In this edition of Litigation Roundup, Texas loses an appeal to the Fifth Circuit, universities battle over alleged trademark infringement, a religious society must pay delinquent taxes after not filing for exemption and farmers throw a water fight with a Dallas-based hedge fund manager.
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.
Fifth Circuit Court of Appeals
A Physical Majority Presence is Not Required of Representatives, Fifth Circuit Rules
The Fifth Circuit Court of Appeals reversed the Northern District’s judgment in favor of Texas Friday and vacated its permanent injunction limiting enforcement of the Pregnant Workers Fairness Act against Texas.
During the COVID-19 global pandemic, the U.S. House of Representatives adopted a rule to allow remote voting. The lawmakers then passed the Consolidated Appropriations Act of 2023, which was signed into law by the president.
The state of Texas sought to invalidate portions of the multitrillion-dollar omnibus appropriations bill, arguing that the act was invalid because House vote on the bill violated the Constitution’s quorum clause.
The district court held that the quorum clause required majority of members to be physically present on the House floor at the time of the vote to duly pass the Consolidated Appropriations Act of 2023. The court enjoined the government from enforcing the portion of the legislation that it concluded Texas had standing to challenge.
Judge James Graves Jr. wrote the opinion for the majority. The panel included Judges Stephen Higginson and Cory Wilson.
“After reading the text, analyzing binding and persuasive authority, and reviewing our Nation’s history and tradition, we conclude that the Quorum Clause does not require physical presence,” Judge Graves wrote.
Judge Wilson wrote a dissenting opinion stating he disagrees with the interpretation of the Quorum Clause.
“Because Congress is not free to define the Constitution’s quorum requirement out of existence, I would hold, as the district court did in its trenchant and thorough analysis, that the House acted outside its authority in passing the Act and that the Act is therefore constitutionally infirm,” Judge Wilson wrote.
William Cole, Jacob Beach, Clayton Calvin, Robert Henneke, Kateland Jackson, Ryan Kercher, Matthew Miller, Ethan Szumanski and Chance Weldon represented the state of Texas.
Courtney Dixon, Clayton Bailey, Michael Raab and Gerard Sinzdak represented the defendants.
The case is State of Texas v. Pamela Bondi, et al., 24-10386.
U.S. Court of Appeals for the District Court of Columbia
Texas Nursing Homes Escape Whistleblower Fraud Litigation
Five Meridian Care nursing homes and their owner/operators will not have to face kickback allegations under the False Claims Act by a whistleblower that the companies made unlawful payments for patient referrals.
In a 2-1 decision, the U.S. Court of Appeals for the District of Columbia ruled that the complaint by the whistleblower and plaintiff, Terri Winnon, “fails to meet the original source requirement” of the FCA and that the allegations are “too thinly pleaded” to prevail.
Winnon, a former math teacher who became an administrative assistant to one of the care facility operators, filed a lawsuit in 2017 claiming that the defendants, which operate nursing care centers from San Antonio to Galveston, paid off doctors and hospital discharge planners for patient referrals to skilled nursing facilities and inflated bills with superfluous therapy services. The lawsuit states that the owners then sought government reimbursement for those costs.
RJ Meridian Care is represented by Joe Whitley and Luke Cass of Womble Bond Dickinson. Whitley is the former U.S. attorney in Atlanta and served as the first general counsel of Homeland Security under President George W. Bush.
Joshua Russ and Kendal Simpson of Reese Marketos and Rachel Rose of Houston represented Winnon.
The case is U.S. v. ex rel. Winnon v. Lozano, 23-7139.
Unified Patent Court, European Union
Patent Infringement Lawsuit of Popular Shoe Brand Expands to the European Union
HandsFree Labs expanded its patent lawsuit against Skechers to the European Union under the Unified Patent Court last week.
If HandsFree Labs’ injunction is approved, Skechers will have to halt the sale of its “Slip-in” products in all EU member states.
“As the holder of more than 200 patents and applications worldwide, HandsFree Labs is committed to protecting our hands-free footwear technology from those who seek to profit from our intellectual property and duplicate our cutting-edge products. Today’s filing in the EU is further proof that we will shield our innovations from patent infringers across all markets,” Gareth Hosford, CEO of HandsFree Labs and Kizik, said in a statement.
