In this edition of Litigation Roundup, a massage company pays $1 million to end the sex assault claims lodged by two female customers, a lawsuit between the parent company of Ace Cash Express and a business partner seeks as much as nine-figure damages, and American Airlines wins an appeal in a discrimination lawsuit venue fight.
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Harris County District Court
Massage Co. Settles Sex Assault Claims for $1M
Houston-area massage franchise Massage Envy has reached an agreement to pay $1 million in order to bring an end to claims brought by two women who allege they were sexually assaulted by a massage therapist during appointments.
The women, identified as T.G. and M.D., filed a notice with the court on Oct. 19 they were nonsuiting the claims they filed in September 2022 with prejudice. Their lawsuit centered around alleged assaults that occurred at a Massage Envy outpost in Conroe at the hands of massage therapist Jose Barajas Franco, who has been arrested and charged with felony sexual assault.
The criminal charges against Franco remain pending. The $1 million settlement represents the maximum insurance policy limit, according to Blizzard Greenberg, the law firm that represents the women. T.G. contracted an incurable sexually transmitted disease from the attack, the firm said.
“The franchise owner attempted to downplay the allegations and we did not stand for it,” Anna Greenberg, who represents the women, said in a statement. “These women, with no knowledge of the other’s allegations, separately reported the assaults by this therapist within just a few weeks of each other. That is no coincidence; that is evidence of a predator at work.”
The case was assigned to Harris County District Judge Robert Schaffer.
The women are represented by Edward Blizzard and Anna Greenberg of Blizzard Greenberg.
Massage Envy is represented by James R. Parish and Regina Sada of Wood Smith Henning & Berman.
The case number is 2022-59001.
Dallas County District Court
Customer Data Theft Suit Seeks Millions in Damages
Populus Financial Group, the parent company of Ace Cash Express, is suing business partner Netspend Corporation, alleging it has suffered “tens of millions if not hundreds of millions of dollars in damages” after Netspend used Populus’ customer data to market its own products.
“In short, Netspend gained access to large quantities of Populus’s confidential information pursuant to the Agreements,” the lawsuit alleges. “Netspend then improperly used and mismanaged Populus’s confidential information when Netspend marketed and promoted Netspend-only products without any approval by Populus. Netspend’s breaches have damaged Populus and caused it massive losses.”
The case was filed in August and has been assigned to Dallas County District Judge Gena Slaughter. Netspend filed an answer Sept. 18, arguing Populus’ claims should be tossed because they are “vague and ambiguous and do not allow defendant to ascertain what specific acts or omissions plaintiff complains of.”
Populus alleges it partnered with Netspend “to develop, market, and service Populus-branded products” but that Netspend took advantage of the arrangement to use the customer data for its own means.
During an audit, Populus alleges Netspend’s breach came to light and it was “caught red handed.”
“Having breached its agreements, failed to provide all required information to Populus, and refused to affirm that it would no longer steal Populus’s customers and pay Populus fully and accurately, Netspend left Populus no choice but to file this lawsuit and obtain redress for Netspend’s wrongful and willful conduct,” the suit alleges.
The case number is DC-23-12153.
Eastern District of Texas
Ernst & Young Beats Back Suit
Ernst & Young recently beat back a lawsuit accusing it of fraud and acting in bad faith in dealings with San Francisco-based technology company Motista.
Chief Judge Rodney Gilstrap issued an order Oct. 17 granting an agreed motion to lift the stay and enter a stipulated dismissal of the claims with prejudice.
Motista filed suit in August 2021, alleging Ernst & Young had improperly obtained and used its trade secrets and acted in bad faith in its dealings with the company.
Prior to Judge Gilstrap’s ruling, the International Institute for Conflict Prevention and Resolution had found Ernst & Young “had not used or improperly obtained Motista’s trade secrets or other technology, had not acted in bad faith in its dealings with Motista, had not breached covenants of good faith and fair dealing, had not made negligent or fraudulent misrepresentations to Motista and had not engaged in common-law unfair competition.”
Motista’s complaint and first amended complaint were filed under seal with the court and remained sealed Monday.
The case number is 2:21-cv-00292.
Southern District of Texas
Alex Jones Can’t Use Bankruptcy to Avoid Paying Sandy Hook Families
Conspiracy theorist Alex Jones and his Free Speech Systems cannot use a personal bankruptcy proceeding to discharge debts owed to the families whose children were murdered in the Sandy Hook Elementary shooting, who he was found to have defamed in his broadcasts.
Willkie represented the families pro bono in the bankruptcy case. They sued Jones for defamation and intentional infliction of emotional distress after he repeatedly called the mass shooting “a hoax.”
A jury awarded two families $50 million, prompting Jones to file to bankruptcy in December 2022. The families argued that the debts owed to them are excepted from discharge under the law.
Jones argued that because there was no determination in the trial court as to whether he had caused the families a “willful and malicious injury” his debts are not excepted from discharge under the law.
U.S. Bankruptcy Judge Christopher M. Lopez issued a ruling Oct. 19 granting a motion for summary judgment in favor of the families.
“As noted above, the Heslin/Lewis petition contains many well pleaded allegations that Jones knew he was causing a willful and malicious injury to Heslin,” Judge Lopez wrote. “Jones is correct though that the petition also describes his behavior as reckless and references ‘reckless attacks’ and ‘reckless harassment’ of the plaintiffs. But upon a careful review of the petition, Jones is also deemed to have committed intentional acts too.”
The families are represented by Rachel C. Strickland, Jennifer Hardy, Stuart R. Lombardi, Ciara Sisco, Courtenay Cullen and Deanna Drenga of Willkie Farr & Gallagher, Avi Moshenberg of McDowell Hetherington and Jarrod B. Martin of Chamberlain Hrdlicka White Williams & Aughtry.
Jones is represented by Vickie L. Driver and Christina Walton Stephenson of Crowe & Dunlevy and Shelby A. Jordan of Jordan & Ortiz.
The case number is 23-03035.
Fifth Court of Appeals, Dallas
American Airlines Wins Venue Fight in Discrimination Suit
Tarrant County will be where litigation takes place in a case where the Halkuff family accuses American Airlines discriminated against their autistic child and barred the minor from boarding a flight from Dallas Forth Worth Airport to Kansas City because of the child’s disability.
The family, which was eventually removed from the flight, filed suit in Dallas County and argued that was the correct venue because that’s where their alleged injury occurred. American Airlines argued that all gates and terminals at the DFW airport are actually in Tarrant County, making that the correct venue.
After Dallas County District Judge Monica Purdy denied American Airline’s June motion to transfer venue, the airline appealed to the Fifth Court of Appeals.
On Oct. 18, the justices issued a ruling that the case belongs in Tarrant County.
“American’s undisputed evidence included specific identification of Terminal D and Gate D-38 as the location where the flight at issue boarded,” the opinion reads. “According to American’s evidence, Terminal D and its associated runways are located entirely in Tarrant County. This evidence not only disproved appellees’ venue fact, it also amounted to evidence that Tarrant County was a proper venue.”
Justices Bill Pedersen III, Dennise Garcia and Nancy Kennedy sat on the panel.
The Hallkuffs are represented by Houston solo practitioner Reginald E. McKamie Sr.
The case number is 05-23-00621-CV.