In this edition of Litigation Roundup, we offer details on a recent $1.3 million arbitration win a team from Greenberg Traurig secured for Frost Bank, identify the law firm pursuing litigation in the wake of a fatal helicopter crash in Houston and explain a ruling from U.S. District Judge Robert Pitman that will likely change who can build transmission lines in 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.
Harris County District Court
Suit Filed Over Helicopter Tour Crash that Killed 4
The company that operates a helicopter tour business has been named in a wrongful death lawsuit weeks after a helicopter crashed into a communications tour in Houston, killing the pilot and three passengers.
Defendants in the wrongful death lawsuit that was filed Nov. 1 are helicopter operator National Helicopter Solutions, the deceased pilot of the Robinson R44 Raven II helicopter, Samantha Grandbouche, helicopter owner Porter Equipment Holding and SBA Communications, the owner of the tower.
Cesar Lerma, Marie Alonso and their son, 9-year-old Dylon Lerma, died in the Oct. 20 crash during a nighttime sightseeing tour of downtown Houston. Their families are seeking more than $50 million in damages.
The flight left Ellington Airport around 7:40 p.m. and descended “to a level lower than the tops of surrounding communication towers while traveling more than 100 miles per hour” as it approached downtown Houston, the lawsuit alleges.
Nine minutes after takeoff, the helicopter crashed into the tower and both crashed to the ground.
“The families of Cesar, Marie and Dylon are devasted and seek both answers and accountability,” Randy Sorrels of Sorrels Law, who represents the plaintiffs, said in a news release. “We hope this lawsuit will answer many unanswered questions, bring about air-safety changes and prevent a tragedy like this from ever happening again.”
A preliminary five-page report released by the National Transportation Safety Board did not make any conclusions about why the crash occurred.
The case has been assigned to Harris County District Judge Lauren Reeder.
The families are also represented by Richard T. “Tom” Stilwell of Sorrels Law.
Counsel for the defendants had not filed an appearance as of Monday afternoon.
The case number is 2024-76978.
PEMEX, Shell Named In Suit Over Fatal Chemical Leak
The family of a contractor who died at a Houston area refinery where a hydrogen sulfide gas leak occurred has filed a wrongful death lawsuit seeking more than $ 1 million in damages against the companies that operated the facility.
Deer Park Refining, which does business as PEMEX Deer Park, P.M.I. Services North America and Shell USA are named as defendants in the lawsuit that was filed Nov. 1. Jose Wilfredo Perez Jr., who worked for ISC Constructors, died Oct. 10 at the Deer Park plant.
He was one of two workers who died at the scene. Another was taken by helicopter to a hospital and several more were transported by ambulance. A total of 35 workers were injured.
The lawsuit alleges his death was caused by the defendants’ decision to begin an “uncontrolled release” of flammable and toxic gasses, including hydrogen sulfide. The release prompted a shelter-in-place order for nearby residents that lasted hours.
Benny Agosto Jr. of Abraham, Watkins, Nichols, Agosto, Aziz & Stogner, who represents Wilfredo’s family, issued a statement alleging the operators’ “failure to implement and enforce stringent safety protocols has led to preventable and devastating losses.”
“Jose Wilfredo Perez, Jr. was a vibrant young man, only 28 years old, with a bright future ahead of him,” he said. “This incident has permanently deprived his family of a beloved son, husband, and family member.”
Agosto’s law firm is also representing three workers who were injured in the incident: Sergio Antonio Olvera, Jonathan Martinez and Yoselyn Soto.
The case has been assigned to Harris County District Judge Elaine H. Palmer.
The plaintiffs are also represented by Disha Roy, Ben Agosto III and Barney P. Dill of Abraham, Watkins, Nichols, Agosto, Aziz & Stogner.
Counsel for the defendants had not filed an appearance as of Monday afternoon.
The case number is 2024-76729.
Texas Business Courts, First Division
Energy Transfer Can’t Keep Dispute in Biz Court
A gas gathering and processing lawsuit that pits Energy Transfer against Culberson Midstream and Moontower Resources cannot proceed in the business courts, after Judge Bill Whitehill issued a ruling Oct. 30 holding that his court “does not have authority” over the dispute.
Energy Transfer had filed suit April 8, 2022, according to the opinion, and Judge Whitehill wrote that H.B. 19, which created the business courts, only gives those courts authority to hear cases filed after Sept. 1, when the courts went live. The ruling means the case, which Energy Transfer removed to the business courts Sept. 30, is returned to Dallas County district Judge Bridgett Whitmore’s courtroom.
Energy Transfer had argued in briefing that H.B. 19 “is silent” on whether litigation that began prior to Sept. 1, 2024, is within the business courts’ purview.
