In this edition of Litigation Roundup, a group of wildfire survivors, represented by Susman Godfrey, are awarded $62 million in damages by a jury in Oregon, federal indictments against the former executives of Dallas-based Tricolor are unsealed and the founder and CEO of an aerospace company in McKinney is accused by former executives he hired of firing them after they refused to commit a $1 million “theft.”
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.
Collin County District Court
Aerospace CEO, COO Say They were Fired for Refusing to ‘Steal’ $1M
John Albers, the founder and CEO of McKinney-based Albers Aero, has been named as a defendant in a lawsuit brought by two executives he hired to run another aerospace company, Delta Black Aerospace.
Clay Kroschel and Bronson Ignacio filed a lawsuit in Collin County district court last week against Delta Black, where they served as CEO and COO, respectively, and against Albers Aerospace, John Albers and Ryan Morfin, bringing claims for breach of contract, breach of fiduciary duty, defamation and wrongful discharge. They are seeking more than $1 million in damages.
Kroschel and Ignacio told the court in the 18-page lawsuit that they were hired by Albers in May and June of 2024 to work for Albers Aero, but soon were told they would instead be working for Delta Black. While serving as executives there, they allege they “discovered a host of unlawful conduct and ongoing breaches of fiduciary duty committed by Albers and Ryan Morfin, a minority shareholder and member of Delta Black’s board of directors.”
“This conduct culminated in a criminal directive by Albers to steal money from Delta Black’s corporate bank account and direct it to Albers Aero,” the lawsuit alleges. “Plaintiffs refused to comply with this unlawful directive and were terminated from employment as a direct result.”
Specifically, according to the lawsuit, Albers and Morfin directed Delta Black’s CFO in October to transfer $1 million from Delta Black’s corporate bank account to Albers Aero. The executives allege such a transfer would have constituted theft under Texas law and would have been a breach of their duties to Delta Black shareholders.
When Kroschel and Ignacio were informed of the request, they explained their objections to Albers on a call and were allegedly told by Albers “I’m the owner of this company and I can call my note whenever I want. I need to get this black eye off my financial statement because I need my books to look better.”
Five days later, on Oct. 21, Kroschel and Ignacio were fired. They allege in the lawsuit that Morfin told them they were being fired for refusing to comply with Albers’ demand.
“Following their terminations, plaintiffs learned that Morfin held a company-wide meeting at Delta Black for the purpose of disparaging plaintiffs and accusing them of misappropriating funds,” the lawsuit alleges. “Morfin made these baseless and defamatory statements not only to all employees of Delta Black, but also repeated them [to] its investors and board members.”
Kroschel and Ignacio are represented by R. Health Cheek, Mason G. Jones and Dylan T. Hughes of Bell Nunnally & Martin.
Counsel information for the defendants was not available Monday.
The case number is 493-09779-2025.
Western District of Texas
Judge Albright Bars Houston IP Lawyer from Filing Patent Cases Without Permission
U.S. District Judge Alan Albright has had enough.
In an 18-page order issued Thursday in the patent infringement lawsuit mCom IP filed against Cisco Systems, he sanctioned Houston lawyer William Ramey $72,551. 60 and prohibited him from filing any more patent infringement lawsuits in the Western District of Texas without first obtaining advance permission from a judge within that district or a Fifth Circuit judge.
mCom sued Cisco in March 2022, according to court documents, alleging the company infringed a patent that covers technology used in unified banking systems. Judge Albright wrote that Ramey has filed many lawsuits against Cisco and that a “variety of issues” with each led to their dismissals.
“For example, Mr. Ramey filed lawsuits where (1) he did not plausibly allege infringement after multiple attempts to amend, (2) his client lacked standing to assert the patent and (3) the complaint was dismissed under 35 U.S.C. section 101, where family members of the asserted patent had already been declared patent ineligible under section 101,” Judge Albright wrote.
Judge Albright noted that in the past five years, Ramey and his associates have been sanctioned at least nine times by judges in California, Texas and New York.
Cisco had argued to the court that Ramey’s conduct in this case “is essentially part of a playbook, which begins when Mr. Ramey files an infringement case with minimal pre-suit investigation.” Judge Albright wrote that Ramey then offers to settle the case for $250,000. The third step, Judge Albright wrote, is that Ramey will voluntarily dismiss a case, if there’s no settlement or dismissal by the district court, once the burden shifts back to his client.
mCom and Ramey in this case, Judge Albright wrote, “advanced substantively weak positions in an unreasonable manner,” which led to his dismissal of the complaint and the amended complaint.
