In this edition of Litigation Roundup, we give you details on the unusual terms of a settlement Texas reached with Cal-Maine Foods in a price gouging suit, the U.S. Court of Appeals issues a ruling being hailed as a victory for taxpayers, and a doctor in the Valley goes to prison for fraud involving adult day care centers.
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.
Harris County District Court
Cal-Maine Pays Texas 2.1M … Eggs, Settles Price Gouging Claims
After five years, a lawsuit that accused Cal-Maine Foods of illegally raising the price of eggs by about 300 percent has been settled, after the company recently agreed to donate a total of about 2.1 million large, brown or white eggs to 17 food banks across the state.
The parties entered an agreed final judgment and injunction Jan. 9, according to court records. The case was assigned to Harris County District Judge Nathan J. Milliron, who as of Tuesday had not signed that pleading or issued a final judgment in the case.
Cal-Maine, one of the largest producers of eggs in Texas, was sued in April 2020 for price gouging. As part of the settlement, the parties agreed to an injunction that for the next decade, Cal-Maine cannot sell eggs during a disaster period “at a price that would result in a violation” of the state’s Deceptive Trade Practices Act, and it cannot demand a price for eggs during a disaster period that would violate the act.
“Defendants shall provide plaintiff with documents and/or a written summary (via email) as to the status or progress of the egg donations on a monthly basis until the egg donations are completed,” the filing reads.
Attorney General Ken Paxton announced the settlement Jan. 15, vowing to “crack down” on corporations that engage in price gouging.
“Cal-Maine tried to take advantage of the people of Texas during the Covid-19 pandemic, and this settlement is an important step toward securing justice for the company’s unethical actions,” he said. “Our efforts to hold Cal-Maine accountable have secured reforms that will help prevent any further illegal price gouging and over two million free eggs that will be distributed by food banks across the state.”
Cal-Maine is represented by Jordan W. Leu and M. Sean Royall of King & Spalding.
Texas is represented by Jonathan Stone of the attorney general’s consumer protection division.
The case number is 2020-25427.
Parents Sue Over 8-Year-Old’s Alleged Sexual Assault at NRG
The parents of a child identified only as “S.E.” have filed a lawsuit alleging their son was sexually assaulted inside a restroom at a Houston Texans game at NRG Stadium.
The actual petition filed with the court Jan. 12 is marked as “restricted” and is not viewable via the court’s online docket. The alleged assault occurred during the Dec. 14 game against the Arizona Cardinals.
The docket shows that the lawsuit names as defendants Aramark Sports and Entertainment Services, ASM Global Parent and Ushay Nixon, the employee who allegedly attempted to assault the 8-year-old boy. Nixon is employed by Aramark and ASM manages NRG Park.
According to a news release announcing the lawsuit, Nixon was arrested after the alleged assault on a charge of indecency with a child and attempted aggravated sexual assault of a child under the age of 14.
The case has been assigned to Harris County District Judge Rabeea Collier.
As of Tuesday, counsel for the defendants had not filed an appearance.
The family is represented by Anna Greenberg of Blizzard Greenberg. She issued a statement calling what allegedly happened “every parent’s worst nightmare.”
She said the boy, who was attending his first NFL game, “was targeted by an employee who never should have been allowed anywhere near children.”
“Companies that invite families into massive public venues have a non-negotiable duty to protect them, and when they fail, they must be held accountable,” she said.
According to the news release announcing the lawsuit, the boy’s mother walked him to the men’s room and waited outside. While inside the restroom unattended, the boy was allegedly approached by Nixon, who directed him inside a stall and locked the door before removing the child’s pants and underwear and telling him to face the toilet.
When the boy noticed Nixon unbuckling his belt, he pushed past him and fled, according to the news release. The lawsuit alleges Nixon had a “documented history of sexual misconduct” prior to being hired by Aramark.
The case number is 2026-02123.
Northern District of Texas
Carrington Coleman Reps X in Antitrust Suit
In a sprawling lawsuit with 43 defendants, X Corp. has tapped Dallas firm Carrington, Coleman, Sloman & Blumenthal to represent it in antitrust litigation accusing music publishers of trying to coerce the internet platform into “taking licenses to musical works from the industry as a whole, denying X the benefit of competition between music publishers.”
