A few years ago, Steven R. Selsberg, a partner in Mayer Brown in Houston, thought he would make a smoking-hot career out of tobacco litigation, but today Selsberg is the go-to litigation lawyer in the United States for the business empire of Carlos Slim Helu, the Mexican billionaire who may be the richest man in the world.
In August, Fortune magazine pegged Slim's net worth at $59 billion, based on the value of his public holdings as of the end of July.
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When Selsberg, 45, is not doing work for Slim or his companies, he handles litigation for other clients from Mexico he obtained through Slim or through other Mexican connections.
Those duties are a far cry from what Selsberg was doing a few years ago when he was a partner in trial firm Shook, Hardy & Bacon in Houston, handling a busy docket of tobacco suits. The story of how litigation for client Philip Morris led to his work for Slim and litigation for other international clients shows how a lawyer can leverage a single, random connection into an entirely fresh practice.
Representing international clients wasn't a part of Selsberg's long-range career plan; he says he was "extremely happy" doing tobacco work and is just now taking Spanish lessons.
"I was going to be a Philip Morris lawyer for the rest of my career. That was my plan," he says.
But Selsberg's career took a big turn after Slim first hired him in 2001 to handle an appeal. By 2002, Selsberg says, work for the Mexican billionaire and his international companies constituted 75 percent of his caseload. By 2005, it grew to 100 percent, but today, Selsberg says, about half of his docket is for Slim-related companies, and the rest is work for other Mexican clients.
Selsberg says his work for Slim and his companies grew significantly after he led a team of appellate lawyers who won a reversal of a $454 million verdict, which was at the time the largest-ever verdict in Dallas County. Part of that verdict was against Slim and his companies Grupo Sanborns and Grupo Carso in a breach of contract suit.
Selsberg says Slim rewarded him for success on the appeal by giving him more work.
"He gives people who do a good job and are loyal more opportunity," Selsberg says, noting for instance that Slim recently asked him to become corporate secretary for the board of directors of CompUSA, the Addison, Texas-based retailer owned by Grupo Carso.
Alejandro Cantu, the general counsel of one of Slim's Mexican companies, American Movil, says Selsberg isn't a good lawyer. "He's a great lawyer," Cantu says, in explaining why Slim and his companies rely on Selsberg for litigation in the United States.
"He's a very complete lawyer, very reasonable. It's hard to find one of those in the states these days," Cantu says.
TEAMWORK
After Selsberg, a Wisconsin native, graduated from Washington University School of Law in St. Louis in 1986, he clerked for two years for former U.S. District Judge James DeAnda of Houston. Selsberg says he thought about moving to Chicago where his family and many friends lived, but New York-based Weil, Gotshal & Manges had just opened an office in Houston, and he eagerly took a job there as an associate.
While at Weil Gotshal, Selsberg says he started doing corporate transactions and litigation, but he opted to transfer into the litigation section, because he didn't care for transactional work and did quite a bit of securities litigation.
In 1997, Selsberg left Weil Gotshal, because he didn't make partner. He joined Shook Hardy in Houston to do tobacco litigation, including the defense of individual smoking suits filed in Texas, Arkansas, Alabama, Mississippi and New Mexico, and appeals before the 5th U.S. Circuit Court of Appeals in a number of Texas suits.
Then, chance led Selsberg to Slim.
In 2001, a jury in the 116th District Court in Dallas returned a verdict awarding Dallas-based COC Services Ltd. $454.5 million, including $364.5 million in punitive damages, in COC Services Ltd. v. CompUSA Inc., et al. In that breach of contract suit, COC alleged Slim and his companies Grupo Carso and Grupo Sanborns, along with CompUSA and its former president, James Halpin, cut COC out of a deal to franchise CompUSA in Mexico.
In May 2001, Dallas County Court-at-Law No. 2 Judge Carlos Lopez entered a judgment that reversed the findings against Halpin and CompUSA, but upheld the verdict against Slim and his companies that totaled $121 million, including $67.5 million in punitives.
At that time, Slim was a member of the board of directors of Richmond, Va.-based Philip Morris Cos. Inc. (now Altria Group Inc.). Selsberg says Steven Rissman, an in-house lawyer at Philip Morris, introduced him to Slim.
Rissman, associate general counsel at Altria Corporate Services Inc., says Slim asked the company to help him find a good appellate lawyer in Texas to handle the appeal of the judgment, and Rissman recommended Selsberg, because the Shook Hardy partner had successfully handled some tobacco appeals for Philip Morris at the 5th Circuit.
