In this edition of Litigation Roundup, the Fifth Circuit wades into a discovery dispute between X. Corp. and Media Matters, Beck Redden secures a complete defense win for HP in New York, and a jury in California wallops Phillips 66 in a trade secret misappropriation trial.
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.
California Superior Court, Alameda County
Phillips 66 Hit with $605M Verdict for ‘Willful’ Misappropriation
Phillips 66 “willfully and maliciously” misappropriated the trade secrets of low-carbon fuels retailer Propel Fuels when it launched its own renewable fuels business, a California jury held last week.
The jury heard five weeks of testimony before siding with Propel Oct. 16. Because of the finding that the conduct was willful and malicious, Judge Michael Markman could triple the $604.9 million award. Propel had alleged in its February 2022 lawsuit that after entering a nondisclosure agreement, it shared certain trade secrets with Phillips during a due diligence period in 2017, when Phillips was considering acquiring Propel.
Propel alleged that in August 2018 Phillips terminated the deal and announced the next day it was entering the renewable diesel market.
“Propel Fuels is pleased that after viewing all of the evidence, the jury held Phillips 66 accountable for stealing our trade secrets,” Rob Elam, founder and CEO of Propel Fuels said in a statement. “Before its discussions with Phillips 66, Propel had worked for more than 13 years to create the market for these fuels, which are important alternatives that improve air quality and help fight climate change. We were pioneers who helped create the market, and what Phillips 66 stole was the result of hard work by entrepreneurs who took the kind of risks that are the foundation for our entire modern economy.”
Propel is represented by Michael Ng, Daniel Zaheer and Zachary Ritz of Kobre & Kim.
Phillips 66 is represented by Jeffrey G. Homrig and John T. Ryan of Latham & Watkins.
The case number is 22CV007197.
New York Superior Court, Albany County
Jury Says HP Owes Supplier Nothing in Complete Defense Win
A jury that heard four days of trial deliberated for about half an hour before determining HP hadn’t breached two agreements with former supplier Integrity International, which does business as TarrenPoint.
On Oct. 16, the jury answered “no” as to whether HP had breached a 2011 or a 2014 contract with TarrenPoint, a company that offers documentation, training and marketing communication services to its clients.
TarrenPoint filed suit in October 2017, alleging HP had stopped paying invoices on time, forcing it to “essentially finance [HP’s] projects on an interest-free basis while waiting months after the provision of services to receive payment, even as such contractors were obligated to pay their employees and contractors in accordance with applicable payday laws.”
TarrenPoint, which alleged it went out of business because of HP’s actions, was seeking $45 million in damages.
HP’s commercial litigation counsel, Brad Hartz, issued a statement praising the Beck Redden team after the verdict.
“I’m grateful to Beck Redden for agreeing to try this case on short notice after an emergency forced the withdrawal of HP’s prior counsel,” he said. “Beck Redden’s appearance was a pivotal moment in litigation that spanned seven years. Alistair’s strategic acumen and superb courtroom performance led to a great result for the company.”
HP is represented by Alistair B. Dawson and Fariha Jawed of Beck Redden and Will Nolan and Jennifer Yetto of Whiteman Osterman & Hanna.
TarrenPoint is represented by Steven R. Fairchild of Fairchild Law, Erin Mead of Thorn Gershon Tymann & Bonanni, Justin W.R. Renshaw of Houston and Shannon A. Lang of Houston.
The case number is 906750-17.
Connecticut Superior Court
Dallas-Based DOBS Scores Another Victory Against Johnson & Johnson
Dallas-based Dean Omar Branham Shirley obtained a $15 million verdict against Johnson & Johnson and several subsidiaries in Bridgeport, Connecticut, on Oct. 15 for a client who is suffering from mesothelioma.
DOBS’ client, Evan Plotkin, accused J&J’s baby powder of causing the cancer in the lining of his lungs. Plotkin is one of thousands of plaintiffs who are suing J&J, alleging the company knew its baby powder contained cancer-causing asbestos for decades.
