In this edition of Litigation Roundup, the Fifth Circuit undoes class certification in an investor suit against Anadarko, Roku beats back a $318 million patent infringement claim in Waco, and a Houston appellate court brings an end to a heart surgeon’s defamation lawsuit against ProPublica and the Houston Chronicle.
Have a development we should include in the next Litigation Roundup? Please let us know at tlblitigation@texaslawbook.net.
Tarrant County District Court
Jury Says Walmart Owes $6M in Injury Suit
A jury in Tarrant County has determined Walmart owes $6 million in damages to a customer who was struck by a reversing car in the retail giant’s auto center.
The unanimous verdict in favor of Carl Chojnicki was returned April 25 by a jury of nine men and three women who heard four days of testimony and deliberated for about five hours. Chojnicki filed suit after he was injured at a store in North Richland Hills in 2019 when a Walmart employee who was driving a customer’s car in reverse struck him, breaking his femur.
The jury found Walmart 80 percent liable for the incident and the employee 20 percent liable and awarded nearly $1.5 million in compensatory damages. The jury also awarded $4.5 million in exemplary damages after finding Walmart’s gross negligence caused the incident.
Evidence was presented that Walmart did not follow an established “spotter” policy in the auto care center.
Tarrant County District Judge Don Cosby presided over the trial.
Chojnicki is represented by Barrett Robin and Sean T. Cook of Hamilton Wingo.
Walmart is represented by Randy Walters of Walters, Balido & Crain.
The case number is 067-327732-21.
Harris County District Court
Shell Gets Win in Jury Trial Over Bonus Payments
A former employee of Shell who alleged she was entitled to $16 million in withheld bonuses from the oil and gas company got nothing when a Harris County jury recently determined there had been no breach of the bonus agreement.
Eva-Maria Frohn, a German-born United Kingdom expatriate who had worked as a crude oil trading manager at Shell in the United States, filed suit in February 2022 against Shell US Hosting Company and Shell Trading Company alleging the company had wrongly withheld $16 million in conditional bonus and stock awards.
The jury in Harris County District Judge Lauren Reeder’s courtroom returned its verdict April 23, rejecting Frohn’s argument that when she requested to return to the U.K. she was entitled to retain the bonus and stock awards.
Shell had argued that Frohn voluntarily resigned from the company when she refused to accept a new role in the U.K., which caused her bonus and stock awards to lapse and meant the company owed her no additional compensation.
Frohn is represented by Colin L. Guy of Hoover Slovacek.
Shell is represented by Shauna Clark, Richard Krumholz, Heather Sherrod, Doug Brown and Tamsin Woolley of Norton Rose Fulbright.
The case number is 2022-07028.
Southern District of Texas
Houston Attorney, Office Manager Indicted in Fraud Case
A Houston personal injury attorney and his former office manager have been indicted on charges they defrauded clients out of settlement proceeds.
Attorney Clyde J. Moore, 62, and his former office manager, Mark A. Broussard, 63, were indicted April 17 on a charge of conspiracy to commit mail fraud in connection with the alleged $2.4 million fraud. Moore is also facing an additional charge of mail fraud. Prosecutors allege the scheme ran from 2012 through 2021 and targeted clients who were victims of car accidents by inflating the costs of medical expenses and misleading clients to believe the firm paid medical providers more than they actually did.
Moore is accused of using the skimmed client funds to pay for his children’s private school tuition and to purchase luxury cars. If convicted, Moore and Broussard could face up to five years in prison on the conspiracy charge. Moore’s additional mail fraud charge carries a maximum sentence of 20 years in prison.
The case has been assigned to U.S. District Judge George C. Hanks Jr.
Moore is represented by Wendell A. Odom Jr. of Odom, Davis & Hobson. Broussard is represented by federal public defender Heather Hughes.
The federal government is represented by Robert Johnson of the Department of Justice.
The case number is 4:24-cr-00204.
Western District of Texas
Roku Beats Back $318M Infringement Claim
A jury in Waco has determined Roku Inc. did not infringe — directly or indirectly — on two patents belonging to Ioengine with its streaming video products.
