In this edition of Litigation Roundup, Marathon Oil takes a $46.5 million hit on appeal, an Austin doctor agrees to pay $13.6 million to settle five False Claims Act cases and a few Paycheck Protection Program fraud cases are adjudicated as well.
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.
Southern District of Texas
Houston Ocean Seismic Co. Pays $4.1M to end FCA Case
Magseis FF LLC, a Houston-based company that provides seismic services to energy companies, has agreed to pay $4.1 million to resolve claims it violated the False Claims Act by fraudulently receiving Paycheck Protection Program loans.
The government alleged Magseis, which is owned by Norway-based Magseis Fairfield ASA, misrepresented how many people it employed in order to obtain PPP funds and loan forgiveness in March 2021. To qualify for the loan and forgiveness Magseis applied for, a company was required to have fewer than 300 employees or meet industry-specific size limits.
The qui tam lawsuit was filed by Blockquote Inc. in April 2024, and the government filed notice of intervention for the purpose of settlement in October 2025. Blockquote is a San Francisco company that specializes in public interest internet research and has brought many qui tam PPP cases.
Of the $4.15 million in settlement funds Magseis has agreed to pay, $2 million is for restitution, according to court documents.
U.S. District Judge Charles Eskridge presided over the case.
Magseis is represented by Matthew D. Krueger and Erin L. Toomey of Foley & Lardner.
The government is represented by Paul B. Moore of the Department of Justice and Amber Perez of the Small Business Administration’s general counsel office.
Blockquote is represented by Jason Marcus of Bracker & Marcus.
The case number is 4:25-cv-01505.
CEO of Veterans Nonprofit Gets Prison
U.S. District Judge David Hittner has sentenced the former chief executive officer of a nonprofit organization that operated a homeless shelter for veterans to three-and-a-half years in prison for defrauding the government out of grant funding.
Brenham resident Clifford Wayne Robertson, 59, pleaded guilty to the crime in September and earlier this month was sentenced to 42 months in prison. He will also have to pay $180,216.96 in restitution, according to court documents.
Robertson was charged with federal program theft in an information document filed by the government in July. Robertson was executive director and CEO of Castle Cares Community Ministry, which did business as The Warrior’s Refuge.
The government alleged that between February and April 2020 Robertson applied for federal assistance from the Department of Veterans Affairs and the Department of Labor and received about $1.8 million in total funds. But instead of using that money to run the nonprofit’s operations, he used the money for personal expenses.
At sentencing, Judge Hittner noted Robertson had prior convictions for bank fraud and aggravated identity theft.
Robertson is represented by George W. Aristotelidis of Houston.
The government is represented by Shirin Hakimzadeh of the Department of Justice.
The case number is 4:25-cr-00389.
Northern District of Texas
Co-Founder of Lender Service Gets Decade for Covid Fraud
Nathan Reis, 47, whom prosecutors allege orchestrated a massive, multimillion-dollar fraud scheme during the pandemic, will spend the next decade in prison and will have to pay $66 million in restitution, too.
In April 2020, Reis cofounded Blueacorn, a company that would help small businesses obtain Paycheck Protection Program loans. His wife Stephanie Hockridge was the other cofounder. She was sentenced in November to 10 years in prison.
Through Blueacorn, Reis and his coconspirators submitted more than 530 fraudulent PPP applications and received more than $65 million in loans. In furtherance of the scheme, Reis and others fabricated tax documents and bank statements.
Reis pleaded guilty to conspiracy to commit wire fraud in August 2025.
U.S. Attorney for the Northern District of Texas Ryan Raybould issued a statement vowing to punish those who “criminally exploit federal funding … to the fullest extent in our district.”
“In a critical time for our nation, when businesses were trying to survive a worldwide pandemic, the defendant egregiously lined his own pockets via his massive fraud scheme,” he said.
Chief U.S. District Judge Reed O’Connor sentenced Reis Dec. 18. A jury convicted Hockridge in June of conspiracy to commit wire fraud, and Chief Judge O’Connor ordered she pay more than $53 million in restitution as well. She has filed an appeal with the U.S. Court of Appeals for the Fifth Circuit.
The couple, who have a 15-month-old son, have asked the court for staggered sentences. The request remained pending as of Monday.
Reis is represented by Kevin Chambers, Matthew S. Salerno and Michael Clemente of Latham & Watkins and Michael P. Heiskell of Johnson Vaughn & Heiskell.
The government is represented by Matthew Weybrecht, Elizabeth Carr, Jeffrey McLaren, Justin Beck, Lindita Torza, Philip Trout, Saurabh Sharad and Steven Michaels of the Department of Justice.
The case number is 4:24-cr-00287.
Arlington Family Convicted for Tax Fraud
David Hunt, his twin sons Brandon and Baylon Hunt, and the sons’ half-brother Corey Burt have all been convicted for their roles in what prosecutors called a multimillion-dollar tax refund scheme.
The Hunts, who all live in Arlington, and Burt, who lives in Long Beach, Mississippi, filed tax returns in the name of bogus trusts they purported to control seeking more than $8.5 million in refunds, according to the government, and received about $1.7 million in refunds from the IRS.
