Bradley v. Phillips Petroleum Co.

• Decision Date: 18 December 2007
• Docket Number: Civil Action No. H-05-3912.
• Parties: Adrienne BRADLEY, et al., Plaintiffs, v. PHILLIPS PETROLEUM COMPANY d/b/a/ Phillips Chemical Company, et al., Defendants.
• Court: U.S. District Court — Southern District of Texas

527 F.Supp.2d 661

Adrienne BRADLEY, et al., Plaintiffs, v. PHILLIPS PETROLEUM COMPANY d/b/a/ Phillips Chemical Company, et al., Defendants.

Civil Action No. H-05-3912.

United States District Court, S.D. Texas, Houston Division.

December 18, 2007.

COPYRIGHT MATERIAL OMITTED

Grover G. Hankins, The Hankins Law Firm, John Orville Jones, Jones and Young, Melvin Houston, Attorney at Law, Houston, TX, for Plaintiff.

Edward J. Patterson, III, Fulbright and Jaworski, Jennifer Diane Sullivan, Fulbright & Jaworski LLP, George W. Billy Shepherd, III, Allison Standish Miller, Cruse Scott Henderson & Allen LLP, Houston, TX, Patrick M. Flynn, Attorney at Law, Houston, TX, Bruce Alan Fickman, Associate General Counsel, Pittsburgh, PA, Stuart M. Israel, Martens Ice et al., Royal Oak, MI, James Lloyd Mount, Jeffry Paul O'Dea, Burt Barr and O'Dea, Jennifer Diane O'Sullivan, Fulbright & Jaworski LLP, Houston, TX, for Defendants.

MEMORANDUM AND ORDER (JONES PLAINTIFFS)

NANCY F. ATLAS, District Judge.

This commercial and tort case is presently in a unique procedural posture, There currently are thirty-five Plaintiffs who include nine original plaintiffs and numerous intervenors. Plaintiffs have divided themselves into two camps, each seeking representation by different attorneys.¹ There are several motions pending before the Court that are relevant to one of these groups.

First is a Motion for Leave to File a Fourth Amended Petition ("Motion to Amend") [Doc. # 119], supplemented by a "Memorandum in Support" [Doc. # 127], filed by attorney Grover Hankins on behalf of Plaintiffs Adrienne Bradley, Wayland Jackson, Scottie Jones, Lawrence Neloms, Shirley D. Oliver, Edward O'Brien, Donald Phlegm, Emma Phlegm, Marie Rodriguez, and Mario Rodriguez, (collectively, the "Jones Plaintiffs").² Defendants Paper Allied-Industrial, Chemical arid Energy Workers International ("PACE International"), Local 4227 Paper Allied-Industrial, Chemical and Energy Workers International ("PACE Local"), Roby G. Plemons, David Taylor, Joseph Campbell, Melvin Byer, James Lefton, B.G. Martinez, and Maxwell Hickerson (collectively, the "Union Defendants") have responded [Doc. # 149]. Upon review of the Motion to Amend, the supporting attachments and Memorandum, and Defendants' Response, as well as all pertinent matters of record, and applicable law, the Court concludes that Jones Plaintiffs' Motion to Amend is denied.

In addition, all named Defendants³ collectively have filed a Motion to Dismiss the Jones Plaintiffs' Claims for Failure to Comply with Court Orders and Rules of Civil Procedure ("Motion to Dismiss") [Doc. # 124]. The Jones Plaintiffs have responded [Doc. # 152]. Although this motion to dismiss does not directly address the pending motion to amend, it does seek dismissal of all claims asserted by the Jones Plaintiffs, including those in their proposed "Second Amended Complaint" [Doc. # 112] and, should the pending motion to amend be granted, those in their proposed Fourth Amended Complaint [Doc. # 119-3]. The Motion to Dismiss is granted, consistent with the rulings herein and those in the Court's Memorandum and Order of Nov. 18, 2007 [Doc. # 168] (the "Curry Memorandum"), addressing the Curry Plaintiffs' Fourth Amended Complaint [Doe. # 116], discussed infra.

I. BACKGROUND

The factual record is set out in more detail in the Court's Memorandum and Order of March 22, 2007, 484 F.Supp.2d 604 ("March 2007 Order") [Doc. # 89]. Briefly, this controversy centers around Defendants' response to an industrial accident that occurred at Phillips Chemical Company's ("Phillips") Pasadena Plastics Complex "K-Resin" Unit on March 27 2000. The accident left one Phillips employee dead and many more injured. Within days of the event, the injured employees were called to a meeting and informed by representatives from Defendant Williams & Bailey Law Firm, LLP ("Williams & Bailey"), that Phillips' workers' compensation insurance covered the incident and Plaintiffs' injuries. The Jones Plaintiffs allege that Williams & Bailey representatives further stated that under Texas law, because Phillips had workers' compensation insurance, the employees could not bring personal injury lawsuits against the company.

In November 2005, nine Phillips employees and spouses of employees⁴ brought suit against the Phillips Defendants, Pacific Employers Insurance Company ("Pacific") (Phillips' workers' compensation carrier), Williams & Bailey, and the employees' Union (PACE International and PACE Local) and Union officials, alleging that these defendants conspired to intentionally misrepresent the state of Phillips' workers' compensation insurance. Specifically, these plaintiffs alleged that Phillips used an internal employee benefit plan to pay some employees' claims in order to create the appearance of workers' compensation so that employees would not file individual personal injury lawsuits. Plaintiffs asserted numerous state and federal law claims arising from these events.⁵

Especially relevant to the Motion to Amend are complicated procedural events that have occurred throughout this litigation: Attorneys Grover G. Hankins and Melvin Houston, as joint counsel, commenced this suit in November 2005.⁶ On April 3, 2006, the two attorneys filed an amended complaint on behalf of the nine original plaintiffs, and eleven new plaintiffs.⁷ Soon thereafter, evidence of a dispute between the two attorneys and allegedly among the plaintiffs emerged.

On April 6, 2006, Mr. Hankins filed a Designation of Lead Counsel, asserting that the nine original plaintiffs had designated him their "Attorney-in-Charge" and expected him to "have full control and management in this cause and to receive all communications from the. Court or other counsel relating to the case."⁸

Over the next few months, the parties conducted discovery. Three of the four groups of defendants—the Phillips Defendants, Pacific, and Williams & Bailey— timely filed individual motions for partial summary judgment on the question of Phillips' workers' compensation subscriber status [Does. # 36, # 37, and # 41]. Mr. Hankins and Mr. Houston jointly filed various responses on behalf of all twenty plaintiffs [Does. # 49, # 51, # 52, # 58, and # 59].

On September 19, 2006, while the summary judgment motions were sub judice, Mr. Hankins filed a "Motion to Remove Melvin Houston [and a co-counsel] as Attorneys of Record for the Original Plaintiffs" ("Motion to Remove") [Doc. # 65].⁹ According to Mr. Hankins, he and Mr. Houston "had inherent directional and supervisory conflicts that have gone unresolved and because of Attorney Houston's steely resolve, said conflicts have the potential of threatening the successful litigation of this cause."¹⁰ Specifically, Mr. Hankins complained that Mr. Houston added clients to the case without his or the original plaintiffs' consent,¹¹ and that Mr. Houston expressed his intent to represent a group of intervenors "over whom Lead Counsel Hankins would have no direction and/or control."¹² Mr. Houston responded that Mr. Hankins lacked proper consent from each of the named plaintiffs to dismiss Mr. Houston or his firm.¹³ The Court declined to rule on matters of an attorney-client nature and accordingly denied the Motion to Remove.¹⁴

While the Motion to Remove was pending, the rift between Mr. Hankins and Mr. Houston—and perhaps among their respective clients—became more pronounced. On October 4, 2006, Mr. Hankins filed a Motion [for Leave] to Amend [Doc. # 73] seeking to file a Second Amended Complaint [Doc. # 73-2] on behalf of fourteen plaintiffs. Mr. Hankins asserted that he had "filed several motions seeking to change counsel, and for additional time to allow Plaintiffs to provided [sic] the Court with information not previously presented by former co-counsel for the Plaintiffs."¹⁵ A review of Mr. Hankins' proposed Second Amended Complaint [Doc. # 73-2] revealed that this expanded group of plaintiffs was seeking to add two entirely new claims, both against new defendants. Specifically, Mr. Hankins' clients sought to raise a claim that Defendants violated the Employee Retirement Income Security Act ("ERISA") and a claim that Phillips and some previously unidentified foreign subsidiaries provided an unsafe workplace at the K-Resin facility in violation of unspecified OSHA standards. The proposed Second Amended Complaint also included expanded theories regarding the alleged invalidity of Phillips' putative workers' compensation insurance policy.¹⁶ In denying Mr. Hankins' motion for leave to amend, the Court noted that his clients were seeking to amend their claims and assert entirely new theories six months after a pleading amendment deadline set months earlier.¹⁷ The Court questioned why the putative new claims and theories had not previously been asserted, given that the events precipitating this lawsuit occurred in March 2000.¹⁸ In addition, the Court held that Mr. Hankins' clients had failed to demonstrate that an extension of time to amend their pleadings was warranted.¹⁹ Finally, the Court determined that, "Defendants should not be required to repeat their efforts in order to respond to adjustments to Plaintiffs' theories that were available but not asserted prior to the deadline for amended pleading or during discovery."²⁰

On March 22, 2007, the Court granted Defendants' motions for partial summary judgment and ordered Plaintiffs to file, by April 22, 2007, a "Third Amended Complaint" in accordance with the Court's legal ruling that Phillips was a valid workers' compensation insurance subscriber and that Plaintiffs were covered by Phillips' policy.²¹ The Court emphasized that "Plaintiffs are not permitted to add new claims," and admonished that Plaintiffs must comply with Federal Rule of Civil Procedure 11(b)(2) and assert only claims that were warranted in light of the Court's decision.²²

On April 2, 2007, Mr. Houston filed a Motion to Certify the Order (that granted partial summary...