In this edition of Litigation Roundup, a Houston appellate court parses who owes a duty of care in a wrongful death lawsuit involving a crash allegedly caused by a driver who was engaging in phone sex, and investigators with the U.S. Securities and Exchange Commission’s Fort Worth regional office reach a deal to end claims a Dallas-based real estate investment company president was lying to investors.
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.
Dallas County District Court
V&E Hit With $30M Malpractice Claim
Vinson & Elkins is facing a legal malpractice lawsuit accusing it of flubbing its representation of Japanese clients Sumitomo Forestry America and SFA JPI Top Holdings in a “complicated business acquisition transaction” with TDI Consolidated.
According to the lawsuit, which notes the companies’ Japanese origin and their “understanding of English and American legal documentation,” the plaintiffs hired Vinson & Elkins in May 2022 to guide them through the transaction to acquire “the JPI service platform, which consisted of a consortium of companies and employees skilled in every aspect of multi-family real estate development, from capital raise to development and construction to lease up and sale.”
In total, the deal cost Sumitomo and SFA $175 million, and they paid their lawyers more than $5 million in fees, according to the lawsuit. The engagement agreement between Sumitomo, SFA and Vinson & Elkins contained an arbitration provision, and the plaintiffs have asked the court to order the parties to arbitration.
“The law firm failed spectacularly in the execution of its duties to the clients,” the lawsuit alleges. “In addition to other breaches of the standard of care, the lawyers negotiated, drafted, edited, approved and then presented to their clients for signature (without adequate explanation) documents that have now had the effect of seriously endangering the clients’ rights to receive from TDI upwards of $30 million in contractual debt obligations under the asset management contracts purchased by plaintiffs in the transaction.”
The 11-page lawsuit points specifically that superseding contractual terms governing the way payment is structured, and argues the contract has given TDI “the ability to argue it could unilaterally terminate the asset management contract at any point prior to sale of the project, while leaving SFA with a right to terminate only in the event of an uncured payment obligation.”
“Of course, in the majority of the legacy projects, no such payment obligation would arise for TDI until after the sale of the project,” the lawsuit alleges.
Soon after the documents were executed, the lawsuit alleges, TDI began terminating the plaintiffs without cause and disavowed “all obligations to pay for work performed over the course of months and years leading up to the termination.”
Sumitomo and SFA are simultaneously involved in related litigation with TDI, the suit notes.
The case, filed June 1, has been assigned to Dallas County District Judge Monica Purdy.
Sumitomo and SFA are represented by Randy Johnston of Johnston Tobey Baruch.
Counsel for V&E had not filed an appearance as of Monday.
The case number is DC-26-09832.
Texas Business Court
Houston Startup Accuses Biz Partner of ‘Ongoing Misuse’ of Software
Houston-based SynMax, a geospatial data analytics company serving the maritime and energy industries, has turned to the Texas Business Court, accusing a customer of misusing the access it had been given to SynMax’s software and proprietary data.
In a lawsuit filed June 1 against Planet Labs PBC and Planet Labs Federal, SynMax alleges it entered into a limited agreement seven months ago with Planet that gave it access to SynMax’s proprietary, AI-powered “Theia” platform, which is described in the lawsuit as a “sophisticated vessel detection and classification software system.”
“Defendants have used that access, along with other proprietary SynMax information, to secretly develop and then publicly launch a competing product,” the suit alleges. “This misuse of SynMax property is in direct violation of the parties’ contractual relationships and Texas law.”
According to the lawsuit, SynMax’s software analyzes low-resolution satellite imagery to identify and track vessels at sea. Planet is the company that has historically provided the images to SynMax but has recently launched its own version of Theia, the lawsuit states.
Judge Grant Dorfman, who sits in the Eleventh Division of the Business Court, signed an agreed joint stipulation and order June 2 barring Planet from using SynMax generated data or the Theia platform in order to sell, promote or market its competing project absent SynMax’s written consent.
SynMax is also seeking relief that would bar Planet from marketing or distributing the competing project.