U.S. District Judge Alan D. Albright presided over the five-day trial that ended with the jury’s verdict April 19. Ioengine filed suit in December 2021 seeking $318 million in damages.
Roku is represented by Tia Fenton, Chris Ricciuti, Matt Gaudet, Holly Engelmann, Elissa Sanford and Alec Royka of Duane Morris and David N. Deaconson of Pakis, Giotes, Page & Burleson.
Ioengine is represented by Gregory T. Chuebon, Noah M. Leibowitz, Jeffrey B. Plies, Derek J. Brader and Michael H. Joshi of Dechert, Jennifer P. Ainsworth of Wilson, Robertson & VanDeventer and Melissa R. Smith and James Travis Underwood of Gillam & Smith.
The case number is 6:21-cv-01296.
District of Colorado
Texas Trial Lawyers Secure $56.5M Win Against Ford
On April 17, a jury in Colorado Springs determined Ford Motor Company owed millions to a woman who was injured as a result of a defective shifting system in her 1998 Ford Expedition.
Five years after the litigation began, jurors awarded Lorelle Thompson $11.75 million in damages for past and future economic losses, noneconomic losses and physical impairment or disfigurement. The jury then slammed Ford with $45 million in punitive damages.
Thompson’s attorneys have touted the win as the largest jury verdict ever awarded in Colorado Springs, surpassing a $33 million award doled out in 2019.
According to court documents, Thompson was injured in December 2016 when her left leg was crushed by what she alleged was a “defective and unreasonably dangerous” Ford Expedition. She put the vehicle in park and exited to check her mailbox but slipped and fell on her back.
That’s when the vehicle “unexpectedly went into powered reverse and began to roll backwards.” Her left leg was behind the driver’s side front wheel and was crushed during the incident that left her with a fractured tibia and fibula and also ripped the skin and muscle from her lower leg.
The jury heard evidence that Ford knew of the defect in the car’s shifting system since at least 1980 but never took action to correct it.
“Our firm remains steadfast in our commitment to championing the rights of individuals against big corporate bullies,” said Bradley Leger of Leger Ketchum & Cohoon. “Today’s verdict sends a clear message that accountability has no bounds.”
U.S. Magistrate Judge Maritza Dominguez Braswell presided over the seven-day trial. It took the jury about seven hours to reach a verdict.
Thompson is also represented by James Ketchum, and Rodney Castille of Leger Ketchum & Cohoon, Tony Buzbee and Colby Holler of The Buzbee Law Firm, and local counsel Bradly J. Holmes and Michael West Blanton.
Ford is represented by Theresa Wardon Benz of Davis Graham & Stubbs, Gabrielle L. Schneiderman of Wheeler Trigg O’Donnell, J. Randolph Bibb Jr. and Ryan Nelson Clark of Lewis, Thomason, King, Krieg & Waldrop and Sherry A. Rozell of McAfee & Taft.
The case number is 1:22-cv-00541.
First Court of Appeals, Houston
Haynes Boone Prevails in First Amendment Suit Against ProPublica, Houston Chronicle
ProPublica and the Houston Chronicle will not have to face a defamation lawsuit brought by a heart surgeon after an appellate panel on Thursday dismissed the case under the Texas Citizens Participation Act.
The TCPA is a law intended to bring an early end to baseless lawsuits that are brought in an attempt to chill free speech rights. In this case, Dr. O. Howard “Bud” Frazier, sued the news outlets after they published a joint article in 2018 investigating Frazier’s research and his patient outcomes, alleging the article was false and damaged his reputation.
ProPublica and the Chronicle argued the article was substantially true and moved to dismiss the suit under the TCPA. The article, headlined “A Pioneering Heart Surgeon’s Secret History of Research Violations, Conflict of Interest and Poor Outcomes,” reported that Frazier had put experimental heart pumps in patients who weren’t eligible for the devices, failed to disclose potential financial conflicts with device makers and had high mortality rates among Medicare patients receiving the devices compared to national averages.
