The litigation landscape over the past 12 months has been defined by some major defense wins, jury verdicts that neared — and in one case exceeded — $1 billion in damages, and rulings from appellate courts that will continue to shape some of the most unwieldy cases working their way through the justice system.
The Texas Legislature, which convenes every other year, also did quite a bit to shape litigation practice in Texas this year, and its creation of the business courts and the Fifteenth Court of Appeals also made our list of the top litigation matters of the year.
Here, in no particular order, The Texas Lawbook looks back on some of the most significant litigation Texas lawyers handled in 2023.
Winter Storm Uri Rulings
From the sprawling litigation stemming from the deadly winter storm that swept across the state in February 2021, knocking out power for days and leaving millions to cope with subfreezing temperatures, two rulings issued in 2023 are particularly noteworthy.
In January, Judge Sylvia Matthews, who is presiding over the multidistrict litigation in Harris County, dismissed more than 60 natural gas company defendants that were named in lawsuits brought by thousands of plaintiffs attempting to hold someone accountable for the damages they suffered.
Those companies that will not have to stand trial for any damages or deaths caused by power outages during the storm include Anadarko, Apache, Atmos, Comstock, El Paso, Energy Transfer, Kinder Morgan and XTO.
The second significant ruling came earlier this month from the First Court of Appeals in Houston. A three-justice panel held that power generators owed retail customers “no legal duty” to provide electricity to the electric grid or to customers during the storm.
“If we created a new duty for wholesale power generators to supply continuous electricity to the grid, and ultimately to the retail customers, we would upend the carefully-crafted framework that the legislature has implemented,” Chief Justice Terry Adams wrote for the panel. “And legislative silence on this new asserted duty does not give us the power to legislate from the bench.”
The ruling means more than 350 companies like Luminant, NRG, Exelon and Sempra Energy Resources will be freed from hundreds of lawsuits alleging they are responsible for property damage and deaths.
Dell Gets Defense Win Mid-Trial in $450M Patent Case
Soon after patent-holding entity WSOU Investments rested its case alleging infringement of its patents related to cloud infrastructure networking technology, U.S. District Judge Alan Albright granted Dell Technologies a directed verdict, ending the case before it got to the jury.
The rare February ruling brought an end to the lawsuit that sought as much as $450 million in damages from Dell Technologies and VMware Inc. Judge Albright agreed with the defendants that WSOU failed to present enough evidence over three days of trial to get the case before the jury. It marked the first time Judge Albright had granted a directed verdict of no infringement since he took the bench in September 2018.
WSOU filed suit in June 2022, alleging infringement of three patents. But before trial began, the defense team also secured a summary judgment ruling that Dell and VMWare had not infringed two of the three patents at issue.
Dell and VMWare are represented by Brian Rosenthal, Veronica Moyé, Benjamin Hershkowitz, Ernest Hsin, Jaysen Chung, Casey McCracken and Blaine Evanson of Gibson, Dunn & Crutcher and Barry Shelton of Winston & Strawn.
WSOU is represented by Jon Waldrop, Darcy L. Jones, Marcus A. Barber, Keather S. Kim, John W. Downing, Thuc Minh Nguyen and Chen Jia of Kasowitz Benson Torres.
The case number is 6:20-cv-00480.
Lawmakers Shape Litigation Practice
Lawsuits aren’t the only actions that make the list this year. Legislators this session passed two laws in particular that will bring significant changes to the way litigation is practiced in Texas: The creation of business courts and the Fifteenth Court of Appeals.
The bills that created the Business Court Judicial District and the appellate court that will handle appeals from that trial court were hotly contested by a coalition of judges, justices and lawyers on both sides of the bar. Opposition softened when lawmakers carved out cases involving insurance contracts, financial loans, consumer transactions, personal injury and wrongful death from the jurisdiction of the new courts.
