In this edition of Litigation Roundup, a Houston immigration attorney is accused of defrauding her clients, X Corp. settles an antitrust lawsuit against Apple in Fort Worth and the U.S. Court of Appeals for the Fifth Circuit hands a loss to Lucid in a constitutional challenge to Texas’ ban on direct-to-consumer auto sales based on precedent they doubt.
Also, the Department of Justice announced last week that an investigation found that Berkeley Law School discriminates against white and Asian students in its admissions process, one month after making the same claims against Duke University School of Law.
In a six-page findings letter sent to the school’s lawyer, Tania Faransso at Wilmer Cutler Pickering Hale and Dorr, the DOJ pointed to a November 2022 article in The New Yorker where the law school’s dean, Erwin Chemerinsky, made a comment the government said shows an “intent to discriminate.”
“What colleges and universities will need to do after affirmative action is eliminated is find ways to achieve diversity that can’t be documented as violating the Constitution,” Chemerinsky is quoted as saying.
According to the government’s investigation, Berkeley uses “race, essay prompts, and other tactics to further its admissions diversity goals.” The dean has said in response that the school “scrupulously complies” with federal and state laws banning the use of race in admissions.
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
As Court Expands, 3 New Judges Added to Roster
The three newly created civil district courts in Harris County are up and running after Judges Jacqueline Franklin, Michael Landrum and Shawn Nicole Thierry started in their new roles earlier this month.
“We are excited to welcome our judges to the Harris County District Courts as we mark this important expansion of our civil judiciary,” Local Administrative District Judge Gloria E. López said in a statement. “We are grateful to the Texas Legislature for its commitment to Harris County and for providing additional resources to help our courts meet the needs of our wonderful community.”
Judge Franklin had previously practiced at Fanaff, Gonzales, Baldwin & Cunningham and has also served as an assistant district attorney in Nueces County. She is a graduate of the University of Arizona and Texas Southern University’s Thurgood Marshall School of Law.
Judge Landrum previously served on two district court benches in Harris County and is a graduate of the University of St. Thomas and the University of Texas School of Law.
Judge Thierry previously served as the executive director of policy in the office of the general counsel at Texas Southern University and has also served as a member of the Texas House of Representatives. She is a graduate of Howard University and Texas Southern University’s Thurgood Marshall School of Law.
Two additional civil district courts, the 516th and the 517th, are scheduled to open in Houston Oct. 1.
Travis County District Court
TikTok Is First Platform Found Liable in U.S. for Deceiving Parents on Child Safety
On Thursday, Travis County District Judge Cory Liu issued what the Texas attorney general’s office is calling a “first-of-its-kind” ruling, finding TikTok had violated the state’s Deceptive Trade Practices Act by misleading consumers about its efforts to protect minors from certain content.
Texas filed this lawsuit in April 2025. Judge Liu’s order granting Texas’ motion for partial summary judgment found the app violated the TDTPA in two ways: by failing to remove videos showing graphic violence, promoting drug use, gambling, or minors behaving in a sexually suggestive manner; and by failing to ensure its “restricted mode” was effective in filtering out “content that might not be appropriate for all audiences.”
In a news release touting the victory, the attorney general wrote that a trial is expected to be scheduled for next month.
“TikTok sacrificed the safety and innocence of children for engagement and numbers, and now they are being held accountable,” Texas Attorney General Ken Paxton said in a statement. “Texas is now the first state in the nation to hold TikTok liable for lying to parents about the safety of its platform and exposing children to harmful content.”
Texas is represented by John Hernandez, Madeline Fogel and Adam Holtz of the office of the Texas attorney general, Brian Barnes, Adam Laxalt, Megan Wold and DeLisa Ragsdale of Cooper & Kirk and Tony Buzbee and Christopher Leavitt of The Buzbee Law Firm.
TikTok is represented by Brandon Duke, John Anaipakos, Joshua Jilovec and Kristin Cope of O’Melveny & Myers and Neema Sahni and Megan Crowley of Covington & Burling.
The case number is D-1-GN-25-003118.
Northern District of Texas
X, Apple Reach Settlement in Antitrust Suit
X Corp. filed a motion Monday to voluntarily dismiss claims against Apple about a year after suing the tech giant and OpenAI, accusing them of colluding in a monopolistic scheme to dominate the global market for artificial intelligence.
The claims against OpenAI Foundation, OpenAI and OpenAI OpCo remained pending as of Monday morning.
“Plaintiffs have resolved their claims in this action against defendant Apple Inc.,” the brief motion filed with U.S. District Judge Robert Pitman reads. “Plaintiffs accordingly move under Federal Rule of Civil Procedure 41(a)(2) to dismiss with prejudice their claims against Apple. Apple does not oppose this motion.”
