Texas Judge Dismisses Malpractice Case Against Steptoe & Johnson
A Texas federal court on Jan. 21 dismissed a $6 million legal malpractice suit brought against two trade lawyers at Steptoe & Johnson, holding it lacked jurisdiction over the case. Thomas Trendl and Gregory McCue had been accused by Allied Fitting of failing to advise it to file protests to maintain its eligibility for refunds on its steel imports (see 2010140049), but Southern Texas U.S. District Court Judge Kenneth Hoyt ruled that the suit covered activities in Washington, not Texas.
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Allied Fitting said its failure to file the protests caused it to lose out on $6 million in refunds it should have gotten when the Commerce Department issued a negative circumvention determination on its imports of carbon steel butt-weld pipe fittings from Malaysia. “Defendants were made aware that Allied was receiving bills for both unliquidated and liquidated entries, but never advised Allied to file protests -- or filed such protests on Allied’s behalf, as is common in the importing community -- to keep certain entries open and available for refund once Commerce Department issued its final determination,” Allied said in its complaint.
Trendl and McCue, for their part, said the refunds were unavailable because of a “noticing error by CBP,” according to a motion to dismiss they filed in November. “Steptoe & Johnson had previously requested that Allied provide them with any CBP notices relating to the refunds, but Allied never did; by the time Steptoe & Johnson were made aware of the errors, the time to appeal had passed,” the lawyers said. McCue was no longer a party in the suit as of the ruling, having been voluntarily dropped from the case by Allied Fitting a week earlier.
Hoyt held that while there was sustained contact between Allied and the two Steptoe lawyers, any services provided or not provided between the two parties occurred in Washington, D.C., and not in Texas. Hoyt also said the court was constrained by the contractual language in which Allied consented to the Washington jurisdiction in case of litigation. Allied didn't comment on whether it intends to sue in Washington.
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