In this edition of Litigation Roundup, Stone Hilton helps X Corp. defeat a proposed class action lawsuit in North Texas, and a group of South Texas doctors agree to pay millions to settle False Claims Act allegations.
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.
Dallas County Court-at-Law
Ben Crump Secures $13M Settlement in Fatal Tow Truck Incident
The family of a man who was fatally struck by a tow truck during a dispute over the removal of his vehicle has reached a $13 million settlement with the defendants they alleged were responsible.
The lawsuit was filed by James Smith’s family in March 2024 against the driver, Roberto Padilla Garcia, and several towing and vehicle management companies (WHW Transport, Inc., CWS Recovery, United Road Towing, Inc., Walnut Hill Wrecker, Vehicle Management Solutions, LLC, URT Texas, Inc., Integrity Parking Management, Mart Caudle Corporation, URT Walnut Hill Wrecker, Inc., URT United Road Towing, Inc., UR Vehicle Management Solutions, URVMS and United Road Towing).
According to the lawsuit, Garcia was attempting to remove Smith’s vehicle from his apartment complex parking lot early on the morning of Dec. 3, 2023, when the dispute arose. Smith, whose vehicle was not fully secured yet, told Garcia he had recently purchased the vehicle and had properly registered it with the apartment complex management, according to the lawsuit.
Rather than release the vehicle, Garcia continued with the tow, prompting Smith to reach inside the tow truck cabin to turn off the ignition. Garcia allegedly closed the window on Smith’s arm, and sped off through the parking lot while he was stuck. Smith jogged alongside the truck, before losing his footing and was struck by the back tires of the tow truck and of his own car.
Garcia allegedly did not stop to render aid. Smith died at a hospital.
Civil rights lawyer Ben Crump, who represented Smith’s family, issued a statement saying the settlement “shows that everyday families can stand up to large towing and vehicle-management companies and obtain justice.”
“Our hope is that James’ legacy will be stronger protections and better enforcement so that no other family has to endure what his loved ones sent through,” he said.
Judge Melissa Bellan presided over the case.
The Smiths are also represented by Paul Grinke and Aaron Dekle of Ben Crump Law.
Garcia and the other defendants are represented by Jay Reynolds Downs of Downs & Stanford.
The case number is CC-24-02167-B
Harris County District Court
Homebuilder Sued Over Construction of $19.5M Mansion
A Houston couple has sued a luxury home builder, alleging they were duped into buying an under-construction mansion the builder never intended to complete.
Omar Khawaja and Mona Zaman originally filed their lawsuit against 215 Carnarvon, Layne Kelly Homes and Bradley Smith in March 2025 but the plaintiffs filed an eighth amended petition Feb. 20. Instead of using the money Khawaja and Zaman paid to build their home, they allege the defendants instead used the money to fund real estate projects in Mexico.
The plaintiffs allege they were fraudulently induced to buy the home, and were convinced by the developer, broker and a bank officer that their home would be finished in a few months, which led them to pay $4.2 million upfront, and personally guarantee a $10 million construction loan for the home.
The case has been assigned to Harris County District Judge Lee Kathryn Shuchart.
Khawaja and Zaman are represented by Ashish Mahendru and Darren Braun of Mahendru PC.
215 Carnarvon, Layne Kelly Homes and Bradley Smith are represented by Jeffrey W. Steidley of The Steidley Law Firm.
The case number is 2025-17267.
Northern District of Texas
Judge O’Connor Tosses Revenge Porn Suit Against X
A John Doe plaintiff who created sexually explicit material for his OnlyFans site had his proposed class action lawsuit against X and X.Ai dismissed by a federal judge in Texas last week who determined an exception in the revenge porn statute he sued under mandated the result.
Doe had alleged that someone, without permission, copied the content he posted on his OnlyFans account, reposted the content to X, and that X then disclosed the pornographic content to X.Ai.
Doe filed suit in September 2025, and it was transferred to the Northern District of Texas the following month. He alleged violations of the Non-Consensual Intimate Image disclosure prohibition, in 15 U.S.C. section 6851, because the pornographic images were reproduced without his permission.
Chief U.S. District Judge Reed O’Connor wrote in his 11-page order granting X’s motion to dismiss the lawsuit, that Doe had created the pornographic images “consensually.”