Judge Dorfman also entered an order June 3 granting expedited discovery in the case.
SynMax is represented by Paul Yetter, Tyler Young, Natalie Gonzales and Ayla Syed of Yetter Coleman and Demetrios Anaipakos and Amanda Woodall of Alavi & Anaipakos.
Planet is represented by Michael K. Oldham of Reynolds Frizzell and Jason M. Storck and Lisa D. Zang of Wilson Sonsini Goodrich & Rosati.
The case number is 26-BC11B-0055.
Northern District of Texas
Dallas Real Estate Investment Co. President Settles SEC Suit
Phoenix American Hospitality and its president have struck a deal with the U.S. Securities and Exchange Commission to bring an end to allegations that investors were lied to about the specifics of two hotel-focused investment funds.
The SEC announced the settled action Friday against Phoenix and William Lee “Perch” Nelson of Dallas. Nelson was accused of misrepresenting the assets held by and the profitability of the two funds and raising about $86 million from 2,000 retail investors between March 2022 and July 2024.
Investors were allegedly told one of the funds owned 11 hotels, but the SEC alleged in reality the fund owned “only a preferred equity interest in a single hotel” until January 2024 when other hotel interests were acquired. Additionally, the SEC alleged Nelson misrepresented that both funds made regular profit distributions to investors of up to 12 percent per year, but neither of the funds were actually profitable, and distributions were funded by returns of investor capital.
Nelson, who did not admit or deny the allegations, entered a deal with the SEC that bars him from serving as an officer or director for five years and requires he pay a $118,225 civil penalty. The deal imposes a $591,127 civil penalty on Phoenix.
The case was assigned to Senior U.S. District Judge Jane J. Boyle, who entered final judgment in the case June 5.
The SEC is represented by its own Keefe M. Bernstein and Rachel Yeates.
Nelson and Phoenix are represented by Brian Hoffman of Holland & Hart.
The case number is 3:26-cv-01846.
Eastern District of Texas
Founder of Healthcare Company to Pay $56.5M in FCA Probe
The federal government has reached a $56.5 million agreement with a businessman and two healthcare companies that will bring an end to two qui tam lawsuits alleging violations of the False Claims Act for making patients appear sicker than they are.
In a lawsuit filed in the Eastern District of Texas by relator Dr. Robert P. Oristaglio in February 2022, and a related lawsuit filed by relator Nancy Cahill in the Southern District of New York, three defendants were targeted with the claims.
Community Care Health Network, doing business as Matrix Medical Network, DPN USA, doing business as HealthFair, and Shahriah “James” Ekbatani, who founded and managed HealthFair, were accused of submitting false claims for reimbursement to Medicare. Oristaglio was the chief medical officer of HealthFair, and Cahill was a former employee of Matrix.
Under the terms of the deal, announced by the government Wednesday, Matrix will pay $36.5 million to settle the New York case. In Texas, HealthFair, which was acquired by Matrix, will pay $5 million and Ekbatani will pay $15 million to end the litigation.
The government alleged that between 2014 and 2019 Matrix had its Medicare Advantage Organizations submit false or invalid diagnosis for chronic medical conditions to the Centers for Medicare and Medicaid Services for risk adjustment purposes. Matrix contracted with the MAOs to provide mobile healthcare buses, staffed by nurses, and provide health assessments for plan beneficiaries on HealthFair buses.
The invalid diagnoses included proliferative diabetic retinopathy, drug-induced polyneuropathy, rheumatoid polyneuropathy, atrial fibrillation, rheumatoid arthritis, chronic obstructive pulmonary disease and chronic bronchitis.
“Patients should be able to trust that their medical providers are making, documenting, and sending diagnosis information to insurers based on accurate assessment, testing, and what is best for the patient,” U.S. Attorney Jay R. Combs of the Eastern District of Texas said in a news release. “It is a breach of trust when providers look to make more money by making their patients appear sicker than they are. Submitting unsubstantiated diagnoses increases costs to the Medicare Advantage program. This case emphasizes our District’s commitment to justice by pursuing anyone who attempts to steal through misrepresentations.”