X filed its lawsuit Jan. 9, arguing across 53 pages that the conduct of the National Music Publishers’ Association and the music publishers it represents is anticompetitive. Sony Music Publishing and Universal Music Corp. are among the defendants.
The lawsuit alleges that in October 2021, NMPA’s president and CEO David Israelite emailed X, purportedly on behalf of “all music publishers” and threatened that the Association would launch “a massive program” that would inundate the platform with Digital Millennium Copyright Act takedown notices “on a scale larger than any previous effort in DMCA history.”
Israelite allegedly warned X that the campaign would effectively turn the platform’s most popular users into “repeat infringers” and would force X to remove them from the platform.
“NMPA also made clear that X could make this all go away — for a price,” the lawsuit reads. “Mr. Israelite explained that X could avoid a coordinated takedown-notice barrage if it agreed to do ‘what many other social media companies have done’ and ‘develop a partnership’ with NMPA and the music publishers to license their musical compositions.”
The case has been assigned to Senior U.S. District Judge Jane J. Boyle.
X Corp. is represented by Alex More and Monica Gaudioso of Carrington, Coleman, Sloman & Blumenthal and Bradley Justus, Christopher Erickson, Craig Reiser, Isabella Schwarze and Scott A. Eisman of Axinn Veltrop & Harkrider.
As of Tuesday, none of the defendants’ counsel had filed an appearance.
The case number is 3:26-cv-00047.
Southern District of Texas
Valley Doc Gets Prison for Adult Daycare Fraud
A doctor from McAllen will spend the next decade in prison after Chief U.S. District Judge Randy Crane sentenced him to 120 months for orchestrating an illegal kickback scheme involving adult daycare centers.
Dr. Osama Nahas, 70, was convicted by a jury in March 2024. At the Jan. 13 sentencing, Chief Judge Crane also ordered that Nahas pay $3.1 million in restitution.
Nahas was indicted in August 2022 on 15 counts, including attempt and conspiracy to commit mail fraud, healthcare fraud, document fraud and conspiracy to defraud the United States, according to court records.
His jury trial began Feb. 20, 2024, with jury selection and lasted eight days. On March 1, 2024, the jury returned its verdict convicting Nahas on nine counts, while finding him not guilty of six counts of document fraud.
According to prosecutors, Nahas, who owned and operated Crosspoint Medical Clinic in Edinburg, would travel to adult daycares across the Valley, ordering unnecessary lab tests and prescriptions for the elderly patients there. The government also prosecuted his medical assistant, Isabel Pruneda, 54, for forging patient signatures on consent forms and “misappropriating expensive medications, including pain creams.”
Chief Judge Crane sentenced her to 97 months in prison.
Prosecutors told jurors that the duo would steer the prescriptions and lab tests to specific companies in exchange for kickbacks and that they would pay the owners of the adult daycare centers they frequented bribes disguised as rent payments to gain access to the patients.
The case was prosecuted by Andrew Swartz and Bradley Gray of the Department of Justice.
Nahas is represented by Jason Davis of Davis & Santos Attorneys & Counselors.
Pruneda is represented by Adolfo Alvarez Jr. of McAllen.
The case number is 7:22-cr-01311.
Fifth Court of Appeals, Dallas
Jury Verdict Undone Based on ‘Improper’ Argument is Reinstated
About one year after Dallas County District Judge Gena Slaughter issued a four-page order wiping out a jury verdictbased on the “improper and incurable” arguments from the defense lawyers, an appellate panel has determined that was an error.
Judge Slaughter’s ruling came in a fraudulent transfer case and admonished lawyers Stephen A. Khoury and C. Gregory Shamoun for their “improper conduct” that “probably resulted in an improper verdict against plaintiffs.”
Khoury and Shamoun, Judge Slaughter wrote, “engaged in unsupported, extreme, and personal attacks on the integrity of plaintiffs’ lead counsel, Mr. Todd J. Harlow.”
“The attacks on Mr. Harlow included denigrating Mr. Harlow by repeatedly referring to him as ‘Harlow,’ insulting him as a ‘silver-tongued lawyer,’ and repeatedly accusing Mr. Harlow of dishonesty, despite being admonished repeatedly by the court — both on and off the record,” the order reads.
In a 35-page opinion issued Jan. 14, a three-justice panel wrote that it does “not condone the conduct of relators’ trial counsel” and that “unprofessional practices like those in this case disserve our citizens, harm clients, and demean our profession.”
