631 S.W.3d 65
Tex.2021Background
- TEFKAB (owner of the Bernardo shoe brand) had five design patents and previously sued for infringement but later concluded the patents were unenforceable and sued its patent lawyers in Maryland.
- TEFKAB hired attorney Arthur Howard (Haynes and Boone) to remove its manager and later to handle sale of the Bernardo assets; Howard prepared a Confidential Business Profile representing the patents as valuable and valid without disclosing the Maryland malpractice suit.
- NFTD (buyers) purchased the Bernardo assets in 2011 and later discovered the patents were invalid; NFTD asserted claims against TEFKAB and added third-party claims against Howard and his firm for negligence, fraud, negligent misrepresentation, and breach of fiduciary duty.
- The trial court severed TEFKAB’s malpractice claims and granted summary judgment for Howard and the firm based on the attorney-immunity defense; the court of appeals reversed, holding immunity does not extend beyond litigation.
- The Texas Supreme Court granted review to decide whether attorney immunity applies to non‑litigation (transactional) conduct and whether the conduct at issue is the “kind” of attorney conduct immunity protects.
- The Supreme Court held attorney immunity applies in all adversarial contexts (including business transactions) when the claim is based on the “kind” of legal services that invoke the attorney’s unique office, training, skill, and authority, and remanded for the court of appeals to decide whether the summary-judgment evidence shows Howard’s conduct qualifies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does attorney immunity apply to attorney conduct outside litigation? | NFTD: No; immunity limited to litigation contexts. | Howard: Yes; immunity covers adversarial contexts beyond litigation. | Held: Immunity applies in all adversarial contexts where attorney must zealously represent a client. |
| Must the protected conduct be the “kind” of legal services tied to unique lawyerly functions? | NFTD: Some alleged acts (broker role, solicitation, business advice) are non‑lawyerly and foreign to representation. | Howard: All challenged acts arose from representing TEFKAB and are lawyerly. | Held: Immunity protects only conduct that is the kind involving an attorney’s office, professional training, skill, and authority; factual inquiry remanded. |
| Does federal patent jurisdiction (28 U.S.C. §1338) deprive state courts of jurisdiction? | NFTD/Howard: Patent validity is disputed and necessary to claims; might implicate federal jurisdiction. | Both sides varied; court evaluated Gunn. | Held: No exclusive federal jurisdiction here—issue not sufficiently "substantial" under Gunn; Texas courts have jurisdiction. |
Key Cases Cited
- Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477 (Tex. 2015) (adopted ‘‘kind of conduct’’ standard for attorney immunity)
- Youngkin v. Hines, 546 S.W.3d 675 (Tex. 2018) (reaffirmed focus on whether conduct is within scope of representation)
- Bethel v. Quilling, Selander, Lownds, Winslett & Moser, P.C., 595 S.W.3d 651 (Tex. 2020) (declined a categorical exception for criminal conduct in litigation context)
- Barcelo v. Elliott, 923 S.W.2d 575 (Tex. 1996) (privity-based rule to protect client control and attorney loyalty)
- McCamish, Martin, Brown & Loeffler v. F.E. Appling Ints., 991 S.W.2d 787 (Tex. 1999) (permitted negligent‑misrepresentation claims by nonclients in certain transactional contexts)
- Gunn v. Minton, 568 U.S. 251 (2013) (federal‑question jurisdiction test for state-law claims implicating patent issues)
- Savings Bank v. Ward, 100 U.S. 195 (1879) (early U.S. precedent limiting attorney liability absent privity)