“Additionally, Mr. Ramey’s conduct shows a reckless disregard for his duty to this court,” Judge Albright wrote. “Mr. Ramey failed to appear at half of the scheduled hearings for this case, including hearings for (1) Cisco’s motion to stay the case and (2) Cisco’s motion to dismiss mCom’s amended complaint.”
The order notes that Ramey filed “at least four meritless cases against Cisco between 2022 and 2023 alone.”
The award of $72,551.60 in sanctions was calculated by multiplying an hourly rate of $753 by 96.3 hours, which was the time it took for Cisco’s lawyers to brief and argue two motions to dismiss.
According to his bio on the firm’s website, Ramey earned a bachelor’s degree in chemistry from Texas A&M University, where he also served as a member of the Corps of Cadets, and is a graduate of the South Texas College of Law.
Cisco is represented by Alex C. Wolens, William M. Logan, Edward A. Day and Krishnan Padmanabhan of Winston & Strawn and Barry Shelton of Shelton Coburn.
In addition to Ramey, mCom IP is represented by Kyril Talanov of Houston.
The case number is 6:22-cv-00261.
Southern District of New York
Ex-Execs of Dallas-Based Tricolor Indicted for Financial Fraud
On Wednesday, the Department of Justice unsealed indictments against former Tricolor Auto executives — CEO Daniel Chu and COO David Goodgame — for their roles in an alleged scheme to defraud the company’s lenders and caused the billion-dollar collapse of the subprime auto retailer and financing company.
The federal government also last week unsealed the guilty pleas of former CFO Jerome Kollar and former finance executive Ameryn Seibold, who each pled guilty to fraud charges Dec. 16 and are cooperating in the government’s investigation.
“As alleged in the indictment, CEO Daniel Chu was the leader of an elaborate scheme to defraud creditors of Tricolor,” U.S. Attorney Jay Clayton said in a news release. “At his direction, Tricolor repeatedly lied to banks and other credit providers, including by falsifying auto-loan data and ‘double pledging’ collateral. Fraud became an integral component of Tricolor’s business strategy.”
“The resulting billion-dollar collapse harmed banks, investors, employees and customers. It also undermines confidence in our financial system.”
In addition to charges accusing Chu and Goodgame of orchestrating the fraud, the men are accused of bank fraud and wire fraud.
According to the indictment, starting in 2018 and continuing through 2025, all four defendants were involved in the conspiracy to defraud Tricolor’s investors and lenders. Specifically, the government alleges Chu directed others to “double-pledge” collateral to multiple lenders and would manipulate the characteristics of “near-worthless” collateral to make it appear that the collateral met lender requirements.
As a result, by August 2025, Tricolor had pledged about $2.2 billion in collateral to lenders and investors but only had about $1.4 billion of real collateral. The cash advances Chu obtained through the fraudulent scheme were allegedly used to enrich himself, according to prosecutors.
The alleged fraud came to a head over the summer, when lenders confronted Chu and Tricolor’s other executives about issues with the collateral. In secretly recorded phone calls, Chu discussed the similarities between Tricolor and Enron and discussed how to go about concealing the fraud, the indictment alleges, suggesting blaming the banks for ignoring red flags as a possible tactic that could gain him leverage to extract a favorable settlement.
In the weeks before Tricolor filed for Chapter 7 bankruptcy Sept. 10, 1,000 employees were placed on unpaid leaves and Chu directed Kollar to pay him $6.25 million, which he then used to buy a home in Beverly Hills
Chu and Goodgame’s cases have been assigned to U.S. District Judge P. Kevin Castel. The case number is 1:25-cr-00579.
Counsel for the defendants had not filed an appearance as of Monday.
Kollar is represented by Rodney C. Villazor of Clark Smith Villazor in New York.
Seibold is represented by Michael J. Uhl of Dallas.
Kollar and Seibold’s cases has been assigned to U.S. District Judge Lewis J. Liman. The case number is 1:25-cr-00584.
Justin Rodriguez and Micah Fergenson of the U.S. Attorney’s Office in New York are prosecuting all four cases.
Fourth Judicial District Court, Oregon
Susman Godfrey Gets $62M Jury Verdict for 10 Oregon Wildfire Survivors
PacificCorp owes a group of 10 wildfire survivors $62 million in damages, a jury in Oregon recently determined.
