In this edition of Litigation Roundup, the federal government wades into an antitrust lawsuit Texas launched against a trio of asset managers alleging coal market manipulation, and the Fifth Court of Appeals in Dallas hears oral arguments in a $19.7 million loan dispute between former partners in a real estate firm.
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.
Eastern District of Texas
Paxton Touts FTC, DOJ Support in Asset Manager Coal Market Manipulation Suit
On Friday, the day after the Federal Trade Commission and the Department of Justice filed a statement of interest in a lawsuit Texas is bringing against a trio of asset managers it accuses of manipulating energy markets, Texas Attorney General Ken Paxton issued a statement of gratitude to the Trump administration.
“I am grateful that the Trump Administration has joined my effort to hold major asset managers accountable for weaponizing the financial industry to illegally control the energy markets and force a destructive ‘green energy’ ideology on the American people,” the statement reads. “The joint conspiracy by BlackRock, State Street and Vanguard sought to undermine America’s energy independence at the expense of consumers and our national sovereignty.”
Texas and 10 other states filed suit against the defendant asset managers in November 2024, accusing them of conspiring to leverage their shareholdings in competing coal companies to influence the management of those companies to reduce coal production. Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, West Virginia and Wyoming are also plaintiffs in the suit.
The states allege the defendants acted to “weaponize” their shares to pressure coal companies to reduce coal output by half by 2030 in an effort to further “green energy” goals, which consequently raised the price of energy for consumers.
The FTC and DOJ explained in the 34-page statement that the federal government has an interest in ensuring “the correct application of antitrust laws, including in America’s energy markets.”
“There should be no confusion: the antitrust laws allow passive fund investing, they allow shareholder advocacy for better corporate governance, and they allow active investing that doesn’t harm competition,” the statement reads. “As discussed below, however, this case alleges much more — the coordinated use of the power of horizontal shareholdings to distort output and prices in energy markets.”
The case has been assigned to U.S. District Judge Jeremy D. Kernodle, who has set a June 9 hearing on the defendants’ joint motion to dismiss several counts, including those alleging violations of consumer protection laws.
Texas is represented by Brian Barnes, Harold Reeves, John Ramer and David H. Thompson of Cooper & Kirk.
The FTC is represented by its own William Adkinson, Kelse Moen, Anupama Sawkar and Daniel Guarnera. The DOJ is represented by its own G. Charles Beller, Alice A. Wang and David B. Lawrence.
BlackRock is represented by David Gringer, Jennifer Milici, John O’Toole, Lauren Ige, Perry Lange and Thomas Mueller of Wilmer Cutler Pickering Hale and Dorr and Gregg Costa, Prerak Shah and Rachel S. Brass of Gibson Dunn & Crutcher.
State Street is represented by Jason M. Powers, George Kryder III, Mackenzie Newman, Megan Cloud, Stacey Vu and Stephen M. Medlock of Vinson & Elkins.
The Vanguard Group is represented by Robert D. Wick, John Playforth and Shadman Zaman of Covington & Burling and Bradley Weber and Chase Cobb of Troutman Pepper Locke.
The case number is 6:24-cv-00437.
Agreed Final $51.7M Judgment Ends 17-Year-Old IP Fight
Two parties who had been fighting a trade secret, patent infringement and breach of contract dispute for nearly two decades filed a joint motion for entry of an agreed final judgment with Chief U.S. District Judge Amos L. Mazzant on Friday.
The lawsuit was filed in November 2008, when plaintiff ams-OSRAM was known as Texas Advanced Optoelectronic Solutions, and defendant Renesas Electronics America was known as Intersil Corporation. The lawsuit is rooted in failed merger discussions between the two companies, during which optical technology company ams-OSRAM shared with Renesas certain confidential and proprietary technology information. Renesas’ predecessors said they had destroyed the confidential material but later came out with what ams-OSRAM alleged was a competing product, produced using its trade secrets.
Munck Wilson Mandala was involved from the outset and took the case on a contingency basis.
“We knew this would be a fight — and we never backed down,” said the firm’s global managing partner, William A. Munck. “The faces of the opposing parties may have changed over time, but the facts never did. This case was about protecting our client’s hard-earned innovations from a party that stole and profited from them. We held them accountable — and we delivered.”
Under the agreed final judgment, Renesas will pay ams-OSRAM $51.7 million. Last month, the U.S. Court of Appeals for the Federal Circuit issued a 3-0 decision affirming Renesas’ liability in the case.
