In this edition of Litigation Roundup, an ExxonMobil unit is hit with a $5.6 million jury verdict in Houston, Amazon, after appealing to the Texas Supreme Court but before any real movement in the appeal, settles a wrongful death lawsuit in which it alleged a state district judge was going to force it to disclose confidential and proprietary information, and a trade secrets fight between competing compounding pharmacies heats up.
The Litigation Roundup is a weekly feature highlighting the work Texas lawyers are doing inside and outside the state. Have a development we should include next week? Please let us know at tlblitigation@texaslawbook.net.
Harris County District Court
ExxonMobil Unit Owes Joint Operating Partner $5.6M
XTO Energy owes Maverick Natural Resources and Breitburn Operating $5.6 million for breaching a joint operating agreement governing wells operating in East and West Texas, a Harris County jury recently determined.
Harris County District Judge Donna Roth presided over the three-day trial that ended Jan. 17.
Breitburn Operating LP and Maverick Natural Resources filed suit in February 2022, alleging XTO had failed to pay them at least $2 million in joint interest billings owed on wells Breitburn and Maverick were operating under the joint operating agreement with XTO.
In an answer and counterclaim filed in September 2022, XTO alleged the plaintiffs had breached the joint operating agreements and were “withholding more than $4 million in revenue” from the wells Breitburn and Maverick were operating.
By the time amended pleadings were filed, Breitburn and Maverick alleged they were owed “more than $15 million in damages” as a result of XTO’s breaches — $7.1 million for expenses, $2.7 million for amounts “XTO has improperly ‘netted’ against revenues owed to Breitburn” and about $5.4 million in revenues.
XTO alleged in its amended counterclaim that the plaintiffs had wrongfully withheld more than $17 million in revenue it is owed. In later filings, XTO alleged new evidence showed it was owed $33 million in revenue from the plaintiffs.
“Plaintiffs’ failure to timely provide accurate information has prevented XTO Energy from being able to account for the revenues owed to XTO Energy and from being able to adequately assess the scope of expenses owed,” XTO told the court.
Judge Roth has set a hearing to enter final judgment in the case for Feb. 3.
Breitburn and Maverick are represented by Ryan Hackney, Colin Phillips, Davis Metzger and Kelsi Stayart White of Ahmad Zavitsanos & Mensing.
XTO Energy is represented by Anthony Arguijo and Mary Byars of Scott Douglass McConnico and Michelle P. Scheffler of Skadden, Arps, Slate, Meagher & Flom.
The case number is 2022-10135.
Compounding Pharmacy’s Theft of Trade Secrets Suit Heats Up
As of Monday, all four defendants named in a December lawsuit filed by Empower Clinic Services, which does business as Empower Pharmacy, had filed an answer and asserted affirmative defenses against claims of conspiracy and theft of trade secrets.
Empower, a Houston-based compounding pharmacy, filed suit against its former director of supply chain, Samuel Pray, his company PSW Group, and two competing pharmacies — Striker Pharmacy and ReviveRX, alleging all were involved in a conspiracy to enrich themselves at Empower’s expense.
According to court documents, Pray was hired by Empower in May 2022 and left in September 2024 to go to work for ReviveRX in violation of a contract, Empower alleges. Empower alleges that after Pray left it discovered he stole Empower property, including a weight-loss drug, and sold it to third parties, including Striker, through his company.
On Monday, Revive, Pray and PSW each filed answers denying the allegations. Revive argued the lawsuit should be dismissed because it has “no basis in law or in fact” and because Empower’s claims are barred by the statute of limitations. Pray and PSW argued the claims against him “are controlled by mandatory arbitration provisions, and this action is therefore barred.”
On Jan. 6, Striker filed its answer, also denying the allegations and arguing a breach of fiduciary duty claim against it must be tossed because “it does not have a fiduciary relationship” with Empower.
Harris County District Judge Michael Gomez signed an order Dec. 6, the day after the lawsuit was filed, denying Empower’s request for a temporary restraining order. A hearing on Empower’s motion for a temporary injunction before Harris County District Judge Lauren Reeder is set for Feb. 10.
Empower is represented by Robin O’Neil and Murray Fogler of Fogler, Brar, O’Neil & Gray.
PSW Group and Pray are represented by Aaron A. Wagner of Kabat Chapman Ozmer.
Striker Pharmacy is represented by Anthony L. Laporte and Alexandra E. Pierce of Hanszen Laporte.
Revive RX is represented by John R. Keville and Eric S. Schlichter of Sheppard, Mullin, Richter & Hampton.
The case number is 2024-85045.
