In this edition of Litigation Roundup, the state of Texas secures a temporary restraining order against Johnson & Johnson from a judge in rural West Texas. The order came a few days after the pharmaceutical company asked a Travis County judge to bring an end to what it said were four retaliatory investigations launched after Johnson & Johnson got a win in Tylenol-related litigation the attorney general initiated in rural East Texas.
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.
Bailey County District Court
Judge Grants TRO Against Johnson & Johnson, Kenvue
The state of Texas has secured a temporary restraining order against Johnson & Johnson and Kenvue in a lawsuit where it accuses the companies of operating in Texas without legally required registrations, in violation of Chapter 9 of the Texas Business Organizations Code.
Senior Judge Gordon H. Green issued the order Friday and has set a temporary injunction hearing in the case for Dec. 15. He struck through a paragraph in the order that would have required the companies to “immediately stop all business operations in Texas — including selling any products and advertising for consumers to purchase those products, unless and until they comply with Texas registration requirements of” Chapter 9.
In a press release announcing the TRO, Attorney General Ken Paxton accused the companies of violating the portion of the code that mandates foreign entities register and maintain active filing before doing business in Texas. J&J’s registration “has lapsed into inactive status, and Kenvue has never registered at all,” the release alleges.
The TRO prohibits the companies from violating Chapter 9.
The request for the TRO came a few days after J&J asked a judge in Travis County to stop four investigations it alleges the AG launched in retaliation after it succeeded in getting a Panola County district judge to dismiss claims the AG lodged in other litigation. In the Panola County case, the state accused Johnson & Johnson and Kenvue of violating the state’s deceptive trade practices act via its marketing of Tylenol.
The case number in Bailey County is 10665.
Northern District of California
American Airlines Challenges $9.6M Verdict in Stroke Victim’s Suit
Fort Worth-based American Airlines has launched a challenge to a $9.6 million verdict returned by a federal jury in San Jose, California, in favor of a man who suffered a stroke while onboard a flight.
Jurors sided with Jesus Plasencia after a six-day trial in September. He died Oct. 11. On Dec. 1, his lawyers filed a motion with the court seeking to substitute his wife, Marcela Tavantzis as the proper party.
“This substitution should be uncontroversial,” the motion reads. “As the Court knows, motions to
substitute in these circumstances are usually pro forma and rarely, if ever, contested. This amended motion is necessary, however, because American Airlines seeks to take advantage of Mr. Plasencia’s death and to have part of the jury’s verdict vacated.”
American Airlines has told the court it will oppose the motion to substitute “to the extent that certain claims for future damages do not survive the death of Jesus Plasencia and should be vacated and/or stricken from the verdict form.”
“American Airlines requests that the entry of final judgment be stayed until plaintiff’s forthcoming motion, and all issues regarding what portions of the verdict form survive Mr. Plasencia’s death, are resolved,” American Airlines told the court in a Nov. 17 notice.
Plasencia, who was a chef in California, was at the gate to board a flight from Miami to Madrid in November 2021 when he suffered a transient ischemic attack, also known as a mini-stroke.
The suit alleged the airline violated protocol by failing to consult a medical professional after his wife reported she believed Plasencia had suffered a stroke. Plasencia alleged protocol was violated again when he suffered a second stroke while flying over the Atlantic Ocean and the plane was not diverted.
In a minute entry in the docket, U.S. District Judge Noël Wise wrote that she “is skeptical that defendant has a colorable argument in opposing the substitution of the party.”
“Nevertheless, defendant is entitled to oppose the motion; if it chooses to do so, it must file its opposition by Dec. 8,” she wrote. “Plaintiff shall file its reply by Dec. 12, and the Court will rule on the motion shortly thereafter. Once the issue regarding the proper plaintiff is resolved, the Court expects the parties to engage in meaningful settlement discussions. The Court will set a schedule for briefing a renewed motion of judgment following good faith settlement discussions.”
Plasencia is represented by Darren Nicholson and Hannah M. Crowe of Burns Charest and Sanjiv N. Singh of San Mateo, California.
American Airlines is represented by Ivy Nowinski, David Harrington and William Wolff of Condon & Forsyth.
The case number is 5:23-cv-05607.
Fifteenth Court of Appeals
Dissenting Justice Invokes Miracle on 34th Street in Exxon Tax Appeal
Exxon Mobil Global Services recently lost an appeal 2-1 in a case where it was challenging a Harris County Appraisal District’s valuation of property at its former offices in Houston.
The Fifteenth Court of Appeals’ majority sided with the State Office of Administrative Hearings and upheld lower court rulings keeping Exxon on the hook for $1 million in property taxes based on a valuation of $45.5 million for computers and telecommunications equipment in two offices in Houston. Exxon had argued the true value of the equipment at the time of the assessment was actually only $1.3 million and that it therefore owed just $37,291 in property taxes.
According to court records, HCAD appraised the value of Exxon’s computers and telecommunications equipment in two offices in Houston at $45.5 million in 2020 and rolled over that appraisal for 2021. But when the leases expired on those two spaces, in June and March, respectively, of 2021, Exxon vacated and moved to new space in northern Harris County.
Exxon argued that before 2020 ended it had “scrapped or recycled” “nearly all” of the equipment at those two offices and the value of the equipment at those locations as of Jan. 1, 2021 was actually only $1.3 million. Exxon then filed protests with the Harris County Appraisal Review Board. When those were denied, Exxon took the fight to the State Office of Administrative Hearings rather than district court.