In 2015, a jury sided with ams-OSRAM, awarding $88.8 million in damages, but on appeal the Federal Circuit upheld the finding of liability but vacated the damages award. At the second trial, jurors awarded ams-OSRAM $86 million in judgment, which was reduced to $48.2 million, plus interest. In 2022, an additional $3.9 million in attorney fees was added to the total by the court.
On appeal the second time, the Federal Circuit upheld the liability and damages finding, with the exception of the calculation of prejudgment interest. The companies then reached a settlement for $51.7 million.
ams-OSRAM is represented by Michael McCabe, Mike Wilson, Chase Cobern, Jordan Strauss and Robert McCutcheon of Munck Wilson Mandala.
Renesas Electronics is represented by Daniel Muino, Seth W. Lloyd and Brian R. Matsui of Morrison & Foerster.
The case number is 4:08-cv-00451.
Jury Sides with Deceased Dallas Rapper’s Estate
The estate of the late Dallas rapper known as Mo3 will retain sole ownership and control of his vocal recordings, a jury recently determined.
Chief U.S. District Judge Amos Mazzant entered final judgment May 12 on the jury’s April 28 verdict in favor of the estate of Melvin Noble Jr. in the lawsuit against former sound engineer Ray G. Bollin Jr. The family filed suit against Bollin in August 2023, accusing him of copyright infringement, conversion and tortious interference after he refused to return Noble’s music files after his death.
Noble was shot and killed in November 2020, the victim of what prosecutors have called a murder-for-hire plot.
Jurors sat through a weeklong trial and deliberated for about two hours before returning their answers to more than a dozen questions. The jury found Bollin was not a joint author of the vocal tracks, that he failed to comply with an agreement to hand them over when the estate requested them and that he was liable for conversion, tortious interference and copyright infringement of the vocal tracks, had used Noble’s name, image or likeness without permission and had violated the Digital Millennium Copyright Act.
But when it came to damages, the jury awarded the estate just $5,000 in damages — $2,500 for the DMCA violation and $2,500 for the unauthorized use of Noble’s name, image or likeness.
The estate is represented by Brent Turman, Meredith Palmer and Troy T.J. Hales of Bell Nunnally & Martin, Terry T.J. Johnson of Plano and Robert “Buck” McKinney of Austin.
Bollin represented himself.
The case number is 4:23-cv-00716.
Business Court of Texas, Eleventh Division
Judge Boots Wastewater Disposal Well Case Out of Biz Court
Business Court Judge Grant Dorfman has determined a lawsuit between two companies seeking more than $10 million in damages allegedly caused by wastewater injected into a Permian Basin disposal well does not belong in his court.
NGL Water Solutions Permian filed its lawsuit against Lime Rock Resources V-A and LRR Pecos Valley in the business court in February, asking the court for a declaration that it isn’t liable for any alleged damage done to LRR’s wells, based on an earlier agreement that immunized it from liability.
Prior to litigation commencing, LRR had in October 2024 sent a letter and later entered settlement discussions with NGL regarding its allegations that its wastewater had escaped the disposal well — called the Colt McCoy SWD No. 3 well in Loving County — and damaged LRR’s wells and mineral interests.
The parties had entered a standstill agreement while settlement talks were ongoing, but NGL filed its lawsuit “one minute after the agreement expired,” Judge Dorfman noted in his 11-page order issued May 20.
LRR responded by filing a lawsuit against NGL in Loving County district court, alleging trespass, negligence and seeking a declaration that NGL had deprived it of its possession, use and enjoyment of mineral interests. LRR also filed a motion to transfer the business court lawsuit to Loving County, arguing that is the mandatory venue for the dispute because it involves real property governed by Section 15.011 of the Texas Civil Practice and Remedies Code.
The earlier agreement between the parties, a shut-in agreement that NGL alleges immunizes it from liability in this dispute, contained a mandatory venue selection clause designating Harris County as the location for litigation. NGL pointed to that provision in arguing against moving the case to Loving County.
“Defendants contend that venue is mandatory in Loving County because the lawsuit essentially arises out of an effort to recover an interest in or damages to real property — namely, Pecos Valley’s oil and gas wells,” Judge Dorfman wrote. “Although NGL’s declaratory judgment action seeks an interpretation of the shut in agreement, it does so only to avoid potential liability for damages to Pecos Valley’s real property as a result of its alleged trespass, negligence, and statutory waste — the very claims set out in the Loving County lawsuit.”