HandsFree Labs filed its first lawsuit against Sketchers last month in the Eastern District of Texas, claiming the popular shoe brand infringed on six of its patents with its Skechers Hands Free Slip-ins shoe line.
HandsFree Labs is seeking royalties for the past several years.
HandsFree Labs is one of three plaintiffs in the suit, alongside Kizik, which licenses HFL patents and Fast IP, the IP holding company that owns the HFL patents.
Boies Schiller partner Ryan Dykal is representing Hands Free Labs and Kizik.
McKool Smith principal Samuel Baxter is representing Skechers. He did not immediately respond to requests for comment.
Skechers and G3 Capital are in the final stages of a $9.42 billion acquisition.
U.S. District Court for the Western District of Texas
Baylor, Boston Battle Over Use of Interlocking ‘BU’ Mark
Baylor University has filed a lawsuit against Boston University for allegedly committing trademark infringement of its “BU” logo.
The complaint filed earlier this month noted that it is “limited in scope” and does not object to the university’s use of its initials “BU.” Baylor objects to the university’s design interlocking the “BU” initials, which it claims are “identical or strikingly similar” to Baylor’s federally registered marks.
Baylor states in the complaint that it first became aware of the alleged infringing act in 2018 with the promotion and sale of three hat styles through Boston’s “BU Campus Store Spirit Shop.” In 2021, Baylor communicated its concern with Boston when it appeared the use of the logo was expanding.
Boston did not cease using the design of the logo and now uses it in connection with its club sports, including women’s rugby, sailing, men’s volleyball and cycling.
Baylor claims the use of the interlocking BU mark is “likely to cause confusion, to cause mistake, or to deceive consumers and potential consumers of the parties as to some affiliation, connection, or association of Defendant or its offerings with Baylor, or as to the origin, sponsorship, or approval of Defendant’s goods or services by Baylor.”
Along with federal trademark infringement, Baylor is also claiming federal unfair competition and false designation of origin, Texas statutory trademark infringement and common law trademark infringement.
Baylor is seeking an injunction to stop Boston from using the interlock BU mark and to destroy all goods with the mark.
The case has been assigned to Judge Alan Albright.
Wendy Larson of Pirkey Barber is representing Baylor University. She did not immediately respond to requests for comment.
Counsel for Boston University have not filed appearances. The university declined to comment.
The case is Baylor University v. Trustees of Boston University, 6:25-cv-00352.
U.S. District Court for the Eastern District of Texas
Toyota Faces E-Key Vehicle Technology Patent Infringement Lawsuit
Emerging Automotive has filed another lawsuit against Toyota for allegedly infringing on three of its patents relating to its electronic key systems.
One of the patents protects systems for transferring user profiles between vehicles, and the other two handle the systems for sharing e-keys for vehicle access.
In 2023, Emerging Automotive filed a lawsuit against Toyota claiming it infringed on several patents on e-key and remote programming. The case was consolidated with a similar lawsuit against Kia.
Judge Rodney Gilstrap stayed the case in June pending the resolution of patent validity challenges before the Patent Trial and Appeal Board.
This case has been assigned to Judge Gilstrap.
Emerging Automotive is requesting a jury trial and damages.
Miller Fair Henry partner Andrea Fair is representing Emerging Automotive. She did not immediately respond to requests for comment.
Counsel for Toyota have not filed appearances. Toyota did not immediately respond to requests for comment.
The case is Emerging Automotive LLC v. Toyota Motor North America Inc., 2:25-cv-00782.
Former Amdocs Employee Claims Breach of Fiduciary Duty Over 401(k) Plan
A former Amdocs Inc. employee claims the company’s 401(k) plan should have been swapped for a better alternative due to a poorly performing stable value fund in a federal class action lawsuit.
Veronica Wolfe invested in the Prudential Guaranteed Income Fund in the 401(k) plan while employed with the communications software company. She claims she was unaware that her employer breached their fiduciary duty and engaged in conduct violating the Employee Retirement Income Security Act of 1974 until shortly before the lawsuit was filed.
