Ironshore Europe DAC v. Schiff Hardin, L.L.P.
912 F.3d 759
5th Cir.2019Background
- Dorel retained Schiff Hardin to defend a products-liability suit (Hinson) after a child was injured; Ironshore insured Dorel for excess coverage ($6M–$25M).
- Schiff Hardin communicated litigation updates, settlement and valuation opinions, and trial developments to Ironshore (which was not then separately represented).
- After an adverse jury verdict and post-trial settlement that exhausted Ironshore’s policy, Ironshore sued Schiff Hardin for negligent misrepresentation under Restatement (Second) of Torts § 552.
- Schiff Hardin moved to dismiss under Fed. R. Civ. P. 12(b)(6), asserting Texas attorney-immunity from suits by non-clients for conduct within the scope of client representation.
- The district court denied dismissal as to omissions about settlement offers; Schiff Hardin appealed the immunity ruling.
- The Fifth Circuit made an Erie guess, concluded Texas attorney immunity extends to negligent misrepresentation claims, and found the alleged communications were within the scope of Schiff Hardin’s representation of Dorel.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Texas attorney-immunity bars negligent-misrepresentation claims by a non-client | McCamish allows negligent-misrepresentation claims against attorneys; Cantey Hanger footnote did not eliminate such claims | Attorney immunity protects lawyers from civil liability to non-clients for conduct in representing a client, including negligent misstatements | Immunity covers negligent-misrepresentation claims; the Texas Supreme Court would extend immunity to such claims |
| Whether Schiff Hardin’s alleged misrepresentations/omissions were within scope of representation | Allegations assert communications were separate from and not necessary to defense of Dorel | Communications (status reports, settlement valuations, trial updates, pre-trial rulings/offers) are routine aspects of representing a client and thus immune | The kinds of communications alleged fall within ordinary duties to the client; immunity applies and dismissal is warranted |
Key Cases Cited
- McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests, 991 S.W.2d 787 (Tex. 1999) (recognized attorneys may face negligent-misrepresentation claims to non-clients under § 552)
- Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477 (Tex. 2015) (articulated modern Texas attorney-immunity rule: immunity for conduct in representing clients unless conduct is foreign to attorney duties)
- Youngkin v. Hines, 546 S.W.3d 675 (Tex. 2018) (reaffirmed Cantey Hanger framework; focus on kind of conduct and existence of attorney-client relationship)
- Troice v. Proskauer Rose, L.L.P., 816 F.3d 341 (5th Cir. 2016) (discussed appealability and review of district orders denying attorney-immunity defenses)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard controlling Rule 12(b)(6) review)