In this edition of Litigation Roundup, a lawsuit Mercuria Energy American filed against a former trader won’t be going to trial after all, and the U.S. Securities and Exchange Commission gets a $7 million final judgment in a case against a forex trader from Houston it alleged was operating a Ponzi scheme.
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.
Harris County District Court
Settlement Reached in Mercuria Energy Case Against Trader
A trial that had been scheduled to begin next week in a lawsuit Mercuria Energy America brought against a former trader will not take place after the parties reached a settlement agreement.
Mercuria had filed suit in February 2025 against Jason “Jimmy” Michael Powers, who was hired in June 2022 to be head of its South Gas Trading team, alleging he cost the company “tens of millions of dollars” in damages by mismarking the value of natural gas derivative contracts.
Trial had been scheduled to begin May 4, but the parties filed an agreed motion explaining a settlement had been reached in March, and a Harris County district judge signed an order dismissing the case in accordance with the parties’ agreement March 25.
In its lawsuit, Mercuria explained that in 2024 it noticed the marks Powers’ assigned “began to deviate noticeably from the marks given by Totem, a service that provides independent mark-to-market prices” that Mercuria uses to check its book valuations.
“When MEA’s head of natural gas asked Powers to justify the deviation … Power’s cited unexecuted bids for physical natural gas to be delivered years in the future to substantiate his valuation of a financial position in natural gas derivatives,” the lawsuit alleges. “This is not an accepted valuation technique in MEA or the industry.”
Powers lodged counterclaims in April alleging breach of contract and violation of the Texas Theft Liability Act, telling the court Mercuria had agreed to pay him $3 million “if it terminated him without ‘just cause.’”
“Yet, to date — despite written demand — Mercuria has refused to pay Powers any of his 2022 and 2023 deferred bonus compensation,” Powers alleges in the lawsuit. “Instead, Mercuria expropriated that compensation. Therefore, these counterclaims are designed to remedy Mercuria’s egregious violations of Powers’ rights under his contractual agreements with Mercuria … and thereby prevent Mercuria from subjecting any other employee to similar illegal conduct in the future.”
Powers is represented by Dennis Herlong and Scott Newar.
Mercuria is represented by Chris Reynolds and Harris Y. Wells of Reynolds Frizzell.
The case number is 2025-11886.
Southern District of Texas
Jackson Walker Successfully Defends Client Against Kash Patel’s Defamation Claims
A defamation lawsuit FBI Director Kash Patel filed against a former agency director has been dismissed by a federal judge in Texas.
Patel filed his lawsuit June 2 against Cesare Frank Figliuzzi Jr., who is the former assistant director for counterintelligence at the FBI, alleging comments he made about Patel on MSNBC constituted defamation.
In the six-page lawsuit seeking more than $75,000 in damages, Patel alleged that during a May 2 appearance on MSNBC, Figliuzzi said, “Reportedly, [Patel] has been visible at nightclubs far more than he has been on the seventh floor of the Hoover building.”
“This statement is entirely false,” the lawsuit alleged. “Since becoming director of the FBI, Director Patel has not spent a single minute inside of a nightclub. There was no basis for defendant’s fabrication, and defendant’s use of the weasel word, ‘reportedly,’ is itself a fabrication, as defendant did not rely on reporting by any other person.”
U.S. District Judge George C. Hanks Jr. entered final judgment dismissing the case April 21. He wrote in the 10-page order that he agreed with Figliuzzi that his comments, when analyzed by a person of ordinary intelligence, would be perceived as “rhetorical hyperbole.”
“The Court finds that Figliuzzi’s statement, when taken in context, cannot have been perceived by a person of ordinary intelligence as stating actual facts about Patel,” Judge Hanks wrote. “… A person of reasonable intelligence and learning would not have taken his statement literally that Dir. Patel has actually spent more hours physically in a nightclub than he has spent physically in his office building.”
Figliuzzi is represented by Marc A. Fuller, Abigail Lahvis and Maggie Burreson of Jackson Walker, Kenneth P. Held and N. Scott Fletcher of Fletcher Held, and Peter Steffensen and Thomas S. Leatherbury of the Southern Methodist University Dedman School of Law.
Patel is represented by Jason Greaves of Binnall Law Group.
The case number is 4:25-cv-02548.
Forex Fraud Defendant Ordered to Pay $6.6M in Restitution
The U.S. Securities and Exchange Commission announced on Friday it had obtained a $7 million final judgment in a case where it alleged a man, via two companies he controlled, was operating a Ponzi scheme.
John Fernandez, who controlled Avail Progression and Elite Generators, had promised investors guaranteed returns by trading their funds in the forex markets. But in reality, prosecutors alleged, he was using most of the investors’ cash to make Ponzi payments to earlier investors and to cover personal expenses.