“H.B. 19, § 8 says, ‘The changes in law made by this Act apply to civil actions commenced
on or after September 1, 2024,’” Energy Transfer wrote. “Nothing in that or any other part of the Act prohibits removal of actions commenced prior to September 1, 2024.”
Judge Whitehill wrote in his 10-page opinion that there are no disputed fact issues, and neither party argued H.B. 19 is ambiguous “and the court does not discern any such ambiguity.”
“Accordingly, the court concludes that H.B. 19’s plain text precludes plaintiffs’ removal and remands this case to the 193rd District Court of Dallas County, Texas,” he wrote.
Culberson and Moontower had argued in briefing that this case represented a “prime example” of why the legislature “included language applying these statutory changes prospectively rather than retroactively.”
“In the two-and-a-half years this case has been pending, the Dallas County trial court judge, the Honorable Bridgett Whitmore, has heard and decided five motions for summary judgment and several other substantive motions,” Culberson and Moontower told the court. “[T]he Dallas Court of Appeals has considered multiple interlocutory appeals; and a petition for review is currently pending before the Texas Supreme Court. Removing this case from a trial court judge who is familiar with the case and has made multiple substantive rulings just months before the scheduled trial setting is inefficient and unreasonable.”
Energy Transfer is represented by Mike Lynn, Andrés Correa and Kyle Gardner of Lynn Pinker Hurst & Schwegmann
Culberson Midstream and Moontower Resources Gathering are represented by Tyler J. Bexley and Joel W. Reese of Reese Marketos.
The case number is 24-BC01B-0005.
Western District of Texas
NextEra Wins Battle Over Texas’ ‘Protectionist’ Transmission Line Law
U.S. District Judge Robert Pitman on Oct. 28 sided with NextEra and found a state law violated the Commerce Clause, granting the Florida-based energy company a judgment in its favor and issuing a permanent injunction preventing the state’s public utility commission from enforcing the law.
Last week’s ruling — which rejected arguments made in a cross-motion for judgment filed by Southwestern Public Service Company and Entergy Texas — was issued in the lawsuit NextEra filed in June 2019.
The crux of the lawsuit was legislation lawmakers passed that same year, Texas Senate Bill 1938, which allowed only companies that currently operated transmission lines within the state from building or operating additional transmission lines in parts of the state not regulated by the Electric Reliability Council of Texas.
NextEra alleged the law was unconstitutional because it discriminated against interstate commerce in violation of the Commerce Clause.
“Texas has now blatantly discriminated against non-Texas companies in this critical area of commerce for half a decade,” NextEra argued in a March motion for judgment on the pleadings. “As the Fifth Circuit observed, it is as if Texas ‘passed a law saying that only those with existing oil wells in the state could drill new wells.’ Because that protectionist effort is anathema to ‘a principal reason for the adoption of the Constitution,’ and because no further factual development is required, this motion for judgment on the pleadings is an appropriate vehicle for entry of final judgment.”
In February 2020, Judge Pitman sided with the state and dismissed NextEra’s lawsuit with prejudice. The Fifth Circuit in August 2022 partially affirmed the ruling, holding NextEra should get another chance to pursue its Commerce Clause claims, writing “the very terms of SB 1938 discriminate against interstate commerce.”
After the U.S. Supreme Court declined to disturb that ruling in December 2023, it returned to Judge Pitman, according to court records, where he also granted motions to intervene filed by LSP Transmission Holdings, East Texas Electric Cooperative, Southwestern Public Service Company, Entergy Texas and Oncor as the Fifth Circuit instructed.
SPS and Entergy had argued that NextEra, LSP and ETEC couldn’t seek relief under the Commerce Clause because their “in-state presence in Texas precludes” that option because the law only “safeguards out-of-state entities from local protectionism.”
“In sum, defendants’ standing arguments are unconvincing,” Judge Pitman wrote. “As the Fifth Circuit has already found, SB 1938 is a statute that facially discriminates against interstate commerce. Because NextEra has previously attempted to enter the interstate transmission market and still seeks that opportunity, SB 1938 infringes upon its right to compete in interstate commerce on equal footing.”
Judge Pitman wrote in his 33-page order that the law “does not advance a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives.”
The plaintiffs are represented by Jeff Tillotson of Tillotson Johnson & Patton and Stuart H. Singer, Pascual Oliu and Evan Ezray of Boies Schiller Flexner.
Entergy Texas is represented by its own George Hoyt and Michael Boldt, Lino Mendiola III, Catherine E. Garza and Henrik Strand of Eversheds Sutherland.