Susman Godfrey represented the group of plaintiffs and has two more trials against the utility company scheduled for February. Houston partner Michael Kelso said nine of their clients lost their homes in the fire.
“Our goal was to present the case in a way that the jury really understood what each of our plaintiffs had gone through and realized how badly this wildfire and PacifiCorp’s, grossly negligent and reckless conduct affected each of their lives and the harm that it inflicted on them,” Kelso said.
PacifiCorp, an Oregon utility company, was found liable for starting the 2020 Labor Day fires that burned more than a million acres, killing 11 people and destroying homes. The trial followed a 2023 verdict in a separate class action in which PacifiCorp was found to have acted with gross negligence and held liable for damages caused by the wildfires.
Kelso said that PacifiCorp had psychological experts examine each of the survivors. In his closing arguments, he argued that there were flaws to that approach and that the analysis was driven by bias since the psychologists were hired by PacifiCorp.
He added that they did not ask the jury for a specific number in their closing or opening.
“We made clear to the jury that our plaintiffs, and we trusted them like the law does with the decision as to the amount of noneconomic damages, and that that decision was in their hands,” Kelso said.
The seven-day trial concluded on Dec. 9, and the next day the jury returned its verdict.
The jury awarded the 10 survivors $39.3 million in noneconomic damages. PacifiCorp had previously agreed to pay $5.15 million in economic damages and, consistent with the liability findings from the 2023 class action against the utility company. The court then ruled to double the economic damages to $10.3 million and apply a 25 percent punitive multiplier to the economic and noneconomic damages for each plaintiff, bringing the total award to $62 million.
“Our clients have suffered devastating losses as a result of PacifiCorp’s reckless disregard,” Susman Godfrey partner Shawn Rabin, who represented the plaintiffs, said in a news release. “This verdict is about more than compensation for the tremendous hardships our clients have endured. It provides them with resources to rebuild their lives and the justice they deserve.”
The trials in February are scheduled for the 17th and another the following week. In total, they represent 20 survivors.
Bill Carmody and Dustin Fire of Susman Godfrey also represented the wildfire survivors.
Douglas Dixon, Rajan Trehan and Emily Munson of Hueston Hennigan and Per Ramfjord and Samanthan Sondag of Stoel Rives represented PacifiCorp. They did not immediately respond to a request for comment.
The case number is 20CV33885.
Alexa Shrake contributed to this report.
U.S. Court of Appeals for the Second Circuit
Irving-based Nexstar Media Group Must Face Price-Fixing Claims
A 2023 lawsuit DirecTV filed against Nexstar Media Group, Mission Broadcasting and White Knight Broadcasting accusing the companies of conspiring to raise the prices satellite providers must pay for certain content has been revived.
In a 39-page opinion issued Tuesday, authored by Judge Steven J. Menashi and joined by Judge Denny Chin, the panel majority determined DirecTV has antitrust standing to proceed in bringing the lawsuit.
“Lost profits from a reduction in output represent a cognizable antitrust injury, and DirecTV has plausibly alleged that its lost profits flowed directly from the output-reducing effects of the alleged price-fixing conspiracy,” the opinion reads. “Additionally, we conclude that DirecTV is an efficient enforcer of the antitrust laws.”
Judge Richard J. Sullivan authored a dissent, explaining he would have sided with the trial court judge who determined DirecTV failed to show it was an “efficient enforcer” of antitrust laws.
“Before today, no circuit had held that a priced-out non-purchaser like DirecTV plausibly alleged antitrust standing,” he wrote.
“Because other circuits have suggested that ‘a regular course of dealing with the conspirators’ can make a party’s claimed injuries something other than ‘inherently speculative,’ the majority maintains that DirecTV too is an efficient enforcer. I am unconvinced.”
After U.S. District Judge P. Kevin Castel dismissed the lawsuit in March 2024, DirecTV appealed to the Second Circuit in April 2024, and a three-judge panel heard oral arguments last December.
DirecTV is represented by Jordan Ludwig, Jared Levine and Amanda Berman of Crowell & Morning and Olivier Antoine and Paul Mezzina of King & Spalding
Nexstar is represented by Christopher Schwegmann of Lynn Pinker Hurst & Schwegmann and Lauren Zehmer and David Haller of Covington & Burling.
Mission is represented by Enbar Toledano, Frank Scaduto, Stephen Obermeier and Michael Showalter of Wiley Rein.
White Knight is represented by Kan M. Nawaday, Craig A. Gilley and Elizabeth Rinehart of Venable.
The case number is 24-981.
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