Fernandez has been permanently enjoined from issuing, offering, purchasing or selling any security “except for purchases or sales for his own personal accounts” and can no longer act as an officer or director of a public company.
Fernandez must also pay about $5 million in restitution and prejudgment interest totaling about $1.6 million. He also owes a $472,902 civil penalty.
U.S. District Judge Ewing Werlein Jr. signed off on the final judgment in the case April 14.
The case was prosecuted by Tyson Lies and Matthew J. Gulde of the U.S. Securities and Exchange Commission.
Fernandez is represented by Philip Hilder and Stephanie K. McGuire of Hilder & Associates.
The case number is 4:22-cv-04365.
Western District of Texas
Bitcoin Mining Co. Beats Infringement Claims
A team of lawyers from Holland & Knight have successfully defended a bitcoin mining client against claims it infringed patented technology used to extend the life of data center equipment.
Green Revolution filed its lawsuit in March 2024, alleging Riot Platforms Inc. had infringed its patented technology. Green Revolution initially claimed infringement of two cooling technology patents, but by the time the jury got the case only one patent was at issue. Green Revolution was seeking more than $52 million in damages and had asked the jury to also award a running royalty that could have exceeded $200 million through the expiration of the patent.
U.S. District Judge Alan Albright presided over the case. The trial began April 13 and the jury returned its verdict April 17.
Riot Platforms and its subsidiaries are represented by Justin Cohen, Rob Hill, Amy Simpson, Morgan Delabar, Billy Oliver and Sadie Mlika of Holland & Knight.
Green Revolution is represented by Ashley N. Moore, Catherine Taylor, Stephen M. Ullmer, Aimee M. Housinger, Alyssa Johnston, Peter S. Wahby, Phillip M. Aurentz, Sarah-Michelle Stearns, Steven Laxton and Zachary H. Ellis of Greenberg Traurig and Deron R. Dacus of The Dacus Firm.
The case number is 6:24-cv-00152.
Hedge Fund Manager Cops to Tax Evasion
A man who used to live in Austin and managed a hedge fund focused on cryptocurrency investments has pleaded guilty to evading tax liabilities.
Justin Ryan Schmidt, who is a Cayman national and has renounced his U.S. citizenship, entered the guilty plea April 20 before U.S. District Judge Susan Hightower and his sentencing has been set for Sept. 18. He faces up to five years in prison.
Prosecutors allege that between 2020 and March 2022 Schmidt earned more than $6 million from his hedge fund but failed to report any of that on tax returns in 2021 and 2022 and instead told the government he earned $5,000 or less for both years. The government alleges he owes more than $1.5 million in income tax liabilities.
The government also alleges Schmidt purchased real estate in Colorado in 2023 for $5.8 million and a few months later sold the property for $9 million but failed to report his gains from the sale and evaded paying taxes on that, too.
Schmidt is represented by Brian Roark of Botsford & Roark and Mark Hull of The Hull Firm.
The case is being prosecuted by Michael C. Boteler and Michael Jones.
The case number is 1:26-cr-00094.
Eastern District of Texas
Judge Wipes Out $175M Patent Win Against Verizon
A patent holder’s decision to wait six years after discovering Verizon was infringing its technology to lodge the claims in court has doomed a $175 million jury award secured last year.
Tyler-based technology firm Headwater Research, which filed suit in July 2023, secured the jury award in July, after a jury found Verizon willfully infringed two of its patented wireless communications technologies through the sale of Apple and Android tablets and cell phones.
U.S. District Judge Rodney Gilstrap in February held a one-day bench trial to consider two defenses raised by Verizon: estoppel and waiver. In a 12-page opinion and order issued Wednesday, Judge Gilstrap agreed with Verizon that it is entitled to equitable relief “based on Headwater’s conduct during and after its 2017 investigation of infringement under the doctrine of implied waiver.”
Headwater had knowledge of Verizon’s infringement in 2017, Judge Gilstrap wrote, but chose not to file suit until July 2023.
“At the time of Headwater’s investigation in 2017, Headwater could only collect damages arising since February 2016 — a damages period of less than two years,” he wrote. “By waiting until July 2023 to file suit, Headwater could and did seek damages for the entire six-year damages period permitted under 35 U.S.C. § 286.”
Judge Gilstrap found that Headwater’s delay “is directly attributable to maximizing the damages it could recover.”
“Every law student, early on, learns the equitable concept of unclean hands,” Judge Gilstrap wrote, explaining Headwater “consciously delayed litigation against Verizon” to benefit itself.