The business court will have statewide jurisdiction, but the regions that will initially be funded encompass the state’s biggest cities — Austin, Dallas, Fort Worth, Houston and San Antonio. The 10 district judges will be appointed by the governor, with advice and consent of the Senate, for two-year terms and could be reappointed. The Fifteenth Court of Appeals will be structured to have a chief justice and two associate justices with plans to add two more justices in 2027. They will be appointed by the governor.
The court will have jurisdiction over organizational and governing disputes where the amount in controversy exceeds $5 million, cases involving a publicly traded company and transaction-related cases where the amount in controversy exceeds $10 million.
The courts are to be up and running Sept. 1.
Lawmakers also attempted to amend the state’s constitution to increase the mandatory retirement age of judges from 75 to 79. The proposition was seemingly unpopular with voters, as 63 percent of the 2.4 million voters who weighed in rejected the proposal.
Neora Cleared of FTC Pyramid Scheme Claims
In what is believed to be the first victory of its kind against the Federal Trade Commission since 1979, health supplement company Neora was cleared by Senior U.S. District Judge Barabara M.G. Lynn of claims its multilevel marketing program was actually an illegal pyramid scheme.
The September ruling came nearly a year after Judge Lynn presided over a bench trial in the case closely followed by the direct-selling industry and brought an end to a seven-year legal battle.
The lawyers from Foley & Lardner who secured the win for Neora and its founder, Jeff Olson, said it marked the first time a direct-selling company defeated the FTC’s pyramid claims at trial and was the first victory of its kind since Amway’s 1979 administrative law win over the FTC.
In a 56-page order issued Sept. 28, Lynn found that Neora’s profits largely come from sales of goods and “do not hinge on the recruitment of new participants” to sell the products.
“The fact that 80% of revenues come from ultimate user sales weighs heavily against a finding that Neora focuses exclusively or almost exclusively on recruiting as opposed to sales,” she said.
The Direct Selling Association had said in an amicus brief that the FTC was pursuing a new and vague “overemphasis on recruiting” test that could have negatively impacted over 1,000 companies.
Neora was represented by Edward Burbach, Craig Florence and Michelle Ku, of counsel John Sepehri, special counsels Robert Johnson and Kristina Silcocks, and associate Stephan McPhail of Foley & Lardner.
The FTC team was led by Guy G. Ward of the commission’s Midwest Region office in Chicago and Michael E. Tankersley of the Bureau of Consumer Protection.
The case number is 3:20-cv-1979.
Federal Circuit Wipes Out $2.1B Award Against Intel
Earlier this month, a panel of judges on the U.S. Court of Appeals for the Federal Circuit ordered a do-over in a patent infringement lawsuit involving microprocessors that had netted VLSI Technology a $2.1 billion award.
At trial before U.S. District Judge Alan Albright in March 2021, jurors in Waco had determined Intel infringed two patents, awarding $1.5 billion for infringement of one patent and $675 million for infringement of the other. Final judgment was entered in favor of VLSI in April 2022, awarding the company $2.1 billion, according to court documents, and an appeal quickly followed.
The federal appellate court upheld the jury’s finding that Intel had infringed the patent that resulted in a $1.5 billion award but determined that a new trial on damages was warranted. The court determined Intel had not infringed the patent that netted the $675 million award.
In particular, the Federal Circuit found it was an abuse of discretion on Judge Albright’s part to deny Intel a chance to plead that it actually had obtained a license to practice both VLSI patents. Judge Albright denied Intel’s request, lodged a few months before trial, to amend its answer to assert the licensing defense.
“This is a very narrow holding,” the panel wrote. “We do not conclude that the license defense is meritorious. We conclude only that the governing law is such that the defense requires additional litigation of the sort that begins once it is added to the case, whether that process is a fully developed motion to dismiss, with fuller analysis of the governing law than has yet occurred, or more fact-based based litigation. Intel might well fail to sustain the defense, but we do not see failure as foreordained on the material supplied to date.”
Judges Alan D. Lourie, Timothy B. Dyk and Richard G. Taranto sat on the panel.
VLSI is represented by Jeffrey A. Lamken of MoloLamken.
Intel is represented by William F. Lee of Wilmer Cutler Pickering Hale and Dorr.