Southwestern Public Service Company is represented by Matthew E. Price, Elizabeth B. Deutsch and Arjun R. Ramamurti of Jenner & Block and by Erika M. Kane of XCEL Energy Services.
PUCT and its commissioners are represented by Jessica Soos of the office of the attorney general.
ETEC is represented by Brad Hancock, Mark C. Davis, Theresa Wanat and Jacob Lawler of Holland & Knight.
Oncor is represented by Thomas S. Leatherbury of Dallas, and Ethan Nutter and Patrick Mizell of Vinson & Elkins.
The case number is 1:19-cv-00626.
American Arbitration Association
Frost Bank Prevails in Arbitration with Ruff Family
A panel of three arbitrators recently entered a final award in favor of Frost Bank in its long-running fight with members of the Ruff family.
The Oct. 30 ruling awards Frost Bank about $1.3 million in attorney fees and denied all claims brought by Michael Ruff, Tracy Ruff Bakshi, Kelly Ruff Frazier and Mark Ryan Ruff.
As the arbitration awards notes, there have been “a series of disputes involving their mother, Suzy Ruff and Frost Bank, the former trustee for the Ruff Management Trust” which have been “vigorously litigated in Texas probate courts, district courts, courts of appeals, the Texas Supreme Court, bankruptcy court, and in this and another arbitration.”
At issue in this case were two separate 2018 distributions from the trust to Suzy Ruff totaling $880,000 that she used to pay attorney Randy Mathis, who was representing her in litigation against her children.
The children had alleged Frost Bank — which managed the Suzy Trust from 2010 until 2019 — had improperly distributed those funds. It was during this time period that Suzy Ruff won a $49 million arbitration award against Mike Ruff for embezzling from her, according to the final award.
Mathis, a Dallas litigator, worked to collect the $49 million award but by 2018 was the subject of an IRS tax levy and a default and foreclosure on a secured bank loan. The financial toll of the Ruff litigation, Mathis testified, “threatened his ability to continue practicing law and representing Suzy in her collection efforts against Mike,” according to the award.
Suzy Ruff in March 2018 asked the bank to monetize a life insurance policy and distribute the $1.8 million in proceeds to her, but “after a skirmish” with her children over that in probate court, Frost “determined that such a distribution was not in her best interests and declined the request.”
A June 2018 request that Frost distribute the entire $4 million trust to her was also declined on the same basis. In August 2018, according to the final award, after receiving letters from Suzy Ruff’s outside counsel that the distributions were in her best interest, the bank agreed to distribute $800,000 in funds, and she loaned Mathis the money.
Suzy Ruff’s children alleged they were entitled to notice before the distribution was made, and not in monthly account statements after the fact.
“Neither the trust agreement nor the Texas Trust Code requires a trustee to disclose a distribution request made by a lifetime beneficiary to remainder beneficiaries prior to making a distribution,” the arbitration panel wrote. “Suzy created the trust with her own funds. She could have required prior notice of requests for distribution, but she did not.”
Michael Ruff represented himself.
The other members of the Ruff family are represented by Ted B. Lyon and Dennis Weitzel of Ted B. Lyon & Associates and Dan L. Wyde of Wyde & Associates.
Frost Bank is represented by Karl G. Dial and Samuel G. Davison of Greenberg Traurig and James W. Bowen of Hunton Andrews Kurth.
U.S. Court of Appeals for the Fifth Circuit
Prof Who Alleged Discrimination, Didn’t Apply for Promotion Loses Appeal
A tenured, white, male professor of finance at the University of Texas who accused Texas A&M University of unlawful hiring practices recently had the dismissal of his putative class action affirmed on appeal.
U.S. District Judge Charles Eskridge had tossed Richard Lowery’s lawsuit in September 2023, finding the claims failed on grounds of ripeness, mootness and standing. Lowery had not yet applied for a faculty position at Texas A&M when he filed suit in September 2022 alleging the university discriminated against white and Asian men in favor of female and non-Asian racial minorities.
Judges Edith H. Jones, Don R. Willett and Kurt D. Engelhardt sat on the panel that issued a three-page ruling Oct. 30 affirming Judge Eskridge.
“Professor Lowery says that he is ‘able and ready’ to apply for lateral positions at the University. But he never submitted an application to substantiate his interest,” the panel wrote. “That fact is fatal in this case because there is little evidence that submitting a job application would be a futile gesture.”
Lowery is represented by Jonathan F. Mitchell of Mitchell Law and Gene Hamilton of the America First Legal Foundation.
A&M is represented by Michael Carter Crow, Layne E. Kruse, Ryan Meltzer and Paul Trahan of Norton Rose Fulbright The case number is 23-20481.