“That means subsection (b)(1)(A) excludes plaintiff’s claim for damages, unless this content ‘was produced by force, fraud, misrepresentation, or coercion,’” the judge wrote.
Doe argued that the content was “produced” by fraud because it was taken from OnlyFans, in violation of the terms of service, and reproduced elsewhere without his consent.
“And under the plain meaning canon, the term produced refers to the creation of the sexually explicit conduct, not things that happen after the content has been created,” Chief Judge O’Connor wrote, explaining the “text and structure” of the statue “makes clear” it is intended to protect the privacy of those who do not want their images publicly disseminated.
“Consistent with that focus, the statute expressly excludes commercial pornographic content — material the individual created for public distribution or monetization rather than for private use,” he wrote.
“Plaintiff created his commercial pornographic content freely and voluntarily. Accordingly, any unauthorized disclosure of it by defendants is not protected. Additionally, Section 230 immunizes defendants from liability.”
Chief Judge O’Connor dismissed the lawsuit with prejudice.
Doe is represented by Charla D. Aldous and Caleb M. Miller of Aldous Law and T. Hardee Bass III, Rosalyn Sia Baker-Barnes, John Scarola and F. Gregory Barnhart of Searcy Denney Scarola Barnhart & Shipley.
X is represented by Christopher D. Hilton, Judd E. Stone II and Noah Schottenstein of Stone Hilton PLLC and Derek Shaffer and Shon Morgan of Quinn Emanuel Urquhart & Sullivan.
The case number is 4:25-cv-01282.
Southern District of Texas
Doctors Pay $4.8M, Settle FCA Claims
A group of six doctors have agreed to pay the federal government $4.8 million in order to bring an end to allegations they bilked the government out of millions by submitting false claims to Medicare, Medicaid and TRICARE.
The doctors are Javier Cabello, 47 of San Benito; Ammar Halloum, 52, of Brownsville; Jamil Madi, 54, of Olmito; Jairo Rodriguez, 62, Rancho Viejo; Ricardo Schwarcz, 57, of Weslaco; and Stanley Sy, 55, of Pharr.
Together, the doctors owned and operated Benchmark Inpatient Services, which did business as Beyond Inpatient Services in Harlingen. Separately, Rodriguez also owned and operated Benchmark Pulmonary Center in Brownsville.
The government became involved in the case after a whistleblower filed suit under the False Claims Act. Prosecutors allege that between January 2020 and May 2023 the doctors submitted false claims for services that either weren’t medically necessary or never actually were performed.
U.S. Attorney Nicholas J. Ganjei issued a statement declaring his office’s “commitment to vigorously investigate and disrupt civil health care fraud.”
“Our country’s most vulnerable deserve care based on their medical need, not on a doctor’s unscrupulous desire to line their own pockets,” he said. “Medical professionals have a solemn obligation to heal the sick and infirm, not bilk the American taxpayer.”
A case number and counsel information was not immediately available Monday.
Western District of Texas
Arbitrator Sides with Employee in Pregnancy Discrimination Case
PermiaCare, a regional provider of behavioral and developmental healthcare in West Texas, has been found to have violated the Pregnant Worker Fairness Act and the Civil Rights Act in its interactions with a former accounting supervisor who resigned.
Jacqueline Tarango filed her complaint in May 2024 and the parties filed a joint motion to stay the litigation to pursue arbitration in October 2024. Tarango had joined PermiaCare in 2019 as a staff accountant and was promoted to accounting supervisor in 2021. She alleged that during her first pregnancy in 2020, her supervisor subjected her to a hostile work environment. That treatment worsened during her second pregnancy, she alleged.
According to the lawsuit, Tarango alleged the supervisor publicly humiliated and belittled her about time worked, denied her request to wear tennis shoes to alleviate pregnancy-related sciatica, and made sexualized comments to her.
An arbitrator agreed with Tarango, and the arbitration award entitles her to $23,000 in back pay and $150,000 in compensatory damages, as well as attorney fees.
The case was assigned to U.S. District Judge David Counts, who entered final judgment in favor of Tarango Feb. 19.
Tarango is represented by Holly B. Williams of Williams Law Firm.
