In this edition of Litigation Roundup, a history professor at the University of Texas at Austin sees his retaliation lawsuit revived while a finance professor at the university sees his discrimination lawsuit tossed, a judge in the valley awards a man who had his leg amputated in a workplace injury $10.5 million, and a team of lawyers at Foley & Lardner get a win for their direct-selling client against the Federal Trade Commission.
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Harris County District Court
Fatal Crash Draws $100M Lawsuit
An allegedly fatigued employee who was driving a truck for food retail services company Hussman Corporation when he crashed, killing a 7-year-old boy, has been named in a lawsuit seeking more than $100 million in damages.
Houston personal injury attorney Brant Stogner of Abraham, Watkins, Nichols, Agosto, Aziz & Stogner is representing the family of Juan Pablo Ariz-Rozo. Hussman and its driver, Juan Napoles Jr., are named as defendants in the lawsuit stemming from the Aug. 8 fatal crash.
Napoles Jr. told officers who responded to the scene that he was fatigued and closed his eyes for a moment preceding the crash. His truck hit the guardrail, became airborne and then flipped back to the left into the neighboring lane of traffic, landing on top of the vehicle Andrea Ariza-Rozo was driving. She was taking her two sons to their first day of school, according to the lawsuit. She and her 9-year-old son, Andres, suffered serious injuries but survived the crash.
The lawsuit, which brings claims for negligence, negligent entrustment, negligent hiring and wrongful death, alleges Napoles Jr. had been involved in eight motor vehicle crashes since 2016.
“This family’s loss is a tragedy that should have never happened,” Stogner said in a news release. “How does a company have someone driving for them with this type of known driving record?”
The lawsuit was filed Sept. 18 and has been assigned to Harris County District Judge Michael Gomez.
Hussman and Napoles Jr. had not retained counsel as of Monday.
The family is also represented by Jennifer O. Stogner and Taylor Pace of Abraham, Watkins, Nichols, Agosto, Aziz & Stogner.
The case number is 2023-63315.
Hidalgo County District Court
Man Who Lost Leg in Forklift Incident Gets $10.5M
The manufacturer of a forklift that a jury found to be defective has been hit with a $10.5 million judgment for the injuries suffered by a forklift operator who had to have his leg amputated.
Christopher Zieske was injured by a Hyster-Yale forklift in 2017 when he was working in a warehouse in South Texas. The jury heard that Zieske lost his balance, causing his left leg to leave the operator compartment, and his leg became lodged between the forklift and a column of the building.
Had the forklift been outfitted with a seatbelt of harness to restrain Zieske and keep him inside the compartment, he wouldn’t have had his leg amputated below the knee, the jury was told.
The jury trial began Aug. 30, and a verdict was returned Sept. 12 finding each party 50 percent liable. The jury awarded Zieske $9 million for past damages and $8.5 million for future damages.
Hidalgo County District Judge Letty Lopez presided over the trial and entered final judgment in Zieske’s favor Sept. 25. The judge awarded $8.75 million in damages and prejudgment interest of $1.8 million.
Zieske is represented by Malorie Peacock and Michael Cowen of Cowen Rodriguez Peacock.
Hyster-Yale Group is represented by Jaime A. Saenz and Francis Grey.
The case number is C-2586-19-H.
Southern District of Texas
Texas A&M Gets ‘Prospective’ Prof’s Discrimination Suit Tossed
A white, male professor of finance at the University of Texas had his putative class action accusing Texas A&M University of unlawful hiring practices dismissed by a federal judge in Houston recently.
U.S. District Judge Charles Eskridge issued the ruling granting A&M’s motion Sept. 29, finding Richard Lowery’s lawsuit failed on grounds of ripeness, mootness and standing. Lowery had filed suit in September 2022 on behalf of himself and other white and Asian men alleging that, while he hadn’t yet applied for a faculty appointment at Texas A&M, the university’s hiring practices favored “females and non-Asian racial minorities at the expense of white and Asian men.”
“For the avoidance of doubt, this order in no way precludes Lowery from bringing later action based on future practices of Texas A&M after implementation of new policy under SB 17,” Judge Eskridge wrote, referencing the law Texas passed in June that dismantles diversity and inclusion initiatives at public universities.
Texas A&M had argued that SB 17 made Lowrey’s claims moot, that his claims were not ripe because he hadn’t actually applied for or been denied a faculty appointment and that he had no standing to bring suit because he hadn’t suffered an injury.
Lowery is represented by Gene Hamilton of the America First Legal Foundation and Jonathan Mitchell of Mitchell Law in Austin.
Texas A&M is represented by Carter Crow, Layne Kruse, Paul Trahan, Jesika Blanco, Ryan Meltzer and Stephen Shuchart of Norton Rose Fulbright.
The case number is 4:22-cv-03091.
Katten Tapped to Defend Pharmacist in $170M Healthcare Fraud Case
Houston pharmacist Shalondria Simpson, 45, has hired Katten to defend her against charges she participated in a $170 million health care fraud, kickback and money laundering scheme.