"We did a pretty thorough due diligence, and Steve, who had done work for the company for years, immediately came to mind," Rissman says.
"He's a brilliant strategist, a wonderful appellate lawyer ... a good team builder and incredibly responsive, rolls up his sleeves," Rissman says.
For the appeal in COC Services v. CompUSA, Selsberg pulled together a team that included well-known Texas appellate lawyers David Gunn, a partner in Beck, Redden & Secrest in Houston; David Keltner, a partner in Kelly Hart & Hallman in Fort Worth, Texas; Mark Josephs, a partner in Jackson Walker in Dallas; and Richard Hogan Jr. and Jennifer Bruch Hogan, partners in Hogan & Hogan in Houston. In 2004, Dallas' 5th Court of Appeals handed a take-nothing victory to the defendants, and in 2006 the Texas Supreme Court denied a petition for review.
The lead trial lawyer for COC Services, Mark Werbner of Sayles Werbner in Dallas, says he was disappointed by what the appeals courts did to the verdict.
"It's a continuation of the Texas [appeals] courts' erosion in their respect for jury verdicts. I can accept that not every case is tried perfectly, or sometimes there's an error in a charge, but basically, this case was reversed on the rationale there was no evidence these parties intended there to be a binding agreement," Werbner says.
Stephen Tipps, a partner in Baker Botts in Houston who led COC's appellate team, says he also was disappointed that the Dallas Court of Appeals took away the jury verdict.
Gunn says Selsberg was the quarterback of the appeal who did a good job managing the talents and egos of the team.
"When you have multiple parties, multiple companies, very high stakes and a lot of high-profile lawyers, you have the ingredients, the makings for a real potential for friction and internal dissension. He was very good at managing the egos, the different contributions people have to make," Gunn says.
After the team got the judgment reversed on appeal, Selsberg says Slim and his companies sent litigation his way. By 2004, most of Selsberg's work at Shook Hardy was for Slim companies.
Slim's business empire, based in Mexico City, includes Carso Global Telecom, which owns Telefonos de Mexico, a fixed-line phone company, and America Movil, a wireless company; and conglomerate Grupo Carso. Miami-based TracFone Inc. the largest prepaid wireless phone company in the United States, is a subsidiary of America Movil. Telmex USA also is based in Miami.
Selsberg says he reached a crossroads in his career in 2004, after executives from Slim's enterprises asked him to recommend a lawyer to represent the company in the MCI Corp. bankruptcy. Shook Hardy didn't do bankruptcy or transactional work at the time.
"Was I going to stay at Shook Hardy and do tobacco litigation work and turn down the Mexican transactional work?" Selsberg recalls. So he started looking at full-service firms with a global presence, and in 2004 he joined Mayer Brown in Houston, where he was reunited with Mark Manela, a friend and former colleague at Weil Gotshal.
"I did everything I could to convince him to join us," Manela says. "He's a great guy, and our friendship goes back to the mid-1980s at Weil, and the opportunity to practice again with one of my oldest friends of the practice of law was just very exciting."
Manela says Selsberg brought a lot to Mayer Brown -- legal skills and "an ability to serve some of the wealthiest and most sophisticated clients in the world."
"I thought Mayer Brown would be an intriguing platform for him to continue to serve his clients, who have needs that go beyond just litigation," Manela says.
Michael Niebruegge, the partner in charge in Houston for Mayer Brown, says, "We didn't just hire him because he represents Mr. Slim. We hired him because he's an excellent lawyer."
Gene Williams, the managing partner of the Shook Hardy office in Houston, did not return a telephone call seeking comment.
"The first year I was busy doing Telmex and Slim family litigation, starting to get some transactional matters [from Slim companies], and since then, the last couple years, probably half of my business is not Slim-related but from Mexico," Selsberg says.
He says the learning curve for representing Mexican clients was "enormous" because of cultural differences.
"Mexican companies -- many are the same size as our major U.S. companies but are still run as family businesses to a large extent. It's very different from us, much more personal," he says.
"You have to be patient. In Mexico, they tend to discuss personal things first and then get to business, where in the U.S., it's the opposite," Selsberg says.
He also notes that his Mexican clients, including many at Slim's companies, are less confrontational, and that can be a challenge in litigation.