The stable value fund held about $118 million worth of plan assets in 2023 and produced minimal returns while exposing the employees to risk, Wolfe claims.
The case was initially filed with the Northern District Court but was transferred to the Eastern District and assigned to Judge J. Campbell Barker.
Wolfe is seeking $150,000 in damages, a jury trial and a proposed class of more than 5,000 people.
Daniel White of Ward White represents Wolfe. He did not immediately respond to requests for comment.
Counsel for the defendants have not filed appearances.
The case is Veronica Wolfe v. Amdoc Inc. et al., 3:25-cv-02186.
Smartphone camera patent clash nears settlement
A Nevada-based technology company and a Chinese global electronics manufacturer have agreed in principle to settle a patent infringement dispute over smartphone camera technology, according to a court filing last week in the Eastern District of Texas, Marshall Division.
C47 Technologies LLC and TCL Technology Group Corp., along with related affiliates TCL Communication, TCL Electronics and TCT Mobile (US) Inc., jointly notified U.S. District Judge Rodney Gilstrap that they had agreed to terms and were finalizing settlement documents.
In their Aug. 13 joint filing, the companies requested a 14-day stay of all deadlines, including pending motions, actions and deadlines, to allow time to finalize the agreement and prepare a dismissal.
The parties said the stay, through Aug. 27, was “not for delay, but to allow for continued efforts toward an orderly resolution of this lawsuit.”
The joint motion also addressed Judge Gilstrap’s prior order requiring the parties to submit a joint notice explaining why they failed to provide a claim construction statement — a key step in patent cases where the parties interpret important patent terms. The court had issued an order demanding an explanation.
According to the motion signed by attorneys for both companies, the oversight happened because the parties had reached an agreement in principle around July 23 and “mistakenly thought” they had already submitted their settlement notice, “but they realize now they did not submit it.”
“They apologize sincerely for failure to file this Notice earlier and respectfully notify the Court that the settlement papers are nearly complete,” the filing said.
They said they planned to move for “dismissal pursuant to the settlement as promptly as possible and will keep the court apprised of developments.”
Las Vegas-based C47 sued TCL and its units in June 2024, alleging that the tech company infringed on its U.S. patent by placing cameras with backlighting detection methods inside smartphones.
TCL, headquartered in Huizhou, China, is one of the world’s largest television makers and a significant player in the mobile phone market through its Alcatel- and BlackBerry-branded devices. Its U.S. affiliate, TCT Mobile, is based in New Jersey.
If U.S. Judge Gilstrap grants the request for a stay, the case will be paused through Aug. 27 while the parties finalize their agreement.
Attorney Christopher Honea of Garteiser Honea in Tyler represented C47 Technologies, while Theodore Angelis of K&L Gates LLP in Seattle represented TCL and its affiliates.
The case is C47 Technologies LLC v. TCL Technology Group Corp., 2:24-cv-00417.
Eleventh District Court of Appeals, Eastland
Religious Society Has to Pay Delinquent Property Taxes, Eleventh Court of Appeals Affirms
In a memorandum opinion, the Eleventh Court of Appeals affirmed the Taylor County Court’s judgment in a property dispute case.
The Central Appraisal District of Taylor County filed a tax lawsuit against KOYOE Society for delinquent property taxes on four pieces of real property.
There was no dispute that the taxes were unpaid.
While Steve Van Horne is not an attorney, he filed a “notice of special appearance” on behalf of the KOYOE Society, which he claimed “is a religious entity” and that he is its minister and overseer. He appeared at the bench trial as an “advocate” for the KOYOE Society.
The argument at trial was that KOYOE Society is a religious organization that is “not part of the political society of Texas” and is not subject to its properties being taxed.
The district claimed the KOYOE Society had not applied for a religious exemption.
Following a bench trial, the 104th District Court ruled in favor of the district and awarded $47,006.41 for delinquent property taxes and a title research fee.
Van Horne appealed on behalf of KOYOE Society and challenged the 11 issues in the trial court’s judgment. Many of the issues were “couched” as jurisdictional issues.