Simpson is charged alongside her twin sister, physician Lashondria Simpson-Camp, 45, of Allen, and pharmacist Shayla Bryant, 38, of Houston. A 13-count indictment against the women was unsealed Sept. 26.
The government alleges that between 2016 and 2022 the trio conspired to submit false claims to the Department of Labor’s Office of Workers’ Compensation Program for expensive drugs that were medically unnecessary and were only prescribed to obtain kickbacks and bribes.
Simpson is charged with one count of conspiracy to pay and receive kickbacks, one count of conspiracy to commit health care fraud, five counts of paying health care kickbacks, one count of conspiracy to commit money laundering and five counts money laundering.
Simpson-Camp is charged with one count of conspiracy to pay and receive kickbacks and one count of conspiracy to commit health care fraud.
Bryant is charged with one count of conspiracy to pay and receive kickbacks, one count of conspiracy to commit health care fraud and one count of paying health care kickbacks.
Simpson is represented by Ryan Meyer and Johnjerica Hodge of Katten Muchin Rosenman.
Simpson-Camp is represented by solo practitioner George D. Murphy Jr. in Houston.
Bryant is represented by Alphonso Anderson of Ledbetter Anderson & Associates and Phillip Yates of Yates & Associates.
The government is represented by Andrew Tamayo and Devon Helfmeyer of the U.S. Department of Justice in Houston.
The case number is 4:23-cr-00415.
Northern District of Texas
Judge Clears Neora in FTC Pyramid Scheme Claims
Nearly a year after a bench trial, Senior U.S. District Judge Barbara M.G. Lynn ruled against the Federal Trade Commission in a case closely followed by the direct-selling industry. Lawyers from Foley & Lardner secured the win for health supplement company Neora and its founder Jeff Olson.
In a 56-page order issued Sept. 28, Lynn found that the FTC did not meet its burden to show that Neora’s multilevel marketing program was an illegal pyramid scheme. She said Neora’s profits largely come from sales of goods and “do not hinge on the recruitment of new participants” to sell the products.
“The fact that 80% of revenues come from ultimate user sales weighs heavily against a finding that Neora focuses exclusively or almost exclusively on recruiting as opposed to sales,” she said.
The court also rejected claims that the company currently touts its products as curing, treating or preventing diseases such as Alzheimer’s.
The Direct Selling Association had said in an amicus brief that the FTC was pursuing a new and vague “overemphasis on recruiting” test that could have negatively impacted over 1,000 companies.
The victory culminated a seven-year battle. According to Foley lawyers, the order marks the first time a direct-selling company has defeated the FTC’s pyramid claims in a court trial and the first victory of its kind since Amway’s 1979 administrative law win over the FTC.
Edward Burbach, chair of Foley’s government solutions practice and co-chair of its state attorneys general practice, credited testimony of Olson and other Neora executives during the bench trial held last year from Oct. 17-24.
Burbach was joined by litigation partners Craig Florence and Michelle Ku, of counsel John Sepehri, special counsels Robert Johnson and Kristina Silcocks, and associate Stephan McPhail.
The FTC team was led by Guy G. Ward and other lawyers from the commission’s Midwest Region office in Chicago and Michael E. Tankersley of the Bureau of Consumer Protection.
The case number is 3:20-cv-1979.
Fifth Court of Appeals, Dallas
Two Justices Voluntarily Recuse in Case Challenging Docket Equalization
Justices Robbie Partida-Kipness and Maricela Moore Breedlove have voluntarily recused themselves from a lawsuit alleging the use of docket equalization measures to more evenly divide the workload among the state’s 14 intermediate appellate courts is unconstitutional.
The lawsuit was filed by Keresa Richardson against Gov. Greg Abbott and the Texas secretary of state. In March Collin County District Judge John Roach denied a request from the state to dismiss the lawsuit on standing and sovereign immunity grounds, and Texas appealed that ruling in May.
In June, Richardson filed a motion seeking to recuse all justices on all intermediate Texas appellate courts from hearing the appeal, arguing they all have a conflict of interest “derived from the fact that this case will affect their elected status, their voting districts, and their future elected status, and thus they are all personally interested in the relief being requested and should not be the arbiters of the issues.”
On Sept. 29, Justices Partida-Kipness and Breedlove obliged and recused.
Richardson alleges that docket equalization — whereby cases from busier courts are transferred to less-busy courts that adjudicate the dispute in accordance with case law from the originating appellate court — deprives her of the “one-person, one-vote principle,” in violation of the equal protection provisions of both the state and U.S. constitutions.
The issue is that justices not elected by the parties in the dispute before them are deciding the dispute, Richardson has said, and the solution is to redraw the appellate districts in a way that would eliminate the need for docket equalization.
Richardson is represented by James A. Pikl of Scheef & Stone.
Texas is represented by Lanora C. Pettit of the state attorney general’s office.
The case number is 05-23-00325-CV.
U.S. Court of Appeals for the Second Circuit
Google Antitrust Case Sent Back to Texas
An appellate panel recently sided with Texas Attorney General Ken Paxton, agreeing that a landmark antitrust lawsuit the state is pursuing against Google belongs in the Eastern District of Texas and not in New York.
