A couple feeds ducks in their neighborhood and now may lose their house from a costly lawsuit brought by their homeowners association. Elon Musk hires lawyers in Austin. Prosecutors in the Northern District of Texas score a plea deal in a money laundering case. The Port of Houston Authority gets more money in its pockets (and soon, their lawyers may, too).
Read further for details on each. And while you’re at it, send any new developments from your noteworthy litigation matters to tlblitigation@texaslawbook.net
If you feel like it, also send me your crazy HOA stories. I’d love to hear them. Here’s one of mine:
The one and only time I’ve been a litigant is when I sued my movers seven years ago for $300.
Their moving truck eviscerated a couple large tree branches at my new condo while pulling into the driveway. I reported the incident to the HOA. They said it was probably fine but said, “Let’s bring in the arborist, just in case.” I had not entertained the possibility that my no-frills condominium building would be fancy enough to have an arborist. The arborist said the tree, for safe measure, should receive a dose of antibiotics. They cost $300. The moving company refused to pay. My then-boyfriend, now-husband, sent them a demand letter. They didn’t respond. My then-boyfriend, now-husband, sued the moving company in small claims court. They got served. My then-boyfriend, now-husband answered a very angry call from the movers that attracted eavesdroppers outside his office and that he later described as his most contentious opposing counsel call all year. They mailed me a check. The end.
Sometimes the most explosive disputes are the small-dollar ones. Why is that?
If you have any thoughts, send them to me.
WDTX
Elon Musk Lawyers Up
Elon Musk, Tesla, and a number of Tesla board members have hired Gary Ewell and Alithea Sullivan of Austin litigation boutique Ewell, Brown, Blanke & Knight to defend them in a derivative lawsuit brought last month by Dallas lawyer Joe Kendall on behalf of investor Solomon Chau.
The lawsuit alleges Tesla has “a toxic workplace culture grounded in racist and sexist abuse and discrimination against its own employees.”
Ewell is a former partner at Vinson & Elkins where he left to form his current firm in 2012. His practice is focused on securities-related matters, representing issuers, underwriters, investors, officers and directors in investigations and adversarial proceedings in the courts and before regulatory authorities. Recent matters include Ewell’s representation of a former Walmart executive when the Department of Justice investigated — and prosecuted — Walmart’s foreign operations.
Ewell and Sullivan co-counsel with a group of California lawyers from Freshfields Bruckhaus Deringer.
The cause number in the derivative shareholder lawsuit is 1:22-cv-00592-LY. The lawsuit has been assigned to U.S. District Judge Lee Yeakel in Austin.
NDTX
Money Transfer Company Pleads Guilty
Dallas-based Ping Express on July 6 pleaded guilty in Dallas federal court to adequately guard against money laundering.
In a press release provided by the U.S. Attorney’s Office for the Northern District of Texas, Ping Express transmitted more than $167 million overseas — $160 million of it to Nigeria — in less than three years. Ping Express admitted that it failed to seek sufficient details about the sources of purposes of the funds or the customers initiating the transmissions.
Sentencing has yet to be set for Ping Express, but on July 5 U.S. District Judge Sam Lindsay set sentencing for Collins Orogun, one of the individual defendants, for Jan. 23, 2023. Orogun, who faces up to 20 years in prison, is one of multiple individual defendants in the case who already struck a plea deal. According to the government, he received more than $1.3 million in cash, cashier’s checks and wires into several U.S. bank accounts he controlled, then quickly moved more than $1 million of the funds to Africa through Ping.
Assistant U.S. Attorney John de la Garza prosecuted the case on behalf of the federal government, while the Homeland Security Investigation’s Dallas field office conducted the investigation.
Ping Express is being represented by George Milner III of Milner & Finn. Orogun’s defense lawyer is Ezekiel Tyson Jr. of the Tyson Law Firm.
The cause number is 3:20-cr-00122-L.
HARRIS COUNTY
What the Duck Is it with HOA Drama?
A Houston area couple who were sued by their homeowners association in June for feeding ducks in their neighborhood has responded to the lawsuit by asserting general denials of the claims lodged by Lakeland Village Community Association.
In the July 5 filing, George and Kathleen Rowe of Cypress, Texas, provided a general denial under Rule 92 of the Texas Rules of Civil Procedure and laid out a number of affirmative defenses, including that the HOA’s restrictions and attempted enforcement of them are “arbitrary and capricious.”
The couple, who the Houston Chronicle reported is on the verge of losing their house in the dispute, retained Houston lawyers Richard Weaver and Kourtney Parker of The Weaver Law Firm to defend them in the lawsuit. Houston lawyer Jonathan Clark of Hoover Slovacek represents the HOA.
The cause number is 2022-34515 and has been assigned to Harris County District Judge Kyle Carter.
SDTX
$22M Port of Houston Authority Verdict Increased and Potentially Growing
A Houston federal judge is currently weighing whether to award attorneys’ fees for the Port of Houston authority and whether to grant a second motion for judgment as a matter of law filed by Louis Dreyfus, the loser thus far in the litigation.
In March, a jury found Louis Dreyfus breached a contract with the Port Authority when it returned a damaged grain elevator and other equipment it had leased to handle its Houston-based exports. On June 3, U.S. District Judge Lynn Hughes entered final judgment, adding on $4 million to the $22.3 million verdict.
The Port Authority’s lawyers at Ahmad, Zavitsanos & Mensing submitted their requested $1.6 million in attorneys’ fees later in June, and July 1 Louis Dreyfus submitted a motion for judgment (the first was filed and denied March 24 at the end of trial). The Port Authority has until July 22 to respond and Judge Hughes will rule on both motions after.
The cause number is 4:19-cv-00746.
NDIL
American Airlines Subsidiary Settles
Irving-based Envoy Airlines, a wholly owned subsidiary of American Airlines, has settled a biometric privacy lawsuit accusing the airline of improperly collecting fingerprints of its employees at Chicago’s O’Hare International Airport.
The proposed class action, brought by plaintiffs Maysoun Abudyyeh and Chelsea Burrow in the Northern District of Illinois, accused Envoy of failing to inform them and about 1,000 other workers that the airline collected and retained their biometric information, which the plaintiffs claimed violated the Illinois Biometric Information Privacy Act.
Bloomberg News reported July 8 that Envoy and American settled the case, but the terms of the settlement were not disclosed. O’Melveny & Myers represents Envoy and American in the litigation. The plaintiffs are represented by Caffarelli & Associates and Fish Potter.
The cause number is 1:21-cv-00142 and was assigned to U.S. District Judge Andrea Wood in Chicago.
Editor’s Note: Mark Curriden contributed to this report.