“For Jacque, this case was not about the money,” Williams said in a statement. “She knew the law had changed with the PWFA. She knew her rights had been violated. Women should never be forced to choose between their health and a family and a job. PWFA is an important advancement for women in the workforce.”
PermiaCare is represented by James M. Welch and Joel Geary of Waddell Serafino Geary Rechner Jenevein.
The case number is 7:24-cv-00124.
Fifth Court of Appeals, Dallas
Panel Rehearing Sought in $19.7M Loan Dispute Between Former Partners
Lawyers for a cardiologist involved in a nearly $20 million dispute with his former business partner, a real estate executive, have asked a panel of justices on the Fifth Court of Appeals to rehear their case trying to undo a January opinion that favored Patrick Barber.
The panel opinion upheld a February 2024 summary judgment ruling from Dallas County District Judge Dale B. Tillery awarding $19.7 million to Barber in the dispute with 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.
In a motion for panel rehearing filed Feb. 26, Dr Sangani argues the panel “rejected both parties’ interpretations of the relevant contracts and, instead, adopted a third approach which no party briefed or presented.”
“However, this panel then failed to follow its own interpretation of the contracts and disregarded well-established summary judgment principles in its analysis,” the motion argues. “That is, the record evidence, when examined through the lens of the panel’s own original interpretation of the agreements, fails to establish as a matter of law that the Sanganis breached the relevant agreements, or, if they had, that Barber is entitled to the amount of damages awarded. Accordingly, the record lacks the evidence necessary to affirm the trial court’s grant of summary judgment.”
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. 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 it’s not a legally operative instrument, and that there was never a loan from the Sanganis to Barber.
The January opinion was issued by Chief Justice J.J. Koch, Justice Carolyn Wright and Justice David W. Evans.
Sangani is represented by Christopher D. Kratovil and John C. Sokatch of Dykema Gossett, Jeremy A. Fielding of Kirkland & Ellis, David S. Coale of Lynn Pinker Hurst & Schwegmann and Marquette Wolf and Ben Taylor of Ted Lyon & Associates.
Barber is represented by Jeff Tillotson, Anne Johnson and Stephani A. Michel of Tillotson Johnson & Patton.
The case number is 05-24-00237-CV
U.S. Court of Appeals for the Fifth Circuit
Disability Discrimination Suit Against Hospital Is Revived
St. David’s South Austin Medical Center will have to face claims it denied medical treatment to a man because of his disability, who ended up dying, after a Fifth Circuit panel partially revived his family’s lawsuit Feb. 25.
The family of Michael Hickson filed its notice of appeal in November 2024, seeking to overturn a ruling from U.S. District Judge Alan D. Albright that ended their lawsuit. The family sued after the hospital stopped providing him food and water and moved him to hospice care despite an assessment indicating he had a 70 percent chance of survival.
Hickson, according to the opinion, suffered a cardiac arrest in May 2017 and first responders who helped resuscitate him injured his spinal cord and left him quadriplegic. After that he required assistance to eat, dress, bathe, use the toilet and transfer to and from his wheelchair, but his family said he was “still active in other ways,” according to the opinion. Hickson, a married father of five, could laugh at jokes, do math with his children, answer yes and no questions and also speak with his family “in a limited, slow and muted manner.”
Because of his condition, he was prone to infections, according to the opinion and was hospitalized at St. David’s in June 2020 for pneumonia, a urinary tract infection, sepsis and suspected Covid.
At some point during his stay, while his health “fluctuated,” a decision was made to move him to hospice care and place him under a do-not-resuscitate order. Doctors told Hickson’s wife “that his inability to walk or talk meant he had a low quality of life” when she questioned the measures. Despite repeated attempts to see her husband or FaceTime with him in his final days, his wife was unable to do so, according to the opinion.
The panel determined the family should be allowed to proceed with claims of disability discrimination and intentional infliction of emotional distress.
“Melissa’s allegations, if borne out, suggest that St. David’s Healthcare engaged in extreme and outrageous conduct,” the Fifth Circuit determined. “A few days into Michael’s hospitalization, Melissa learned that St. David’s Healthcare placed Michael on DNR status and stopped giving him food, fluids, or medications other than for pain. Melissa ‘pleaded’ with Dr. Cantu to change Michael’s code status, but Dr. Cantu said that only [Michael’s temporary guardian] Jessica could do so.”