The appellate court sided with the trial court
Chief Justice John Bailey wrote the majority opinion for the appellate court. The panel included Justices W. Stacy Trotter and Bruce Williams.
The KOYOE Society was an appellant in KOYOE I, another tax suit involving the district. The appellate court wrote that KOYOE’s jurisdictional claims are essentially the same as those made in KOYOE I. The court rejects its claims for the same reasons in this case.
Chief Judge Bailey wrote that the KOYOE Society was not harmed by the trial court’s evidentiary ruling and that its jurisdictional claims are unavailing because they are not supported by law.
McCreary Veselka Bragg & Allen shareholder Nicholas Goettsche represented the Central Appraisal District of Taylor County.
The case is KOYOE Society v. Central Appraisal District of Taylor County, 11-23-00199-cv.
369th District Court
Water Fight Ensues Between Farmers and Hedge Fund Manager
A group of East Texas farmers and a water supply corporation filed a lawsuit last week against a local groundwater conservation district’s handling of permit applications.
The complaint states the case is about the “exploitation of limited precious groundwater resources” by Dallas-based hedge fund manager Kyle Bass, “who has manipulated the District’s process to his advantage (and to the detriment of the local communities) through improper board member participation.”
Bass’ companies allegedly filed permit applications with the Neches & Trinity Valleys Groundwater Conservation District requesting authorization to drill 43 high-capacity water wells and ultimately produce more than 15 billion gallons of groundwater annually from the Carrizo-Wilcox Aquifer. He allegedly intends to export the groundwater outside the district and sell it for profit.
“Thousands of residents and businesses protested the applications based on the impacts this large project will have on their wells, which are vital to their lives and livelihood,” the complaint reads. “Unfortunately, Mr. Bass and his entities only seem interested in returns on investments as opposed to impacts on existing users and the resource.”
The Neches & Trinity Valleys Groundwater Conservation District serves Anderson, Cherokee and Henderson counties.
Bass’ companies allegedly hired one board member to drill more than 40 high-capacity wells. The director eventually resigned from the board. A second director also serves as a councilmember for the city of Palestine, the Anderson County seat, which the complaint argues makes him ineligible for appointment to the board.
The plaintiffs include Sanderson Farms, 4K Farms, Charlie Parker Farms, Arc Cattle & Poultry, Thuy Tien Farm, Circle S Farms and Consolidated Water Supply Corporation.
The plaintiffs are asking the court to issue a mandamus requiring the district to remove the alleged ineligible board member and appoint a new board member.
The plaintiffs are also seeking an injunction to halt the district from issuing drilling permits based on pending applications and the State Office of Administrative Hearings from conducting contested hearings.
A hearing for a temporary injunction was held this afternoon before Judge Michael Davis.
Counsel for both parties did not immediately respond to requests for comment.
Clayton Bailey and Jared Wilkinson of Bailey Brauer, E. Spencer Nealy and Patrick Lindner or Davidson Troilo Ream & Garza, Stacey Reese, David Deasonson and Will Gray of Pakis, Giotes, Burleson & Deasonson are representing the plaintiffs.
John Stover of Skelton Slusher Barnhill Watkins Wells is representing Neches & Trinity.
The case is Sanderson Farms LLC, et al. v. Neches & Trinity Valleys Groundwater Conservation District, DCCV25-5642-369.
Illinois Circuit Court, Adams County
Illinois court rejects Texas House bid to enforce lawmaker arrests
An Illinois court dismissed an emergency request from the Texas House of Representatives seeking to hold state Democratic lawmakers in contempt and to return them to Austin after they fled to avoid appearing in a special legislative session on new congressional maps.
The Circuit Court of the 8th Judicial Circuit in Adams County, Illinois, said it lacked the “inherent authority” to enforce Texas “quorum warrants” — civil arrest orders issued by the Texas House to force absent members to return to the Capitol.
Circuit Court Judge Scott D. Larson said that his court lacks the “power to direct Illinois law enforcement officers, or to allow the Sergeant-at-Arms of the House of Representatives of the State of Texas, or any officer appointed by her, to execute Texas civil Quorum Warrants upon nonresidents temporarily located in the State of Illinois.”