All four were indicted by a Fort Worth grand jury in June. This month, all four were convicted by a jury of conspiracy to defraud the government and the three sons were additionally convicted of multiple counts of aiding and assisting the preparation of false tax returns.
Additionally, the government alleged Brandon and Baylon Hunt filed falsified financial instruments and money orders in furtherance of the scheme.
“Some of these documents were submitted to the IRS in response to IRS efforts to collect the fraudulently obtained refunds,” the DOJ wrote in a news release announcing the convictions. “The defendants continued filing false returns and other documents even after receiving warning letters from the IRS about their submissions.”
U.S. District Judge Mark Pittman will sentence each of them in March. Each defendant faces up to five years in prison for the conspiracy charge and up to three years in prison for the false tax return charge.
Baylon Hunt is represented by Mark R. Danielson of Mansfield. Brandon Hunt is represented by J. Warren St. John of Fort Worth. David Hunt is represented by Roderick White of Fort Worth. Burt is represented by federal public defender John M. Nicholson.
Matthew Weybrecht of the DOJ in Fort Worth is the lead prosecutor on the case.
The case number is 4:25-cr-00146.
Western District of Texas
Win for Book People Nets Haynes Boone Attorneys $1.2M in Fees
About two months after a group of lawyers from Haynes Boone prevailed for a group of clients challenging a state law that would have required book vendors to review and rate books sold to public schools based on sexual content, a judge recently determined the legal team is owed $1.2 million for its work.
In October, U.S. District Judge Alan D. Albright declared unconstitutional certain parts of Texas’ HB 900. And last week, two days before Christmas, he partially granted a request for attorney fees for the prevailing side.
He denied a request to award $7,656 in fees incurred for responding to a motion to stay filed by the state and for $715,000 in conditional appellate fees but granted the request in all other regards.
As for the fees incurred responding to the motion to stay, Judge Albright wrote that the request was raised for the first time in the plaintiffs’ reply and noted that the defendant “did not have the opportunity to contest those fees.”
“While defendant could anticipate challenging the fees incurred bringing the fee motion itself, defendant could not necessarily anticipate the fees sought for responding to the motion to stay,” he wrote. “The Court will, in its discretion, decline to award this category of fees sought by plaintiffs.”
Judge Albright wrote that the lawyers “can seek appellate attorneys’ fees at a later time, if they are successful, when the stages of appeals and amounts of fees incurred are documented.”
Austin’s Book People, Houston-based Blue Willow Bookshop, the American Booksellers Association, the Association of American Publishers, the Authors Guild and Comic Book Legal Defense Fund filed suit seeking to enjoin the law in July 2023.
The plaintiffs named as defendants the Texas State Library and Archives Commission, Texas State Board of Education and Texas Education Agency.
Judge Albright concluded that the READER Act, which stands for Restricting Explicit and Adult-Designated Educational Resources, “unconstitutionally compels speech, is void for vagueness, and is an unconstitutional prior restraint.”
The plaintiffs are also represented by Laura Lee Prather, Catherine Robb, Michael Lambert and Reid Pillifant of Haynes Boone.
The state is represented by Ryan G. Kercher, Mark A. Csoros, Munera Al-Fuhaid and Zachary Berg of the attorney general’s office.
The case number is 1:23-cv-00858.
Austin Doc Agrees to $13.6M Settlement of 5 FCA Cases
An Austin-based doctor who ran Advanced Pain Care has agreed to pay $13.6 million to bring an end to five separate qui tam lawsuits alleging that he submitted false claims to the government for urine testing.
Dr. Mark Malone and APC, a pain management clinic with outposts in and around Austin, Amarillo, Waco and Houston, struck the deal this month. The settlement includes more than a dozen related entities.
U.S. Attorney for the Western District of Texas Justin R. Simmons issued a statement that Dr. Malone had violated the oath to “do no harm” and has instead “cause[d] harm by submitting false claims for procedures, thereby enriching themselves to the detriment of the American taxpayer.”
“These settlements demonstrate my office’s commitment to protect the healthcare programs on which the American people have come to rely,” he said.
The government alleged the doctor and APC submitted false claims to Medicare, Medicaid, TRICARE, the Department of Veterans Affairs and the Federal Employees Health Benefits Program for urine drug testing.
Judges Orlando L. Garcia and Robert Pitman presided over the cases.
Malone and APC are represented by David J. Pivnick and Michael Podberesky of McGuire Woods and Suneeta Hazra of Arnold & Porter.
The government is represented by Mary E. Kruger and Thomas Parhham Jr. of the Department of Justice.
Relator Megan Lawlor is represented by Daniel L. Hargrove of Hargrove Law Firm, Jason S. Coomer of Austin and Kay Reeves and Loren Jacobson of Waters & Kraus. Relator Bobbie Mack is represented by Austin Kaplan of Kaplan Law Firm and Jason Marcus of Bracker & Marcus. Relator Jennifer Nuessner is represented by Jim Haley of Austin, Patrick J. O’Connell of Austin and Brianna Green and Samuel J. Buffone Jr. of Buffone Law Group. Relator APC is represented by Cary L. McDougal of Cooper, Huddleston & Aldous and Mark Scott La Spina of The La Spina Law Firm.