Selsberg says much of the litigation work he does for Slim's companies is not filed in Texas. But he does represent CompUSA in Perlmutter v. CompUSA, a class action suit filed in state court in Travis County in 2007. The plaintiff alleges CompUSA improperly charged sales tax on amounts that were rebated to consumers, but CompUSA denies the plaintiff has standing to sue.
But through the Slim connection, and through other contacts he has made in Mexico, Selsberg is building a practice handling U.S. litigation for Mexican citizens and businesses.
For instance, he represents two wealthy Mexican women in a suit they filed against their brother in state court in Harris County, Texas. The plaintiffs in Araceli Alarcon Velazquez, et al. v. Gabriel Alarcon Velazquez, et al., filed in 2006 in the 80th District Court, allege their brother, Gabriel Alarcon Velazquez, who lives in Houston, is attempting to defraud them of their share of the family fortune by "stealing or failing to account for hundreds of millions of dollars of assets of family companies."
Defense attorney Ricardo Cedillo, a shareholder in Davis, Cedillo & Mendoza in San Antonio, says his client "vehemently denies" the allegations. "We look forward to our day in court to prove them to be meritless," Cedillo says.
Selsberg says he is defending the Diocese of Tehuacan and Cardinal Norberto Rivera in a high-profile suit filed in 2006 in the Superior Court of the State of California in Los Angeles. The plaintiff in Joaquin Aguilar Mendez v. Cardinal Roger Mahony, et al. alleges the defendants, including Selsberg's clients, conspired to protect a Mexican priest accused in the alleged sexual assault of a child.
Selsberg says his clients deny the allegations and also bring jurisdictional objections to the suit.
TRUST IN THE SYSTEM
Arturo Elias, Slim's son-in-law and spokesman, says the Slim companies rely on Selsberg so much for U.S. litigation, because he delivers good results and is good at navigating through the U.S. legal system, which differs from Mexico's.
"He teaches us to trust in the U.S. system," Elias says.
He says Selsberg "charges a lot of money," but "of course, it's worth it."
Selsberg says he works on an hourly basis and charges $600 an hour. He declines to say how much the Slim companies paid Mayer Brown in 2006 for his work.
Cantu, the GC for America Movil, says Selsberg is a "complete" lawyer who gives good advice on when to settle and when to fight.
In one instance, Selsberg negotiated a settlement for Slim and one of his companies with the plaintiffs in Walter Mischer Jr., et al. v. VistaLink International Ltd., et al., a breach of contract, breach of fiduciary duty and tortious interference suit filed in the 129th District Court in Harris County. The suit settled under confidential terms.
Houston lawyer Paul Dobrowski, who represented the plaintiffs in the case, says Selsberg defended the suit aggressively and did an excellent job preparing Slim for a deposition.
Dobrowski, of Dobrowski LLP, says Selsberg was smart enough to realize his clients had "exposure" and settled the suit.
"It wasn't like he sat there and said, "I'm going to make me a big fee,'" Dobrowski says. "He was right up front, took stock of the situation and, in my opinion, did his client a real service and recognized that and got the case settled."
Cantu notes that the appellate win in COC Services v. CompUSA was important to Slim and his companies.
"He was very successful, and that was important for the company, because we were not obligated to pay the amount of damages," Cantu says. "Our reputation was clean."
Richard Salzman, the general counsel of TracFone, says Selsberg has handled some litigation for his company, but the lawyer also acts as a general adviser on litigation matters. Salzman says he speaks with Selsberg at least a couple times a week.
"He's a great resource. He may not be counsel for record on all of our stuff, but on all the large stuff he definitely is. We deal with other small issues around other states, but for everything of material significance we retain Steve," Salzman says.
He adds, "He gives good results."
Selsberg says the executives and lawyers he deals with in the Slim business empire are "dream clients," because they are intelligent, professional, loyal and trustworthy.
He travels to Mexico a couple times a month and usually meets with the general counsel of the individual companies or with Elias, who is Slim's contact for litigation matters in the United States. Selsberg says he last met with Slim a few months ago when the billionaire had him over to his house in Mexico City for the first time and told him to lose 10 pounds.
"I lost it," Selsberg says, adding that Slim was joking, but he took the suggestion to heart.
Selsberg says Slim's house is understated but has impressive art and book collections.
Selsberg's take on the richest man in the world: "He's a really intelligent, organized guy. He has high expectations for himself and others, but he's very fair, very, very nice." Enditem