Texas State Securities Board
Edward Jones Agrees to $17M Settlement After 4-Year Investigation
The states of Texas and Montana led the way on a recently announced $17 million settlement with Edward D. Jones & Co. to bring an end to an investigation into supervisory failures 14 states alleged had harmed “main street investors.”
Texas Securities Commissioner Travis J. Iles and Edward Jones’ senior associate general counsel James E. Crowe III inked the consent order Dec. 20, with Edward Jones agreeing to pay Texas about $336,000. The 12 other states that participated in the investigation are Alabama, Arkansas, Connecticut, Florida, Indiana, Massachusetts, Michigan, New Jersey, Nevada, Ohio, Washington, and Wisconsin.
The states alleged Edward Jones failed in its supervisory obligations when it moved some customers from brokerage to advisory accounts in the wake of a 2016 U.S. Department of Labor Fiduciary rule that meant investment advice to retirement accounts was subject to a fiduciary standard of care.
Additionally, the states alleged Edward Jones had charged customers charged too much in certain advisory fees. But in a news release announcing the deal, Texas noted there was no evidence of “willful or fraudulent conduct by Edward Jones,” and said the company had “fully cooperated” in the investigation.
“Our priority has and will always be to protect Texas investors,” Iles said. “We are beyond pleased with the efforts of the states, the ongoing cooperation from Edward Jones, and their commitment to compliance. Texas Deputy Commissioner Cristi Ramón Ochoa was a keystone to this resolution.”
The consent order number is IC-25-CAF-01.
Northern District of Texas
Buc-ee’s Says Cape-Wearing Cartoon Dog Logo Infringes its Trademark
Buc-ee’s has accused the operator of gas stations in Dallas and Irving of infringing its trademarked cartoon beaver logo.
Just 10 days after convenience store giant Buc-ee’s sued Super Fuels Lombardy and its affiliates, the company filed an answer to the lawsuit Jan. 17, denying the allegations against it and argued in raising affirmative defenses, in part, that Buc-ee’s had waited too long to bring the lawsuit, and that it had suffered “no harm, irreparable or otherwise, due to any action by the defendants.”
Super Fuels operates a gas station on Northgate Drive in Irving, across from the Dallas Fort Worth International Airport, and on St. Augustine Drive in Dallas, just north of Interstate 20 and near the interchange with U.S. Highway 175.
Its logo features a brown cartoon dog with a lighter-colored face and chest, wearing a red cape inside a blue circle. Buc-ee’s logo features a brown cartoon beaver with a lighter-colored face and chest, wearing a red baseball cap inside a yellow circle.
“Defendants’ use of the infringing marks is likely to cause confusion among consumers in the relevant market as to the source and origin of defendants’ services,” Buc-ee’s alleges. “As illustrated above, defendants’ infringing marks prominently feature an anthropomorphic and cartoon representation of a smiling animal that closely resembles a beaver, which is similarly positioned in a right-facing angle and is depicted in front of a circular background.”
The case has been assigned to U.S. District Judge Ed Kinkeade.
Buc-ee’s is represented by Terrell R. Miller, Aaron Chibli and Michelle Ku of Foley & Lardner.
Super Fuels is represented by Joyce Lindauer and Rebecca Vaughn of Joyce W. Lindauer Attorney PLLC.
The case number is 3:25-cv-00075.
Western District of Texas
Doctor Freed from Antitrust Suit Over Cardiology Services in Laredo
U.S. District Judge Xavier Rodriguez signed an order Tuesday granting a Laredo cardiologist’s motion for summary judgment, freeing him from a lawsuit that had accused the doctor of anticompetitive activities in South Texas.
The 67-page order brought an end to the October 2021 lawsuit Doctors Hospital of Laredo and Laredo Physicians Group had filed against Dr. Ricardo Cigarroa, Cigarroa Heart and Vascular Institute, and Laredo Texas Hospital Company, which does business as Laredo Medical Center.
Doctors Hospital of Laredo and Laredo Physicians Group are providers of interventional cardiology services in Laredo, according to court documents, and are direct competitors with Cigarroa, his institute and the Laredo Medical Center.
Judge Rodriguez referred to the plaintiffs and defendants as “the sole players in the market” for such services within that geographical region.
According to the order, Dr. Cigarroa used to treat patients at DHL, LMC and at his own clinic, the Cigarroa Clinic. In August 2020, the plaintiffs wanted to expand their interventional cardiology practice but “ran into roadblocks.”
