Four women with injuries from transvaginal mesh medical devices alleged in a legal-malpractice lawsuit that their attorneys and law firms botched their cases by missing the statute of limitations, and then kept the mistake secret and lumped them into aggregate settlements.
But in a twist, one of the law firm defendants has sued the plaintiffs’ attorneys, alleging they stole trade-secret client lists, improperly solicited the pelvic mesh clients and publicly revealed confidential settlements in violation of court orders.
While the first legal-malpractice lawsuit was filed in the U.S. District Court for the Southern District of Texas, the second trade-secrets case was filed in Wharton County District Court. Now they’re in the same venue because on Wednesday, the second lawsuit was removed to federal court.
In the first case, Alvarado v. Clark, Love & Hutson, four women from California, Georgia and Indiana alleged breach of fiduciary duty and fraud by nondisclosure by Houston attorneys Clayton Clark, Scott Love, Shelley Hutson and their firm Clark, Love & Hutson, and lawyers James Lee Jr. and Erin Murphy and their firm, Lee & Murphy Law Firm.
The defendants were handling 26,000 transvaginal mesh cases, and the complaint alleged they missed the statute-of-limitations window for hundreds or possibly thousands of cases, according to the suit. Rather than telling the clients about the problem, they lumped the cases into aggregate settlements totaling nearly a billion dollars, it alleged. The defendants never told the women their claims were time-barred, plaintiffs claimed.
The complaint alleged that Clark Love served short-form complaints to pelvic-mesh manufacturers for thousands of cases but later missed the court-ordered deadline to file them in the multi-district litigation. Instead, the firm filed lawsuits listing up to 90 plaintiffs in state courts and then manufacturer-defendants removed them to federal court and transferred them to multi-district litigation dockets, where they waited an extended time. Clark Love used the delay to negotiate settlements for their clients, including the time-barred claims, alleged the complaint.
In the end, the law firms settled 15,000 to 20,000 cases with four pelvic mesh manufacturers in aggregate settlements worth a total of $750 million to $1 billion and didn’t inform their clients or the court that time-barred claims were in the bunch, said the complaint. It alleged that the defendants received between $250 million to $330 million in attorney fees from the bulk settlements.
The four women who are suing the lawyers and firms alleged they kept only $11,000 to $69,000 once they had paid costs and attorney fees out of their settlements. If their claims were not time-barred, they could have proceeded to trial, where plaintiffs have been recovering an average of $20.9 million, they claimed.
Dale Jefferson, partner in Martin, Disiere, Jefferson & Wisdom in Houston, who represents Clark Love and its three attorneys, said the defendants deny the allegations.
“One of the complaints is the allegation that somehow or another a bunch of our clients had blown statutes of limitations, which completely ignores the fact that we’ve had private tolling of limits with the mesh manufacturing defendants,” Jefferson said. “These settlements were fair and reasonable.”
Don Jackson, partner in Ware, Jackson, Lee, O’Neill, Smith & Barrow in Houston, who represents Lee & Murphy and its two attorneys, didn’t immediately return a call or email seeking comment.
About two weeks after the women sued the defendants in the first case, Clark Love filed a new lawsuit against the Alvarado plaintiffs’ attorneys, Jim Beggs, Lynda Landers and their firm, Beggs Landers Law Firm.
The July 1 original petition in Clark, Love & Hutson v. Beggs alleged that the defendants used Clark Love’s confidential trade secret client lists to solicit clients to sue Clark Love. To get the clients to sue, Beggs Landers used wrongful, unlawful and prohibited client advertising and solicitations, and it constitutes tortious interference with Clark love’s contracts and business relationships. The firm also alleges violations of the Texas Uniform Trade Secrets Act and civil conspiracy.
The petition alleged that the improper advertisements were sent to clients through the mail, and they violate attorney disciplinary rules by failing to label it as an advertisement, disclose the lawyer responsible for the ad, tell where the firm is located, and more.
Some Clark Love clients who received the ads were never identified in public filings, and Beggs Landers couldn’t have known who they are or how to contact them unless they had Clark Love’s client lists, alleged the petition. The lawsuit claimed the defendants somehow got the lists by improper means.
On July 1, Wharton County’s 23rd District Court granted Clark Love a temporary restraining order requiring Beggs Landers to stop soliciting employment and sending advertisements to Clark Love clients. The court also restrained Beggs Landers from disclosing or using Clark Love’s trade secrets for any purpose or acquiring new trade secret information.
On Wednesday, Beggs Landers and its attorneys removed the lawsuit to the U.S. District Court for the Southern District of Texas.
“Instead of placing their focus on defending the allegations set forth in Alvarado, plaintiffs filed suit in Wharton County against the attorneys of the [transvaginal mesh] clients, where neither defendants or plaintiffs reside, and immediately obtained a temporary restraining order which prevents defendants from advertising for [transvaginal mesh] clients in violation of the First Amendment,” the notice of removal alleged.
Beggs and Landers both said in an interview that they deny the allegations that they obtained Clark Love’s client lists and improperly solicited and advertised to clients.
“All of those things in the pleadings are supported by public record,” Landers said. “It’s either from our clients, or public record. … We don’t have any kind of list.”