In this edition of Litigation Roundup, the U.S. Securities and Exchange Commission’s Fort Worth regional office gets a final judgment against a Mansfield man accused in a $2.9 million fraud, and a company that offers an array of services to fuel retailers turns to the Texas Business Court in pursuit of $21 million in damages.
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.
Tarrant County District Court
Lynn Pinker Tells Judge Paxton Can’t Keep Litigating ActBlue Suit
Political fundraising platform ActBlue informed Tarrant County District Judge J. Patrick Gallagher on Friday that, pursuant to an order issued by a federal judge in Massachusetts, Attorney General Ken Paxton is enjoined from continuing to litigate his case against it.
In April, Paxton filed suit against ActBlue accusing the company of misleading consumers and allowing “fraudulent and foreign donations.” The state is seeking more than $1 million in damages and a court order that would permanently bar the website from implementing “unlawful, deceptive and misleading fundraising practices” and from facilitating “donor fraud.”
ActBlue followed up May 1, filing suit in federal court in Massachusetts, alleging the lawsuit was a sham and was not filed to protect Texans from violations of the state’s Deceptive Practices Act but instead to retaliate against ActBlue for promoting and enabling campaign contributions to Democratic candidates, including Paxton’s challenger, James Talarico.
U.S. District Judge Richard G. Stearns agreed Thursday, issuing a 15-page order granting ActBlue a preliminary injunction barring Paxton and the state from continuing to litigate the case in Tarrant County and barring the attorney general “from bringing any new state civil enforcement action premised on the same conduct.”
Judge Stearns wrote that the evidence Texas brought suit against ActBlue in bad faith “is sufficiently overwhelming to qualify this as one of the rare cases where the exception [to Younger]should apply.”
ActBlue is represented by Michael P. Lynn, Yaman Desai and Paulina Nenclares of Lynn Pinker Hurst & Schwegmann and Felicia H. Ellsworth, Ronald C. Machen and Matthew T. Jones of Wilmer Cutler Pickering Hale and Dorr.
Texas is represented by David Bizar and Jonathan Stone of the Texas attorney general’s office.
The case number is 096-376890-26.
Texas Business Court, First Division
Fuel Retailer Service Co. Files $21M Suit
United Uptime Services Inc. has filed a new lawsuit in the Texas Business Court accusing a software company of duping it into buying its products that caused $21 million in damages to its business.
United Uptime, a company that provides various services — including maintenance, installation and compliance — has accused Cognitus Consulting of fraudulent and negligent misrepresentation, fraud, breach of contract, breach of the covenant of good faith and fair dealing and breach of warranty.
“In addition to fraudulently inducing United Uptime to execute a contract, Cognitus thereafter breached that contract by providing United Uptime with a defective system that caused, and continues to cause, serious damage to United Uptime’s business,” the lawsuit filed June 11 alleges. “Cognitus then perpetuated its fraud by continuing to promise it could cure any defects in the software, convincing United Uptime to sign additional statements of work, and forcing United Uptime to pay for services that Cognitus could not perform, all while concealing problems with the software implementation Cognitus knew existed.”
According to the lawsuit, which has been assigned to Judge Bill Whitehill, problems started in late 2023 after United decided it wanted to unify six disparate software systems that were used to operate its various business units. The move was meant to maximize efficiency and employ software that could leverage AI and other new technologies.
United Uptime told the court it began investigating third-party software companies and requesting proposals from a select few, including Cognitus. In February 2024, Cognitus provided its proposal to United Uptime, and after numerous meetings, the companies entered a master services agreement in June 2024 under which Cognitus would implement the new software for a total of $1.67 million.
“To date, United Uptime has paid Cognitus approximately $4,331,538.64 for an [enterprise resource planning] product that does not perform according to industry standards, does not address United Uptime’s core business processes, and does not meet the specific pre and post agreement representations of Cognitus regarding performance and functionality.”
