In this edition of Litigation Roundup, the Fifth Circuit explains the limitations of Section 230 of the Communications Decency Act in allowing a lawsuit against Salesforce to proceed, the Houston city council greenlights a settlement in a revenge porn case involving members of the fire department and a multimillion-dollar jury award in a case involving a contract to construct a natural gas plant is slashed.
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 City Council OK’s Settlement with Firefighter in Revenge Porn Case
Earlier this month, the Houston City Council approved an $850,000 settlement to end litigation brought by a former fire department captain who filed suit after learning her supervisor had secretly obtained and repeatedly watched an intimate video of her.
In November 2023, a Harris County jury awarded Melinda Abbt $130,000 in mental anguish and exemplary damages and about $120,000 in attorney fees in the lawsuit against the supervisor, John Chris Barrientes.
The video was stolen off Abbt’s laptop, according to the lawsuit, and it’s unclear exactly how Barrientes came into possession of the video, but what wasn’t disputed at trial is that in 2007, he shared the video with a higher-ranking firefighter, District Chief David Elliott.
Abbt was unable to return to work after learning the video had been circulated, and she and her family also moved away from the city because of the mental anguish caused by both the end of her career and seeing former colleagues around town, her lawyers have said. Her husband is still employed by HFD.
Joe Ahmad of Ahmad, Zavitsanos & Mensing, who represents Abbt, issued a statement that what his client went through “should never have happened.”
“Melinda’s case changed sexual harassment law in the Fifth Circuit for the better and hopefully will improve the way the city of Houston handles these cases in the future, too,” he said.
U.S. District Judge Drew B. Tipton has given the parties a Jan. 3 deadline to file documents to dismiss the case.
Abbt is also represented by Jordan Warshauer of Ahmad, Zavitsanos & Mensing.
Houston is represented by Marjorie Cohen and Matthew Swiger of the city’s legal department.
The case number is 4:19-cv-01353.
Lubbock County District Court
NCAA Accused of ‘Misleading’ Practices Over Transgender Policies
The Texas attorney general filed a lawsuit on Sunday against the National Collegiate Athletics Association, taking aim at the student athletics regulator’s policy that allows transgender athletes to compete in women’s sports.
The lawsuit alleges the policy, which allegedly results in “mixed” sporting events with male and female participants, constitutes a false, deceptive and misleading practice.
“Consumers purchase goods and services associated with women’s college sports because they enjoy watching women compete against women — not men competing against women,” the lawsuit argues.
Texas is asking the court for injunctive relief.
“Texas consumers are legally entitled to spend their hard-earned dollars on the competitions that matter to them, without being misled,” the suit reads. “This court should enjoin the NCAA from its misleading and unlawful conduct to protect Texas consumers from the NCAA’s false, deceptive, and misleading practices.”
A case number was not available Monday afternoon and neither was counsel information for the NCAA. The case was filed in Lubbock County District Court but it was not immediately clear to which judge the case had been assigned.
Texas is represented by Johnathan Stone and Matthew Kennedy of the office of the attorney general.
First Court of Appeals, Houston
Panel Wipes Out $22M of Jury Award in Gas Contract Dispute
Linde Engineering North America cannot hang on to about $22.4 million in damages a Harris County jury awarded it in a construction contract dispute with Arrow Field Services, an appellate panel recently determined, but the justices left intact a $20.7 million actual damages award.
Arrow, a midstream oil and gas company in North Dakota and Linde, a construction, engineering and project management company, entered an agreement in April 2018 under which Linde would construct a natural gas plant in Watford City, North Dakota. A dispute over payments for the project arose in August 2019, according to the opinion, and Arrow stopped paying Linde’s invoices. The plant became operational that same month. Linde paid a total of $124 million for the project.
A jury had found in favor of Linde on its claims for breach of contract and violations of the Texas Prompt Payment Act, awarding it $20.7 million in damages, $17.6 million in prejudgment interest, $4.6 million in attorney fees and about $130,500 in costs.
In a 73-page ruling issued Dec. 17, the panel determined that there’s an exception in the TPPA that bars it from being applied to agreements “ to explore, produce, or develop oil, natural gas, natural gas liquids, synthetic gas, sulphur, ore, or other mineral substances, including any lease or royalty agreement, joint interest agreement, production or production-related agreement, operating agreement, farmout agreement, area of mutual interest agreement, or other related agreement.”
That means the prejudgment interest award must be recalculated in accordance with the rate permitted under the agreement, the panel held, and the awards of attorney fees and costs cannot stand.
“Because Linde’s PPA claim fails, it cannot recover the $4,616,760 awarded as attorney’s fees, the $130,568 awarded as costs, and the $17,683,501 awarded as prejudgment interest under the PPA, and the 18% prejudgment interest must be recalculated at the proper rate,” the panel held.
Justices Amparo Monique Guerra, Gordon Goodman and Chief Justice Terry Adams sat on the panel.
Arrow Field Services is represented by William J. Boyce and Marisa C. Hurd of Alexander Dubose & Jefferson.
