In this edition of Litigation Roundup, a direct-to-consumer eyewear company alleges Perkins Coie’s failure to conduct basic diligence ahead of a planned acquisition cost it $50 million, the appellate courts in Houston wipe out a pair of multimillion-dollar jury verdicts, and a Dallas seafood company draws a fine from the federal government for mislabeling Chilean salmon as a more expensive product.
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.
Tarrant County District Court
Ashurst Perkins Coie Hit with $50M Malpractice Suit for Alleged M&A Diligence Blunders
A direct-to-consumer company that sells eyeglasses and contact lenses has filed a lawsuit against the law firm that advised it through a “high-stakes acquisition and stock-purchase transaction,” alleging it failed to conduct “basic diligence” ahead of the deal that “would have revealed serious red flags.”
The 25-page lawsuit, filed July 16 by Lensabl Inc., names as defendants Perkins Coie, Ashurst, Ashurst Perkins Coie and the Ashurst Perkins Coie Foundation, seeking more than $50 million in damages. Lensabl explained in the petition that Perkins Coie had represented it since January 2019, including during 2022, when it secured a $3 million investment from Goldman Sachs-owned MyEyeDr.
That investment, Lensabl alleges, “created nuanced legal complexity.”
“It implicated investor-rights issues, preferred-stock rights, rights of first refusal, governance documents, shareholder dynamics, sale-transaction constraints and capitalization-table consequences that any later acquisition lawyer needed to understand before allowing Lensabl to enter a major equity transaction,” according to the petition.
In late 2022 and early 2023, Lensabl was approached by a group of buyers associated with Robert Byrnes Holdings with a proposal to purchase 49 percent of Lensabl for $28.99 million. Lensabl said the proposal also included a “future path to control,” that would affect its “ownership, governance, shareholder liquidity, investor rights, operating freedom and future sales opportunities.”
“For a capital-dependent company, the offer appeared transformative,” the lawsuit reads. “But the appearance of value depended on the buyer’s ability to pay. The foundational question — above all else — should have been whether RBH had the money to fund the purchase.”
Perkins Coie billed Lensabl more than $400,000 for work done on the transaction, according to the lawsuit. The term sheet was executed in May 2023, and the formal transaction agreement was executed in July 2023.
But Perkins Coie never verified the funds, according to the lawsuit, and did not request bank statements or other proof of funds. A search of public records would have revealed that Ramon “Ray” Coscolluela, who was among the group of buyers and who had helped bring the business opportunity to Lensabl, had recently been convicted of money laundering and was under federal supervision “when he appeared in the Lensabl/RBH transaction.”
“His supervision conditions included financial restrictions, including restrictions on incurring new credit charges, opening additional lines of credit and incurring new monetary loans, obligations or debts without approval. The conditions also addressed self-employment and business activity,” the lawsuit alleges. “Those facts were discoverable on [PACER] before the Lensabl/RBH transaction agreement was signed.”
Another member of the buyer group, Jose De La Espriella, had pleaded guilty to passport fraud in federal court and had been indicted for theft of property in a payroll-fraud case in Tarrant County that he received deferred adjudication for, the lawsuit alleges,
“Plaintiff does not allege that every public record alone proved the transaction was fraudulent,” the lawsuit alleges. “However, plaintiff does allege that the buyer group came with a public train of criminal, regulatory, financial and integrity-related red flags that any meaningful diligence process had to confront. Perkins Coie did not confront them.”
The suit brings claims for legal malpractice, breach of fiduciary duty, gross negligence, violation of the Texas Deceptive Trade Practices Act, fraud by nondisclosure or omission and negligent misrepresentation.
RBH failed to fund the first closing, according to the lawsuit, costing Lensabl “lost time, liquidity, leverage, investor confidence and strategic flexibility” forcing it to enter a “distressed asset sale for a fraction of prior value.”
“Perkins Coie did not have to guarantee the buyer’s success, but it did have to identify the central risk, recommend basic diligence and closing protections and warn Lensabl if that work was outside its scope,” the lawsuit alleges. “Perkins Coie failed and should now be held accountable.”
Lensabl is represented by Andrew Cobos, Nicholas Kacal and Kianna Zermeno of The Cobos Law Firm and Paul Ready of The Ready Law Firm.