“In his affidavit, Dr. Frazier states that a ‘properly risk-adjusted ranking would not show [his] patients’ outcomes so low.’ He did not, however, present any evidence of what properly risk-adjusted data would have shown,” the appellate panel held. “We conclude that the allegedly defamatory statements, when compared against the record before us, are not more damaging to Dr. Frazier’s reputation than a truthful statement would have been. They, too, are substantially true.”
This is the second time the case has been before the Houston appellate court. In January 2020, a panel of the court determined the trial court had wrongly refused the consider the media defendants’ motion to dismiss under the TCPA.
“This case was critical to upholding investigative journalism’s vital role in holding powerful figures accountable, especially in matters of public health,” said Haynes Boone partner Laura Prather, who represents the media defendants. “The truth and responsible reporting practices will prevail over meritless defamation claims seeking to silence watchdog journalism on issues of public concern.”
Chief Justice Terry Adams and Justices Amparo Monique Guerra and April L. Farris sat on the panel.
Frazier is represented by David H. Berg, James Quinn and Caroline K. Gorman of Berg & Androphy and Michael Adams-Hurta of Wright Close & Barger.
The publications are also represented by Catherine Robb of Haynes Boone.
The case number is 01-22-00281-CV.
Fourteenth Court of Appeals, Houston
Houston Misallocated Street, Drainage Funds
Engineers Bob Jones and Allen Watson notched a win in their fight against the city of Houston on April 23 when a three-justice panel agreed the city had misallocated funds intended to be used on street and drainage infrastructure projects.
Jones and Watson alleged that, in violation of a city charter amendment that passed with 74 percent of the vote in November 2018, the city wasn’t allocating the required amount of ad valorem tax revenue to the drainage fund.
In particular, Jones and Watson alleged that for fiscal year 2020 the city council only allocated $46 million in tax revenue to the drainage fund when it should have allocated more than $96 million to the fund.
“In sum, we conclude that the officials’ methodology is legally incorrect, and the evidence conclusively establishes that their misallocations are ultra vires,” the panel wrote. “The officials should be allocating an amount to the drainage fund that applies the full 11.8 cents multiplier, not the so-called ‘11.8 cents equivalent,’ which is anything but equivalent.”
Chief Justice Tracy Christopher and Justices Ken Wise and Meagan Hassan sat on the panel.
Houston is represented by Collyn A. Peddie of the city’s legal department.
Jones and Watson are represented by Matthew Erickson and Tom Phillips of Baker Botts and Ryan D. Greene of Terrill & Waldrop.
The case number is 14-23-00550-CV.
Texas Supreme Court
Pandemic Liability Limitations Upheld
A law enacted in 2021 to protect universities from monetary liability for cancelling in-person classes due to the pandemic is not an unconstitutionally “retroactive” law, the Texas Supreme Court decided.
The court answered a question from the U.S. Court of Appeals for the Fifth Circuit in a case brought by Southern Methodist University graduate Luke Hogan. He brought a breach-of-contract claim against SMU to recover monetary damages he said were owed after SMU cancelled in-person classes at the government’s insistence for the spring of 2020.
Justice Jimmy Blacklock, writing for a unanimous court, noted that Hogan was one of millions of public school and college students affected by school closures. “Unlike millions of other students, Hogan took his school to court,” Blacklock said.
Anticipating claims related to coronavirus closures, the Texas Legislature in 2021 enacted the Pandemic Liability Protection Act. Hogan contended that article I, section 16 of the Texas Constitution prohibits the Legislature from retroactively withdrawing his right to hold SMU liable for breaking its promise of an in-person education.
A federal district court sided with SMU. Hogan appealed, and the Fifth Circuit certified the question.
Blacklock said Hogan must show he had a reasonable and settled expectation that he could recover money damages from SMU if the government forcibly shut down the campus but had not done so.
“The Legislature does not exceed its authority by resolving lingering uncertainty about the viability of a speculative, untested theory of liability on which the common law already casts considerable doubt. And that is what we have here,” he said.
