## Facts

- Dresser Industries, Inc. became a defendant in a consolidated antitrust class action in federal court alleging price-fixing and fraudulent concealment in the oil-well drill bits market.
- The plaintiffs’ lead counsel, Susman Godfrey (including partner Stephen D. Susman), signed and prosecuted the complaint against Dresser.
- At the same time, Susman Godfrey was representing Dresser in two ongoing matters: an antitrust/tortious interference case (CPS) and an asbestos-related case (Cullen Center).
- Through its ongoing defense work for Dresser, the firm had extensive access to Dresser’s internal information and privileged communications, including matters relevant to corporate operations and antitrust strategy.
- The firm notified Dresser that it was serving as plaintiffs’ lead counsel in the drill-bits class action and offered to transition Dresser’s other matters to new counsel; Dresser did not immediately substitute counsel.
- Dresser moved in the district court to disqualify Susman Godfrey from representing the plaintiffs; the district court denied the motion, relying heavily on Texas disciplinary rules and a lack of “substantial relationship” between the matters.
- Dresser petitioned the Fifth Circuit for a writ of mandamus directing disqualification.

## Issues

1. Whether a federal court should disqualify a law firm that concurrently represents a client in ongoing matters while suing that same client in unrelated litigation without valid informed consent.
2. Whether the district court abused its discretion by treating state disciplinary rules as controlling and by applying a former-client “substantial relationship” framework to a concurrent-client conflict.
3. Whether mandamus is an appropriate remedy to correct the district court’s refusal to disqualify counsel in these circumstances.

## Decision

- The Fifth Circuit granted the petition for a writ of mandamus.
- The court held that a law firm may not sue its own current client while concurrently representing that client in other matters, particularly absent adequate informed consent.
- The court concluded the district court abused its discretion in denying disqualification.
- The court directed the district court to disqualify Susman Godfrey as plaintiffs’ counsel in the antitrust class action against Dresser.

## Legal Principles

- Federal courts apply a federal law of attorney conduct grounded in national ethical standards; state disciplinary rules may guide but do not control federal disqualification decisions.
- Concurrent-client conflicts are governed primarily by the duty of loyalty; direct adversity to a current client is generally impermissible without informed consent and a reasonable basis to believe the representation will not be adversely affected.
- The “substantial relationship” test is principally associated with former-client conflicts and does not resolve a situation where counsel is simultaneously adverse to a current client.
- Disqualification may be warranted even without proof of actual misuse of confidences because the loyalty breach and risk to the attorney-client relationship are themselves incompatible with concurrent adversity.
- Mandamus may issue to correct a clear abuse of discretion in managing attorney conflicts when the conflict is plain and the integrity of the proceedings is threatened.

## Conclusion

The Fifth Circuit ordered disqualification by mandamus because Susman Godfrey simultaneously represented Dresser in ongoing matters while suing Dresser in a major antitrust class action, a direct concurrent-client conflict that violated the duty of loyalty under federal ethical standards and could not be justified by treating state rules or a former-client framework as dispositive.


In re Dresser Indus., Inc., 972 F.2d 540 (5th Cir. 1992)