In this edition of Litigation Roundup, a Texas software company is among those named in a lawsuit alleging a conspiracy among landlords to artificially inflate rental prices, the Fifth Circuit issues a rare precedential opinion in a venue dispute that pries a case away from U.S. District Judge Alan Albright, and that appellate court also found a new U.S. Securities and Exchange Commission disclosure rule was “arbitrary and capricious.”
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Eastern District of Texas
Most of Defamation Suit Against Jerry Jones Tossed with Prejudice
U.S. District Judge Robert W. Schroeder III has dismissed with prejudice much of a lawsuit brought against Jerry Jones by a woman who says she was defamed by the Dallas Cowboys owner after claiming to be his daughter.
But Alexandra Davis, 26, will get a chance to amend her lawsuit to bring her claim that Jones, his attorney Donald Jack Jr. and communications consultant James Wilkinson acted with malice in making statements about her.
“In her complaint, plaintiff pleads that defendants’ ‘statements were all false and made with malicious intent’ and that ‘defendants in making the false and defamatory statements acted not only negligently but also acted with malice,’” Judge Schroeder wrote in the Oct. 31 order. “Beyond the ‘conclusory statement’ that defendants acted with actual malice, however, plaintiff does not allege specific facts to demonstrate that defendants knew the statements were false or that they acted with reckless disregard for the truth when they made them.”
Judge Schroeder granted a motion from Davis to amend her complaint based on the court’s rulings.
Davis filed suit March 27 against Jones, the Cowboys, Wilkinson, Wilkinson’s business Trailrunner International and Jack, alleging each had participated in “a deliberate plan and scheme to publicly defame plaintiff.”
Davis had filed a prior declaratory judgment action in Dallas County court seeking a ruling that she wasn’t bound by the settlement agreement her mother and Jones allegedly entered into when she was an infant. When that was reported by the Dallas Morning News and others, Davis alleges, the attacks against her began.
“This plan, as set forth below, centered upon attacking his own daughter in the world-wide public domain as an ‘extortionist’ and a ‘shakedown artist’ whose motivation was money and greed and who was ‘conspiring’ in concert with other ‘extortionists’ to exact money from defendant Jones and his family,” Davis alleges. “This designed campaign was based knowingly on false statements and accusations alleged by defendant Jones and his agents to be truthful facts both in court filings and in public statements to the media.”
Davis is facing counterclaims accusing her of breaching a binding settlement agreement between Davis, Jones and Davis’ mother, Cynthia Davis-Spencer.
“That settlement agreement barred plaintiff from suing Jones to establish paternity and obligated the parties to maintain confidentiality regarding the facts and terms of the settlement agreement,” Jones alleges in the countersuit. “In exchange, plaintiff received as consideration millions of dollars from early childhood through adulthood.”
Davis is represented by Jay Gray and Andrew Bergman of BergmanGray, Erin Keil and Donald “Matt” Keil of Keil Law Firm and Hailee M. Amox of Atchley Russell Waldrop & Hlavinka.
The case number is 5:23-cv-00032.
Northern District of Texas
Plumbing Supply Co.’s ‘Water-Saving’ Toilet Claim Draws Suit
Texas-based Danco, a manufacturer and distributor of plumbing supply products, has drawn a lawsuit from California-based competitor, Fluidmaster, over Danco’s claims that its dual-flush toilet saves water and is covered by a lifetime warranty.
Fluidmaster told the court it is the No. 1 “toilet parts brand in the world” and sells more than 100 million products annually. Fluidmaster alleges its competitor is lying to the public to “undermine” Fluidmaster’s business.
If a customer follows Danco’s instructions and installs the dual-flush device, Fluidmaster alleges the customer doesn’t actually save any water. And while Danco tells consumers the product is covered by a lifetime warranty, Fluidmaster contends it’s actually only covered by a five- or seven-year warranty, depending on the model.
Fluidmaster is asking the court for an injunction as well as unspecified monetary damages that it argues should be tripled because the false advertising is intentional.
The lawsuit was filed Oct. 26 and assigned to U.S. District Judge Ada Brown.
Fluidmaster is represented by Casey Low, Mark Litvack, Sarah Goetz and Carolyn S. Toto of Pillsbury Winthrop Shaw Pittman.
Danco has not yet retained counsel.
The case number is 3:23-cv-02388.
Superior Court of the District of Columbia
Texas Real Estate Software Co. Named in Rent Hike Conspiracy Suit
Richardson-based RealPage, which creates real estate and property management software, was among the more than one dozen defendants named in a new lawsuit accusing landlords of participating in a conspiracy to artificially inflate rental prices.
The lawsuit, filed Nov. 1, is being brought by the attorney general of the District of Columbia and names as defendants RealPage and 14 of the “largest landlords” operating in D.C. — Avenue5 Residential, AvalonBay Communities, Bell Partners, Bozzuto Management Company, Camden Development, Equity Residential Management, Gables Residential Services, Greystar Management Services, Highmark Residential, JBG Associates, Mid-America Apartments, Paradigm Management II, UDR, and William C. Smith & Co.
Camden is based in Houston and Highmark is based in Dallas, according to the complaint.
The suit alleges that those parties have conspired to use RealPage’s “revenue management” software program “to inflate rents for tens of thousands of apartments across the District, causing District renters to pay millions of dollars they would not have, but for defendants’ misconduct.”