The case was assigned to U.S. District Judge Sean D. Jordan.
The relator is represented by Rachel Rose of Houston and John Summers of Caldwell Cassady & Curry.
The government is represented by J. Kevin McClendon of the Department of Justice.
Counsel information for the defendants and relator Cahill wasn’t immediately available Monday.
The case numbers are 4:22-cv-00133 and 19-cv-11153.
Amsterdam District Court
Greenpeace Gets Greenlight in Energy Transfer Suit
The Dutch court in the Netherlands has determined Greenpeace can proceed with its lawsuit accusing Dallas-based Energy Transfer of making defamatory statements.
The international organization for climate activism based in the Netherlands was hit with a jury verdict of more than $660 million in March 2025 after Energy Transfer sued it for defamation associated with protests held in 2016 and 2017 fighting the construction of the Dakota Access Pipeline, alleged it was owed millions for the five-month delay in the pipeline’s construction.
Prior to the three-week jury trial, Greenpeace International filed an anti-SLAPP suit in the Dutch court against Energy Transfer.
Last month, the North Dakota Supreme Court directed the trial court to enter a narrow antisuit injunction against Greenpeace International, barring claims in the Netherlands aimed at erasing any final award of damages in the North Dakota suit.
“We do not foreclose all related litigation by GPI in the Netherlands. GPI’s Dutch action includes claims premised on Energy Transfer’s dismissed federal RICO suit and on alleged out-of-court defamatory statements — matters the North Dakota proceedings did not adjudicate,” North Dakota Supreme Court Justice Jerod Tufte wrote in the majority opinion. “Any antisuit injunction entered on remand should leave GPI free to pursue those claims.”
He further wrote that Greenpeace International “may not avoid the injunction by replacing a barred theory under a different label.”
The Dutch court issued a judgment Wednesday stating the opposite. And both sides are touting the judgment as a victory.
“Energy Transfer secured an important victory today in Amsterdam, where the court rejected Greenpeace’s central legal argument that the EU Anti-SLAPP directive supports its claims to essentially undo ET’s successful outcome in the North Dakota court last year. The court agreed with Energy Transfer’s position that the directive does not apply. This is a significant legal determination that vindicates Energy Transfer’s consistent stance throughout this litigation,” Energy Transfer said in a statement.
The company acknowledged that the court didn’t fully agree with it.
“Energy Transfer maintains that no legitimate basis exists for a European court to assert jurisdiction over an American company with no employees, operations, or assets in the Netherlands, for conduct that occurred entirely on American soil. That jurisdictional reality has not changed, and Energy Transfer will continue to press that position. Energy Transfer remains committed to pursuing all available legal remedies to full resolution.”
Energy Transfer asked the court to halt the proceedings until the appeals finished in North Dakota. However, the court wrote that would cause an “unreasonable delay.”
“People are tired of billionaires and their polluting corporations behaving like the law does not apply to them. Greenpeace International is holding this Big Oil bully accountable for repeated attempts at silencing our speech,” Mads Christensen, Greenpeace International executive director said in a news release. “Energy Transfer is clearly desperate to avoid this case, but Kelcy Warren’s pipeline company will have to answer for its actions here in the Netherlands.”
Greenpeace is also seeking a new trial in North Dakota.
“For a third time, Energy Transfer has failed to halt our case. After unsuccessfully petitioning two levels of North Dakota courts and the Amsterdam District Court, Energy Transfer will have to face accountability for its conduct, including repeated abusive lawsuits and defamatory statements,” Daniel Simons, senior legal counsel strategic defense for Greenpeace International said in a news release. “Greenpeace International carries on this legal fight to remedy the harms suffered as a result of Energy Transfer’s intimidation tactics and to ensure corporate bullies know they now have to answer in court if they bring SLAPP suits.”
Energy Transfer is to file a statement of defense to the Dutch court by July 15.
The case number is C/13/771545 / HA ZA 25-1227.