“And when Michael’s condition unexpectedly improved and caused the hospital’s ethics consultant, a palliative-care nurse, and Dr. Cantu to question whether inpatient hospice care was still appropriate, the hospital never restarted hydration or nutrition for Michael, leaving him to starve and thirst to death.”
Judges Carolyn Dineen King, Edith H. Jones and Cory T. Wilson sat on the panel.
The Hickson family is represented by Ernest Galvan and Michael Bien of Rosen Bien Galvan & Grunfeld, Mark S. Whitburn and Sean Pevsner of Whitburn & Pevsner and Kelley Simoneaux of Washington, D.C.
St. David’s, Dr. Anderson is represented by Ryan C. Bueche and Missy Atwood of Germer Beaman & Brown and Matthew Wymer of Wymer & Tom.
Hospital Internists of Texas is represented by Richard Cooper and Michelle Robberson of Cooper & Scully, Terri Harris and Paula K. Hale of Steed Dunnill Reynolds Bailey Stephenson and Stewart G. Milch of Gordon Rees Scully Mansukhani.
The case number is 24-50956.
U.S. Supreme Court
Justices Pass on Boeing, SWAPA Case
In a win for a union, the U.S. Supreme Court has denied a petition filed by The Boeing Company in a lawsuit brought by the Southwest Airlines Pilots Association, meaning the litigation that been around since 2019 will finally return to a Dallas trial court.
The high court denied the petition Feb. 23. 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.
That ruling cleared 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.
Craving more Texas Lawbook litigation coverage? Don’t worry, we’ve got you covered. Take a look at these stories you may have missed in the past few days.
The families of nine Camp Mystic campers and counselors who died in the July 4 flood last summer filed a lawsuit in the Western District of Texas against the Texas Department of State Health Services, claiming the agency should not have approved the camp’s license. The camp’s license expires next week, and it has announced it will reopen this summer.
In the latest edition of Asked & Answered, Hilgers partner David Sillers talks about his First Amendment practice and shares his most memorable moments in his career so far. Sillers recently joined the firm and reunited with managing partner Grant Schmidt and partner Cynthia Schmidt, whom he met while clerking alongside them for former U.S. District Judge Barbara M.G. Lynn.
The first jury trial in the Texas Business Court, intended to showcase the new court, became an exercise in crisis management. Litigants had to overcome five courtroom changes and a flood. This is the behind-the-scenes story of the court’s inaugural jury trial that was filled with other unexpected firsts.
Vinson & Elkins is leading bankruptcy proceedings for Axip Energy Services. The Houston-headquartered natural gas compression company that focuses primarily in the Permian Basin states in court documents that it has $240 million in liabilities, but that it has agreed to divest most of its assets to Service Compression of Fort Worth.
A federal judge sentenced a Plano orthopedic surgeon, Dr. Michael Taba, to 8.5 years in prison for his role in one of the biggest healthcare fraud cases in Texas history that prosecutors said bilked the U.S. government out of nearly $200 million through unnecessary compound drug prescriptions. U.S. District Judge Sam A. Lindsay handed down the sentence on Tuesday in Dallas after a jury convicted Taba more than two years ago of conspiracy to commit healthcare fraud and three counts of aiding and abetting healthcare fraud.
Katten’s Brandon N. McCarthy said he was perplexed when his client, retired Dr. David Wolf of Houston, was indicted on an alleged kickback scheme that was ultimately dismissed against 10 doctors. “This was perplexing as my client was 81 years old and had retired from medicine over half a decade ago,” McCarthy said. “He had a 50-year career as a doctor with a perfect record. No medical board issues. No criminal record. My first thought was, ‘What in the world are they doing?’”
A Texas federal judge tossed a superseding indictment accusing 10 doctors, two pharmaceutical executives and two business entities of a kickback scheme involving prescriptions that spanned six years from 2013 to 2019. The defendants had moved to dismiss the superseding indictment on several grounds, including statute-of-limitations issues. Rather than respond to that motion, the prosecutors moved to dismiss the case “in the interests of justice.”