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Troice v. Greenberg Traurig, L.L.P.

United States Court of Appeals, Fifth Circuit

April 17, 2019

SAMUEL TROICE, Individually and on behalf of a class of all others similarly situated; MICHOACAN TRUST, Individually and on behalf of a class of all others similarly situated; PAM REED, Putative Class Representative, Plaintiffs - Appellants
v.
GREENBERG TRAURIG, L.L.P.; YOLANDA SUAREZ, Defendants - Appellees

          Appeal from the United States District Court for the Northern District of Texas USDC No. 3:12-CV-4641

          Before JONES, CLEMENT, and SOUTHWICK, Circuit Judges.

          LESLIE H. SOUTHWICK, CIRCUIT JUDGE:

         Under Texas law, an attorney is immune from civil suits brought by a non-client when the conduct at issue occurred within the scope of the attorney's representation of a client. This appeal concerns three purported exceptions to that doctrine. The district court held that none of them exists. We AFFIRM.

         FACTUAL AND PROCEDURAL BACKGROUND

         This appeal has its roots in the R. Allen Stanford Ponzi Scheme that has already been the subject of much litigation. See Janvey v. Democratic Senatorial Campaign Comm., Inc., 712 F.3d 185, 188-89 (5th Cir. 2013) (detailing the Ponzi scheme and the civil and criminal actions it spawned). The scheme was centered around the sale of certificates of deposit ("CDs") through Stanford International Bank, Ltd. and related entities. See id. at 188. The basic workings of the fraud were to take the funds raised from the CD sales and reissue them to purchasers as if they were returns from investments. See id. The scheme eventually collapsed, and the Government and others brought criminal prosecutions and civil suits against Stanford and others. See id. at 188-89. The only aspect of the scheme before us is the purported involvement of an attorney then practicing at Greenberg Traurig ("Greenberg").

         The receiver for the Stanford Receivership Estate, the Official Stanford Investors Committee, and three defrauded investors sued Greenberg under a respondeat superior theory. They alleged a Greenberg attorney conspired with Stanford to further the fraud. The investor plaintiffs ("plaintiffs" hereafter) also sought class certification. Greenberg moved to dismiss the claims for lack of subject matter jurisdiction, or in the alternative, for a judgment on the pleadings. The district court granted judgment on the pleadings and denied the motion for class certification as moot. The plaintiffs appealed. They have also moved that we certify to the Supreme Court of Texas the state law questions on which this case turns.

         DISCUSSION

         We review the grant of a judgment on the pleadings de novo, utilizing "the same standard as a motion to dismiss under Rule 12(b)(6)." Doe v. MySpace, Inc., 528 F.3d 413, 418 (5th Cir. 2008). That is, confined to the pleadings and accepting the allegations as true, we ask if "the complaint states a valid claim for relief." Hughes v. Tobacco Inst., Inc., 278 F.3d 417, 420 (5th Cir. 2001) (quoting St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 440 n.8 (5th Cir. 2000)). We will uphold the grant of judgment on the pleadings "only if there are no disputed issues of fact and only questions of law remain." Id. Only questions of law remain here.

         Greenberg's winning argument in the district court was that attorney immunity under Texas law precluded the plaintiffs' claims. The plaintiffs countered that multiple exceptions to the general rule exist and permit Greenberg's liability. The district court disagreed. The issues here are primarily about Texas law. We first discuss why we will not certify and then move to our analysis of Texas law.

         I. Certification of issues to the Supreme Court of Texas

         The Supreme Court of Texas has the discretion to accept certification of "determinative questions of Texas law having no controlling Supreme Court precedent." Tex.R.App.P. 58.1. In deciding whether to certify issues, we consider whether there are "sufficient sources of state law" to allow us to make "a principled rather than conjectural conclusion"; "the degree to which considerations of comity [such as the likelihood of the issue's recurrence] are relevant"; and "practical limitations of the certification process" such as "significant delay and possible inability to frame the issue so as to produce a helpful response" from the relevant state appellate court. Florida. ex rel. Shevin v. Exxon Corp., 526 F.2d 266, 275 (5th Cir. 1976). Certification, though, "is not a panacea for resolution of those complex or difficult state law questions which have not been answered by the highest court of the state.'" Transcontinental Gas Pipeline Corp. v. Trans. Ins. Co., 958 F.2d 622, 623 (5th Cir. 1992).

         The Texas Supreme Court has not directly answered the issues that confront us, and "this case involves an area of Texas law that appears to be somewhat in flux." Kelly v. Nichamoff, 868 F.3d 371, 377 (5th Cir. 2017). Nonetheless, the substantial treatment of the issues by the Texas courts of appeals and the "cogent and sound arguments" presented by counsel give sufficient guidance about what the Supreme Court of Texas would hold. Compass Bank v. King, Griffin & Adamson P.C., 388 F.3d 504, 505 (5th Cir. 2004). Accordingly, we DENY the motion for certification.

         II. Attorney immunity from liability to ...


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