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Lawyer-Legislators: Can a client control their vote?:

Harry J. Joe, et ano. v. Two Thirty Nine Joint Venture, 145 S.W.3d 150 (TX. 2003)

Student Contributor: Max J. Starkie* 

Facts:  A client brought an action for malpractice and breach of fiduciary duty against his attorney and law firm after the attorney, a member of a local city council, voted in favor of a construction moratorium that was adverse to the client. The 14th Judicial District Court, Dallas County granted summary judgment for the attorney and law firm. The client appealed. The Dallas Court of Appeals reversed and remanded. Review by the Texas Supreme Court was granted. The Texas Supreme Court reversed and rendered judgment ruling that the client-appellant take nothing.

In 1992, an attorney and shareholder with the law firm of Jenkins & Gilchrist, P.C., who also served as a legislator on a city council, began his representation of Two Thirty Nine Joint Venture. He provided legal service for 239 JV’s formation, its acquisition, development, and sale of 239 acres of land in Irving, Texas.

The attorney-legislator voted in favor of an ordinance that adversely affected 239 JV. Specifically, he voted in favor an ordinance that would place a 120-day moratorium on apartment construction in Irving, Texas. The ordinance imposing the moratorium passed unanimously. As a result, the potential buyer of 239 JV’s acreage cancelled the contract with 239 JV. 239 JV claimed that the attorney-legislator’s vote as a council member quashed a land sale the group had in the works.  The attorney-legislator did not disclose information about the meeting to anyone at the law firm or 239 JV about the meeting, its agenda, or his position on the moratorium. The attorney-legislator later voted in favor of an extension of the moratorium on two more occasions.

In April, 1997, 239 JV filed a lawsuit against the attorney-legislator and his law firm of Jenkins & Gilchrist, P.C. The pleadings alleged that the attorney-legislator and his law firm owed 239 JV “a duty of ordinary care and a fiduciary duty and one of loyalty” and that the actions of the law firm and the attorney-legislator constituted a breach of those duties. 239 JV also alleged that the attorney and the law firm failed to disclose the conflict of interest created by the attorney’s involvement with the moratorium while the firm represented 239 JV in ongoing efforts to sell a tract of land for an apartment building and failure to disclose matters that were material to the firm’s representation of 239 JV.

Issue:  Whether the applicability of legislative and official immunity to legislators, who are also practicing attorneys and who encounter a conflict between their public and private professional responsibilities, shields lawyer-legislators from civil liability for activities within their legislative capacities?

Ruling:  When these obligations conflict, the Court held that legislative immunity shields lawyer-legislators from civil liability for activities within their legislative capacities. In other words, clients cannot sue lawyer-legislators for voting as legislators against clients’ interests.

Lesson: The decision allows numerous Texas attorneys to continue serving on public boards and in elected office without worrying about numerous possible conflicts posed by representing specific private clients as attorneys.

This decision is important because it spells out that lawyer-legislators are now free from having clients control how they vote, a proposal that would have made it nearly impossible for lawyers to serve in public office. Had the decision not been reversed, it could have been a disastrous outcome for lawyers who serve on public bodies.

A lawyer-legislator’s clients also have reasons to be troubled by the decision. If a client is going to hire an attorney-legislator, the client should be careful about what issues are coming up before his attorney because that attorney now has no obligation to inform the client of anything he’s learned in the course of his legislative duty. In other words, legislative immunity trumps the fiduciary duty a lawyer owes a client.

Max J. Starkie is a second year law student at Texas Tech University School of Law, and a candidate for his J.D. in May 2011. He was an advocate on the AAJ National Mock Trial Team for the Texas Tech University School of Law. He has served as a law clerk for the Honorable Judge Royal Hansen of the Third District Court in Salt Lake City, Utah. He served as a Police Officer in the State of Utah for approximately seven years prior to attending law school. Max received his B.S. in Criminal Justice from Utah Valley University.

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Posted in: Texas