Verizon is represented by Gregg Costa, Trey Cox, Josh Krevitt, Kate Dominguez, Brian Rosenthal, Andrew Robb, Robert Vincent, Jaysen Chung, Hannah Bedard, Allen Kathir, Charlie Sim, Eli Balsam, Michelle Zhu and Angelle Henderson of Gibson, Dunn & Crutcher and Deron Dacus of the Dacus Law Firm in Tyler.
Headwater is represented by Adam Hoffman, Benjamin Wang, Qi Tong, Marc Fenster, Reza Mirzaie, Brian Ledahl, Dale Chang, Ben Wang and Kris Davis of Russ August & Kabat, Andrea Fair and Garrett Parish of Miller Fair Henry in Longview and Robert Blunt of Parker Blunt & Ainsworth in Tyler.
The case number is 2:23-cv-00352.
U.S. District Court, Colorado
Carter Arnett Gets Defense Win in $20M Deliberate Indifference Case
A jury that heard nine days of testimony has cleared Denver Health and Hospital Authority and five individual healthcare providers of liability in a lawsuit that had accused the defendants of acting with deliberate indifference in treating a man who later died.
The lawsuit was filed in September 2023 by the family of Leroy Taylor, a 71-year-old man who died in a jail cell in February 2022. According to an autopsy report quoted in the lawsuit, Taylor “died as a result of hypertensive and atherosclerotic cardiovascular disease. Contributing factors were pulmonary emphysema [and] chronic renal failure.”
His family was seeking as much as $20 million in damages. The trial began with jury selection April 13, and the jury returned its verdict April 23.
U.S. District Judge Charlotte N. Sweeney presided over the case.
Denver Health and Hospital Authority are represented by Linda R. Stahl, Leon Carter, Ashana Stanley and Maria Zermeno of Carter Arnett and Anthony E. Derwinski of Ruegsegger Simons & Stern.
In a news release, Stahl praised the jury’s decision.
“This verdict reflects the dedication and professionalism of our trial team and, most important, the truth: our clients provided appropriate, conscientious care under difficult circumstances,” she said. “We are thrilled that our dedicated nurses and chief medical officer can finally put this ordeal behind them.”
The plaintiffs are represented by Ciara Anderson, Neil Sandhi and Siddhartha H. Rathod of Rathod Mohamedbhai.
The case number is 1:23-cv-02355.
U.S. Court of Appeals for the D.C. Circuit
4 Retired Jurists from Texas Support Anthropic as Amici
Four former judges with Texas ties are among a group of 149 former judges and members of the nonprofit group Democracy Defenders who signed on to an amicus brief in support of Anthropic PBC in its lawsuit against the U.S. Department of War.
Anthropic filed suit against the Department of War March 9, after it was designated as a “supply chain risk” to the country’s national security. The lawsuit is a challenge to that designation.
This amicus brief was filed April 22 and across 49 pages it argues, in part, that when DOW slapped Anthropic with that designation, it did so by misinterpreting the statute and ignoring “necessary procedures.”
The retired Texas judges who signed the brief are: Judge Royal Furgeson Jr., a former district judge in the Western District of Texas; Judge Brian Owsley, a former magistrate judge in the Southern District of Texas; Judge T. John Ward, a former district judge in the Eastern District of Texas; and Chief Justice Dori Contreras, a formerly of the Thirteenth Court of Appeals in Corpus Christi.
The amici wrote that “a private company’s contractual dispute with a government agency cannot render that company a ‘supply chain risk’ within the meaning of 41 USC § 4713(k)(6).”
“To be sure, courts must sometimes conduct themselves differently due to national security concerns,” the amici argued. “Some claims are not justiciable because resolving them would require the court to make the types of substantive national security judgments that judges are ill-equipped to render. In other cases, courts must consider the impact on national security when crafting an injunctive remedy in order to avoid judicial entanglement in the conduct of foreign affairs or national defense.”
“But this is not such a case. Petitioner’s claims are justiciable and can be resolved based on the plain text of the law.”
The amici are represented by Gregg J. Costa and Lauren Goldman of Gibson, Dunn & Crutcher, Martie Kutscher of Palo Alto, California, Sophia Brill and Connor P. Pui of Washington, D.C., and Norman L. Eisen, Stephen A. Jonas and Diamond J. Brown of Democracy Defenders Fund.
Anthropic is represented by Kelly Dunbar, Anneke F. Dunbar-Gronke, Megan Gardner, Joshua Geltzer and Kevin Lamb of Wilmer Cutler Pickering Hale and Dorr.
The federal government is represented by Sharon Swingle, Sean R. Janda and Brian Springer of the Department of Justice.
The case number is 26-1049.
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