## Facts

- A client retained an attorney and his firm to sue a company; during the litigation, a firm associate became the client’s main contact.
- The attorney and his partner later dissolved their partnership; the associate joined the former partner’s new firm, and the client chose the new firm for continued representation.
- The matter settled at mediation; the settlement agreement included strict confidentiality terms barring disclosure of settlement-related information.
- On the day the settlement was signed, the associate informed the former attorney that the case had settled and that the company required strict confidentiality.
- About five months later, the former attorney caused publication of a press release without the client’s consent that identified the client, referenced the lawsuit, stated the case had settled, and disclosed settlement-related details and the client’s views.
- The company sued, alleging the press release breached the settlement confidentiality clause; the client filed a cross-claim against the former attorney and firm for breach of fiduciary duty.
- The fiduciary-duty cross-claim was tried to the court in a bench trial.

## Issues

1. Whether a former attorney owed a continuing fiduciary duty of confidentiality covering non-public settlement information obtained through the prior representation.
2. Whether issuing a press release disclosing settlement-related information without client consent breached that fiduciary duty.
3. Whether the client proved damages proximately caused by the alleged breach as required under Texas law.
4. Whether Texas confidentiality rules permit disclosure of client-related information on the theory that it is “public” or “generally known.”

## Decision

- The court concluded the former attorney owed continuing fiduciary confidentiality obligations to the former client concerning information relating to the representation, including non-public settlement information.
- The court found the press release breached the attorney’s fiduciary duty by disclosing non-public information about the mediated settlement without the client’s consent.
- The court dismissed the client’s fiduciary-duty claim because the client failed to prove compensable damages caused by the disclosure.
- The court rejected a general “public” or “generally known” exception to the confidentiality duty under the Texas disciplinary rules.

## Legal Principles

- Under Texas law, a breach of fiduciary duty claim requires (1) a fiduciary relationship, (2) breach, and (3) damages proximately caused by the breach; failure to prove damages defeats the claim even if breach is shown.
- A lawyer’s duty of confidentiality may continue after the representation ends and can extend to non-public information relating to the representation, including mediated settlement information subject to contractual confidentiality.
- The Texas disciplinary confidentiality rule does not provide a broad exception allowing disclosure of client-related information merely because it is in public records or otherwise “generally known.”
- Unconsented public statements about a client’s matter for the lawyer’s own purposes can constitute disloyal and improper disclosure when they reveal protected information relating to the prior representation.

## Conclusion

The court held that a former attorney breached continuing fiduciary confidentiality duties by publicizing non-public settlement-related information in a press release, but the client’s fiduciary-duty claim failed because the client did not establish damages proximately caused by the disclosure.


Sealed Party v. Sealed Party, No. H-04-2229, 2006 WL 1207732 (S.D. Tex. May 4, 2006)