The case number is 22-1906.
SCOTX Clarifies Noneconomic Damages Standard
In a closely watched, long-awaited ruling, the Texas Supreme Court in June issued a ruling in Gregory v. Chohan, a wrongful death case that had come to it on appeal two years and two months earlier.
The justices could have set radical new standards for tethering noneconomic damages to the evidence in wrongful death and personal injury cases, but it rejected a recommendation by defendant trucking company New Prime to implement a ratio requirement between noneconomic and economic damages.
Some law professors and trial lawyer groups who filed amicus briefs argued that New Prime was advocating for a standard that would value the grief of rich plaintiffs more than that of poor plaintiffs.
The lawsuit stems from a November 2013 pileup that killed three people. The two families who sued the allegedly responsible driver, Sarah Gregory, and her employer, New Prime, were awarded nearly $39 million in damages by a jury — $35.9 million of which was noneconomic damages.
The issue on appeal was whether the $15.5 million in noneconomic damages awarded to the family of Bhupinder Singh Deol should be cut. The family — his widow, their three children and his parents — was awarded about $1.3 million in economic damages.
The plurality of the Texas Supreme Court determined attorneys for the other two families made several improper arguments to the jury regarding the amount of damages. Jurors were told to consider the cost of a Boeing F-18 fighter jet, $71 million, the cost of a Mark Rothko painting, $186 million, and to give New Prime their “two cents worth” by awarding the families two cents per each person killed in the crash for all 650 million miles New Prime trucks drove in the year of the accident.
That would total $39 million.
The jury awarded $38.8 million.
The high court explained in ordering a new trial on damages in the case that it wasn’t suggesting a plaintiff must put forth “direct evidence of a quantifiable amount of damages.”
“In other words, the requirement that some evidence support the amount of damages for emotional injury is not a requirement of precise quantification or a requirement that a particular type of evidence must always be proffered,” the opinion stated. “It is instead merely a requirement that the amount of damages must have a rational basis grounded in the evidence.”
Justices Debra Lehrmann, Rebeca Huddle and Evan Young did not participate in the decision.
The Deol family is represented by Jeffrey Levinger, Tim Tate and Mick N. Das.
New Prime and Gregory are represented by Thomas Wright of Wright Close & Barger and Scott Brister of Hunton Andrews Kurth.
The case number is 21-0017.
Fifth Circuit Weighs in on Texas Hammer
In April, a three-judge panel issued a ruling related to the effects of attorney advertising on juries and determined that discussion of attorney Jim Adler’s “Texas Hammer” commercials did not merit a new trial in a trucking crash suit.
Injured motorist Travis Heckman had requested the jury award him $2.1 million in damages, but instead he was awarded $37,500. Heckman argued on appeal that mentions of the “Texas Hammer” had tailed the outcome of his trial.
Heckman sued Raynols Gonzalez-Caballero and his employer, Cuba Trucking, after an accident that happened on Interstate 20 in March 2019. A jury found Caballero, the driver of the 18-wheeler that crashed with Heckman, was solely liable but awarded a fraction of the damages sought.
On appeal, Heckman raised two issues: Caballero’s striking of the only two Black people on the venire panel constituted a Batson violation; and the defense counsel in closing arguments had improperly tried to insert plaintiff’s attorney Jim Adler and his television marketing efforts, which was prejudicial.
During jury selection, according to the opinion, defense counsel asked the panel “How many people think there’s way too many personal injury lawsuits filed today?” Many on the panel agreed with the statement, with some mentioning to Adler’s “Texas Hammer” TV commercials to explain their belief.
In the commercials, Adler carries a large sledgehammer, jumps on 18-wheelers as they speed down highways and touts multimillion-dollar verdicts he’s secured for injured plaintiffs.
“Call me right now!” he says.
Defense counsel never mentioned Adler by name, but during closing arguments Heckman alleges the defense attorney placed emphasis on using the word “hammer,” purportedly referencing the voir dire discussions.
On both points on appeal, the panel determined in its April 13 opinion it was appropriate to defer to the trial court’s rulings that no new trial was merited.