Alexa Shrake contributed this report.
Fourteenth Court of Appeals, Houston
Phone Sex-Related Wrongful Death Case Tossed
Last week, a panel unanimously determined that a woman who was allegedly engaging in phone or video sex with the driver of a 18-wheeler at the time he was involved in a fatal crash “owes no duty to the general public to control the conduct of a call recipient who is operating a vehicle.”
The court had to answer that legal question in a lawsuit brought by the family of Jocelyn Ortega, who was fatally struck by an 18-wheeler driven by Thomas Earl Roberts, when she was pulled over on the shoulder of Interstate 45 in June 2022. Ortega had been involved in a rear-end collision with another driver just before Roberts drove into the scene that a firetruck was already responding to.
According to the opinion, Roberts swerved to avoid hitting the fire truck, but in doing so lost control of the rig, causing it to roll over and onto Ortega’s car.
After the crash, Ortega’s family sued, alleging the woman who was on the phone with Roberts “knew or should have known” Roberts was driving at the time and that her actions were the proximate cause the fatal collision. The family alleged Texas law “does and must impose a duty of reasonable care on a remote participant in a call/video to refrain from distracting a driver.”
Harris County District Judge Lauren Reeder entered judgment dismissing the case May 5, 2025, and the Ortega family filed notice of appeal four days later.
Justices Brad Hart, Ken Wise and Katy Boatman sat on the panel. Justice Hart explained in the 11-page opinion that the Ortegas’ sole issue on appeal is the argument that Texas courts recognize the duty to avoid distracting a driver.
“However, none of the Texas cases cited by appellants recognize such an expansive duty, and our research has uncovered no such Texas case,” he wrote.
The court explained that a “driver maintains control over the extent to which he is distracted by a remote caller because the driver may unilaterally end the call at any time.”
“Given that the relevant duty and no duty rules arguably recognized by the supreme court and our sister courts do not impose a duty on a remote cellphone caller to control the conduct of a call recipient who is operating a vehicle, we conclude there is no such duty,” the court held.
The family is represented by Thomas B. Cowart, Marc C. Lenahan and Andrew J. Klopfer of Lenahan Law.
The woman represented herself.
The case number is 14-25-00371-CV.
Texas Supreme Court
Jurisdictional Issue Dooms Cities’ Challenge to Telecom Rate Law
The Texas Supreme Court on Friday brought to an end litigation that had been ongoing for nine years, determining Houston and McAllen sued the wrong party in the cities’ challenge to a state law reducing how much telecommunications companies can be charged to run their equipment on public property alongside city streets.
The lawsuit was led by McAllen and Houston, but nearly 60 cities joined in the challenge to the laws enacted in 2017 and 2019. The municipalities, who sued the state of Texas in 2017, argued that the law required them to charge less than market rates for the use of public property, making it tantamount to an unconstitutional gift to telecom companies.
In a nine-page opinion, Chief Justice Jimmy Blacklock explained “the cities sued the wrong defendant.”
“Naming the ‘State of Texas’ as an all-purpose defendant is not a cheat code for bypassing the requirement, incumbent on any plaintiff in any context, to seek a judgment against the party whose actions are the cause of the alleged injury,” he wrote. “Injury arises from the law’s application to, or enforcement against, the plaintiff by someone — not from the mere existence or enactment of the law.”
Justice Blacklock wrote that it’s possible the correct defendant in this lawsuit could be the Public Utility Commission or its officers.
Travis County District Judge Maria Cantú Hexsel had partially sided with the cities, and the Third Court of Appeals agreed the law violates the Texas Constitution’s gift clauses.
“Perhaps, if the case is revived in a justiciable posture, some of the time and effort expended over the last nine years will not have gone entirely to waste,” Justice Blacklock wrote. “Wasteful or not, courts must always dismiss a case to which the judicial power does not extend, no matter the stage of the litigation at which the defect is discovered.”
The justices also rejected the cities’ argument that because Texas judicially admitted it was a proper party, any jurisdictional defect was waived.
