining order to prevent the lawyers from holding a press event, and on June 7, while a judge was considering that motion, they agreed to a gag order and called off the conference they’d scheduled for that day. The whole process — from the first public notice of the suit to the gag order in hand — had taken only three days. “O’Quinn’s quick action may have prevented a firestorm of public attention to the class action suit,” writes the Texas Lawyer’s Jeffreys. It is not recorded whether any of the defendants O’Quinn has sued have ever tried, let alone succeeded in, such a tactic against him.

Here’s an entertaining wrinkle we haven’t reported: the case was sent to an arbitrator, because trial lawyer O’Quinn had required his clients to sign a binding arbitration agreement in the event of disputes! (The irony here is far greater than any Judge Bork personal injury suit.)

The Houston Chronicle reports that the three Houston attorneys on the arbitration panel determined in March that O’Quinn’s deduction was not authorized by his contracts with his clients, and that they are now deciding damages. The former clients, now represented by Joe Jamail, are asking for O’Quinn to completely disgorge all of his fees, a legitimate possibility under the Burrow v. Arce decision, which would be over half a billion dollars. Arbitration decisions are generally not appealable. It’s unclear what has happened to O’Quinn’s countersuit against his clients alleging libel. (Mary Flood, “O’Quinn’s law clients win round against him”, Houston Chronicle, Jun. 9 (h/t W.F.)).

Arbitration is generally quicker than litigation, but O’Quinn seems to have successfully stalled this case for over seven years, not to mention avoid any publicity from it. To date, we are the only media source that has even mentioned the contempt hearing.

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John O’Quinn update

Judge Denise Page Hood has issued an order to show cause why the O’Quinn law firm (many entries; also POL Jul. 15, 2005, POL Jul. 10, and POL Aug. 3) should not be held in contempt for improperly withholding breast implant settlement money from their clients. There is no press coverage of this brewing scandal.

There has, however, been plenty of press coverage of one of O’Quinn’s other clients, Anna Nicole Smith’s mother. In that circus, O’Quinn finds himself a defendant in a civil defamation suit brought by Smith’s, er, widower, attorney Howard K. Stern, for going on national television and accusing Stern of murdering Smith. [AP/ABC News] The fact of having this client gave cause TMZ.com to dig up some of the more obvious scandals in O’Quinn’s past, though they still missed the more recent ones covered by Point of Law.

Elsewhere in O’Quinn news: the firm settled its $1 billion fen-phen verdict (Apr. 28, 2004) for an unknown amount on the eve of appeal as part of a global settlement of O’Quinn’s caseload of fen-phen cases. (Brenda Sapino Jeffreys, “$1 Billion Fen-Phen Case Settles Before Appellate Oral Arguments”, Texas Lawyer, Apr. 16). The verdict was tainted because the plaintiffs blamed fen-phen for Cynthia Cappel-Coffey’s PPH, but Ms. Cappel-Coffey had been taking four other diet drugs since fen-phen had been pulled from the market that had the known risk of causing PPH. Yet that evidence was excluded from the jury, though the Texas Lawyer coverage barely touches upon this outrage. The state court in judicial hellhole Beaumont also improperly applied Texas caps on punitive damages.

Complete text of the breast implant order after the jump, if you don’t want to read the order in PDF format.

Read On…

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Election watch: “Lawyer’s $1 million keeps Bell in game”

Texas:

Houston trial lawyer John O’Quinn saved Democrat Chris Bell’s struggling gubernatorial campaign from financial oblivion this week by making a record $1 million donation. …

“There’s something about a million-dollar check that really warms the heart,” said Bell.

O’Quinn has promised to raise another $4 million for Bell’s campaign, and that could make the Democrat more competitive with all his opponents [incumbent Republican Rick Perry, independent Carole Keeton Strayhorn (herself heavily backed by trial lawyers), and independent Kinky Friedman]. …

Bell said O’Quinn is not looking for special favors from state government.

“There’s nothing that state government can do for John, nor is he asking for anything but good government,” Bell said. …

O’Quinn, Williams and Umphrey were part of a legal team that shared in a $3.3 billion legal fee for settling the state’s lawsuit against the tobacco industry.

(R. G. Ratcliffe and Janet Elliott, Houston Chronicle, Oct. 11).

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“Shorts’ nemesis dumped a client’s shares”

“Texas plaintiffs’ lawyer James ‘Wes’ Christian, the legal mind behind the rash of claims alleging naked short-selling in penny stocks…was a consistent seller of several companies that he is representing in high-profile and bitter legal fights,” according to records obtained by the New York Post. For example, “in May 2001, several months after Nanopierce retained Christian to launch one of the initial lawsuits against naked short-sellers – and after the publicity surrounding the legal battle goosed the stock price – he began unloading blocks of stock.” Christian is partnering with regular Overlawyered mentionee John O’Quinn on the naked-short-selling lawsuits, which have not fared well in court thus far. (Roddy Boyd, New York Post, Aug. 18).

Reporter Christopher Faille interviewed me for an August 23 article in the subscriber-only HedgeWorld. The article quotes me as saying that Mr. Christian

“seems to be preserving a possible line of argument that inducing a stock-price rise isn’t really part of his business plan, he just happens to own these stocks because the companies pay him in shares, he would have been happy to take cash payment instead, et cetera.”

That was precisely what Mr. Christian said in the interview Tuesday—that he took the stock instead of cash simply because Nanopierce didn’t have the cash necessary for him to do the original pre-litigation due diligence.

Older ethical rules — now often fallen into disuse — used to discourage or prohibit lawyers from taking stakes in enterprises they represented in litigation. As the HedgeWorld article quotes me as saying, “If what attorney Christian is doing is consistent with the ethical rules of the Texas bar, maybe it’s time to revisit those rules.”

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