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Texas Court Rejects Claim That Association’s Lawyer Represents Members

In a decision involving the Texas Automobile Dealers Association, a state appeals court rejected an argument that the association's general counsel had an attorney-client relationship with a member embroiled in a lawsuit.

An appeals court decision in Texas addresses some important questions about the relationship between an association general counsel and the organization’s members.

The case arose when a member of the Texas Automobile Dealers Association was sued after the proposed sale of the Nissan dealership went sour last year. During discovery in the lawsuit, the lawyer for Baytown Nissan had a phone discussion about the conflict with TADA General Counsel Brenda Karen Phillips. The plaintiff in the case—the spurned potential buyer—sought to depose both lawyers about the substance of their conversation.

We … decline to adopt a blanket rule of privilege between a trade association’s members and the association’s counsel.

Baytown Nissan asked the trial court to stop the depositions, arguing that the phone call was privileged. It said Baytown had an implied attorney-client relationship with Phillips because, in her role as TADA general counsel, she provides legal services to members.

The trial court rejected that argument and allowed the depositions. Baytown appealed, asking the court not to admit the testimony in evidence in the case. The Texas First Court of Appeals issued, essentially, a split decision: Justice Jane Bland wrote for the court that while the so-called work-product doctrine protected the dealer’s attorney, J. Cary Gray, from being compelled to testify, TADA’s Phillips was not shielded because there was no attorney-client relationship between her and the dealership.

Bland cited a 2003 federal district court decision [PDF], also involving TADA, that rejected an implied attorney-client relationship between association counsel and a member.

“We similarly decline to adopt a blanket rule of privilege between a trade association’s members and the association’s counsel,” Bland wrote in her opinion. “Consistent with our precedent, we instead examine the objective evidence in the record supporting an attorney-client relationship between the association’s counsel and this particular member. The record cannot support an implied relationship here.”

As Bloomberg BNA notes, there was no evidence that Phillips was under any sort of agreement with Gray or the Nissan dealership. Phillips claimed that she only provided general information, not legal advice, to Gray.

“Although Gray provided statements regarding his belief that the conversation was subject to attorney-client privilege and would be kept confidential, such unstated subjective beliefs do not give rise to an attorney-client relationship by implication,” Bland wrote.

Although Phillips’ deposition about the call could be admitted in the case, Gray’s could not, under the work-product doctrine, because he initiated the conversation in anticipation of a lawsuit, the judge added.

(iStock/Thinkstock)

Ernie Smith

By Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. MORE

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