Counsel for the law firm had not filed an appearance as of Monday, according to the docket. It was not immediately clear to which judge the case had been assigned.
The case number is 236-379975-26.
Northern District of Texas
Arlington Man Indicted in ‘Church-Flipping’ Fraud Schemes
A man who allegedly duped 50 churchgoers out of about $3.2 million has been indicted on charges of wire fraud, wire fraud conspiracy and aggravated identity theft.
Richard Reinaldo Garcia, 53, of Arlington, entered a not guilty plea to the charges June 9. The FBI believes there may be additional, unknown victims of the alleged scheme and has set up a questionnaire for those who believe they may have been defrauded.
According to the indictment, from August 2021 until April 2025, Garcia is accused of using his own church-related entities (Ministerio Gracia, Iglesia Gracia de Texas, Gracia Church of Texas and Pesar de Todo) to solicit funds he said would be used for “church flipping” real estate projects or “joint venture” agreements to host Christian music concerts and church programs.
But in actuality, prosecutors allege, Garcia used the funds to pay his own personal expenses.
The case has been assigned to U.S. District Judge Mark Pittman, who has set a jury trial in the case to begin Oct. 13.
Garcia is represented by Fort Worth lawyers William Biggs and Matthew Smid.
The government is represented by Mark McDonald of the Department of Justice.
The case number is 4:26-cr-00146.
Dallas Seafood Wholesaler Fined Over Salmon Labeling
Dallas seafood wholesaler Seafood Supply Co. has been fined for telling customers salmon it sourced from Chile was actually from Scotland or elsewhere in Europe.
Seafood Supply was named in a felony information filed by the Department of Justice in February, which charged the company with two counts of violating the Lacey Act. The company entered a guilty plea to the charges that same month.
The government alleged the company falsely labeled the less expensive Chilean fish from January 2020 until February 2022. A news release from the DOJ notes that the company has been under new leadership in the years since the violations.
Chief U.S. District Judge Reed O’Connor presided over the case. At a sentencing hearing on July 17, Chief Judge O’Connor gave the company three years of probation and ordered it to pay a fine of $125,000 per count and a special assessment of $800.
Seafood Supply is represented by Tim Newman of Haynes Boone.
The government is represented by Renee Hunter and Christopher Hale of the Department of Justice.
The case number is 3:26-cr-00088.
Western District of Texas
Air Force Lt. Col. Says Randolph AFB Housing Sickened Him, Family
The companies controlled by Randolph Family Housing and Hunt Military Communities have been sued by an Air Force officer and his family, who allege they were placed in two contaminated homes that made them sick.
Lt. Col. Travis Allen, who is stationed at Randolph Air Force Base in San Antonio, filed suit against AETC II Privatized Housing and AETC II Property Managers, alleging the entities that secured government contracts to provide military housing “have for many years concealed harmful housing conditions from unsuspecting military personnel and their families.”
The lawsuit alleges the homes suffered from “rainwater intrusion, leaking pipes, seeping sewage, excessive moisture, repulsive rodent and insect infestations, and systemically-poor maintenance,” in addition to defects such as structurally deficient flooring and walls, “pervasive mold and other toxins, inescapable contamination due to the presence of asbestos and lead-based paint, deficient electrical, plumbing and HVAC systems.”
Allen alleges living in the housing caused a “significant decline” in his health and that he was diagnosed with an autoimmune disorder. The family also had to put down a 5-year-old dog that, according to the lawsuit, “had been perfectly healthy until they moved into this home.”
His daughter began suffering from “respiratory allergies and asthma” while living in the home, the lawsuit alleges, and she also tested positive for lead in her blood.
The case, filed July 14, has been assigned to U.S. District Judge Orlando Garcia.
The Allens are represented by Francisco Guerra IV, Jennifer Neal, David Sierra, Julie Matsen and Robert Brzezinski of Guerra LLP, Randall Pulman and Ryan Reed of Pulman LeFlore Pullen & Reed and James R. Moriarty of Houston.
Counsel for the defendants had not filed an appearance as of Monday.
The case number is 5:26-cv-04431.
First Court of Appeals, Houston
Panel Says Economic Loss Rule Dooms Jury’s $9.3M Award
Comal Energy Services was recently hit with a take-nothing judgment when an appellate panel determined the economic loss rule barred its negligent misrepresentation claim against Asset Risk Management.