“Relators assert that the complained-of arguments were curable, but real parties in interest did not object and request curative instructions, and therefore, the trial court abused its discretion
in granting the new trial,” the panel wrote. “After reviewing the petition, the responses, the reply, and the record, we agree.”
Chad Baruch of Johnston Tobey Baruch, who represented the relators on appeal, issued a statement that the opinion “reinforces a critical guardrail in Texas civil practice.”
“Trial courts have broad discretion, but that discretion stops short of erasing a jury’s work absent truly extreme and incurable conduct,” he said. “The court made clear that the standard is demanding by design, and for good reason.”
In the underlying fraudulent transfer lawsuit, Renate Nixdorf GmbH & Co. and Watercrest Partners sued a large number of defendants in two separate actions that were consolidated for trial. The defendants are TRA Midland Properties, Pillar Income Asset Management, Midland Residential Investment, TRA Apt. West TX, Transcontinental Realty Investors, American Realty Investors, Winter Sun Management, H198, Triad Realty Services, Regis Realty Prime, Chikory I, Sunchase American, Longfellow Arms Apartments, Vistas of Vance Jackson, Donald C. Carter, Robert T. Shaw Sr. and Ryan Phillips.
Renate Nixdorf, referred to in court documents as RNK, alleged it held a $48.75 million judgment against “disgraced real estate fraudster and international fugitive” Werner Eric Brauss, while Watercrest held a $300,000 judgment against Brauss’ “ex-wife and coconspirator.”
“Brauss fled the country on Nov. 11, 2009 to avoid criminal prosecution and a flood of civil lawsuits brought by defrauded investors in his myriad real estate scams,” RNK alleged in its fourth amended petition. “Immediately before Brauss escaped to Brazil, on Nov. 10, 2009, Brauss [and his ex-wife] ‘assigned’ all of their ownership interests in TRA Midland to [Midland Residential Investment] in return for no consideration.”
In March 2023, after three weeks of trial, jurors were given a 41-page charge, containing 28 multipart questions. The jury determined that RNK and Watercrest were creditors of Brauss’ and that Brauss had transferred stock in two entities and 100 percent of the membership interests in Midland Equity “with actual intent to hinder, delay or defraud” his creditors.
The jury found that six of the defendant entities — MRI, TRA Midland, TRA Apt. Pillar, TCI and ARI — were “part of a conspiracy that caused harm to either Renate Nixdorf or Watercrest Partners.” The jury also made findings of liability against some of the defendants, but not all.
The relators are also represented on appeal by Robert L. Tobey of Johnston Tobey Baruch. Tobey issued a statement that the opinion threaded the needle of protecting “the integrity of the jury system while still condemning unprofessional conduct.”
“It draws a clear line between advocacy that can be addressed in real time and the extraordinary step of setting aside a verdict altogether,” he said.
Justices Tina Clinton, Jessica Lewis and Cynthia M. Barbare sat on the panel.
Renate Nixdorf GmbH & Co. and Watercrest Partners are represented by Todd J. Harlow and Thomas F. Allen Jr. of Frost Brown Todd.
The case number is 05-25-00205-CV.
U.S. Court of Appeals for the Fifth Circuit
Panel Clarifies ‘Limited Partner’ Meaning in Tax Case
In a 45-page opinion issued last week, a three-judge panel determined 2-1 that the phrase “limited partner” isn’t as narrowly defined as the Tax Court previously held, and handed Sirius Solutions a win in its suit against the Commissioner of Internal Revenue.
“The Tax Court interpreted ‘limited partner’ to refer only to passive investors in a limited partnership,” the opinion begins. “It therefore upheld the IRS’s upward adjustment of Sirius Solutions’ net earnings from self-employment. We disagree. A ‘limited partner’ is a partner in a limited partnership that has limited liability. So we vacate and remand.”
Sirius had filed its notice of appeal in May 2024, according to court records, challenging a February 2024 ruling handed down in favor of the Commissioner of Internal Revenue.
Mary A. McNulty of Holland & Knight, who represents Sirius, issued a statement calling the Fifth Circuit’s decision “a big win for taxpayers.”
“Today, the Fifth Circuit rejected the government’s attempt to infer new meaning from a statute that was clearly understood for more than four decades to exempt limited partners from self-employment taxes,” she said. “This ruling brings clarity and common sense back to a part of the tax code that never should have been controversial in the first place.”