“While defense counsel’s references — in statements or slides — may have been inappropriate, they do not warrant a new trial,” the court held. “We lack the trial judge’s advantage of courtroom context in determining the extent of the jury’s perceived connection between the comments and Adler, and the able trial judge concluded that defense counsel’s statements did not constitute an ‘attempt to insert Mr. Adler and his marketing efforts into the trial.’ Moreover, though some members of the venire spoke of Adler in a negative or disparaging way, others spoke positively of him and his commercials, mitigating the prejudicial impact of such a connection if it did indeed exist.”
Judges Patrick E. Higginbotham, Jerry E. Smith and Kurt D. Engelhardt sat on the panel.
Heckman is represented by Fort Worth attorney Jason Smith.
Gonzalez-Caballero is represented by Susan Kidwell of Locke Lord and Henri Dussault of Brackett & Ellis.
The case number is 22-10415.
Banks in Stanford Ponzi Scheme Case Settle for $1.34B, Avoid Trial
On the eve of trial, Toronto-Dominion Bank, HSBC Bank and Independent Bank, which was formerly known as the Bank of Houston, agreed in February to pay $1.34 billion to victims of R. Allen Stanford’s Ponzi scheme to avoid facing claims the financial institutions aided and abetted the $8 billion fraud against 18,000 investors.
Lawyers for the court-appointed receiver, Ralph Janvey, and the Official Stanford Investors Committee planned to ask jurors to award between $4 billion and $10 billion. Two other banks — Trustmark National bank and Société Générale Private Banking (Suisse) — settled earlier in the year after agreeing to pay a combined $257 million.
TD Bank paid $1.2 billion, Independent Bank paid $100 million and HSBC Bank paid $40 million to end the suit.
The settlements brought the total amount of money recovered by Janvey for the victims to more than $2.7 billion.
Stanford is currently serving a 110-year prison sentence for the fraud. His scheme unraveled 14 years ago when the U.S. Securities and Exchange Commission obtained court orders freezing his assets and Janvey was appointed to begin recovering funds for investors.
The case was assigned to U.S. District Judge Kenneth M. Hoyt.
The Official Stanford Investors Committee is represented by lead attorneys Scott Powers and Kevin Sadler of Baker Botts.
Toronto-Dominion is represented by lead attorney Rodney Acker of Norton Rose Fulbright.
Suisse is represented by lead attorney Noelle M. Reed of Skadden, Arps, Slate, Meagher & Flom.
Trustmark is represented by lead attorney Robin Gibbs of Gibbs & Bruns.
HSBC Bank is represented by lead attorney Roger Cowie of Locke Lord.
Independent Bank is represented by lead attorney Paul Watler of Jackson Walker.
The case number is 4:22-cv-00800.
AT&T, Verizon, Nokia, Ericsson Beat $400M Patent Claim
In June, U.S. District Judge Rodney Gilstrap handed a complete defense victory to AT&T, Verizon, Nokia and Ericsson in a patent infringement lawsuit that was seeking more than $400 million in damages.
Judge Gilstrap ended the lawsuit that was filed by Howlink Global in February 2022 by granting the cellular companies a summary judgment win holding that there had been no infringement — only the second such ruling in the past three years in the patent hub of the Eastern District of Texas, according to the Alston & Bird defense team that secured the win.
The case also tested a novel defense model where the carriers and suppliers retained one firm to represent all parties.
Howlink had accused the defendant companies of infringing four patents covering cellular communications. Judge Gilstrap, in adopting a May recommendation from U.S. Magistrate Judge Roy Payne, held that Howlink’s theory of infringement was based on an overly broad reading of the patents’ scope.
The parties filed a sealed notice of settlement July 21.
Howlink’s lead attorney was John Eichmann of Eichmann PC in Los Angeles.
Lead defense counsel was Theodore Stevenson III of Alston & Bird.
The case number is 2:22-cv-00040.
Editor’s Note: Mark Curriden and Janet Elliott contributed to this report.