Lawmakers had a legitimate public purpose to resolve legal uncertainty created by the pandemic to promote the speedy recovery of the Texas economy from one of the most traumatic episodes in our history, the court said.
SMU was represented by M. Scott Barnard, Heather L. Peckham and Brennan H. Meier of Akin Gump Strauss Hauer & Feld.
Hogan was represented by Philip J. Furia. Jason P. Sultzer of The Sultzer Law Group, Poughkeepsie, New York; Michael A. Tompkins of Leeds Brown Law, Carle Place, New York; and Jeff Edwards, Michael Singley and David James of Edwards Law in Austin.
Texas was represented at argument by Deputy Solicitor General Bill Davis. In its amicus brief, the attorney general said that if every student recovered the sort of damages sought here, Texas universities, elementary and secondary schools and childcare facilities could be bankrupted.
The case is No. 23-0565.
Weatherford Gets Wrongful Death Suit Booted
Weatherford will not have to litigate in Texas courts a wrongful death lawsuit brought by the family of a former employee, after the Texas Supreme Court on Friday determined all six factors courts consider when determining appropriate forum weighed in favor of moving the case elsewhere.
The ruling overturns an October 2022 First Court of Appeals’ decision rejecting Weatherford’s bid to end the suit on forum non conveniens grounds.
The family of Kevin Milne filed suit against Weatherford following his November 2019 death, alleging the company failed to timely disclose the results of a medical exam he underwent in Egypt before being on long-term assignment in the country while working for Weatherford.
The exam showed Milne had a mass on his kidney. His family alleges had he received the results sooner he would have survived and that Weatherford has a global policy “to not provide the employees with the results of any medical exams and to keep the results internally with the human resources department.”
Weatherford argued that the case had “no connection to Texas,” because Milne was a resident of the United Kingdom and his widow is a resident of South Africa, the exam that spurred the lawsuit took place in Egypt and his subsequent medical treatment prior to his death took place in South Africa.
The Texas Supreme Court noted that all Weatherford Egypt parties residing in that country “are beyond the compulsory subpoena power of a trial court in Texas.”
“And it would be far more convenient to determine the responsibility of all foreign parties in one trial,” the court wrote.
“Although the Milnes have not filed any claims for wrongful death in Egypt, they recognize their ability to do so. They also acknowledge that such claims could be brought in their home countries of South Africa and Scotland,” the court held. “… Dismissal narrows the forums to only three — Egypt, South Africa, and Scotland. Because dismissal will not be the cause of any 11 unreasonably duplicative litigation, the sixth factor weighs in favor of dismissal.”
Weatherford is represented by Todd W. Mensing, Ryan A. Hackney and Kelsi Stayart White, of Ahmad Zavitsanos & Mensing and Jeffrey L. Oldham and Tracy C. Temple of Bracewell.
The Milnes are represented by Marlon Portes of New York City, solo practitioner Denyse Renee Ward of Houston, Karen Alvarado of Brothers, Alvarado, Piazza & Cozort and D. Todd Smith and Anne G. Crisp of Butler Snow.
The case number is 22-1014.
U.S. Court of Appeals for the Fifth Circuit
Anadarko Gets Class Cert Undone in Investor Suit
On Thursday, a three-judge panel reversed a trial court’s ruling that had granted class certification to a group of Anadarko stockholders who allege they were misled by the company about the value of an oil field project in the Gulf of Mexico.
The panel reasoned that Anadarko was wrongly denied an opportunity by the trial court to file a surreply in response to new evidence presented by the plaintiffs.
“Our adversarial system of justice requires that we give both sides full and fair opportunity to present their strongest possible arguments to the court,” Judge James C. Ho wrote for the court. “It is through that clash of ideas that we ensure that justice is done pursuant to the laws that govern the dispute in question. That clash of ideas was missing here.”
Anadarko has argued there was a separate cause for the 2017 stock drop precipitating this lawsuit.
In May 2017, the price of Anadarko’s stock fell about 8 percent after the company announced a test well in the Shenandoah oil field in the Gulf of Mexico came up dry, resulting in a $900 million write-down on its investment.