Larson said the Texas House had petitioned the Illinois judiciary to assume authority to punish lawmakers for conduct reserved exclusively for the Texas Legislature. He also stressed that Texas quorum warrants were geographically limited, authorizing enforcement only within the state of Texas.
“This court does not have the inherent power to initiate, consider, and determine whether the actions of foreign legislators while in a special legislative session were contumacious,” the ruling stated.
The Texas House sought an emergency ruling to hold the Democratic representatives in contempt, issue civil arrest warrants in Illinois and return them to Texas for legislative proceedings. The petition cited the U.S. Constitution’s full faith and credit clause, arguing that Texas warrants should be recognized as valid in Illinois.
But the court rejected that argument, saying there was no underlying Texas court order to enforce.
“Petitioner has failed to present a legal basis for the court to obtain subject matter jurisdiction over this cause of action,” the ruling said. As a result, the judge declined to consider issues of personal jurisdiction, venue or the merits of the Texas House’s claims.
Unlike typical contempt cases, which involve violations of court directives, the judge wrote that the Texas House was asking Illinois courts to initiate new contempt proceedings — something beyond their jurisdiction.
The lawmakers fled to Illinois to deny a quorum in the Texas House. According to the Texas Constitution, two-thirds of House members must be present to have a quorum to conduct business. In early August, Democrats staged a walkout to prevent a quorum and stop a Republican-led congressional redistricting plan. On Monday, the Texas House gaveled in a second special session called by Gov. Greg Abbott with a quorum for the first time in two weeks as Democrats slowly started returning to Austin.
Minority Democrats have previously left the state to block Republican-led legislation, often traveling to neighboring states where Texas law enforcement lacks authority to compel their return.
In 2021, over 50 Democrats left for Washington, D.C., to block a GOP-supported voting bill before returning after nearly a month and a half.
Delaware Superior Court
Susman Godfrey Leads Dominion to $67M Settlement with Newsmax
The digital media operation Newsmax announced in public documents Monday that it has settled its defamation lawsuit brought by Dominion Voting Systems for $67 million.
Led by lawyers for Susman Godfrey, Dominion sued Newsmax in 2021, claiming that the TV network knowingly broadcast false information accusing the voting machine company of rigging votes in the 2020 presidential election.
Susman Godfrey also led Dominion’s litigation against Fox News, which resulted in a $787.5 million settlement in 2023.
The Susman Godfrey lawyers who have worked on the litigation include Stephen Shackleford and Mark Hatch-Miller in New York, Davida Brook in Los Angeles and Jonathan Ross, Mary Kathryn Sammons, Laranda Walker and Elizabeth Hadaway in Houston.
Other lawyers for Dominion include Brian Farnan and Michael Farnan of the Farnan Law Firm in Wilmington.
Lawyers at Todd & Weld and Duane Morris represent Newsmax.
The case is US Dominion Inc. v. Newsmax Media, N21C-08-063.
Mark Curriden and Mark Smith contributed to this report.
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.
The federal government’s bankruptcy court watchdog asked a federal judge Friday to reject efforts by Jackson Walker to individually settle claims against it involving the law firm’s critical role in the secret romance scandal between one of its partners and former Houston Bankruptcy Judge David Jones.
The first lawsuit in the aftermath of the Fourth of July Kerr County floods was filed in Kerr County District Court last week. The family of a woman who died in the flooding alleges an RV park committed negligence and is seeking a jury trial and more than $1 million in damages.
An apartment complex damaged by Hurricane Harvey sees a reversal by the Fifth Circuit in a constitutional takings case that the city of Houston shouldn’t have denied its request for a repair permit. The case returns to the Southern District for further proceedings to compensate the apartment complex.
A settlement between Match Group and the Federal Trade Commission will resolve the dating website’s alleged misleading practices. The Dallas-based company has agreed to pay $14 million and clarify its “guarantees.”
Nathan Reis entered his guilty plea on the day his trial was to begin before U.S. District Judge Reed O’Connor in Fort Worth. Reis’ wife, former Phoenix TV news anchor Stephanie Hockridge, was convicted by a jury in Judge O’Connor’s court in June.