“Because Comal seeks only contract-based economic losses arising from contract performance, its remedy lies in contract, not tort,” the court held. “The economic loss rule bars its negligent misrepresentation claim.”
The case stems from a dispute that arose during construction of a natural gas pipeline in West Texas and southern New Mexico. Salt Creek Midstream, according to the opinion, contracted with Comal for engineering, inspection and construction services for the project and Salt Creek also retained ARM for accounting and invoice processing services.
The relationship between Salt Creek and Comal soured, leading to litigation, and Comal sued ARM alleging the company misrepresented that Comal would be paid under its contract with Salt Creek, when, according to Comal, “the determination had already been made that Comal’s invoices would not be approved or paid,” the opinion states.
A jury that heard the case in October 2023 awarded Comal $9.3 million in damages on its negligent misrepresentation claim but rejected its claims of fraud and tortious interference. ARM moved for a new trial, raising the economic loss rule argument, which was denied in February 2024. ARM filed its notice of appeal in April 2024.
Justice Jennifer Caughey authored the court’s opinion, joined by Justices Veronica Rivas-Molloy and Amparo “Amy” Guerra.
The alleged misrepresentations, Justice Caughey wrote, “concern contractual obligations and only exist because Comal performed work and sought payment under the contract.”
“If there were no contract here, there would be no claim,” the opinion reads. “The only reason the ARM individuals were even communicating with Comal was because of the Salt Creek-Comal contract’s obligations concerning invoices and payment. Accordingly, Comal’s negligent misrepresentation claim is barred as a matter of law.”
Asset Risk Management is represented by Mia Lorick, David Harrell and Christopher Verducci of Troutman Pepper Locke.
Comal Energy Services is represented by Robert Dubose of Alexander Dubose & Jefferson and Millard Johnson and Alexander Fones of Johnson DeLuca Kurisky & Gould.
The case number is 01-24-00277-CV.
Fourteenth Court of Appeals, Houston
Panel Wipes Out Jury’s $25.9M Award
Earlier this month, an appellate panel determined a jury based its decision in a noncompete case against Columbia/HCA of Houston on the wrong partnership agreement.
In September 2024, jurors sided with Fondren Orthopedic, a group of doctors, in their lawsuit against the Nashville, Tennessee, for-profit operator of healthcare facilities. Fondren had filed suit in October 2021, accusing HCA of violating a noncompete agreement by allowing 10 competing hospitals in the Houston area to offer similar services.
The jury heard three weeks of testimony and deliberated for about five hours before awarding Fondren all the damages it requested. The final judgment in the case awarded Fondren $25.9 million in damages, $3.3 million in attorney fees and $7.2 million in prejudgment interest.
On appeal, HCA argued the jury had been given the wrong partnership agreement to consider. Specifically, HCA argued the trial court had misinterpreted the agreement to apply section 8.2 to HCA. That provision binds “each limited partner” and its affiliates. The jury found HCA breached that section by providing “substantial orthopedic surgery services” via the challenged facilities.
Justice Katy Boatman authored the court’s eight-page opinion, joined by Justices Kevin Jewell and Randy Wilson, agreeing with HCA.
“The contract’s plain language yields one reasonable interpretation: Columbia/HCA, as an affiliate of general partner Columbia Hospital Corporation, is free to compete as provided by section 6.6 bound only by the non-compete restriction in section 8.4(d) — not section 8.2,” the panel wrote.
HCA is represented by Eileen O’Neill, Michelle Blair, Paul Smith and C. Dennis Barrow Jr. of Ware, Jackson, Lee, O’Neill, Smith & Barrow and Sean Berkowitz and Kevin Jakopchek of Latham & Watkins.
Fondren is represented by Kelsi White and Antonio X. Milton of Ahmad, Zavitsanos & Mensing.
The case number is 14-25-00216-CV.
Fifteenth Court of Appeals, Austin
Attorney Immunity Issue Splits Panel in Reynolds and Reynolds Case
The former CEO of Reynolds and Reynolds, Norman Thomas Barras, cannot proceed with a lawsuit against Frank Jackson, a general counsel affiliated with the company, as part of his $350 million wrongful termination lawsuit against his former employer, an appellate court determined July 14.
