In this week’s roundup, we have two new lawsuits, a venue change, a new SEC enforcement action, a ruling denying a request for a new trial, a revenge porn final judgment, a loss for Ken Paxton and a tentative dismissal of an investor lawsuit involving Tilman Fertitta.
WDTX & SDNY
Elon Musk Sued in Federal Court — Twice in One Week
Within the same week, Elon Musk and two of his companies — Austin-based Tesla and California-based SpaceX — were sued in federal court.
In a derivative shareholder lawsuit filed June 16 in Austin federal court by Tesla investor Solomon Chau, Dallas lawyer Joe Kendall claims on Chau’s behalf that Tesla has a “toxic workplace culture grounded in racist and sexist abuse and discrimination against its own employees.”
The same day, a Dogecoin investor sued Musk, Tesla and SpaceX in Manhattan federal court, alleging they operated a pyramid scheme to drive up the price of Dogecoin through Musk’s many promotions of the cryptocurrency on Twitter only for it to plummet in value.
New York lawyer Evan Spencer represents the investor, Keith Johnson, who is seeking $258 billion in damages.
No outside lawyers have appeared yet in defense of Musk’s empire, but Tesla’s acting chief legal officer is David Searle. According to Searle’s LinkedIn page, he was elevated to Tesla’s head lawyer from deputy GC in October 2021. A lawyer with Texas roots, Searle is the sixth top lawyer of Tesla since 2019, Corporate Counsel reported at the time he got the promotion. Before joining Tesla, Searle was a vice president and chief ethics and compliance officer at Walmart and has previously served in-house roles in Texas at Bristow Group, Nexeo Solutions and Baker Hughes. Searle clerked for U.S. Circuit Judge Jerry Smith of the Fifth Circuit after law school and began his legal career at Baker Botts in Houston.
The discrimination suit is 1:22-cv-00592-LY and has been assigned to Judge Lee Yeakel. The crypto suit is 1:22-cv-05037-AKH in the Southern District of New York and has been assigned to Judge Alvin K. Hellerstein.
Uber Wrongful Death Suit Changes Venues
A Travis County lawsuit against Uber Technologies filed in May by the family of a fatally shot peaceful protester has been removed to Austin federal court.
Dallas personal injury Quentin Brogdon and Dallas corporate defense lawyer Zach Mayer will now face off in the Western District of Texas over the lawsuit, which traces back to the evening of July 25, 2020. Garrett Foster was peacefully protesting at a Black Lives Matter rally in downtown Austin when Uber driver Daniel Perry shot him to death. A murder trial against Perry is pending.
Brogdon, who represents the Foster family, contends that Uber should have known Perry was “a ticking time bomb” because he posted online threats to shoot protestors and, moreover, Uber generally did not enforce its policy preventing drivers from carrying firearms.
Brogdon brings the suit with Crain Brogdon law partner Robert Crain and Dallas lawyers Andrew Wilkerson and Michael Campbell of Wilkerson Campbell.
Mayer defends Uber with San Antonio lawyer Steven Barnett and Albuquerque, New Mexico, lawyer David Larsen. Perry’s lawyer is C. Robert Dorsett Jr. of Dorsett Johnson in Austin.
The cause number is 1:22-cv-00598. It has not been assigned to a judge yet.
NDTX
Dallas businessman Albert C. Black III has been appointed as the receiver of Texas real estate executive Blake Robert Templeton, Boron Capital and two other Templeton-controlled entities in a new enforcement action brought by the U.S. Securities and Exchange Commission. On June 14, the SEC announced it had filed an emergency action to halt an alleged multiyear investment fraud in which Templeton supposedly raised more than $18.7 million over the last decade and repaid some investors Ponzi-style.
The receivership appointment is part of a temporary restraining order that U.S. District Judge Sam Cummings granted for the SEC, in which he also halted the offering, froze the defendant’s assets and granted other emergency relief. Judge Cummings scheduled a preliminary injunction hearing for 9 a.m. June 28 to determine whether those measures should be continued throughout the litigation.
Matthew Gulde and David Fraser of the SEC’s Fort Worth Regional Office are prosecuting the matter. Receiver’s counsel for Black is Dallas shareholder Dennis Roossien Jr. of Munsch Hardt.
No lawyer has made an appearance yet for Templeton and the defendant entities.
The cause number is 5:22-cv-00114-C in the Lubbock division of the U.S. District Court for the Northern District of Texas.
TARRANT COUNTY
Former Flight Attendant Will Continue Pressing Sexual-assault Claim Against American Airlines
A state district judge finalized a jury’s verdict against a former flight attendant who sued American Airlines over her sexual assault in 2018. But the lead attorney for Kimberly Goesling, who sought $26 million from the airline, said Judge Kimberly Fitzpatrick’s June 16 judgment will not stop his client from seeking a new trial.
After a jury found in American’s favor on May 11, awarding nothing to Goesling, her lawyer, Rob Miller of Miller Bryant in Dallas, unsuccessfully sought to have the judge removed from the case because, through a series of errors on the part of Fitzpatrick and her staff, an improper jury instruction was included in the written charge the jurors brought with them when they retired to deliberate.
