In this edition of Litigation Roundup, Fluor beats back class action lawsuit brought by retirement plan participants, a jury in Houston finds there was no infringement of a patent covering a tool used in oil and gas drilling and the Fifth Circuit revives a proposed class action against Six Flags.
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Southern District of Texas
Jury Says No Infringement in Perforation Gun Trial
A jury in Houston determined that DynaEnergetics Europe GmbH, which was seeking more than $30 million in damages for the alleged infringement of a patent for a piece of equipment used in oil and gas drilling, is entitled to nothing and that its technology had not been infringed by Hunting Titan.
The seven-day trial ended Jan. 18 and U.S. District Judge Sim Lake entered final judgment in favor of Hunting Titan that same day, according to court records.
DynaEnergetics sued Hunting Titan in January 2020, court records show, alleging the patent covering its perforation gun had been infringed. The tool contains explosive charges and is used to perforate oil and gas wells in preparation for production.
In a separate but related case, the Patent Trial and Appeal Board in late October invalidated all 21 claims in another of DynaEnergetics Europe GmbH’s perforation gun patents. That ruling came in a case brought by G&H Diversified Manufacturing, which was one of nearly a dozen companies DynaEnergetics had accused of infringing the patent for technology used in oil and gas drilling.
Hunting Titan is represented by lead attorney Charles Baker of Locke Lord.
DynaEnergetics is represented by lead attorney Barry Jeff Herman of Womble.
The case number is 4:20-cv-02123.
Marriott Hit with Employment Discrimination Suit
Marriott International and Marriot Hotel Services has been accused by a former bartender of retaliation and discrimination after she was fired after filing a report that her supervisor had assaulted her.
Marriott removed the suit to federal court Jan. 10, according to court documents, but Charlotte Paliwoda first raised the claims in a July 17 lawsuit filed in Harris County district court. Paliwoda had served as a bartender for the hotel since December 2016 and alleges she was assaulted by her supervisor, food and beverage operations manager Nikki Kim, in August 2021.
The six-page lawsuit does not explain the circumstances surrounding the alleged assault, but says that after Paliwoda reported it to Marriott executives, she suffered adverse employment actions.
“The company wrongfully cut plaintiff’s hours, issued her bogus, unwarranted written disciplinary actions, precluding her from being promoted, refused to allow her to take leave or trade shifts … and refused to pay her fairly,” the suit alleges.
The case has been assigned to U.S. District Judge Lee Rosenthal, who has set an initial conference in the case for March 9.
Paliwoda is represented by Emily Susannah Frost of Frost Domel.
Marriott is represented by Nehal Shah Anand of Littler Mendelson.
The case number is 4:23-cv-00084.
Northern District of Texas
Former Employees’ Suit Against Fluor Gets Tossed
A group of former employees challenging Irving-based Fluor Corp.’s management of its employee savings and investment plan had their proposed class action lawsuit dismissed recently.
In a Jan. 18 ruling, U.S. District Judge Brantley Starr granted two motions to dismiss filed by Fluor in June. The investors filed suit Jan. 24, 2022.
“Sometimes stocks underperform,” Judge Starr wrote in a 17-page ruling dismissing the suit that alleged violations of the Employee Retirement Income Security Act.
The former employees had alleged that “competent fiduciaries would not have retained the investments” they were challenging in this lawsuit. But the court agreed with Fluor that two of the named plaintiffs had no standing to bring suit because they hadn’t invested in the plan options they were challenging.
The plaintiffs also failed to provide information that would have enabled Judge Starr to evaluate the process Fluor had for selecting investments, he wrote.
“Providing the court with data from other investments that outperformed the Fluor investments does little to aid the court in evaluating the fiduciary process,” he wrote. “Put bluntly, a flawed fiduciary process can result in great returns while a diligent and complete fiduciary process can result in underperformance. For this reason, the court cannot reasonably infer the fiduciary process was flawed based on the alleged facts.”
In November, Judge Starr approved a $33 million class action settlement between Fluor and a different group of investors who alleged the company made misleading statements between 2013 and 2020 concerning the costs of projects and whether those projects were being completed on time.
Fluor is represented by David I. Monteiro, Christopher Joseph Boran, Eric M. Makinen, Matthew James Sharbaugh and Sean Kenneth McMahan of Morgan Lewis & Bockius.
The investors are represented by and Anthony L. Vitullo of Vitullo Law Firm.
The case number is 3:22-cv-00154.
Harris County District Court
Chamberlain Hrdlicka Draws Malpractice Suit Over Divorce Settlement
A Houston businessman alleges Chamberlain Hrdlicka White Williams & Aughtry and a Houston-based attorney for the firm negligently advised him on business dealings, forcing him to fork over $5 million to his ex-wife during divorce proceedings.
Karl J. Van Eps alleges in the suit filed Jan. 6 that he approached the firm and attorney Barry Adkins in 2004 about legally changing the name of his drywall business from ApartCare to something that would better reflect the type of work the company did.
But instead of changing the name, Barry advised Van Eps to change the structure of the company by forming a new limited partnership in which he and his then-new wife would be limited partners.
“Although Barry offered Karl estate planning advice, he failed to advise Karl that, in the event of a divorce from Shannon, the new company formed during the marriage would be presumptively community property,” Van Eps alleges. “Conversely, a mere change of name, like Karl wanted, would not have converted the company from separate property to community property.”
When his wife filed for divorce in 2021, she claimed the business was community property. Van Eps couldn’t refute the contention and he was forced to pay her half of the value of the business, $5 million, according to the lawsuit.
Van Eps is represented by Lance Christopher Kassab and David Eric Kassab of The Kassab Law Firm.
The law firm and Adkins hadn’t retained counsel as of Monday afternoon.
The case number is 2023-01002.
U.S. Court of Appeals for the Fifth Circuit
Six Flags Sees Class Action Allegations Revived
A proposed class action lawsuit alleging Six Flags Entertainment Corporation misled investors about the progress of construction on parks in China and overstated its 2018 revenue by $15 million has been revived on appeal.
In a unanimous ruling issued Jan. 18, a three-judge panel determined that Oklahoma Firefighters Pension and Retirement System — a labor union and retirement system that had purchased Six Flags stock — should be allowed to proceed with the lawsuit accusing two executives of committing securities fraud.
The district court failed to give appropriate weight to the allegations from a confidential witness that were corroborated by other evidence, including a photo showing a lack of construction progress at a park site in Zhejiang, the panel held.
“We hold that the complaint adequately alleges that Six Flags improperly recognized revenue on the China parks in its class period financial statements due to defendants’ misleading statements regarding the parks’ construction progress and the admission of $15 million in overstated revenue in 2018,” the panel held.
Judges Leslie H. Southwick, Catharina Haynes and Stephen A. Higginson sat on the panel.
Six Flags is represented by Sandra Goldstein, Stefan H. Atkinson, Dan Cellucci and Jeremy Alan Fielding of Kirkland & Ellis.
Oklahoma Firefighters Pension and Retirement System is represented by Katherine M. Sinderson, Adam Hollander, Christopher Ryan Miles and John Rizio-Hamilton of Bernstein Litowitz Berger & Grossman and Lewis T. LeClair of McKool Smith.
The case number is 21-10865.