A news release issued in the wake of the decision states that the opinion represents the first time an appellate court in Texas recognized that attorney immunity protections apply to in-house lawyers and was also the first time the Fifteenth Court of Appeals granted dispositive relief from a mandamus petition in a Texas Business Court case.
According to the opinion, after he was fired, Barras brought the $350 million wrongful termination claim against Reynolds and Reynolds and later added a claim alleging Jackson tortiously interfered with his employment contract via his role in the investigation that led to his for-cause termination.
Jackson, general counsel of Reynolds and Reynolds’ parent company Universal Computer Systems Holding, argued the claim against him, based on legal advice he offered, must be dismissed based on attorney immunity and filed a Rule 91a motion.
Jackson filed his petition for writ of mandamus with the Fifteenth Court of Appeals in December, seeking to overturn an earlier ruling from Business Court Judge Grant Dorfman in Houston that allowed the claims to proceed against him.
Chief Justice Scott A. Brister authored the majority’s 14-page ruling, joined by Justice Scott Field, holding that the tortious interference claim against Jackson is based on “precisely the kind of conduct that is expected of corporate attorneys and general counsels,” meaning “Barras’s suit against Jackson has no basis in law.”
“[G]iven Barras’s repeated emphasis that Reynolds is a billion-dollar enterprise, it is hard to see any detriment to Barras if he must pursue his breach claim directly against the company that fired him,” Justice Brister wrote. “Jackson argued in his opening brief that this balance favors granting mandamus relief here, and Barras did not contest it or assert otherwise in his response brief.”
Justice April Farris authored an 11-page dissent arguing her colleagues had “mistakenly” lowered the threshold for dismissal under Rule 91a below the standard “that the rule and Texas Supreme Court precedent required.”
“Crucially, the allegations in Barras’s live petition paint a picture of Jackson seeking to oust the CEO of Reynolds — a company that did not employ Jackson as general counsel or in any other capacity — so that Jackson could secure the CEO position for himself,” Justice Farris wrote. “Whatever the limits of attorney immunity may be for in-house attorneys, the facts as pleaded by Barras — which we must take as true — preclude any finding that Jackson’s conduct qualifies for attorney immunity as a matter of law.”
“To hold otherwise would immunize the conduct of any attorney jockeying for a corporate position to promote his own self-interest. Consequently, I would hold that the Business Court properly denied Jackson’s Rule 91a motion. It certainly did not abuse its discretion by doing so.”
Jackson is represented by Gregg Costa, Sydney Scott, Lloyd Marshall, Jack DiSorbo, Kylie Calabrese, Kohl Anderson and Tony Alessi of Gibson, Dunn & Crutcher.
Barras is represented by David George of The George Appellate Law Firm and Tony Buzbee, Thomas Holler and Mitchell Blasio of The Buzbee Law Firm.
The case number is 15-25-00235-CV.
U.S. Court of Appeals for the Fifth Circuit
Invoking ‘Hundred Years’ War,’ Panel Boots Appeal in Highland Capital, Dondero Row
An appellate panel on Friday issued a five-page opinion that contained just three sentences, the latest ruling from a court in the ongoing, bitter legal dispute between Acis Capital Management and James Dondero.
The bulk of the opinion — nearly four pages — is a recital of all the related lawsuits filed so far in this ongoing litigation saga.
“Joshua Terry, Highland Capital Management, and James Dondero have litigated Terry’s firing and the parties’ related financial fallout as if refighting the Hundred Years’ War,” the opinion begins, before citing nearly four full pages worth of cases involving those parties. “The question presented is whether res judicata bars another round of litigation. It does.”
The dispute has roots in 2016, when Highland Capital CEO Dondero fired Terry, leading to an $8 million arbitration award in Terry’s favor. From 2011 to 2016, Acis was led by Terry, the former head of Highland’s structured products team and an Acis co-founder.
Acis filed this latest notice of appeal in June 2025, according to court records. The panel heard oral arguments in the case July 9.
Judge Andrew S. Oldham authored the court’s opinion, joined by Judges Stuart Kyle Duncan and Cory T. Wilson.
Acis is represented by Kelsi White and Emily Adler of Ahmad, Zavitsanos & Mensing and Shawn Bates of Yetter Coleman.
Dondero is represented by Michael Lang, Dallas Flick, Haleigh Jones and Ali Ohlinger of Crawford, Wishnew & Lang.
The case number is 25-10797.
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