In this edition of Litigation Roundup, an appellate panel in Dallas wipes out a $7.8 million final judgment against a Munsch Hardt client, and in a case that went all the way to the U.S. Supreme Court, a team of Baker Botts lawyers successfully defended its client’s $213 million trade secrets win.
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.
Collin County District Court
Walmart Agrees to $13.3M Settlement in Driver Compensation Case
Walmart has agreed to pay $13.3 million to settle allegations it violated the Texas Deceptive Trade Practices Act with representations it made to certain delivery drivers regarding their compensation.
Half of the funds from the settlement, which was signed in mid-June but announced Monday, have already been distributed directly to participants in the Spark Driver Program, according to a press release from the Texas attorney general’s office.
Texas alleged Walmart failed to give drivers, who would deliver groceries and other goods from Walmart directly to customers’ doors, tips that were intended for them, held back special incentive earning opportunities, altered base pay amounts and misrepresented what was required to earn additional income.
Walmart denied “any wrongdoing or liability and alleges that it has not engaged in any conduct that violated Texas law, including the DTPA,” the assurance of voluntary compliance filed in Collin County district court states.
Attorney General Ken Paxton issued a statement regarding the settlement.
“Any big corporation that promises certain offers and pay in exchange for services must honor those promises,” he said. “I am always proud to stand up for my constituents to make sure that they are fairly compensated for their hard work.”
As part of the agreement, Walmart paid $6.68 million to Spark drivers in Texas and agreed to pay a civil penalty of $6.68 million.
“If it is determined that Walmart has made any material misrepresentation or false statement in documents submitted to the state of Texas pursuant to this [assurance of voluntary compliance], then Walmart shall pay to the state of Texas an additional civil penalty in the amount of $5 million.”
Walmart is represented by its own Bob Balfe, its senior vice president and chief counsel for global investigations.
Texas is represented by Karyn Bowlds of the Texas attorney general’s office.
The case number is 296-04270-2026.
Southern District of Texas
Florist Pleads Guilty to Underreporting Millions in Taxable Income
A Houston woman who is the owner of a high-end flower company has entered a guilty plea on charges she failed to report to the Internal Revenue Service the true amount of taxable income she received.
Le Hao Tran pled guilty June 30 to filing a false tax return. She is the owner and operator of Blooming Gallery and HTX Rental and Delivery Service. Prosecutors alleged that between 2019 and 2022 she would hide income by taking customer’s checks to check-cashing businesses and would sometimes deposit checks into her personal bank account. In 2022, the government alleged, she earned more than $9 million from the companies but only reported about $7 million in earnings.
The underreporting resulted in a loss to the IRS of about $1.3 million total, and Tran already has paid restitution in that amount, according to the Department of Justice.
The case has been assigned to U.S. District Judge George C. Hanks Jr., who scheduled sentencing for Sept. 11.
Tran is represented by Richard Kuniansky of Houston.
The federal government is represented by Bradley Gray of the Department of Justice.
The case number is 4:26-cr-00359.
Western District of Texas
Man Admits to $3.2M Embezzlement from Employer
A 34-year-old man from Kyle has pleaded guilty to taking more than $3.2 million from his former employer, Austin Freight Systems, and using the money to pay off student debt and fuel an online gambling habit.
Mitchell David Slentz, who was in charge of AFS’ accounting operations, entered the guilty plea June 29. He was charged via an information in May with one count of wire fraud and one count of engaging in monetary transactions with criminally derived proceeds.
Prosecutors alleged Slentz made 147 deposits of company money into his personal accounts between October 2023 and March 2025. He made two payments on his student loan debt, totaling about $58,000 and also allegedly used some of the money to fund what authorities called an “extensive” gambling habit, with financial analysis showing he deposited or won more than $1 million on the platform.
The case has been assigned to U.S. District Judge Alan D. Albright. Sentencing is scheduled for Sept. 14.
Slentz is represented by Mark Hull of The Hull Firm and Victor Arana of Arana Law Group.