“The trial demonstrated once again that J&J knew its products would cause harm, but they chose to do the wrong thing time and time again,” DOBS partner Ben Braly said. “No amount can ever make up for what [J&J] did to Evan.”
J&J has denied its talc-based baby powder caused cancer. Erik Haas, the company’s vice president of litigation, published a statement vowing to appeal the Plotkin verdict.
“We will immediately appeal the erroneous rulings by the trial judge that prevented us from sharing critical facts with the jury that demonstrate the plaintiff’s exceedingly rare form of mesothelioma was not caused by talcum powder,” Haas said. “Those facts show that the verdict is irreconcilable with the decades of independent scientific evaluations confirming talc is safe, does not contain asbestos and does not cause cancer.”
This is the fourth trial win DOBS has secured against J&J this year.
In August, a Columbia, South Carolina, jury handed up a $63.4 million verdict for plaintiff Michael L. Perry.
A Portland, Oregon, jury in June delivered a $260 million verdict in the case brought by Kyung Lee.
In April, a Cook County, Illinois, jury returned a $45 million verdict for the family of Theresa Garcia who died of mesothelioma.
J&J has accused plaintiff law firms of pushing “junk science” in trials to obtain victories.
“As we have steadfastly maintained, this litigation is the result of paid for science fomented and financed by plaintiffs firms,” Haas added in his statement.
DOBS managing partner Trey Branham responded to Haas’ statement in a news release.
“But this is now four different juries, in four different states, in front of four different judges making the exact same findings,” Branham said. “At some point [J&J] and its decision makers are going to have to understand that it cannot be that they alone are right and everyone else is wrong.”
J&J recently filed for Chapter 11 bankruptcy in the federal Southern District of Texas for its Red River Talc subsidiary, which includes ovarian cancer cases. U.S. Bankruptcy Judge Christopher Lopez ordered a nationwide stay on those cases, but mesothelioma cases are not affected.
Texas Supreme Court
Case Transferred to 15th COA Gets Sent Back to Houston
Out of several dozen civil lawsuits that were transferred from various intermediate appellate courts to the new Fifteenth Court of Appeals when it launched last month, at least one of those has been returned to its original appellate court.
Darryl George and his mother, Darresha George, will get to proceed with an appeal in their lawsuit against Barbers Hill Independent School District before the First Court of Appeals in Houston after the Texas Supreme Court on Oct. 16 issued an order retransfering the case.
The Georges, who allege the district has violated a new state law prohibiting discrimination on the basis of hair texture or discrimination against certain protected hairstyles, such as locs and braids, were among the first litigants to challenge an order transferring a case to the new appellate court.
Dylan O. Drummond of Langley & Banack, who represents the Georges, issued a statement saying his clients were “gratified” by the Texas Supreme Court’s decision to return the case to the First Court of Appeals.
“We look forward to continuing their fight for justice under Texas’s CROWN Act,” he wrote.
The Georges had argued three issues precluded the Fifteenth Court of Appeals from having exclusive jurisdiction over this case: It doesn’t present a constitutional question, the attorney general isn’t a party, and the district isn’t “an agency of the executive branch of the state government or a state board, commission, department, or office.”
“Absent exclusive intermediate appellate jurisdiction, the court should sustain the Georges’ objection to their appeal’s transfer to this court and disagree to the transfer,” they argued.
In June, the Legislature passed and the governor signed into law S.B. 1045, which created the Fifteenth Court of Appeals and granted it exclusive, statewide jurisdiction over certain cases involving the state or state officials.
George is also represented by Allie R. Booker of Booker Law Firm.
Barbers Hill ISD is represented by Sara Leon, Michelle Alcala and Hans P. Graff of Leon Alcala.
The case number in the Texas Supreme Court is 24-9083 and the case number in the First Court of Appeals is 01-24-00789-CV.
U.S. Court of Appeals for the Fifth Circuit
X Corp. Discovery Request Paused in Media Matters Suit
Media Matters convinced the Fifth Circuit to temporarily halt an order requiring it to disclose certain information about, and communications with, its donors in a business disparagement lawsuit brought against it by X Corp.