United Uptime is represented by Jamil N. Alibhai and Natalie S. Poole of Munsch Hardy Kopf & Harr and Marcus Harris and Nicollette L.K. Roggeveen of Taft Stettinius & Hollister.
Counsel for Cognitus Consulting had not filed an appearance as of Monday.
The case number is 26-BC01B-0050.
Northern District of Texas
Sidley Tapped to Represent Big 12 in Suit Against Texas Tech
The Big 12 has filed a federal lawsuit asking a judge to clarify that it has the authority to sanction Texas Tech University without running afoul of the Sherman Act in a move seeking to head off threatened litigation from the Texas attorney general.
The lawsuit comes in the wake of a Lubbock state district court judge’s June 8 ruling against the NCAA, clearing the way for Brendan Sorsby, who has admitted to placing multiple bets on football games, including 40 bets on his own teams’ games while at Indiana University, to be the Red Raiders’ starting quarterback this season. He has not yet played a game for Texas Tech and last season played for the University of Cincinnati, where he has admitted he had someone place $60,000 into a FanDuel account that he used to place bets.
The 47-page lawsuit, filed Sunday, names as defendants Ken Paxton, Texas Tech, Texas Tech University System, Chancellor Brandon Creighton, President Lawrence Schovanec and Athletic Director Kirby Hocutt.
“The attorney general asserts that the Big 12 will commit per se antitrust violations if it sanctions TTU in any way,” the lawsuit reads. “According to the attorney general, the Big 12 — an entirely lawful association in which TTU participates including by voting for sanctions against a different member institution — cannot impose any sanction against a member for voluntarily choosing to play a student who has acted contrary to the values, policies, and rules of the Conference, and violated the rules of TTU itself, and the NCAA, as well as myriad state laws, and thereby undercut the very essence of fair competition.”
Paxton sent a letter to the Big 12 Conference June 11 threatening to bring an antitrust lawsuit seeking damages exceeding $200 million against anyone seeking to sanction Texas Tech “for acting consistent with a valid court order.” In the letter, Paxton alleges any sanction “would constitute a horizontal agreement among competitors to disadvantage Texas Tech.”
The Big 12 told the court the heart of this case is about “routine association governance, rule enforcement, and self-regulation — not the sort of naked agreement among competitors that remotely could support per se condemnation.”
Noting that Texas Tech is a “voluntary member” of the conference, subject to its bylaws, rules, regulations and governance procedures, the lawsuit alleges the Big 12 bylaws “expressly authorize” it to determine whether a member school has “engaged in conduct warranting sanctions and, if so, to impose sanctions on that member institution.”
The case has been assigned to U.S. District Judge Karen Gren Scholer.
The Big 12 is represented by Natali Wyson, Margaret H. Allen, Christopher J. Van Slyke, Benjamin R. Nagin, Eamon P. Joyce and Jacob Steinberg-Otter of Sidley Austin.
Counsel for the defendants had not filed an appearance as of Monday.
The case number is 3:26-cv-01966.
SEC Gets Final Judgment Against Mansfield Man
A Mansfield man accused of duping investors out of at least $2.9 million has reached a settlement with the U.S. Securities and Exchange Commission ending a civil enforcement action against him.
Rajesh Markan, who faced parallel criminal proceedings in the Northern District of Texas, was accused by the SEC of soliciting 10 brokerage customers to invest about $2.9 million in what they were told was a private equity fund that was advised by a well-known New York firm. Markan allegedly told the investors after six-to-12 years, they could expect to receive above-market returns.
But the federal authorities alleged the fund was fake, there was no association with the New York firm and that Markan used most of the money for personal expenses.
Markan was named in a civil complaint filed by the SEC June 27, 2025. He was charged via a felony information in the criminal case in April 2025.
U.S. District Judge Brantley Starr entered final judgment in the civil case June 1. U.S. District Judge David Godbey entered final judgment in the criminal case Nov. 13, 2025, sentencing Markan to 48 months in prison on one count of securities fraud and ordering he pay $2.4 million in restitution.