The case is being prosecuted by Joshua Somers and Mark Tindall of the Department of Justice.
The case number is 1:26-cr-00251.
First Court of Appeals, Houston
NWSL Uses TCPA to Defeat Ex-Coach’s Defamation Suit
The National Women’s Soccer League, its players association and two law firms that represented those entities — Covington & Burling and Weil, Gotshall & Manges — have been freed from a defamation lawsuit brought by a former coach.
James Clarkson, former head coach of the Houston Dash, had sued those four entities and a handful of individual lawyers for defamation, tortious interference and conspiracy in the wake of a leaguewide investigation over alleged misconduct by league leaders, including Clarkson. The league and the players association requested the law firms publish in December 2022 the joint report. And in his lawsuit, Clarkson alleged the joint report “falsely characterized him as just another serial abuser who was ‘racially insensitive,’ ‘abusive,’ ‘insensitive toward mental health,’” and accused him of having “engaged in ‘emotional misconduct,’” and failing to “show appropriate regard for players’ wellbeing.”
The defendants argued that the lawsuit had to be dismissed under the Texas Citizens Participation Act, an anti-SLAPP law, because it was brought in response to their exercise of free speech, because Clarkson was a public figure, and because Clarkson could not prove the statements at issue were made with “actual malice.”
But Clarkson, in fighting dismissal, argued that the commercial speech exemption in the TCPA applied to save his claims, because the law firms’ choice to make public the joint report in press releases constituted commercial speech.
The appellate panel agreed that the nature of the controversy, regarding alleged player mistreatment, qualified as a matter of public concern and agreed that in this case Clarkson qualifies as a limited public figure.
The league and its law firms had argued the commercial speech exemption should not apply. And the appellate panel agreed for two reasons, including that Clarkson hadn’t alleged any of the statements at issue defamed him. The panel explained Clarkson failed to show the allegedly defamatory statements “were made with knowledge that they were false or with reckless disregard of whether they were false or not.”
“Because the law firms provided the legal services described in the press releases pro bono and published the joint report at their clients’ request, the statements in the press releases did not arise out of the sale of legal services or the law firms’ status as sellers of legal services,” the panel held.
After the Harris County district court judge declined to dismiss the case in May 2024, the defendants each filed appeals in August 2024. The First Court of Appeals declined to hear oral arguments in the case and issued its opinion June 30 dismissing the case.
The suit was sent back to the trial court to determine how much in attorney fees the prevailing parties are entitled to, pursuant to the TCPA.
Justices Veronica Rivas-Molloy, Kristin Guiney and Clint Morgan.
The NWSLA is represented by Jay Brown, Matthew S.L. Cate and Patrick G. Compton of Ballard Spahr.
The NWSLPA is represented by Bruce Johnson of Berg Plummer & Johnson and John R. Bielski of Willig, Williams & Davidson.
Weil Gotshal & Manges is represented by Chip Babcock, Jamila M. Brinson, Gabriela M. Barake and Cody Vaughn of Jackson Walker.
Covington & Burling is represented by George M. Kryder, Jeremy M. Reichman, Patrick Mizell and Cathy Smith of Vinson & Elkins.
Clarkson is represented by David M. Minces and Aaron S. Rankin of Minces Rankin.
The case number is 01-24-00437-CV.
Fifth Court of Appeals, Dallas
Kinder Morgan Unit Beats $7.8M Judgment on Appeal
In a complex breach of contract dispute, a three-justice panel recently determined a final award of $5.6 million in actual damages and another $2.1 million in interest and costs rendered against a Kinder Morgan unit cannot stand.
After Dallas County District Judge Gena Slaughter entered final judgment in September 2024 in favor of North Park Advantage Walden MRU, Kinder Morgan Treating filed notice of appeal in December 2024, after its motion for a new trial was denied.
