TX: Underlying class action suit
Facts: The case arises from a class action suit that was filed by attorney’s on behalf of all chiropractors in Texas against various insurance companies who refused or delayed payment of the doctors’ bills for services to patients. The class was never certified and during the period between the filing and dismissal of the class action, settlements were entered and approved for some of the named clients. The other named clients, who were left out of the settlements, sued their attorney’s for fraud and breach of fiduciary duty a settlement was reached. The unnamed clients intervened in that case asserting similar claims and a separate trial was ordered. Both the clients and attorneys filed for summary judgment. The court granted summary judgment for attorneys and clients appealed.
Issue: Whether there is an implied attorney client relationship upon filing a class action suit will all potential class members?
A lawyer’s professional duty generally does not extend to persons whom the lawyer never represented, even where the lawyer’s work was intended to benefit them. A class action may be maintained only by order of the trial court. See Tex.R. Civ. P. 42(c)(1). Until a trial court determines that all prerequisites to certification are fulfilled, there is no class action, the case proceeds as an ordinary lawsuit, and attorneys for named class members have no authority to represent or act on behalf of the unnamed class members. Under these circumstances the named class member’s attorneys owe no duty to any unnamed class members.
Lesson: There is no attorney client relationship or fiduciary duty owed to all potential class members once a class action suit it filed.
Posted in: Texas