## Facts

- Nitla S.A. de C.V., a Mexican pharmaceutical company, sued Bank of America, N.A. alleging misappropriation of more than $24 million on deposit.
- In discovery, Nitla requested documents that Bank of America withheld as attorney-client privileged and work product.
- After in camera review, the trial court ordered production of numerous documents and, while the documents were under the court’s control, handed them directly to Nitla’s counsel for review.
- Bank of America sought a stay to pursue mandamus relief but did not obtain appellate relief before Nitla’s counsel reviewed the documents pursuant to the production order.
- In a mandamus proceeding, the court of appeals ultimately held that most of the documents were privileged and then directed the trial court to disqualify Nitla’s counsel.
- On Bank of America’s disqualification motion, the trial court denied disqualification, finding no competent evidence that Nitla’s counsel developed trial strategy from the privileged materials and that less severe measures could prevent any unfair use.
- Nitla sought mandamus relief in the Texas Supreme Court to vacate the court of appeals’ disqualification order.

## Issues

1. Whether the trial court abused its discretion by refusing to disqualify counsel who reviewed documents later held privileged when counsel reviewed them under a trial court production order.
2. Whether the court of appeals misapplied disqualification law and exceeded mandamus review by ordering disqualification absent a concrete showing of prejudice or unfair advantage.

## Decision

- The Texas Supreme Court conditionally granted mandamus relief.
- The Court held the court of appeals misapplied the law and therefore abused its discretion in ordering disqualification.
- The Court directed the court of appeals to vacate its order requiring disqualification of Nitla’s counsel.
- The trial court’s refusal to disqualify counsel remained in effect.

## Legal Principles

- Attorney disqualification is a severe remedy that should be ordered only when necessary to protect the integrity of the judicial process and after considering less drastic alternatives.
- Counsel’s review of materials later determined privileged does not create an automatic basis for disqualification, particularly when the review occurred in reliance on a facially valid trial court order.
- Disqualification requires more than speculation; a party must show a concrete risk of actual prejudice or unfair advantage that cannot be addressed through lesser measures.
- In mandamus, an appellate court must apply a deferential abuse-of-discretion standard to trial-court disqualification rulings and may not substitute its judgment for the trial court’s fact-based determinations.

## Conclusion

The Texas Supreme Court rejected a near-automatic disqualification rule based solely on counsel’s exposure to privileged materials and held that, where counsel reviewed documents pursuant to a trial court order and the record lacked competent evidence of prejudice, mandamus relief compelling disqualification was improper.


In re Nitla S.A. de C.V., 92 S.W.3d 419 (Tex. 2002)