The landlords are accused of both delegating their price-setting authority to RealPage rather than competing against one another for prices, and of unlawfully sharing “competitively sensitive data” with RealPage that is fed into the software program.
The software is allegedly used to set rental rates for more than 50,000 units in D.C.
“To recruit more landlords to their cartel, Defendants have publicly advertised that landlords who participate in the scheme, agreeing to use RealPage’s RM Software to set rents, can boost revenue (i.e., rents) by 2-7 percent,” the suit alleges. “Increases of this magnitude translate to millions in wrongfully inflated rents in the last four years alone.”
The case is being led by D.C. Attorney General Brian L. Schwalb and Jennifer C. Jones, Adam Gitlin and Amanda Hamilton of the AG’s office, as well as Emmy L. Levens, Robert A. Braun and Aaron J. Marks of Cohen Milstein Sellers & Toll.
A case number and counsel information for the defendants was not immediately available.
U.S. Court of Appeals for the Fifth Circuit
TikTok Copyright Case Doesn’t Belong in Judge Albright’s Court
A lawsuit brought by a Chinese company that owns several copyrights for video and audio editing software accusing TikTok of infringement does not belong in Texas courts, but in California, the Fifth Circuit has held.
The panel granted a petition for writ of mandamus Oct. 31, after U.S. District Judge Alan Albright declined TikTok’s request to transfer venue in the lawsuit brought by Beijing Meishe Network Technology Co.
“The Western District of Texas contains no relevant evidence, is thousands of miles away from the vast majority of relevant witnesses, and is wholly unconnected to the underlying dispute,” the panel wrote. “This case concerns Chinese intellectual property that was allegedly infringed and misappropriated by employees located in China. The only individuals in the United States who have any documented connection to this dispute are located outside the district. The Northern District of California is a clearly more convenient venue to adjudicate this case.”
In the last 15 years, the court noted, it has issued fewer than 10 precedential opinions on transfer motions like the one at issue in this case, despite receiving more than 2,000 requests to resolve such transfer motions.
Judges Jerry E. Smith, Leslie H. Southwick and Cory T. Wilson sat on the panel.
Beijing Meishe is represented by Chad Flores of Flores Law, Adam Allgood, Korula T. Cherian and Stephanie R. Wood of Cherian and James Mann and Gregory Thompson of Mann, Tindel, Thompson.
The case number is 23-50575.
SEC’s Share Repurchase Rule ‘Arbitrary and Capricious’
The U.S. Securities and Exchange Commission will have to take a second look at a rule requiring certain disclosures about stock buybacks after the Fifth Circuit determined the agency had failed to respond to concerns from the U.S. Chamber of Commerce and others about the economic implications of the rule.
“As explained above, the rule’s primary benefit — decreasing investor uncertainty about motivations underlying buybacks — is inadequately substantiated,” the panel held. “Almost every part of the SEC’s justification and explanation of the rule reflects the agency’s concern about opportunistic or improperly motivated buybacks.”
The ruling, handed down Oct. 31, mandates that the SEC “correct the defects in the rule within 30 days.”
“This is a limited remand,” the court wrote. “This panel retains jurisdiction to consider the decision that is made on remand.”
Judges Jerry E. Smith, Leslie H. Southwick and Stephen A. Higginson sat on the panel.
The SEC is represented by its own Ezekiel Hill, Dominick V. Freda and Theodore Weiman.
The case number is 23-60255.
Antero’s $11.9M Judgment in Kickback Case May Get Second Look
The former operations manager for Antero Resources in West Virginia, who in August 2022 was hit with an $11.9 million final judgment in a kickback case, may get the opportunity to investigate whether he’s entitled to pay less because of a settlement Antero made with another party.
In a ruling issued Oct. 31, a three-judge panel determined U.S. District Judge Terry Means’ decision denying John Kawcak’s request to pursue post-trial discovery of Antero’s settlement with companies owned by Kawcak’s close friend, Tommy Robertson, was based on “an erroneous understanding of the law” and “must be vacated.”
“But that does not necessarily mean that Kawcak will be entitled to take post-trial discovery on the Antero-Robertson settlement,” the panel held. “District courts have ‘broad discretion . . . on discovery issues,’ and this discretion permits a range of allowable outcomes.”
The Fifth Circuit sent the case back to Judge Means to “consider whether to allow Kawcak to pursue discovery relating to Antero’s settlement with the Robertson companies and whether to offset the final judgment in light of that settlement.”
A jury determined in April 2022 that Kawcak had accepted kickbacks for natural gas projects in West Virginia in exchange for steering contracts to Robertson’s companies.
Judge Means denied Kawcak’s request to apply a settlement offset, finding he failed to introduce evidence at trial about the amount of the settlement. The Fifth Circuit wrote that it wasn’t aware of any precedent “obligating a defendant to prove the existence of a settlement credit at trial.”
“Indeed, as Kawcak observes, the amount of a third-party settlement does not become relevant until after the jury reaches a verdict,” the panel wrote.
Judges Jennifer Walker Elrod, Don R. Willett and Edith Brown Clement sat on the panel.
Kawcak is represented by Jeffrey Levinger of Dallas, Decker A. Cammack of Whitaker Chalk Swindle & Schwartz and Joseph Cecere of Dallas.
The case number is 22-10918.