“Plaintiffs (i) failed to hire new interventional cardiologists they attempted to recruit, (ii) lost Dr. Cigarroa (and his son, Dr. Cigarroa II, also an interventional cardiologist), who moved their practice to LMC, and (iii) lost their only cardiovascular surgeon — Dr. Anthony Santos — and related employees, who were recruited by LMC,” the order reads. “Plaintiffs have not gone out of business; they have successfully hired new interventional cardiologists and continue to provide interventional cardiology treatment to patients in Laredo. Still, plaintiffs insist that the roadblocks they encountered were not due to market competition but to defendants’ anticompetitive conduct.”
The roadblocks, according to the plaintiffs, “were the result of illicit agreements and conspiracies” aimed at both preventing them from recruiting new doctors, and soliciting and poaching its staff “to stamp out competition and monopolize the interventional cardiology market.”
In moving for summary judgment, the defendants argued there was insufficient evidence to support the lawsuit, and Judge Rodriguez wrote Tuesday that he agreed.
“While there is evidence of some of these conspiracies, the record lacks evidence that they caused anticompetitive effects, nor is much of the conduct anticompetitive itself,” the order reads. “Plaintiffs’ state law claims fail because defendants did not engage in independently actionable tortious conduct. As plaintiffs’ counsel acknowledged at oral argument, Plaintiffs filed this action to stop defendants’ conduct. They may have succeeded. But that does not mean that the conduct violated the antitrust laws.”
Dr. Cigarroa was profiled by Texas Monthly in a June 2020 article that heralded him as the “Dr. Fauci of South Texas.”
Doctors Hospital of Laredo and Laredo Physicians Group is represented by James E. Zucker, Justin S. Rowinsky and Katherine Dannenmaier of Yetter Coleman.
Cigarroa is represented by James Leader Jr., Jason M. Powers and Ryan Sun of Vinson & Elkins, Peter D. Kennedy of Graves, Dougherty, Hearon & Moody, James G. Munisteri of Foley & Lardner and Martha Cigarroa and Steve A. Whitworth of Whitworth Cigarroa.
Laredo Medical Center is represented by James G. Munisteri and Thomas A. Leonard of Foley & Lardner.
The case number is 5:21-cv-01068.
Texas Supreme Court
Amazon Settles, Ends Fight over ‘Confidential’ Documents
More than two months after turning to the state’s high court seeking protection from a trial court order it argued would force it to disclose confidential, proprietary information responsive to discovery requests in a wrongful death lawsuit, Amazon.com and affiliated companies have settled the lawsuit.
Amazon.com, Amazon Logistics and Amazon.com Services filed a motion to dismiss its petition for writ of mandamus with the Texas Supreme Court Jan. 22, which the court granted two days later.
“Relators, Amazon.com, Inc., Amazon.com, LLC, Amazon Logistics, LLC and Amazon.com Services, Inc. and real party in interest, Dimitrula Velez, Individually and as representative of the Estate of Ilian Arie Velez, deceased, and on behalf of all wrongful death beneficiaries of Iliana A. Velez, jointly file this motion to (i) notify the Court that the parties have reached an agreement resolving the underlying dispute and, (ii) pursuant to that agreement, request this Court to dismiss relators’ petition for writ of mandamus,” the short motion reads.
The Texas Supreme Court had requested that the Velez family respond to the petition by Jan. 13, but the family informed the court on that date that the parties were finalizing a settlement.
In its November petition, Amazon argued Travis County District Judge Jessica Mangrum had wrongly refused to declare its insurance policy details and “proprietary intellectual property” as confidential, calling the ruling a “dangerous precedent.”
“This mandamus petition brings to the surface a growing trend among plaintiffs’ attorneys: the race to corner a niche market in suing a specific corporate defendant, like Amazon, by gleaning inside knowledge through expansive discovery in other litigation,” Amazon told the Texas Supreme Court in its petition.
“Litigants — particularly those with a national presence who face ongoing widespread litigation — should be able to trust that the information they disclose pursuant to a protective order will be shielded from public view and be kept out of the hands of their competitors or used to profit plaintiffs’ counsel,” Amazon argued.
A three-justice panel of the Third Court of Appeals issued a ruling upholding Judge Mangrum’s challenged orders in June.
Amazon is represented by Bradley W. Snead, Jessica Z. Barger, Kelley Clark Morris and Emily C. Freeman of Wright Close & Barger, John Bridget of Wilson Elser Moskowitz Edelman & Dicker and Jacob B. Kring and Mark A. Fritsche of Husch Blackwell.
The Velez family is represented by Russell S. Post, Mary Kate Raffetto and John S. Adcock of Beck Redden and Robert C. Hillard, Marlon M. Reilly, Michael E. Richardson and Alex Hilliard of Hilliard Martinez Gonzales.
The case number is 24-0925.