Markan is represented in the criminal and civil matters by Kendall Castello of MC Criminal Law. Robert L. Webster of Dallas also represented Markan in the criminal case.
The SEC is represented by Tyson M. Lies and Robert J. Boudreau of the SEC’s Fort Worth regional office.
The case numbers are 3:25-cv-01653 and 3:25-cr-00145.
Eastern District of Texas
Frisco Couple Goes to Prison for Pyramid Scheme
About six months after a jury in Sherman convicted a Frisco couple of running an illegal pyramid scheme that defrauded more than 10,000 victims out of about $30 million, the duo has been sentenced to 40 years in prison.
Chief U.S. District Judge Amos L. Mazzant sentenced Marlon Moore, 39, and LaShonda Moore, 38, to prison June 9 for their roles orchestrating the fraudulent chain-referral pyramid scheme called “Blessings in No Time.” The couple filed notice they were appealing their sentences to the U.S. Court of Appeals for the Fifth Circuit June 10.
“The Moores’ get rich quick scheme has earned them a well-deserved stay in federal prison,” U.S. Attorney Jay Combs said in a news release. “Playing games with other peoples’ money while promising unrealistic returns is stealing and will be prosecuted and punished.”
According to court documents, the couple founded BINT during the pandemic and operated the scheme from June 2020 through June 2021, promising investors 800 percent returns on investments of $1,4000. The Moores told investors the invitation-only community was established to bestow “blessings” on those who needed economic help during the pandemic.
They were convicted in January of one count of conspiracy to commit wire fraud, five counts of wire fraud and three counts of money laundering.
The scheme also resulted in a July 2023 final judgment from Collin County District Judge Andrea K. Bouressa ordering the couple to pay $10.76 million to the state. Texas had sued the couple in 2021, accusing them of using an appearance on the Oprah Winfrey Network as a means to bolster credibility while representing themselves as the operators of a faith-based wealth building organization.
Marlon Moore represented himself with Kyle Therrian and Aubrey Noonan of Rosenthal, Kalabus & Therrian serving as standby counsel.
LaShonda Moore represented herself with Kambira Jones Morgan of The Jones Legal Defense Group serving as standby counsel.
The case was prosecuted by Abe McGlothin Jr., Adam L.D. Stempel, Robert Wells, Sean Taylor and Theodore M. Kneller of the Department of Justice.
The case number is 4:23-cr-00243.
Southern District of Texas
CEO Cops to Falsifying Wastewater Tests
The CEO of a lab that sampled and tested wastewater from treatment facilities and two of his former colleagues have admitted to federal authorities they violated the Clean Water Act by falsifying certain results.
Derek McCoy, 52, the CEO of North Water District Laboratory Services; Deena Higginbotham, 56, the director of client services there; and John Montgomery, 60, who worked as a compliance coordinator at an unnamed “Company A,” according to the indictment, have pleaded guilty to falsifying or aiding and abetting the falsification of data required under state and federal law. All three were indicted in July 2025 and entered plea agreements June 11.
The charge is punishable by up to two years in prison and a $250,000 fine.
The federal government alleges that for three years they worked together to falsify certain records to ensure pollutant limits did not exceed allowable amounts of ammonia, E.coli and phosphorous. Those falsified wastewater testing results were then sent to the Environmental Protection Agency and the Texas Commission on Environmental Quality.
U.S. District Judge David Hittner has scheduled sentencing for the trio to take place Sept. 3.
“By submitting falsified data, these defendants undermined the integrity of a program specifically designed to safeguard human health,” acting U.S. Attorney John G.E. Marck said in a news release. “Today’s guilty pleas show that we and our partners at EPA … as well as TCEQ, are committed to rooting out and holding accountable those who not only violate the law but also endanger the safety and erode the trust of the public we serve.”
Higginbotham is represented by Charles Flood of Flood and Flood. Montgomery is represented by Erin Epley of Houston. McCoy is represented by Gary Tabakman of Houston.