Judges Jerry E. Smith, James E. Graves Jr. and Kurt D. Engelhardt issued the 12-page per curiam opinion Oct. 20, finding X’s discovery requests were “disproportional to the needs of the case” and that Media Matters was “likely to succeed on the merits of its appeal.”
X sued Media Matters in November after the outlet published a report accusing X of placing advertisements from several well-known companies next to “pro-Nazi content.” Many of those companies — Apple, Comcast, NBCUniversal and IBM among them — withdrew all ads from the platform in response.
“We doubt that X Corp. needs the identity of Media Matters’s every donor, big or small, to advance its theories,” the Fifth Circuit wrote in staying the order compelling production. “Nor does it need the full residential addresses for any of those stated purposes. Conversely, Media Matters and its donors would bear a heavy burden if Media Matters had to release this information. It could enable others to harass or intimidate Media Matters or its donors. Indeed, X Corp.’s owner, Elon Musk, has said that X Corp. would ‘pursue not just [Media Matters] but anyone funding that organization. I want to be clear about that anyone funding that organization, will be, we will pursue them.’”
X is represented by Judd E. Stone II, Michael Abrams, Cody C. Coll, Ari Cuenin and Christopher D. Hilton of Stone Hilton and John Sullivan of S|L Law.
Media Matters is represented by Aria Branch, Christopher D. Dodge, Abha Khanna and Jacob D. Shelly of Elias Law Group and Andrew LeGrand of Gibson Dunn.
The case number is 24-10900.
U.S. Supreme Court
High Court Passes on Nate Paul Mandamus
Last Tuesday, the U.S. Supreme Court denied a petition for writ of mandamus filed by embattled Austin real estate developer Nate Paul, who was fighting a trial court’s criminal contempt finding.
In June, Paul had appealed to the high court after his case drew a sharply divided opinion from the Texas Supreme Court. He argued the case gave SCOTUS an opportunity to resolve lower court splits on two issues:
- Whether a criminal-contempt prosecution by an interested private party violates the Due Process Clause.
- Whether sentencing a criminal defendant to jail via email, in absentia and without the opportunity to address the judge, violates the Due Process Clause or the Sixth Amendment.
Paul argued Travis County District Judge Jan Soifer violated his constitutional right to due process as well as the principles of separation of power when she allowed opposing counsel representing a charitable foundation in a civil real estate dispute to criminally prosecute him for contempt.
Because the lawyer representing The Roy F. and Joann Cole Mitte Foundation was “financially interested” in the outcome of the contempt proceedings, Paul argues it should have been referred to a local prosecutor. He also argues a second violation of his constitutional rights occurred when he was not given an opportunity to address the court prior to his sentencing.
Paul was found to be in contempt of court for violating an order requiring him to disclose any transfer of assets in excess of $25,000, and Judge Soifer ordered him incarcerated for 10 days.
The Texas Supreme Court stayed that order of contempt pending the outcome of this appeal.
Two days after the SCOTUS ruling, the Roy F. and Joann Cole Mitte Foundation filed an opposed motion with the Texas Supreme Court asking it to lift the stay. Paul filed a letter in response the same day, indicating he was preparing to file a petition for writ of habeas corpus in the case.
Paul is represented by David Gerger of Gerger Hennessy Martin & Peterson, Brent C. Perry of Burford Perry, Cynthia E. Orr and Gerald H. Goldstein of Goldstein & Orr in San Antonio and Lisa S. Blatt, Amy Mason Saharia and Aaron Z. Roper of Williams & Connolly in Washington, D.C.
The Mitte Foundation is represented by Ray Chester, Michael A. Shaunessy and Andrew Edge of McGinnis Lochridge and Craig T. Enoch and Elana Einhorn of Enoch Kever.
The case number in the U.S. Supreme Court is 23-1313. The case number in the Texas Supreme Court is 23-0253. Krista Torralva contributed to this report.