Miller said through a spokesperson that he plans to update his motion for a new trial within 30 days.
Goesling was assaulted in her hotel room by Mark Sargeant, a British celebrity chef who was working with American Airlines, while the two of them were on a business trip to Germany. Her suit said American was in part to blame for the attack because an official of the airline got Sargeant drunk and told him Goesling was interested in him romantically. The jury agreed that Sargeant had committed sexual assault but rejected Goesling’s claim for damages from American.
American’s lead lawyer at trial was Shauna Wright from Kelly, Hart & Hallman. The cause number is 342-314656-20 in Tarrant County’s 342nd district court.
DALLAS COUNTY
Judge to Texas AG Paxton: Mind Your Own Beeswax
A Dallas County Court at Law judge on June 17 struck Texas Attorney General Ken Paxton from a lawsuit involving Children’s Medical Center Dallas and a physician there providing care for transgender youth.
Judge Melissa Bellan ruled that Paxton has no authority to act in the case because it involves no state statutes.
“The AG should not be getting involved in these situations,” the judge said.
Dr. Ximena Lopez sued Children’s to reverse the hospital’s decision to stop providing treatments including puberty blockers and hormone therapy to transgender patients. Last month, Children’s agreed to allow Lopez to resume this care while the case is being litigated.
Paxton sought to intervene in the case, claiming “gender-affirming care” constitutes child abuse.
Lopez’s lawyer, Charla Aldous, applauded the judge’s ruling that Paxton has no standing to intervene in the suit.
“The attorney general has no business being in this case and tried to push his way into it to satisfy a political interest,” Aldous said.
The case is Ximena Lopez, M.D. v. Children’s Medical Center at Dallas, cause no. CC-22-02427-B in Dallas County Court at Law No. 2.
COLLIN COUNTY
Revenge Porn Verdict Affirmed for Ex-Middle School Teacher
On Monday, June 20, a Collin County judge affirmed a $250,000 jury verdict for a young woman in a revenge porn and invasion of privacy lawsuit. The verdict is one of the first — and largest — involving the 2015 Texas Relationship Privacy Act.
The 26-year-old woman, identified only as Jane Doe, sued her ex-boyfriend after discovering the images in November 2018 and after unsuccessful attempts to get law enforcement involved. A jury ruled in the woman’s favor in November 2021 after hearing evidence from the plaintiff’s lead attorney, Kenton Hutcherson of Dallas, that more than 25 explicit photos of her had appeared online since December 2016. The images continued to appear online through 2020, and the woman said the postings disrupted her life so much that she gave up her career as a middle school teacher out of fear that the images would be discovered.
Besides solidifying the $250,000 price tag, Collin County District Judge Benjamin Smith signed a separate permanent injunction ordering 26-year-old Diego Rotea of Allen to remove the images from a list of websites and image board groups, many of which are notorious for posting revenge porn images.
The cause number is 380-06731-2020 in Collin County’s 380th district court.
WESTERN DISTRICT OF LOUISIANA
Investors Lose Round One in Dud-SPAC Lawsuit Against Texas Billionaire Tilman Fertitta
A federal magistrate judge in Louisiana is recommending that a lawsuit brought by investors feeling duped by a special purpose acquisition company led by Houston restaurateur Tilman Fertitta and Wall Street financial executive Richard Handler be dismissed.
Investors sued Fertitta and Handler, who are partners in the SPAC that became Waitr Holdings, claiming that they made misrepresentations to obtain their funding. Waitr raised about $250 million and went public in 2018, only to lose 96 percent of its value in 2019, according to court documents. Fertitta, who also owns the Houston Rockets, and Handler, who is CEO of Jefferies Financial Group, argued that they were honest with investors.
In a 62-page finding, U.S. Magistrate Kathleen Kay recommended to presiding U.S. District Judge Terry Doughty dismissal of the lawsuit because the plaintiffs failed to state a claim that would win relief in federal court.
Feritta, Handler and other defendants are represented by Liskow & Lewis partners George Denegre, John Anjier and Melanie Derefinko of New Orleans, Dorsey & Whitney partners Andrew Brantingham and Caitlin Hull of Minneapolis, and Shearman & Sterling partners Adam Hakki of New York and Katherine Brennan of Houston.
The plaintiffs are represented by Kahn Swick & Foti partners Craig Geraci Jr., Kim Miller and Lewis Kahn of New Orleans, Matthew Lundy of Lake Charles, Fishman Haygood partner Jason Burge, Eric O’Bell of Metairie, Smith Shanklin partners John Smith, Alicia Sosa and Loren Shanklin of Baton Rouge and Andrew Lemmon of Hahnville, Louisiana.
The cause number is 2:19-cv-01260-TAD-KK in the U.S. District Court for the Western District of Louisiana in Lake Charles.
Editor’s Note: Bruce Tomaso and Mark Curriden contributed to this report.