HCAD argued that because the challenge involved property labeled as “industrial,” SOAH had no jurisdiction over the case. An administrative law judge there agreed with HCAD, and then Exxon turned to Travis County District Court for mandamus relief.
The Travis County court granted SOAH’s plea to the jurisdiction and dismissed the appeal. The Fifteenth Court of Appeals reached the same conclusion Friday and dismissed the appeal for lack of jurisdiction.
Chief Justice Scott Brister authored a six-page dissent explaining that in his view, on this record, “judges should be more skeptical” and wrote that sometimes appraisal districts can make a mistake and label property as “industrial” when it isn’t.
“Judges would be skeptical that computers located in an office tower in the heart of downtown Houston really are ‘industrial,’” he wrote. “They would be skeptical that equipment appraised previously at $45 million would not be moved, replaced, or otherwise decrease a single penny in value despite the imminent closure of the leased offices where it was located due to a major corporate relocation. And judges would be skeptical when a regional property tax manager for Exxon Mobil swears under oath based on personal knowledge that none of the appraisal district’s assumptions about the computers here are true — and nobody from the appraisal district contradicts her affidavit.”
He concluded his dissent by referencing the 1947 movie Miracle on 34th Street, recounting how U.S. Postal Service employees in the film delivered letters to Santa in a New York trial court, “after which the trial judge renders his verdict: ‘Since the United States Government declares this man to be Santa Claus, this court will not dispute it. Case dismissed.’”
Chief Justice Brister wrote that the same effective result happened here, based on HCAD’s decision to label the computers as “industrial” property.
“The stakes here are not letters to Santa but excess property taxes of over $1 million in real money,” he wrote. “We have to do better than this. We will never instill confidence in Texas civil and administrative courts if we do not. I respectfully dissent.”
Justice Scott K. Field authored the majority opinion, joined by Justice April Farris, and wrote that the chief justice’s analogy, “while creative,” “fall[s] flat.”
“The dissent contends that ‘we have no business’ insisting that EMGS appeal to a district court to obtain review of a taxing authority’s classification of its property as industrial,” Justice Field wrote. “But what the Court has no business doing is becoming the first court in Texas to create new, implied powers for an ALJ that the Legislature did not expressly grant it. The dissent concludes by noting the amount of money EMGS will lose because a mistake was made and expressing that ‘we have to do better than this.’ It is not the role of a court, however, to choose winners and losers based on the amount of money one party will lose due to a procedural mistake. Instead, we are charged with following the law no matter the outcome.”
“Contrary to what the dissent believes, as a court of law we can do no better than that.”
Exxon is represented by Tracy Turner and John Brusniak of Brusniak Turner.
SOAH is represented by Karen L. Watkins of the attorney general’s office.
The case number is 15-24-00034-CV
Texas Supreme Court
Justices Won’t Reconsider Pass on Dallas Poker House Case
The Texas Supreme Court on Friday denied a motion for rehearing in a case where the city of Dallas was seeking to have a local poker room’s certificate of occupancy revoked.
The state’s high court initially passed on the case in September, leaving in place a Fifth Court of Appeals ruling siding with Texas Card House. Dallas initially granted, then revoked, then reinstated the certificate of occupancy.
The city filed a petition in April 2022 seeking to reverse the Board of Adjustment’s ruling, and Dallas County District Judge Eric V. Moyé did just that after a bench trial in October 2022.
Judge Moyé wrote that the Board “abused its discretion and made an illegal decision” in reinstating the certificate of occupancy.
Texas Card House appealed in November 2022, and the Dallas Court of Appeals sided with it in August 2024, determining the Board’s decision to reinstate the certificate should stand and had been wrongly usurped by Judge Moyé who found the poker house was illegally operating.
In a motion for rehearing filed Oct. 27, Dallas told the court that review is merited here because “[t]his case involves a use that the Texas Legislature has outlawed statewide.”
“Equity will conform to the statutory mandate that TCHDallas2 is not allowed to operate its for-profit poker house, regardless of whether a city building official has issued a [certificate of occupancy] for that use,” the motion reads.
After the initial denial from the Texas Supreme Court, The Lawbook spoke with a handful of attorneys who have represented other poker house clients in criminal and civil proceedings involving municipalities who said more clarity for the murky legal space where poker clubs and card houses currently operate would be welcomed.
Texas Card House is represented by Mike Gruber, Brian Mason, Zachary Tobolowsky, Dale Wainwright and Justin Bernstein of Greenberg Traurig.
Dallas is represented by Kirsten M. Castañeda of Alexander Dubose & Jefferson.
The case number is 24-0851.
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Chief U.S. District Judge in the Eastern District of Texas Amos Mazzant last week sent to arbitration a driver data privacy lawsuit against Toyota and Progressive. Florida resident Philip Siefke sued the companies alleging Toyota violated the Computer Fraud and Abuse Act by sharing driving data with Progressive, and accuses the insurer of violating the Federal Wiretap Act and invasion of privacy.
Phoenix-based Fennemore announced it was entering the Texas legal market last week by combining with a San Antonio-based litigation and labor employment firm, Schmoyer Reinhard. Co-founding partners of Schmoyer Reinhard, Shannon Schmoyer and Christine Reinhard, left Akin Gump in March 2008 to launch their own labor and employment firm in San Antonio.