“While such admissions may make for poor practice, they have no effect on a court’s jurisdiction, which the court is obligated to consider sua sponte no matter what the parties say,” Justice Blacklock wrote in a footnote.
The Texas Cable Association and Comcast filed a joint amicus brief in the lawsuit last June, raising the jurisdictional defect issue that ended up deciding the case.
“The cities have no standing to challenge SB 1152 here because the State plays no role in enforcing it,” the brief reads. “… Under the Third Court’s rationale, it is open season for cities to sue ‘the State’ any time they disagree with the Legislature changing a fee, adjusting or eliminating a tax, or exerting control over the State’s own property.”
Texas is represented by Daniel Ortner and William Peterson of the Texas attorney general’s office.
Houston is represented by Collyn A. Peddie of the city’s legal department.
McAllen is represented by C. Robert Heath, Gunnar P. Seaquist and Gregory D. Miller of Bickerstaff Heath Delgado Acosta.
The Texas Cable Association and Comcast are represented by Bryce L. Callahan and Christian J. Ward of Yetter Coleman.
The case number is 24-1060.
U.S. Court of Appeals for the Fifth Circuit
Lutheran Church Wins Appeal in Concordia University Fight
On Thursday, The Lutheran Church — Missouri Synod received a 2-1 ruling in its favor in a governance dispute with a private, Lutheran college in Austin, Concordia University, that revived the denomination’s federal lawsuit.
According to the opinion, the underlying dispute is rooted in a November 2022 decision by the Concordia board of regents to “unilaterally change its internal governing documents to reject the authority and governance of LCMS.” LCMS sued Concordia and its officials in federal court in Austin, alleging the court had federal jurisdiction on diversity grounds because it was a Missouri corporation and the defendants were Texas citizens.
Judge Edith H. Jones authored the court’s opinion, joined by Chief Judge Jennifer Walker Elrod. Judge James E. Graves Jr. authored a dissent. The court heard oral arguments in the case Aug. 4.
Judge Jones wrote in the majority opinion that U.S. District Judge David A. Ezra had “quintessentially violated the church autonomy doctrine” by siding with Concordia University’s argument that a lack of diversity of citizenship doomed the litigation.
“It reached this result only by overlaying a secular corporate law interpretation on the church’s spiritually crafted governance documents, and then imposing Texas unincorporated association law on the Lutheran Church, whose special status has been recognized by Missouri law for more than a hundred years,” she wrote, before reversing and remanding the case.
Judge Ezra adopted a magistrate judge’s report and recommendation that determined the LCMS is an “unincorporated association” under Texas law, and therefore is a “citizen of every state in which its members reside.”
In his dissent, Judge Graves wrote that “whether the proper parties are before the court is not a matter of doctrinal controversy.”
“The district court was thorough and considerate in its analysis and correctly found that the church autonomy doctrine was not implicated,” he wrote. “I respectfully dissent.”
The church is represented by Daniel Blomberg, Andrea Butler and Robert K. Ellis of Becket Fund for Religious Liberty, Kevin Dubose and Wallace B. Jefferson of Alexander Dubose & Jefferson and Gregg R. Kronenberger of Kronenberger Law Firm
The university is represented by Clark Richards
The case number is 25-50130.
U.S. Supreme Court
Fifth Circuit’s Decision to Vacate AT&T FCC Fine Undone
The U.S. Supreme Court on Thursday determined 8-1 that AT&T and Verizon’s Seventh Amendment right to a jury trial had not been violated by the Federal Communications Commission’s decision to hit the telecommunications companies with fines totaling $104 million.
The FCC had fined AT&T $57 million and Verizon $47 million after determining the companies mishandled customers’ location-based data in violation of section 222 of the Telecommunications Act. The companies argued the fines could not stand because they were handed down after in-house adjudication by the FCC, in violation of their rights to have a judge and jury hear the case.
In April 2025, the U.S. Court of Appeals for the Fifth Circuit agreed with AT&T.
“No one denies the Commission’s authority to enforce laws requiring telecommunications companies like AT&T to protect sensitive customer data,” Judges Stuart Kyle Duncan, Cory T. Wilson and Catharina Haynes wrote in the 20-page opinion. “But the Commission must do so consistent with our Constitution’s guarantees of an Article III decisionmaker and a jury trial.”
The U.S. Court of Appeals for the Second Circuit, meanwhile, denied Verizon’s petition for review, writing in part that the FCC’s forfeiture order “does not, by itself, compel payment” and therefore does not run afoul of the Seventh Amendment with it issues a forfeiture order without a jury.
The U.S. Supreme Court granted certiorari in both cases and decided them together. Chief Justice John Roberts wrote the court’s opinion, agreeing with the Second Circuit that “[f]orfeiture orders issued under §503(b)(4) do not definitively resolve the parties’ legal obligations.”
“And the Commission’s factual findings are not conclusive,” he wrote. “It thus does not offend the Constitution for the Commission to issue forfeiture orders without the involvement of a jury.”
Justice Clarence Thomas was the court’s lone dissenter. He wrote that it was only after AT&T and Verizon paid the FCC more than $100 million that the federal agency “took the position that its orders were not really binding after all.”
“The Commission now agrees that AT&T and Verizon would have been entitled to a jury trial de novo in an Article III court had they declined to pay. Because its orders were not binding until after that jury trial, the Commission says, AT&T and Verizon in reality paid the Commission voluntarily,” he wrote. “The Court accepts that account and does not grant the carriers any relief. Because I would give the parties an opportunity to proceed under a correct understanding of the law, I respectfully dissent.”
AT&T and Verizon are represented by Pratik A. Shah, Z.W. Chen and Margaret Rusconi of Akin Gump Strauss Hauer & Feld, Scott H. Angstreich of Kellogg, Hansen, Todd, Figel & Frederick and Jeffrey B. Wall and Morgan L. Ratner of Gibson, Dunn & Crutcher.
The FCC is represented by D. Adam Candeub, Bradley Craighmyle, Jacob M. Lewis, Sarah E. Citrin and Adam Sorensen of the FCC’s Office of General Counsel and D. John Sauer, Abigail A. Slater, Malcolm L. Stewart, Vivek Suri, Robert B. Nicholson and Matthew A. Waring of the Department of Justice.
The case numbers are 25-406 and 25-567.
Craving more Texas Lawbook litigation coverage? Don’t worry, we’ve got you covered. Take a look at these stories you may have missed in the past few days.
In the most recent edition of Asked & Answered, Third Court of Appeals Justice Rosa Lopez Theofanis shares how she sees AI impacting the appellate process and dishes on what lawyers practicing before her shouldn’t do. Justice Theofanis, who is the first sitting judge to participate in Asked & Answered, joined the all-female panel in January 2023.
The analytical drug discovery and development services and research company Inotiv and 18 of its affiliated entities filed for Chapter 11 bankruptcy protection Wednesday in the Southern District of Texas. Inotiv, which cites $500 million to $1 billion in both liabilities and assets, hired Ropes & Gray and Hunton Andrews Kurth as its lead legal advisors.
The Lanier Law Firm announced Tuesday it was opening an office in southwest Fort Worth, marking the firm’s fourth office nationwide. The Houston-based firm also has outposts in New York and Los Angeles.
The artist who freehand painted a massive mural of whales in downtown Dallas has filed a federal lawsuit against FIFA over its decision to paint over and “permanently destroy” the work of art.
GoldenPeaks Poland, a European renewable energy company that operates solar-powered systems in Poland and Hungary, and 40 of its affiliated businesses filed for Chapter 11 bankruptcy protection in the Southern District of Texas on Friday.
A jury trial began in Dallas County Judge Maria Aceves’ courtroom Wednesday in a breach of contract and fiduciary duty case involving two men whose business partnership soured. The property at the center of the suit was once an LA Fitness next to the old Valley View mall, which the Dallas Mavericks have announced will be their new arena and an entertainment district.