Judge Dorfman wrote that Loving County is the “legally required venue” for this dispute.
“For the foregoing reasons, defendants’ motion to transfer venue is hereby granted,” he wrote. “Although the Court offered additional time at the oral hearing for it to do so, NGL did not make an election pursuant to Texas Government Code § 25A.006(b) or (c); and so the Court believes it lacks authority to transfer the case to Loving County. Accordingly, the Court dismisses this cause without prejudice.”
NGL is represented by Denise Scofield, Brandon Duke and Kyle Terao of O’Melveny & Myers.
Lime Rock is represented by Nick Brown, Harris Blum, Daniel T. Donovan and Holly Rioux-Lefebvre of Kirkland & Ellis and Greg M. Holly of Monahans.
The case number is 25-BC11B-0005.
First Circuit Civil Court, Hawaii
Dallas-based Baron & Budd Sees 11-Year-Old Case Net $700M Settlement
Earlier this month, Dallas law firm Baron & Budd announced it had successfully helped represent the state of Hawaii in a lawsuit against two multinational pharmaceutical companies over the safety and effectiveness of blood-thinner Plavix.
The lawsuit was originally filed March 19, 2014, according to court records, against defendants Bristol-Myers Squibb, Sanofi-Aventis US LLC and three Sanofi-affiliated companies. On May 9, a $700 million settlement agreement was inked. Baron & Budd represented Hawaii alongside attorneys from the state attorney general’s office and from the law firm Cronin, Fried, Sekiya, Kekina & Fairbanks.
Bristol-Myers and Sanofi will divide the $700 million owed and make the payment to Hawaii via wire transfer by June 9. Gov. Josh Green called the settlement a “landmark” and a “major victory” for the state.
“Once the money goes into our general fund, we can go to work on immediately identifying ways to enhance our health care services for Hawaii’s residents,” he said. “I am very proud of the work by our attorney general and outside counsel that helped in achieving this result for the people of Hawaii.”
The case number is 1CC141000708.
Southern District of New York
Haynes Boone Team Gets Defense Win in $58M Lawsuit
An Alien Tort Claims Act lawsuit that had been seeking $58 million from the Shell Petroleum Development Company of Nigeria has been dismissed by a federal judge in New York.
According to court documents, a Nigerian contractor, Forstech Technical Nigeria Limited, filed suit against the Shell subsidiary, which is now known as the Renaissance Africa Energy Company, in October 2024. FTNL alleged RAEC owed millions in processing fees stemming from a contract between FTNL and the government of the Nigerian state of Bayelsa to construct an oil and gas processing facility in Gbarantoru. FTNL alleged the facility was constructed and became operational without necessary permits.
In November, RAEC filed a motion to dismiss, arguing in part that the lawsuit focuses on alleged conduct that happened in Nigeria so courts here do not have jurisdiction over the dispute.
U.S. District Judge Paul A. Engelmayer presided over the case and entered an order on May 19 dismissing the case based on improper venue, insufficient service of process, failure to state a claim and failure to join a necessary party.
FTNL is represented by Da’Tekena Barango-Tariah of Brooklyn.
RAEC is represented by Rebecca Schwarz, Michael Mazzone and Mark Trachtenberg of Haynes Boone.
The case number is 1:24-cv-07629.
Fifth Court of Appeals, Dallas
Panel Hears $19.7M Loan Dispute Between Ex-Partners in Real Estate Firm
The Dallas Court of Appeals has been asked to overturn a lower-court judgment awarding nearly $20 million to a real estate executive from his former business partner, a cardiologist.
The case stems from a loan dispute between Patrick Barber, described in court documents as an experienced real-estate investor, and Dr. Bharat Sangani, Barber’s partner for more than 20 years in Encore Enterprises Inc., a commercial real estate company headquartered in the greater Dallas area. (Sangani’s wife, Smita Sangani, is also listed as a party to the litigation, but it deals strictly with the business relationship between Barber and Dr. Sangani.)
The appeal of a judgment by state District Judge Dale B. Tillery’s February 2024 in favor of Barber was argued Thursday before a three-judge panel of the Fifth Court of Appeals: Chief Justice J.J. Koch, Justice Carolyn Wright and Justice David W. Evans.
Arguing for Sangani, the appellant, was David Coale of Lynn, Pinker Hurst & Schwegman.
Jeff Tillotson of Tillotson Johnson & Patton represented Barber.