Judges Dennis Jacobs, Richard C. Wesley and Beth Robinson sat on the panel that issued the Oct. 4 ruling in favor of Texas, holding Google failed to show there were “exceptional circumstances” that would allow the case to proceed in New York.
Texas filed suit in the Eastern District of Texas in 2020, targeting what it has called Google’s “digital advertising monopoly.” Alaska, Arkansas, Florida, Idaho, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nevada, North Dakota, Puerto Rico, South Carolina, South Dakota and Utah have joined Texas in bringing suit.
Google is represented by Jessica Ellsworth of Hogan Lovells in D.C.
Texas is represented by Lanora Pettit of the state attorney general’s office.
The case number is 23-901.
U.S. Court of Appeals for the Fifth Circuit
Professor’s Retaliation Suit Against UT Revived
A history professor at the University of Texas at Austin will get another chance to bring his lawsuit alleging he was retaliated against after authoring a report showing minority professors were not compensated the same as other professors.
In an Oct. 5 ruling, the court found that U.S. District Judge David A. Ezra had wrongly granted the university dismissal of the claims brought by Alberto Martinez, who is Hispanic and a tenured professor. Martinez is representing himself in the case.
Martinez alleges that the department chair, Jacqueline Jones, was among the “white administrators” who “became angered or very annoyed by” his report. He alleges Jones acted out against him in retaliation, including by filing a report alleging he had engaged in an inappropriate relationship with a graduate student, publicly accusing him of making “disparaging” and “denigrating” statements about female coworkers and anti-Semitic remarks and removing him from the Equity Committee he had served on when he authored the report.
After receiving a right-to-sue letter from the Equal Employment Opportunity Commission in August 2020, Martinez brought this lawsuit in November 2020.
The panel wrote that Martinez presented evidence to avoid summary judgment dismissal that shows “a causal link between the October report and Jones’ retaliatory acts.”
Judges Carl E. Stewart, James L. Dennis and Cory T. Wilson sat on the panel.
UT is represented by Todd A. Dickerson of the state attorney general’s office.
The case number is 23-50036.
SXSW Insurance Coverage Dispute Kicked Back on Jurisdiction Grounds
A lack of clarity in the record about diversity of citizenship in an insurance coverage dispute between SXSW and Federal Insurance Company means the Fifth Circuit “cannot reach the merits” of the case after hearing oral arguments Sept. 7.
In an Oct. 5 ruling, the panel sent the case back to U.S. District Judge Robert L. Pitman to consider additional evidence regarding the jurisdictional issue in the case.
“We could not find proper allegations or evidence of SXSW’s citizenship. So we gave notice before oral argument that the parties should discuss this issue. When questioned, the parties pointed to one page in the record,” the opinion reads. “But that record cite is insufficient to support jurisdiction.”
The lawsuit stems from the cancelation of the 2020 music festival in the wake of the Covid-19 pandemic. SXSW refused to refund ticket purchases, drawing a class action lawsuit from customers that Federal Insurance refused to foot the bill to defend.
Judge Pitman granted a summary judgment win to the insurer, and SWSX filed this appeal in October 2022.
Judges Andrew S. Oldham, Don R. Willett and Kurt D. Engelhardt sat on the panel.
SXSW is represented by Peter Kennedy of Graves, Dougherty, Hearon & Moody.
Federal Insurance is represented by Avniel Adler of Walker Wilcox Matousek.
The case number is 22-50933.
U.S. Court of Appeals for the Federal Circuit
Munsch Hardt Beats Back Injunction for Insulin Therapy Client
Insulinic, a company that treats diabetes via insulin IV-infusion therapy, has been freed from an injunction that prohibited it from treating patients.
Well Cell, a competing company, had secured an injunction from U.S. District Judge Lee Rosenthal in 2022 after bringing claims accusing Insulinic of infringing its patents and misappropriating its trade secrets through the use of its IV therapy treatments.
Insulinic appealed the injunction in December, and oral arguments were heard by the U.S. Court of Appeals for the Federal Circuit in June. On Sept. 21, that court issued a ruling reversing the injunction finding Well Cell hadn’t presented sufficient proof to show irreparable harm or that the claims were likely to succeed on the merits.
“Well Cell at best provided evidence of speculative harm,” the panel wrote.
“Well Cell argued — and the district court found — that Well Cell’s reputation risked being damaged if appellants performed the claimed methods illegally or improperly and Well Cell was blamed for such behavior,” the 12-page opinion reads, holding Well Cell’s argument “rests on two levels of speculation.”
Judges Sharon Prost, Raymond T. Chen and Tiffany P. Cunningham sat on the panel.
Insulinic is represented by Jamil Alibhai and Winston Huff of Munsch Hardt Kopf & Harr.
Well Cell is represented by Lema Barazi of Lloyd & Mousilli.
The case number is 23-1229.
Editor’s Note: Janet Elliott contributed to this report.