The United States Law Week

Schiff Hardin Wins Attorney Immunity in Representation Spat

Jan. 3, 2019, 8:19 PM

Texas’s attorney immunity doctrine protects Schiff Hardin LLP from having to defend claims of negligent misrepresentation brought by Ironshore Europe DAC, the U.S. Court of Appeals for the Fifth Circuit said Jan 2.

That’s because Schiff Hardin was representing Dorel Juvenile Group Inc., but not Ironshore, in the underlying car seat failure-to-warn and marketing defect case, the court said. Ironshore was a third party to the litigation, having issued Dorel an excess insurance policy that was touched by the adverse jury verdict.

Ironshore argued that Schiff Hardin’s progress updates made it believe its policy wouldn’t be impacted by the suit. Had Ironshore known about particular material developments in the case, it said it would have settled with the lawsuit’s other plaintiffs for a lower amount to protect its policy.

The Texas Supreme Court hasn’t yet ruled directly on whether the state’s attorney immunity doctrine applies to negligent misrepresentation cases like the one Ironshore brought against Schiff Hardin, the Fifth Circuit said.

So the Fifth Circuit made an educated guess that the Texas Supreme Court likely would so extend the doctrine, and moved on to conclude that Schiff Hardin met the doctrine’s requirements.

“All of the alleged misrepresentations and omissions were related to Schiff Hardin’s representation of Dorel” in the car seat case, the court said.

“Schiff Hardin’s first duty was to its client, Dorel, and it was up to Ironshore to retain its own counsel if it was dissatisfied with the comprehensiveness of the information it was receiving from its insured’s attorneys,” the Fifth Circuit said.

The Fifth Circuit therefore reversed the U.S. District Court for the Eastern District of Texas’s denial of the attorney immunity defense and rendered judgment in Schiff Hardin’s favor.

The case is Ironshore Europe DAC v. Schiff Hardin LLP, 5th Cir., No. 18-40101, 1/3/19.

To contact the reporter on this story: Porter Wells in Washington at pwells@bloomberglaw.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com

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