Linde Engineering is represented by Thomas C. Wright, Raffi Melkonian, Eric B. Boettcher and A. Rose Doda of Wright Close & Barger and Ryan Caughey, John P. Lahad, Laranda M. Walker and Ace M. Factor of Susman Godfrey.
The case number is 01-23-00023-CV.
U.S. Court of Appeals for the Fifth Circuit
Salesforce Loses Bid to Toss Sex Trafficking Suit
Salesforce cannot use Section 230 of the Communications Decency Act to shield itself from a lawsuit brought by a group of sex trafficking victims who were trafficked through Backpage.com because their claims “do not treat Salesforce as the publisher or speaker of third-party content,” a three-judge panel determined on Dec. 19.
Salesforce had filed notice it was appealing to the Fifth Circuit in December 2023, trying to undo rulings from U.S. District Judge Andrew S. Hanen that allowed four lawsuits brought by six plaintiffs to proceed.
The plaintiffs’ claims against Salesforce are rooted in Salesforce’s provision of customer-relationship-management software to Backpage.com, which they allege equates to knowingly facilitating sex trafficking. The website was seized and shut down by the federal government in 2018. The company later pled guilty to human trafficking.
Salesforce argued the lawsuits against it should be dismissed because the plaintiffs’ claims “necessarily” treat it as the publisher of advertisements on Backpage.
“We disagree,” the panel wrote. “The text of section 230, our precedent, and the precedent of our sister circuits uniformly reject the argument Salesforce advances. Instead, the proper standard is whether the duty the defendant allegedly violated derives from their status as a publisher or speaker or requires the exercise of functions traditionally associated with publication. Under this standard, plaintiffs’ claims do not treat Salesforce as a publisher or speaker of third-party content.”
The panel specified that the section 230 immunity ruling should not be viewed as any commentary on the merits of the dispute.
“Immunity and liability are distinct,” the opinion reads. “The question of whether Salesforce is liable to plaintiffs because it knowingly benefitted from participation in a sextrafficking venture is not before our court and remains to be answered.”
Judges Don R. Willett and Dana M. Douglas sat on the panel. U.S. District Judge David S. Morales of the Southern District of Texas sat on the panel by designation.
The plaintiffs are represented by Warren Harris and Walter Simons of Bracewell.
Salesforce is represented by Allyson Ho, Stephen J. Hammer, Bradley G. Hubbard and Kristin Linsley of Gibson, Dunn & Crutcher.
The case number is 23-20604.
U.S. Court of Appeals for the Ninth Circuit
Justin Timberlake Can’t End Breach of Contract Suit
A documentary filmmaker and director can proceed with his lawsuit against Justin Timberlake after an appellate panel recently denied the artist’s bid to bring an early end to the lawsuit.
According to court documents, John Urbano sued Timberlake in July 2022 over a soured deal to make a documentary promoting his 2013 album The 20/20 Experience, bringing claims for breach of contract, breach of a joint venture agreement, breach of good faith and fair dealing and copyright ownership.
“Rather than simply hire and pay Mr. Urbano to create the film, however, Mr. Timberlake proposed a different arrangement: the two would create the documentary in secret (without preapproval from the label), take it to the label, and say, ‘Pay us,’” the suit alleges. “Mr. Urbano agreed, foregoing his customary director’s fee to instead be partners with Mr. Timberlake in this joint venture. And after sixty days of filming, thousands of hours of editing, and numerous cuts, Mr. Urbano created the Making of The 20/20 Experience — a documentary that moved Mr. Timberlake to tears.”
But while sales of the album “skyrocketed,” the suit alleges Timberlake’s interest in the joint venture related to the film “faded.” Urbano alleged that the agreement provided that proceeds from the film would be divided between them, but filed this suit after Timberlake failed to market or promote the documentary and later denied ever having an agreement with Urbano.
The lawsuit is seeking financial damages and also a determination as to who owns the documentary and the copyright to the footage.
Timberlake had moved to dismiss the lawsuit under California’s anti-SLAPP law, arguing he had been sued in connection with his exercising his right to free speech — namely his “contributions to the creative endeavors in the documentary” — and therefore the lawsuit should be tossed.
“Timberlake cannot connect his speech to an issue of public interest,” the appellate panel wrote in its four-page opinion issued Dec. 19.
“The wrong alleged in the [first amended complaint] is Timberlake’s failure to negotiate a backend deal for Urbano’s compensation, not conduct related to the speech-related creation or production of the documentary itself,” the opinion reads.
Judges Carlos T. Bea, John B. Owens and Lucy H. Koh sat on the panel.
Urbano is represented by Bailey A. Blaies, Austin Curry, Warren J. McCarty III, Bradley Caldwell, Jason Cassady and Daniel R. Pearson of Caldwell Cassady & Curry and David W. Gouzoules and Kendra J. Hall of Procopio, Cory, Hargreaves & Savitch.
Timberlake is represented by Edwin F. McPherson of Los Angeles. The case number on appeal is 24-652. In the trial court, the case number is 2:22-cv-04512.