The underlying case stems from two separate contracts: one between North Park Advantage and Copano Pipelines/Rocky Mountain under which North Park Advantage was to take over construction and operation of a gas processing plant from Copano that was built for SandRidge Exploration and Production; and another under which North Park Advantage contracted with Kinder Morgan Treating to lease certain equipment in order to process SandRidge’s gas.
After disputes arose, North Park Advantage filed suit against both companies, alleging fraud and negligent misrepresentation and pursued an additional claim of breach of contract against Kinder Morgan Treating.
The claims against Copano were decided by a jury, which rejected North Park Advantage claims. North Park Advantage’s negligent misrepresentation claim against Kinder Morgan Treating proceeded to a bench trial, pursuant to a clause in the equipment lease agreement, but the jury also issued an advisory verdict finding. The jury found KMT did not commit fraud but did make a negligent misrepresentation to North Park Advantage and that KMT was 60 percent at fault while North Park Advantage was 40 percent at fault.
The appellate panel determined that the economic loss rule served as a bar to North Park Advantage’s claim of negligent misrepresentation and found there was no evidence to support the trial court’s finding that KMT breached the agreement with North Park Advantage.
The panel wrote in a 32-page opinion issued July 1 that “a negligent misrepresentation claim arising from the negotiation process faces the economic loss rule and will fail unless the plaintiff can establish an injury independent of the contractual expectancy.”
“Thus, merely because a plaintiff suing for negligence or negligent misrepresentation opts to sue for reliance damages does not mean that such damages are not, in essence, ‘contract’ damages or that those damages constitute an independent injury,” the court held. “Under the circumstances presented in this case, we conclude that the economic loss rule bars Advantage’s negligent misrepresentation claim.”
Justices Nancy Kennedy, Emily Miskel and Mike Lee sat on the panel.
Kinder Morgan Treating is represented by D. Mitchell McFarland, Carrie Schadle and William M. Toles of Munsch Hardt Kopf & Harr and Gwen H. Samora of Copeland & Rice.
North Park is represented by Craig B. Florence, Brantley A. Smith and Stacy R. Obenhaus of Foley & Lardner.
The case number is 05-24-01447-CV.
Gateway, Clemishires Argue Impact of Leach Dismissal in Defamation Suit
In the wake of a Texas federal judge’s decision to dismiss a lawsuit where members of Gateway Church accused leaders of misrepresenting how tithe funds were being used, the parties in a sexual assault lawsuit involving the church have submitted opposing arguments to an intermediate appellate court regarding the impact that should have.
Chief U.S. District Judge for the Eastern District of Texas Amos Mazzant determined in late June that the ecclesiastical abstention doctrine, which generally prohibits courts from getting involved with church decisions that could impede religious institutions’ autonomy, mandated dismissal of the suit.
After a Dallas County district judge declined to dismiss a defamation lawsuit against Gateway Church and its elders brought by Cindy Clemishire, who alleges she was raped by the church’s former pastor, the defendants appealed that decision, arguing the ecclesiastical abstention doctrine should have ended that suit, too.
Gateway and the elders doubled down on that argument in a letter sent to the appellate court June 25, that pointed to the dismissal of the tithing suit, Leach v. Gateway, explaining that Judge Mazzant had determined that resolving the claims in that suit “would require the court to examine the management of Gateway’s donated funds, which will ‘necessarily implicate questions of faith, scripture, and religious doctrine.’”
“The same principles require dismissal here,” Gateway argued in the letter. “Plaintiffs’ claims necessarily ‘require the court to examine’ Gateway’s governance decisions and communications regarding the ‘character and conduct of its leaders.’”
Clemishire responded with her own letter June 30, arguing many things distinguish the Leach case from Clemishire’s claims, including that Leach was an “internal church controversy.”
“This case is not,” the letter reads. “As the Clemishires have explained, they are outsiders who have never joined Gateway or even attended any of its services.”
Clemishire is represented by William Drabble, Jeff Leach, Andrew York and J. Reid Burley of Gray Reed McGraw and Richard Hardy, Meghan Mitchell and Jodee Rankin of Faddoul, Cluff, Hardy & Conaway.