The case is being prosecuted by Nathan Stopper, Steven Schammel and Liesel Roscher of the Department of Justice.
The case number is 4:25-cr-00404.
Texas Supreme Court
Justices Grant Exxon Review in Insurance Fight
Exxon Mobil Corporation will get a chance to argue before the state’s high court that Lexington Insurance Company has wrongly denied it coverage for claims stemming from an explosion and fire at its Beaumont refinery.
The litigation arises from the 2013 refinery explosion that injured three subcontractors who were working for Brock. According to court filings, Exxon had secured an umbrella policy with Lexington that had a $25 million per-occurrence limit.
“Lexington agreed it was reasonable to settle rather than risk a substantial adverse judgment. But Lexington denied coverage,” Exxon argued in its petition for review. “It claimed that the umbrella policy’s employer’s liability exclusion, which precludes coverage for injury to ExxonMobil employees, barred coverage for claims by Brock employees against ExxonMobil.”
Lexington, meanwhile, has argued that the umbrella policy “was not intended to provide workers’ compensation or employer’s liability coverage.”
“The umbrella policy’s workers’ compensation exclusion bars coverage for ‘any obligation’ Exxon has pursuant to workers’ compensation laws, precluding coverage for Exxon here,” the insurer argues.
The court has scheduled oral arguments for Oct. 7.
Exxon is represented by Nicholas M. Bruno, Russell Post and Erin Huber of Beck Redden, Jack Carroll, Gilbert I. Low and Nathan M. Brandimarte of Orgain, Bell & Tucker, Mike Morris of Miller, Scamardi, Carrabba & Burgess and Brett R. Sheneman of Exxon Mobil Corporation.
Lexington is represented by Thomas Wright, Natasha Taylor and Zachary Bowman of Wright Close Barger & Guzman and Darin Brooks, Kristen Kelly, Brian Waters and Julia Bobbitt of Gray Reed.
The case number is 25-0410.
Chamberlain Granted Review in Breach Suit
The Texas Supreme Court on Friday granted a petition for review filed by Chamberlain, Hrdlicka, White, Williams & Aughtry in a case where it alleges erroneous jury instructions caused it to be hit with a damages award “almost 20 times” what was allowable in a breach of contract suit.
According to court documents, the law firm entered an agreement with a cost-reduction consultancy company, ESL Ventures, under which the company would present the firm with recommendations on how it could cut costs. The deal included language that allowed Chamberlain to terminate at any time, but it also entitled ESL to an early termination fee of $40,000 and a higher fee if Chamberlain terminated after ESL presented its report that would equal 50 percent of any projected cost savings.
Chamberlain terminated the contract and offered to pay ESL the $40,000 but ESL, according to the lawsuit, refused to accept the payment and filed a breach of contract lawsuit instead.
At the close of evidence, ESL asked for and received a directed verdict that Chamberlain had filed to pay the $40,000 termination fee. Chamberlain argued in its petition that ESL “did not request a jury question on its high fee breach theory,” and the only damages question submitted to the jury instructed them that the court had determined as a matter of law that the firm failed to comply with the agreement.
“Having been broadly instructed that the firm failed to comply with the contract, the jury unsurprisingly awarded ESL damages that accorded with the high fee breach on which ESL’s trial evidence had focused: $700,000, almost 20 times the low fee’s $40,000 cap,” the petition reads.
ESL argued that the plain terms of the agreement contained “no ‘cap,’ no ‘high fee’ and no ‘low fee,’” and told the court, “those terms were contrived by Chamberlain to arouse attention for potential review.”
The court has scheduled oral arguments for Nov. 3.
Chamberlain is represented by Wallace B. Jefferson, Rachel A. Ekery and Nicholas Bacarisse of Alexander Dubose & Jefferson and Steven J. Knight and Amy Jo Foreman of Chamberlain.
ESL is represented by Keith M. Remels of Dow Golub Remels & Gilbreath.
The case number is 24-0825.
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