The case stems from a January 2014 promissory note between the Sanganis, as borrowers, and Barber, as lender.
Dr. Sangani is chairman and chief executive officer of Encore Enterprises. The company’s web site says it has “a total asset value of $3.7 billion, $1.6 billion in assets under management, and a portfolio of over 150 completed transactions.”
Barber was Sangani’s minority partner in Encore — he owned 10 percent of the company, Sangani, the other 90 percent. According to court filings, Barber left Encore in December 2020 after a dispute over, among other things, the timing and size of his distributions and compensation as well as the use of roughly $22 million in company funds to cover personal expenses of Sangani and his family. Barber’s appellate brief called those expenditures “unauthorized” and “impermissible.” Filings by Sangani said Encore paid some of his personal expenses as part of the company’s repayment of tens of millions of dollars he’d loaned to Encore over the years.
Barber claimed at trial that under the 2014 promissory note he’s owed $19.7 million, including interest, and Judge Tillery agreed.
Sangani claimed the note is unenforceable because, as Coale told the appellate panel, it’s “not a legally operative instrument.”
There was never a loan from the Sanganis to Barber, Coale said. The promissory note, he said, was intended, rather, to provide Barber with “an asset that he could put on his balance sheet to show lenders and secure better debt terms” while he awaited “potential future payments” from Encore. The cardiologist and his wife were listed as the borrowers, according to court documents, so the note wouldn’t show up as a debt on Encore’s books.
“It’s not a contract at all. It’s illusory,” Coale said.
That interpretation, Tillotson countered, would mean that “a series of agreements that were put together and negotiated and incorporate each other … were in fact a big joke — illusory.”
The note, Coale argued, specifies that the Sanganis cannot be found in default or have any liability under the document for failure to make payments to Barber so long as Sangani, in his “sole and absolute discretion,” determines that Encore does not have sufficient available cash to make such payments.
“When you’re a minority shareholder, you’re just a minority shareholder,” Coale said. “The majority shareholder gets to call the shots.”
He added, “There is simply no textual support for the idea that this instrument allows any kind of claim about the maturity value of this note if Dr. Sangani has concluded in his sole and absolute discretion that there’s not available cash.”
Tillotson said the note “does not say he [Sangani] has sole and absolute discretion for anything. … He cannot just simply say, ‘I can do whatever I want.’”
Rather, Tillotson argued, when read together with a related “key person memorandum of agreement” signed by the parties at the same time as the note, it’s clear that Sangani’s “sole and absolute discretion” applied only to determining when and in what order disbursements from Encore would be made — not whether to pay Barber at all.
In determining enforceability, he said, “you do not construe agreements with an eye towards rendering them illusory. You work to harmonize the language to find them enforceable.”
The case number is 05-24-00237-CV.
Bruce Tomaso contributed to this report.
Related litigation coverage from the past week
- Southwest Airlines has agreed to pay one cent in damages and a confidential amount in attorney fees and court costs to resolve a lawsuit brought by political conservative Edward Blum’s American Alliance for Equal Rights over its now-terminated flight program for low-income Hispanic students.
- The Texas Supreme Court corrected what it called a “cascade of errors” and reversed a $6.1 million verdict in favor of Rainbow Energy Marketing in its dispute with American Midstream over a contract to ship gas on the Magnolia natural gas pipeline.
- SCOTX undid a jury’s finding of negligence and $2.8 million award to 30 homeowners in rural Matagorda County who experienced flooding during Hurricane Harvey in 2017.
- A Dallas County jury awarded almost $9.5 million to a trucking business that claimed it was forced aside when a private equity firm acquired its principal client, the El Rancho Supermercado grocery chain.
- Trial teams from Gibbs & Bruns convinced two Harris County juries to return complete defense wins for two of its clients, one that was facing as much as $13.7 million in liability and another that was fighting claims seeking more than $20 million in damages.
- Denying any wrongdoing, American Airlines and Qurium Solutions have settled a federal lawsuit brought by Edward Blum’s American Alliance for Equal Rights, which alleged that their supplier diversity practices unlawfully prioritized race and ethnicity.
- In a fiery seven-page concurrence, U.S. Circuit Judge for the Fifth Court of Appeals James C. Ho criticized seven U.S. Supreme Court justices, including three appointed by President Donald Trump, who issued a ruling that temporarily blocked the federal government from deporting three Venezuelans under the Alien Enemies Act.