But within an hour after that announcement, Colorado officials announced they had determined Anadarko was responsible for a fatal gas explosion that happened at a residential area in that state a month earlier and would be requiring all energy companies to inspect all oil and gas lines within 1,000 feet of occupied homes.
U.S. District Judge Charles Eskridge sided with the investors and granted class certification, prompting Anadarko to file notice of appeal in August.
The Fifth Circuit explained that Anadarko should have been allowed to respond to a rebuttal report from the stockholders showing that Anadarko’s stock price fell 4.1 percent in after-market trading after the Shenandoah disclosure but before the news article about the Colorado announcement was published.
Judges Carolyn Dineen King and Kurt D. Engelhardt also sat on the panel.
Anadarko is represented by Kevin Orsini and Lauren Rosenberg of Cravath, Swaine & Moore and George T. Shipley of Shipley Snell Montgomery.
The class is represented by Joseph Daley of Robbins Geller Rudman & Dowd, Elton Kendall of Kendall Law Group and Thomas R. Ajamie of Ajamie Law.
The case number is 23-20424.
Panel Affirms Win for Pecan Farm
A three-judge panel, noting it was “mindful of our deferential review of jury verdicts and the unique factual scenario present in this case,” affirmed a win for a pecan farm in a flooding damage lawsuit brought against a neighboring sand and gravel mine.
A jury had awarded Good River Farms about $650,000 in damages in the lawsuit it brought against Martin Marietta Materials and TXI Operations in the wake of a 120-year flooding event that hit the Austin area in October 2015.
The companies sit across from each other on the banks of the Colorado River. On appeal, MMM and TXI argued that based on the law and physics the case should have never gotten to a jury because water allegedly impounded on MMM and TXI’s property would have had to “magically” cross over the “raging Colorado River to land on the other side to flood the pecan farm.”
Good River offered eyewitness testimony and evidence that the water that flooded its property was coming northward and not from the normal eastward flow of the Colorado River.
“Although this case presents a close call, the jury verdict demands our deference,” the panel held in its Thursday ruling. “Because sufficient evidence supports its conclusions that Martin Marietta violated Texas Water Code § 11.086 and committed common law negligence, we affirm.”
Judges Dana M. Douglas, Jerry E. Smith and Catharina Haynes sat on the panel.
Martin Marietta and TXI are represented by Ken Carroll, D. Lance Currie and Debrán O’Neil of Carrington, Coleman, Sloman & Blumenthal.
Good River is represented by Travis J. Phillips of Austin.
The case number is 23-50330.
Insurer Doesn’t Have to Defend Fatal Drag Racing Suit
Kinsale Insurance Company notched an appellate win Friday when a panel of judges agreed it does not have to pay legal defense costs in a wrongful death lawsuit brought against a policyholder in the wake of a drag racing event.
Flyin’ Diesel Performance & Offroad was sued by injured spectators and the families of deceased spectators following an incident that happened in October 2021 at “Race Wars 2,” which court documents describe as a “no prep” drag racing event.
During the race, a car driven by a participant collided with spectators.
Kinsale filed notice of appeal in May 2023, soon after U.S. District Judge Jason Pulliam ruled against the insurer and found the commercial general liability insurance policy “ambiguous.”
The panel found the policy contained an exclusion for coverage of lawsuits stemming from bodily injury or property damage that is the result of the “operation, maintenance, use, entrustment to others, or loading and unloading of any motorized vehicle of any type.”
“Contrary to Flyin’ Diesel’s approach, we must construe every part of the CGL policy — the CGL declaration, the CGL form, and the CGL endorsements — simultaneously,” the panel wrote. “So construed, the CGL policy is not ambiguous.”
Judges Jerry E. Smith, Patrick E. Higginbotham and Stephen A. Higginson sat on the panel.
Kinsale is represented by Gregory S. Hudson and Alissa K. Christopher of Cozen O’Connor.
Flyin’ Diesel Performance & Offroad is represented by Jon M. Smith of Austin.
The case number is 23-50336.
Editor’s Note: Janet Elliott contributed to this report.