The U.S. Court of Appeals for the Fifth Circuit revived legal malpractice claims by a Mississippi aerospace company that alleged missteps as outside counsel from a Big Law firm assisted two of its in-house attorneys with gender discrimination claims.

In a New Year's Eve ruling, the Fifth Circuit upheld the dismissal of many of L-3 Communications Vertex Aerospace's claims, but allowed others to proceed against Womble Carlyle Sandridge & Rice, its former partner Charles Edwards and L-3′s former deputy general counsel, Courtney Paine Snider.

The law firm, which has changed names to Womble Bond Dickinson, had 468 attorneys, 17 offices and $289.3 million in revenue in 2018, which landed it at No. 111 on the Am Law 200, according to Law.com.

The litigation started as a gender discrimination, harassment and retaliation lawsuit by Paine Snider against L-3, but morphed into a legal malpractice matter when the company discovered alleged conflicts of interest involving Paine Snider and Edwards, who died in 2015.

Womble represented L-3 from 2000 to 2009 and Edwards, a labor and employment attorney, had worked with Paine Snider on various employment-related legal matters. Edwards stopped doing legal work for the company in 2005.

Between 2005 and 2007, Paine Snider and Edwards exchanged emails about discrimination and related claims that she had against the company. He gave her legal advice about the statute of limitations in 2006.

Later in 2006, another L-3 in-house attorney who reported to Paine Snider submitted a complaint alleging gender discrimination. The company suspected that Paine Snider had given this employee legal advice about pursuing her grievance.

L-3 brought in outside law firms to investigate, and they reported in 2006 that Paine Snider "likely committed multiple sins of omission in her duty of loyalty," said the opinion.

Meanwhile, Paine Snider raised her complaint about gender discrimination and harassment, and asked for an internal investigation. The company eventually brought in a business and ethics consultant to help L-3's ethics officer.

Edwards helped Paine Snider in 2007 write a document to submit to the consultant about her complaints and to identify L-3 general counsel Steve Sinquefield as the prime offender. Edwards contacted the consultant in 2007 and asked for a meeting about resolving Paine Snider's issues.

"L-3 immediately called Edwards and his firm, asserting that they had a conflict of interest, and that Edwards could not represent Paine Snider. Edwards's contact with Paine Snider about her claims against L-3 largely came to an end after L-3's parent company's general counsel, Kathleen Karelis, confronted Edwards, and then expressed to Womble her dismay and concerns regarding Edwards's conduct," the opinion said.

In 2009, Paine Snider was terminated amid an economic downturn that caused L-3 to cut 26 positions.

She filed suit in November 2009 for discrimination, harassment and retaliation.

The district court dismissed Paine Snider's claims as a sanction for discovery abuses. The Fifth Circuit denied her appeal of the dismissal.

The trial court also granted summary judgment, denying all of L-3's claims because they were barred by the statute of limitations.

Among other things, L-3 argued in its appeal that it was wrong for the court to decide that limitations barred all of its claims, because there were disputes about how limitations might be tolled by the discovery rule, fraudulent concealment doctrine and continuing tort doctrine.

The Fifth Circuit ruled that evidence showed the company knew about Edwards and Paine Snider's conduct in 2007, but it failed to sue them until 2012, which fell outside of the statute of limitations.

In contrast, the Fifth Circuit revived claims regarding how Edwards, earlier, had helped the other in-house attorney, Janice Wolf, with her gender discrimination complaint against L-3. Wolf initially testified in a deposition that neither Edwards nor Paine Snider helped her with her claim. But then in 2011, in court pleadings L-3 uncovered documents in discovery that showed that Edwards asked a non-Womble lawyer to represent Wolf, explained L-3's policies, suggested how to draft a letter about Wolf's claims and discussed her evidence and draft complaints. The emails showed that it was Paine Snider who told Wolf she should talk with Edwards for help, according to court filings.

The appellate panel also reversed the trial court's dismissal of claims by L-3 regarding misappropriation of confidential client documents by Paine Snider. In a 2011 deposition of Sinquefield, Paine Snider's attorney pulled out a company legal update marked as confidential and attorney-client privileged because it talked about ongoing litigation. L-3 claimed Paine Snider gave that to her lawyer without permission.

Paine Snider's attorney, John Lassiter of Burr & Forman in Jackson, Mississippi, didn't return a message seeking comment before deadline. Neither did Maria Nan Alessandra of Phelps Dunbar in New Orleans, who represented L-3, nor Michael Ulmer of Watkins & Eager in Jackson, who represented Womble.

Read the opinion: