In this edition of Litigation Roundup, a man who alleges he was shorted two ounces of beer by Cinemark files a class action lawsuit against the movie chain, an East Texas jury hits Samsung with a $142 million patent infringement verdict in a damages redo trial, and a new SEC trading surveillance initiative draws a constitutional challenge.
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Wise County District Court
Jury Says Ranch Entitled to $1M in Legal Fees
Last week a jury determined 10-2 that US Trinity Bridgeport is entitled to at least $1 million in legal fees to cover the cost of a four-year fight over limestone mining rights.
According to court documents, WCJ Assets Ltd. sold the 1,417-acre property to US Trinity, which operates the American Patriot Ranch, for $4.3 million in November 2019. WCJ alleged in its lawsuit that the contract contained clauses entitling it to mine for limestone on the property.
American Patriot raised several arguments in defense, including WCJ had ignored “red flags” in negotiations, that state law barred the operation of a processing and crushing facility on the property and that the proposed mining operations conflicted with existing utility easements and rights-of-way.
WCJ was seeking $50 million in damages, but those claims didn’t make it past pretrial motion practice. After two days of trial, the jury on April 17 awarded American Patriot a little more than $1 million for representation in the trial court and about $270,000 in conditional fees for representation on appeal.
American Patriot Ranch is a sanctuary and retreat near Decatur, Texas, that serves war veterans and their families.
WCJ Assets is represented by Kelly J. Curnutt and Patrick A. Wadlington Jr. of Curnutt & Hafer.
US Trinity Bridgeport is represented by Israel R. Silvas, Cliff P. Riley, Tara S. Kern, Salvador J. Robles, Caroline Lawhorn and Maria McIntyre of Dykema Gossett and Derrick S. Boyd, G. Alan Powers and Scott Lindsey of Boyd Powers & Williamson.
The case number is CV20-08-579.
Circuit Court, Cook County, Illinois
Dallas Firm Gets $45M Mesothelioma Win
The Dallas-based law firm of Dean Omar Branham Shirley last week secured a $45 million jury verdict in a wrongful death lawsuit against Johnson & Johnson and two of its subsidiaries.
The firm brought suit on behalf of the family of Theresa Garcia, a mother and grandmother who was a lifelong user of Johnson & Johnson’s baby powder and died of mesothelioma. The jury heard evidence that Garcia, a mother of six, frequently used the product on herself and her children. Experts explained that baby powder has been shown to contain asbestos.
Garcia was diagnosed with mesothelioma in January 2020 and died six months later. The lawsuit, filed in April 2020, named Johnson & Johnson, Johnson & Johnson Holdco and Kenvue as defendants but Johnson & Johnson’s bankruptcy filing caused a delay in bringing the case to trial.
The jury found Kenvue 70 percent liable and found Johnson & Johnson and Johnson & Johnson Holdco each 15 percent liable for the damages.
The Garcia family is represented by Jessica Dean, Ben Adams and Mark Buha of Dean Omar Branham Shirley.
Johnson & Johnson is represented by Johnson & Bell of Chicago.
The case number is 2020 L 004505.
South Dakota’s Fourth Judicial District Court
Homeowners Near Sinkhole Get Second Chance to Opt-in to Class Action
Homeowners living near a sink hole that has developed in a housing edition in Black Hawk, South Dakota, will get another chance to opt into a class action lawsuit seeking damages.
Judge Eric Strawn of Meade County South Dakota signed an order April 10 giving homeowners in the Hideaway Hills neighborhood who may have initially opted out of litigation until May 1 to opt back in to the suit that is seeking damages for what may be the complete loss of 158 homes.
The homeowners, led by Andrew Morse and John and Emily Clarke, are suing the state of South Dakota and the South Dakota Commission of School and Public Lands pointing to an abandoned state-operated gypsum mine as the root of their problems.
Trial is slated to begin later this year.
The homeowners are represented by Kathleen Barrow and David Grant Crooks of Fox Rothschild.
Counsel information for South Dakota wasn’t immediately available Monday.
The case number is 42CIV-20-000295.
Eastern District of Texas
In Court-ordered Second Trial, McKool Smith Team Gets $142M Win Against Samsung
A panel of jurors on April 17 determined Samsung owes G+ Communications $142 million for infringing two patents related to 5G technology. Originally, a different panel of jurors in January had returned a $67.5 million damages verdict against Samsung in this same dispute.
But U.S. District Judge Rodney Gilstrap, on his own, issued an order March 1 ordering a new trial take place on damages, citing his “material concerns about jury confusion regarding the form of the reasonable royalty awarded herein — i.e., that the jury may have awarded damages in the form of a running royalty when it intended to award them as a lump sum.”
During trial, Judge Gilstrap wrote, neither side “addressed whether a reasonable royalty award should be a running royalty.”
“Though the parties never raised this in their proposed charge or verdict form, the court was unwilling to be silent in the face of such a guaranteed ‘train wreck,’” Judge Gilstrap wrote. “However, because of counsel’s failure to develop and educate the jury about these very different concepts during the trial, the jury’s verdict on damages is not sufficiently reliable.”
After the second trial, jurors awarded $61 million for infringement of one patent and $81 million for infringement of the second.
G+ Communications is represented Jennifer Truelove of McKool Smith and Jason Sheasby of Irell & Manella.
Samsung is represented by Ruffin B. Cordell of Fish & Richardson and Melissa Smith of Gillam & Smith.
The case number is 2:22-cv-00078.
Cinemark Sued by Moviegoer over Beer Size Discrepancy
Cinemark USA was hit with a proposed class action April 16 alleging that it is selling customers 24-ounce drink containers that actually only hold 22-ounces of liquid.
Shane Waldrop, who is bringing the lawsuit on behalf of himself and anyone else who has paid for the “24-ounce drink,” alleges he felt like the 24-ounce beer he purchased at the Cinemark Tinseltown 17 in Grapevine on Valentine’s Day was too small to actually hold that amount of liquid.
So he took the cup home and discovered the cup Cinemark represented as a 24-ounce receptacle could only hold 22-ounces of liquid, according to the lawsuit. Cinemark sells beer in containers advertised as 24 ounces and 20 ounces, respectively. Waldrop said he could tell the 24-ounce beer wasn’t what it was advertised to be when he held it next to a 20-ounce drink he had purchased.
The cost of what Cinemark labels a 24-ounce beer is $9.53 after tax, according to the complaint, while the 20-ounce beer is $8.44 after tax.
“This is especially misleading because the 24 oz drink should provide a deal for consumers over the 20 oz drink’s price: $0.37 per ounce vs. $0.39 per ounce. But due to the actual volume of 22 oz available in the ‘24 oz’ drink, the price is $0.40 per ounce making the larger drink more expensive per ounce, which is not a deal at all,” the suit alleges.
The case has been assigned to U.S. District Judge Amos L. Mazzant.
Waldrop is represented by Jarrett Ellzey Jr., Leigh Montgomery and Alexander Kykta of Ellzey & Associates and Eddy L. De Los Santos of Munsch Hardt Kopf & Harr.
Counsel for Cinemark had not filed an appearance as of Monday.
The case number is 4:24-cv-00321.
Western District of Texas
SEC Draws Suit over Trade Surveillance Database
The U.S. Securities and Exchange Commission has been accused by two investors and a self-described nonpartisan conservative think tank of violating the Fourth Amendment by unilaterally setting in motion “one of the greatest government-mandated mass collections of personal financial data in United States history: the Consolidated Audit Trail.”
The lawsuit, filed by the National Center for Public Policy Research, Erik Davidson and John Restivo on April 16, names the SEC, its chairman Gary Gensler and Consolidated Audit Trail as defendants.
“Without any statutory authority, SEC adopted a regulation, Rule 613, that forces brokers, exchanges, clearing agencies, and alternative trading systems (ATS) to capture data on every investor’s trades, from inception to completion,” the suit alleges. “The data is then stored in a centralized database that SEC and private regulators can mine for data and analyze in perpetuity.”
The lawsuit compares the SEC’s use of the technology to George Orwell’s “Big Brother” and to a phrase coined by British philosopher Jeremy Bentham during the French Revolution, the “Panopticon,” which he used to “describe the terror of a prison wherein all inmates would be subject to 24-hour surveillance by an unseen observer.”
“Such a system was unthinkable for free people, yet today SEC’s scheme frighteningly seizes the personally identifiable record of ‘every order, cancellation, modification and trade execution for all exchange-listed equities and options across all U.S. markets’ for everyone who trades on an American exchange — at least the Panopticon applied only to persons imprisoned for a crime,” the proposed class action lawsuit alleges.
The case has been assigned to U.S. District Judge Alan D. Albright and referred to U.S. Magistrate Judge Derek T. Gilliland.
The plaintiffs are represented by Margaret A. Little of the New Civil Liberties Alliance and Mark D. Siegmund of Cherry Johnson Siegmund James.
Counsel for the defendants had not yet filed an appearance as of Monday.
The case number is 6:24-cv-00197.
Fifth Court of Appeals, Dallas
Paxton Appeal in Disciplinary Case Tossed
A three-justice panel on April 18 determined in a 2-1 ruling that it didn’t have authority to hear an interlocutory appeal in the Commission for Lawyer Discipline case currently pending against Texas Attorney General Ken Paxton.
Paxton had appealed in March 2023 after Collin County District Judge Andrea K. Bouressa rejected his argument that the separation of powers doctrine mandated dismissal of the lawsuit. The state bar’s disciplinary arm brought this suit against Paxton based on his actions trying to overturn the results of the 2020 election.
The appellate panel agreed with Judge Bouressa, writing that “[s]ubjecting Paxton to disciplinary proceedings does not violate separation of powers; immunizing him does.”
“The substance of the Commission’s claims and the relief sought demonstrate the disciplinary action is not against Paxton in his official capacity,” the panel wrote. “Rather, it is against Paxton in his capacity as a Texas-licensed lawyer and an officer of the legal system; a legal system that obliges lawyers to maintain the highest standards of ethical conduct but subjects them to discipline when they fall below certain minimum standards necessary to preserve an open society founded on the rule of law.”
Justice Emily Miskel wrote that she believes the court does have jurisdiction to hear Paxton’s appeal and that she would have dismissed the Commission’s lawsuit with prejudice.
“The Commission is attempting to interfere with the attorney general’s exercise of his discretionary authority in carrying out his constitutionally assigned powers,” Justice Miskel wrote. “This attempt by the judicial branch to control how the attorney general may plead allegations in the state’s lawsuit is an unconstitutional encroachment on powers granted to the executive branch, and it violates the separation-of-powers article of the Texas Constitution.”
Justice Erin A. Nowell authored the majority opinion, joined by Justice Nancy Kennedy.
Paxton is represented by the office of the attorney general.
The Commission is represented by its own Michael G. Graham, Royce LeMoine and Seana Willing.
The case number is 05-23-00128-CV.
Sidney Powell Has Win Against State Bar Affirmed
Attorney Sidney Powell, who was a member of the legal team of former President Donald Trump that challenged in court the results of the 2020 election, has defeated a disciplinary action brought by the state bar of Texas.
A three-justice panel on April 17 affirmed dismissal of the lawsuit brought against Powell by the Commission for Lawyer Discipline. Dallas County District Judge Tonya Parker had in February 2023 granted Powell’s no-evidence motion for summary judgment.
The lawsuit alleges Powell violated disciplinary rules when she filed allegedly frivolous lawsuits challenging the results of the 2020 election. Powell filed a declaration that she didn’t draft the complaints, or compile or attach any exhibits.
Judge Parker noted in her order that she “did not consider any documents the bar failed to cite or identify.” The bar admitted, according to the opinion, that it misidentified or failed to include several exhibits it relied on in filing its second amended response.
“As the trial court correctly observed, the second amended response contained ‘only three citations to purported summary judgment evidence,’ specifically, two references to Exhibit F and one reference to Exhibit E (apparently intending to refer to Exhibit G). Indeed, the bar not only failed to cite to or argue about any additional documents — the documents are not mentioned at all,” the panel wrote.
The panel called out the bar’s “scattershot approach to the case,” which it said left the trial court and the appellate court to sort through the argument to determine what issues had actually been raised. The panel called the bar’s pleadings “imprecise” and its exhibits “carelessly filed.”
Justices Dennise Garcia, Maricela Moore Breedlove and Nancy Kennedy sat on the panel.
The Commission is represented by its own Michael G. Graham, Royce LeMoine and Seana Willing.
Powell is represented by Robert H. Holmes of Holmes Lawyer in Dallas.
The case number is 05-23-00497-CV.
Louisiana’s Fourth Circuit Court of Appeal
State Appellate Court Upholds Huntsman’s $93M Win
On Friday, Louisiana’s Fourth Circuit Court of Appeal issued a ruling affirming a $93 million jury verdict returned in favor of chemical manufacturer Huntsman International and Rubicon in its lawsuit against Praxair.
The dispute is rooted in industrial gas supply contracts entered into by the two companies or their predecessors between 1970 and 1998. Praxair agreed to sell certain amounts of carbon monoxide and hydrogen gas, which Huntsman uses to produce methylene diphenyl diisocyanate, called MDI in court documents, at its facility in Geismar, Louisiana.
The Praxair plant is adjacent to the Huntsman plant in Geismar, and the plants are connected via pipelines, according to court documents. After a three-week trial in April 2022, jurors found Praxair breached the agreements and caused Huntsman financial losses as a result.
Praxair is represented by Craig Isenberg, Chloe M. Chetta and Lance W. Waters of Barrasso Usdin Kupperman Freeman & Sarver and Thomas Flanagan, Anders F. Holmgren and Camille E. Gauthier of Flanagan Partners.
Huntsman is represented by Marie R. Yeates, James D. Thompson III, Christopher V. Popov and Michael A. Heidler of Vinson & Elkins, James M. Williams of Chehardy Sherman Williams Murray Recile Stakelum & Hayes and Robert L. Redfearn Jr. and Bruce Shreves of Simon, Peragine, Smith & Redfearn.
The case number is 2022-CA-0777.
U.S. Court of Appeals for the Fifth Circuit
Three Tight Votes, Three Denials of Rehearing En Banc
On April 16 and 17, the Fifth Circuit issued three opinions denying rehearing en banc by votes of 8-9, 8-9 and 8-8 in three separate cases.
On April 16, the court denied rehearing en banc in Book People v. Wong — in which booksellers are challenging a Texas law requiring they assign sexual content ratings to books to be sold to schools — and in Consumers’ Research v. Consumer Product Safety Commission — which argues the CPSC’s structure violates the separation-of-powers doctrine.
In Consumers’ Research, the following judges were in favor of rehearing: Edith H. Jones, Jerry E. Smith, Jennifer Walker Elrod, James C. Ho, Duncan, Kurt D. Engelhardt, Andrew S. Oldham and Cory T. Wilson. These judges voted against rehearing in that case: Chief Judge Priscilla Richman and Judges Carl E. Stewart, Leslie H. Southwick, Catharina Haynes, James E. Graves Jr., Stephen A. Higginson, Don R. Willett, Dana M. Douglas and Irma Carrillo Ramirez.
The denial of rehearing en banc in that case leaves in place the court’s Jan. 17 panel opinion — in which Judge Jones dissented — holding that the Consumer Product Safety Commission’s structure is not unconstitutional. But the court wrote that the case “tees up one of the fiercest (and oldest) fights in administrative law” and may attract the attention of the U.S. Supreme Court.
In Book People, Chief Judge Richman and Judges Jones, Smith, Elrod, Ho, Duncan, Engelhardt and Oldham voted in favor of rehearing. The nine who voted against rehearing were Judges Stewart, Southwick, Haynes, Graves, Higginson, Willett, Wilson, Douglas and Ramirez.
The denial of rehearing en banc in that case leaves in place the court’s unanimous Jan. 17 panel opinion upholding a district court’s injunction that barred the new rule, which book sellers argue violates the first and fourteenth amendments, from going into effect.
But it was an 8-8 tie that denied rehearing in In re Space Exploration Technologies. Judge Ho did not participate in the consideration of rehearing en banc. The judges who voted in favor of rehearing were Chief Judge Richman and Judges Edith Jones, Smith, Elrod, Willett, Duncan, Engelhardt and Oldham. Those against rehearing were Stewart, Southwick, Haynes, Graves, Higginson, Wilson, Douglas and Ramirez.
The denial of rehearing en banc in that case leaves in place the court’s divided March 5 ruling denying SpaceX’s request to keep a lawsuit it filed against the National Labor Relations Board in the Northern District of Texas alleging the structure of hearings before the NLRB violates the constitution.
Judge Elrod dissented from the panel in March, writing she believes the case belonged in the Southern District of Texas where it was filed, and not in the Central District of California where NLRB wanted it moved.
SpaceX contended that because it operates a major facility in the Southern District of Texas, filing suit in Brownsville was appropriate.
“NLRB cannot seek to condemn SpaceX’s past labor practices in the Southern District of Texas, bind SpaceX’s future practices in the Southern District of Texas, and at the same time avoid proper venue in the Southern District of Texas,” Judge Elrod wrote.
The cases numbers are 23-50668; 22-40328 and 24-40103.