The case numbers are 5:15-cv-00060; 1:20-cv-00215; 1:21-cv-00257; 5:23-cv-01106 and 1:23-cv-01410, which remained under seal Monday.
First Court of Appeals, Houston
Panel Wipes Out Marathon’s $46.5M Jury Award
Because a contract between a contractor and Marathon Petroleum didn’t expressly provide for comparative indemnity, the energy company cannot hang on to a $46.5 million jury award that had been entered in its favor, a Houston appellate court recently determined.
In a 20-page opinion issued by a three-justice panel Dec. 23, the First Court of Appeals explained that the heart of this case required answering one “straightforward question: Can an indemnitee under a contractual indemnity agreement — who is sued with other defendants for negligence — settle all of the plaintiffs’ negligence claims and then recover from its indemnitor the portion of the settlement attributable to the other defendants under a comparative indemnity scheme?”
“The answer to that question is yes, with one caveat,” the panel wrote. “The indemnitee may do so provided that the parties’ indemnity agreement complies with the express negligence doctrine and expressly provides for such comparative indemnity.”
The litigation here stems from a fire that occurred at a refinery in Texas City that’s owned by Blanchard Refining Company. Marathon is an affiliate of Blanchard, and Industrial Services is a contractor that agreed to provide turnaround services at the refinery for five years. The fire occurred three years into the contract, according to the opinion.
One employee of Industrial was injured in the fire and 15 others were injured, along with one employee of another contractor, Certified Safety Inc. A total of four lawsuits were filed by those injured against Marathon and other contractors, which Marathon and the contractors settled for $104 million. Marathon agreed to pay $86 million of that settlement.
“Industrial did not participate in the settlement with the plaintiffs,” according to the opinion.
Following the settlement, Marathon filed a breach of contract lawsuit against Industrial, seeking indemnification that would cover most of what it paid in the settlement. After a jury trial, the trial court awarded Marathon $46.48 million in damages based on how the jury apportioned liability.
Chief Justice Terry Adams and Justices Clint Morgan and Susanna Dokupil sat on the panel.
Industrial Specialists is represented by Jessica Z. Barger, Eva M. Guzman, Brian J. Cathey and Eric B. Boettcher of Wright Close Barger & Guzman, Michael A. Golemi and James T. Kittrell of Liskow & Lewis and Mark D. Latham of New Orleans.
Marathon and Blanchard are represented by Joel Z. Montgomery, Jonathan B. Smith, Amy Maddux and Z. Alex Rodriguez of Shipley Snell Montgomery.
The case number is 01-23-00704-CV.
U.S. Court of Appeals for the Federal Circuit
Win for Hurricane Harvey Claimants Upheld
A group of property owners in Houston who prevailed against the federal government in a takings lawsuit over flooding during 2017’s Hurricane Harvey have had their win upheld by a three-judge panel of the U.S. Court of Appeals for the Federal Circuit.
In a 27-page opinion issued Dec. 22, the court rejected arguments from the government that the liability finding against the U.S. Army Corps of Engineers should be wiped out. The property owners all lived upstream of the Addicks and Barker dams, west of downtown Houston.
During the historic storm, the government made the decision to hold water back behind the dams to save downtown Houston and downstream properties. The upstream property owners argued, and courts so far have agreed, that decision constituted a taking of property that must be compensated.
Daniel Charest of Burns Charest, who represented the property owners for more than eight years, issued a statement praising the ruling.
“This ruling reinforces that every property owner whose land is subject to the government’s flowage easement deserves compensation for that permanent burden on their property rights,” he said. “This decision confirms that the government made a very calculated decision decades ago to use private property as flood storage to protect downtown Houston and downstream properties. So it must compensate upstream property owners for this taking.”
Judges Jimmie V. Reyna, Richard G. Taranto and Tiffany P. Cunningham sat on the panel
The plaintiffs are also represented by Elizabeth B. Deutsch and Ian Gershengorn of Jenner & Block, Charles Irvine of Irvine & Conner, Emery Lawrence Vincent of Sorrels Law, Roger J. Marzulla and Nancie Marzulla of Marzulla Law and Vuk Vujasinovic of VB Attorneys.
The federal government is represented by Brian C. Toth and Todd Kim of the Department of Justice.
The case number is 23-1363.
Craving more Texas Lawbook litigation coverage? Don’t worry, we’ve got you covered. Take a look at these stories you may have missed in the past few days.
Dallas-based Dean Omar Branham Shirley last week secured a $1.5 billion verdict against Johnson & Johnson and other defendants in a jury trial in Baltimore, a figure which includes a whopping $1 billion in punitive damages assessed only against Johnson & Johnson.
Stephen Gilstrap, a six-year veteran of the U.S. attorney’s office, joins roughly 2 dozen lawyers who have left since the start of the year. Gilstrap is at least the 24th lawyer to have left the U.S. attorney’s office in the Northern District this year, according to a tally by The Texas Lawbook. The office, when fully staffed, employs about 100 assistant U.S. attorneys.