AUSTIN, Texas (Legal Newsline) - Having convinced a federal court to dismiss a class action by thousands of disgruntled former clients because the cases were different, Texas attorney George Fleming can’t now argue the cases should be dismissed because he won a favorable verdict in one of them.
Citing the doctrine of judicial estoppel, the Texas Supreme Court snuffed out Fleming’s attempt to end litigation over how he handled lawsuits stemming from the fen-phen diet drug crisis in the late 1990s. Fleming is accused of pocketing $20 million of a $339 million settlement to cover his own costs of screening more than 40,000 potential claimants to identify those with the best cases.
Some 4,000 plaintiffs sued Fleming after learning of the diversion. They attempted to form a class action but Fleming successfully argued before a federal court that the cases lacked a common body of facts and law. The court then dismissed the class action because it lacked jurisdiction.
Fleming made the same argument after losing a bellwether trial in Texas court. The plaintiffs argued that verdict should apply to the rest of their cases but Fleming convinced the court that “nothing has changed” since his victory in federal court and individualized issues predominated.
Several years later, Fleming won a jury trial and sought to dismiss the rest of the cases against him, now arguing common issues predominated in the 4,000 lawsuits still pending. A trial judge granted summary judgment but an appeals court reversed. The Supreme Court of Texas upheld that judgment in a May 17 opinion by Justice Evan A. Young, albeit on different grounds.
Fleming was sued after he subtracted his screening costs from the money successful plaintiffs won suing over fen-phen, the Supreme Court observed.
“In other words, he charged his clients not just for their own medical-screening costs but also for those of approximately 32,000 people who never became his clients and who did not participate in the underlying case,” the court said.
In opposing class certification in federal court, Fleming argued “that common questions would not predominate” because of “the substantial choice of law questions that need to be resolved” for each plaintiff. After winning a case, however, Fleming switched his legal argument to claim the essential legal questions had been answered and should be applied to the remaining cases against him.
The Texas Supreme Court said it’s permissible to accept the reasoning a lower-court ruling in subsequent proceedings not to perform a wholesale flip-flop like Fleming did. Judicial estoppel allows a court to refuse to accept the new argument.
“Its essential function is to prevent the use of intentional self-contradiction as a means of obtaining unfair advantage,” the court said. “It is neither a punishment nor unfair to hold a party to its prior position when the first court adopted that position and, because of that adoption, the party obtained the result it sought.”