Gateway is represented by Ronald W. Breaux, Bradley W. Foster and Christopher R. Knight of Haynes Boone, Wendi L. Hodges and Alison R. Haefner of Middlebrook | Group and David M. Macdonald and John A. Safarli of Macdonald, Devin, Madden, Kenefick & Harris.
The Gateway elders are represented by Edwin Buffmire, Marc Fuller and Sarah J. Starr of Jackson Walker.
The case number is 05-25-01527-CV.
Eighth Court of Appeals, El Paso
Union Pacific Jury Win in Fatal Crash Affirmed
Plaintiffs who brought a wrongful death lawsuit against Union Pacific and lost at trial have had the result affirmed by an intermediate appellate court.
The family of Juan Maldonado, a commercial truck driver who was struck by a train and killed on Union Pacific’s tracks in July 2018, had argued on appeal the trial court wrongly determined their inadequate warning claims were federally preempted and wrongly instructed the jury on the definition of “extrahazardous.”
According to court documents, Maldonado was on his way from Big Springs to Van Horn to pick up a load of sand when he came to the crossing marked with a yield sign and crossbucks. A train traveling 68 miles per hour applied emergency brakes but collided with Maldonado, who was ejected from the cab of his rig before it exploded.
The family alleged the crossing was “extrahazardous” because the area had seen an uptick in commercial truck traffic as a result of the sand mine in the area. Over objections from the Maldonados, the jury was told “extrahazardous” was defined as follows: “A railroad crossing is extra-hazardous when, because of surrounding conditions, it is so dangerous that persons using ordinary care cannot pass over it in safety without some warning other than the usual crossbuck sign.”
In a 17-page opinion issued June 25, the panel affirmed the trial court’s judgment.
“Because we conclude that the trial court’s definition of extrahazardous was legally correct, and the Maldonados have not shown that the trial court abused its discretion in denying its requested surplus instruction, we overrule their second issue,” the panel wrote.
Chief Justice Salas Mendoza and Justices Gina M. Palafox and Lisa Soto sat on the panel.
Union Pacific is represented by Kent Rutter and Christina Crozier of Haynes Boone and John W. Proctor and Michael L. Peck of Brown, Proctor, Peck & Piwetz.
The plaintiffs are represented by M. Paul Skrabanek of Pierce Skrabanek and Raymond D. McElfish of McElfish Law.
The case number is 08-24-00135-CV.
Fourteenth Court of Appeals, Houston
Panel Ends Sex Assault Claims Against Hilton
A woman who alleged she was twice sexually assaulted at a Hampton Inn in Weslaco cannot proceed with her lawsuit against Hilton Franchise Holdings and Hilton Worldwide Holdings after an appellate panel recently determined the entities’ special appearances should have been granted.
The woman, who is not being named by The Lawbook, alleged that when she worked for a nonprofit organization in 2021, her manager was allowed to check in for everyone on the business trip and was given a key to each employees’ room. At night, while staying there on business trips in April and June 2021, according to court documents, the woman alleges her manager entered her room and sexually assaulted her.
She filed suit in Harris County against her manager, against the owner and manager of the hotel and against the Hilton entities. Hilton argued to Harris County District Judge Kyle Carter they should be released from the lawsuit because the basis of the lawsuit did not arise from their limited contacts with Texas, which deprived the court of specific jurisdiction.
Hilton told the court its principal place of business was in Virginia, that it was not a party to the franchise agreement for the Weslaco hotel, that neither Hilton entity holds title or leased the Weslaco hotel, and that it has no control over who is employed or trained by that hotel.
In a 14-page opinion issued June 30, the appellate panel agreed with Hilton, writing the woman’s claims “are not based on the activity of Hilton Worldwide or Hilton Franchise in Texas.”
Chief Justice Tracy Christopher and Justices Randy Wilson and Chad Bridges sat on the panel.