Judges Andrew S. Oldham, Kurt D. Engelhardt and James E. Graves Jr. sat on the panel that delivered the Jan. 16 opinion.
Judge Graves dissented, writing that he would have upheld the Tax Court’s decision because “the text and structure of 26 U.S.C. § 1402(a)(13) are clear that its tax exemption for limited partners applies only to those functioning as passive investors.”
“The record here clearly establishes that the individual partners were not merely passive investors but were ‘limited’ in name only,” he wrote.
Sirius Solutions is represented by Lee Meyercord and Richard Phillips of Holland & Knight and Jennifer McCaig of NAPA Management Services Corporation.
CIR is represented by Paul A. Allulis of PilieroMazza and by Samuel Jones, Ellen DelSole and David Hubbert of the Department of Justice.
The case number is 24-60240.
Haynes Boone Defends Antitrust Win for Vizient
In a 19-page opinion, a unanimous three-judge panel determined U.S. District Judge Brantley Starr got it right in October 2024 when he tossed an antitrust lawsuit against Vizient Inc., which describes itself as a healthcare performance improvement company and is described in court documents as a healthcare group purchasing organization.
Vizient secured a summary judgment win against Endure Industries after about four years of litigation in the lawsuit where Vizient was accused of violating the Sherman Antitrust Act by “monopolizing the market and engaging in anticompetitive conduct.” Endure filed suit after it lost bids to contract with Vizient.
Judge Starr’s ruling hinged on what he said was Endure’s failure to define the “relevant market” within which Vizient carried out its allegedly anticompetitive activities. He rejected the argument that Vizient’s rebate programs and group purchasing organization contracts with hospitals “locked in” consumers to purchase only Vizient medical supplies.
“As noted above, 629 hospitals have left Vizient over the course of its time as a [group purchasing organization],” Judge Starr wrote. “Vizient is hardly Hotel California.”
The panel wrote that Endure “failed to satisfy its burden to establish a genuine dispute of material fact as to either of its proposed antitrust markets.”
Judges Jerry E. Smith, Carl E. Stewart and Irma Carrillo Ramirez sat on the panel that issued the Jan. 13 opinion.
Endure is represented by David Coale, Andrés Correra and Zhenmian Xu of Lynn Pinker Hurst & Schwegmann, Jim Bullock of Beard & Harris, Robert W. Gifford and Kenneth Johnston of Johnston Clem Gifford and Nathaniel Plemons of the attorney general’s office.
Vizient is represented by Ronald Breaux, Benjamin G. Goodman, Andrew W. Guthrie and Ashley Koos of Haynes Boone.
The case number is 24-10995.
U.S. Supreme Court
SWAPA Responds to Boeing Petition
On Thursday, the Southwest Airlines Pilots Association filed its brief in opposition to The Boeing Company’s petition for writ of mandamus, arguing the court should deny review in the case for three key reasons.
The SWAPA brief is the latest to come in the case that’s been litigated since 2019. Boeing appealed to the U.S. Supreme Court in September, seeking to overrule a June 2025 unanimous ruling from the Texas Supreme Court that the Railway Labor Act does not preempt the claims brought by SWAPA, clearing the way for the union to sue the company for damages caused by its alleged misrepresentations about the airworthiness of the 737 MAX.
Boeing had argued that because deciding the case requires interpretation of the collective bargaining agreement between Southwest Airlines and its pilots, the claims were preempted. SWAPA argued, and the court agreed, that the RLA does not preempt its suit because the act only applies to claims between airline carriers and employees, and Boeing is neither.
In its brief to the high court, SWAPA argued this case doesn’t merit review because it doesn’t require interpretation of the CBA, because the Texas Supreme Court’s opinion did not create any conflict in the law regarding RLA preemption and because “this case is a poor vehicle for general review of RLA preemption.”
Boeing is represented by Aaron L. Nielson, Craig D. Primis and Kasdin M. Mitchell of Kirkland & Ellis.
SWAPA is represented by David Coale of Lynn Pinker Hurst & Schwegmann, Jeffrey W. Hellberg Jr. of Wick Phillips Gould & Martin and Anthony U. Battista and Mary Dow of Condon & Forsyth.
The case number is 25-495.
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