Retailer Conn's Appliances Inc. has won a battle to have its former senior legal counsel barred from representing a plaintiff now suing the company on causes of action similar to those that the in-house attorney defended during her time there. Conn's bid to have the lawyer sanctioned for filing the lawsuit failed, however.

Judge Vanessa Gilmore of the U.S. District Court for the Southern District of Texas in Houston found that the Telephone Consumer Protection Act and Texas Debt Collection Act claims that Trista Johnson brought against Conn's in May on behalf of a client are “substantially related” to the work she did while serving as Conn's No. 2 in-house lawyer from December 2016 to February 2018. This relationship, the judge concluded, precludes Johnson's representation of her client under local, state and national professional conduct rules.

Johnson had unsuccessfully argued that she did not spend the bulk of her day-to-day work managing TCPA and TCDA claims but rather leaned heavily on outside counsel and in-house paralegals for mainly managing those cases. She also claimed that during her time at the Woodlands, Texas-based seller of furniture, mattresses, home appliances and consumer electronics, she attended only three arbitration hearings and one settlement conference and that any knowledge of the company's approach to litigating these claims was public information and thus not secret.

Gilmore also rejected Johnson's claim that the matters are not “substantially related” because her client is a new one and thus her claims are factually distinct from the cases Johnson handled on behalf of Conn's.

“There is no dispute that Johnson managed TDCA and TCPA claims for [Conn's] and that Johnson's current client has raised TDCA and TCPA claims,” the judge wrote. “The claims Johnson managed for [Conn's] involved the same factual allegations about [Conn's] use of an automatic telephone dialing system to repeatedly call consumers without their consent.”

She continued: “Anytime a lawyer represents a new client, there are factual differences because the client has a different identity and subjective viewpoint of the facts. The relevant [disciplinary] rules focus not on the identity of the client, but on the similarity between the subject matter of the current and former representations.”

Gilmore accepted Conn's argument that Johnson's knowledge of specific facts—related to Conn's use of the automatic telephone dialing system, arbitration strategy for defending TCPA claims, and her organization and participation in a corporate witness training system on Conn's telephony equipment—precluded her representation in the new case. But the judge found that Conn's provided no evidence of bad faith sufficient to warrant sanctions.

“Johnson put forth reasonable and compelling arguments for why she believed she could represent” her new client, Gilmore wrote.

In an emailed statement to Corporate Counsel that reflected her pleasure that the motion for sanctions was denied, Johnson, now a consumer protection solo practitioner in Conroe, Texas, said that “while my client and I knew this was a potential outcome, we are still disappointed in the Court's decision. I believed I was on solid footing given the applicable rules and case law analyzing other disqualification motions, and that Conn's motion misstated the facts and applicable standards.”

Conn's attorney, Michael Harvey of Munsch Hardt Kopf & Harr in Houston, said, ''We are pleased that the Court agreed that Ms. Johnson's actions violated the ethical principle of client loyalty and warranted the harsh and rare result of attorney disqualification.”