Hilton is represented by Gregory DuBoff, Grace Simmons and Ryan Frankel of McGuireWoods.
The plaintiff is represented by Jeremy M. Masten of Houston.
The case number is 14-25-00289-CV.
Texas Supreme Court
Cities Take ‘Death Star Bill’ Fight to SCOTX
Houston, San Antonio and El Paso have taken their constitutional fight against the so-called Death Star bill to the Texas Supreme Court, asking the state’s high court in a petition for review filed June 29 to review the case that they argue has “profound implications for every Texas local government, for thousands of local regulations, Texas industries, and businesses, and for Texas jurisprudence itself.”
The cities are challenging HB 2127, called the Texas Regulatory Consistency Act by proponents and the Death Star bill by those opposed to it. The law, passed in 2023, prohibits local governments from “adopting, enforcing, or maintaining” local rules in the areas of agriculture, business and commerce, finance, insurance, labor, natural resources, occupations or property.
In July, the Third Court of Appeals reversed a trial judge’s ruling that declared the bill unconstitutional, finding the cities “failed to show an injury-in-fact,” meaning they failed to allege the act caused them injuries.
“Instead, they allege that the Act is unconstitutional on its face and that they will have to review their charters, repeal preempted regulations, and suffer other such generalized injuries if forced to comply with its terms. These injuries lack sufficient concreteness and particularization for standing purposes,” the panel wrote.
The cities also “failed to show that their alleged injuries are fairly traceable to the state,” the panel held.
In the petition for Texas Supreme Court review, the cities argued the lower court “ignored petitioners’ well-established basis for standing: the unique injury cities suffer when they must implement unconstitutional state statutes.”
Houston is represented by Arturo G. Michel, Collyn A. Peddie and Lydia S. Zinkhan of the city’s legal department. San Antonio and El Paso are represented by Jane Webre, Kennon L. Wooten and Lauren Ditty of Scott Douglass & McConnico and city attorneys Deborah Klein and Evan D. Reed.
Texas is represented by Rance Craft of the attorney general’s office.
The case number is 26-0521.
U.S. Supreme Court
Justices Pass on Trade Secrets Case, Leaving $213M Victory in Place
The U.S. Supreme Court has declined an invitation from Tata Consultancy Services to undo a $213 million trade secret misappropriation judgment against it, leaving in place the big win a Northern District of Texas jury handed down to Computer Sciences Corporation in November 2023.
Tata had filed its petition for writ of certiorari with the high court in March, and the court requested in April that Computer Sciences Corp. file a response before ultimately denying the petition June 15.
“We are proud to have represented CSC in this important trade secrets case from discovery through CSC’s collection of more than $213 million. CSC steadfastly sought to protect its IP during seven-plus years of litigation, including a trial and appeals to the Fifth Circuit and Supreme Court,” said Baker Botts partner and lawyer for CSC, Thomas E. O’Brien, in a statement. “Every factfinder and court that looked at this case reached the same conclusion: Tata willfully and maliciously misappropriated CSC trade secrets.”
At trial, CSC alleged Tata misappropriated its trade secrets and used that proprietary information to develop a competing insurance policy administration system. The resulting unfair competition in the life insurance and annuities administration and processing market, CSC alleged, included the inking of a $2.6 billion contract with Transamerica.
CSC told the jury that developing its sophisticated programs took decades of development and millions of dollars and that Tata unlawfully misappropriated the source code in an effort to compete without making the same kind of development investment as CSC.
Tata is represented by John Bash, Jacob M. Bliss and Olivia Horton of Quinn Emanuel Urquhart & Sullivan and Anand K. Sharma, Rajeev Gupta, John M. Williamson and Luke J. McCammon of Finnegan, Henderson, Farabow, Garrett & Dunner.
Computer Sciences Corp. is represented by Aaron Streett, Macey Reasoner Stokes, Kurt Pankratz, and Susan C. Kennedy of Baker Botts.
The case number is 25-1107.
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