In its 61-page complaint, X told the court the lawsuit presents “a tale of two monopolists joining forces to ensure their continued dominance in a world rapidly driven by the most powerful technology humanity has ever created: artificial intelligence.”
“Working in tandem, defendants Apple and OpenAI have locked up markets to maintain their monopolies and prevent innovators like X and xAI from competing,” the suit reads. “Plaintiffs bring this suit to stop defendants from perpetrating their anticompetitive scheme and to recover billions in damages.”
While the lawsuit has “at best minimal connections” to Fort Worth in the Northern District of Texas, Judge Pitman determined in October that the case should remain there because neither party had filed a motion to transfer.
X Corp. and SpaceXAI are represented by Craig M. Reiser, Scott A. Eisman, Eva Yung, Bradley Justus and Christopher Erickson of Axinn, Judd Stone II, Christopher Hilton, Alexander Dvorscak and Noah Schottenstein of Stone | Hilton and Charles W. Fillmore of Brown Pruitt Wambsganss Dean Forman & Moore.
Apple is represented by Dee J. Kelly Jr. and Julia G. Wisenberg of Kelly Hart & Hallman and Emily Henn, Henry Liu, Lauren Zehmer and Carol Weiland of Covington & Burling.
OpenAI is represented by Michael K. Hurst, Chris W. Patton and Andy Kim of Lynn Pinker Hurst & Schwegmann and William Savitt, Kevin S. Schwartz and Stephen D. Levandoski of Wachtell, Lipton, Rosen & Watz.
The case number is 4:25-cv-00914.
Western District of Texas
Austin-Area Man Gets Prison in $27M Tax Fraud
A Hill Country man who helped clients he solicited hide taxable income from the federal government via what prosecutors call a fraudulent and abusive tax shelter has been sentenced to 60 months in prison.
Aanand Shukla of Jonestown, Texas, allegedly used seminars, webinars and podcasts to market the program to customers nationwide, educating them on how to restructure their companies, flow income through layered trusts and a private family foundation in order to avoid paying taxes on about $27 million in income.
Shukla is alleged to have operated the scheme from 2017 through 2025, charging clients between $25,000 and $225,000 for his services.
Shukla was named in an information filed Feb. 23 and entered a plea agreement with the government that same day.
The case was assigned to U.S. District Judge Robert Pitman.
Shukla is represented by Lynette Byrd of Oberheiden.
The government is represented by Boris Bourget, Lauren Pope and Michael Jones of the Department of Justice.
The case number is 1:26-cr-00101.
Southern District of Texas
Houston Immigration Attorney Charged in Fraud Scheme
A 44-year-old Houston attorney is facing federal charges for mail fraud and making false statements in a scheme prosecutors allege targeted her own clients.
Alla Nowowiejski was indicted Sept. 2, was arrested in Houston Sept. 8 and had her initial appearance before U.S. Magistrate Judge Richard W. Bennett Sept. 9, where she entered a not guilty plea.
According to a news release, Nowowiejski would take money from her clients who hired her to adjust their work status or apply for work visas but would either not submit the applications or only partially submit them. To make her clients believe she was doing the work she was retained to do, the government alleges she would create fake documents with fake reference numbers.
The case was originally assigned to U.S. District Judge Nicholas J. Ganjei, but because the case was “charged, litigated, considered or investigated” by the U.S. Attorneys Office for the Southern District of Texas while he was U.S. attorney for the district, the case will be assigned to a new judge.
If convicted, Nowowiejski faces a maximum of 20 years in prison.
The government is represented by Thomas Carter of the Department of Justice.
According to a minute entry in the docket, Nowowiejski has retained Ted Nelson as counsel.
The case number is 4:26-cr-00583.
U.S. Court of Appeals for the Fifth Circuit
Lucid Loses Challenge to Texas’ Direct-to-Consumer Ban, 2 Judges Say They’re Bound by Precedent They Doubt
Electric vehicle manufacturer Lucid USA and Lucid Group, which sells the vehicles online and at retail centers, failed earlier this month in a constitutional challenge to Texas’ ban on direct-to-consumer auto sales, but two of the judges on the panel authored concurrences dubitante, expressing doubts about the legal reasoning underpinning the decision.
Lucid filed notice of appeal in April 2025, challenging the ruling from U.S. District Judge Robert Pitman finding the prohibition withstands scrutiny under the Fourteenth Amendment’s equal protection and due process clauses.
Chief Judge Jennifer Walker Elrod and Judges Patrick E. Higginbotham and James E. Graves Jr. heard oral argument in the case March 2. In the panel’s Sept. 4 opinion upholding Judge Pitman’s ruling, the judges pointed to a 2024 holding from the court in Tesla v. Louisiana Auto Dealers Association, where Tesla challenged a similar prohibition in Louisiana.
Lucid had argued that the Tesla ruling and others in that line were not controlling in this lawsuit because those involved facial challenges while Lucid was bringing an as-applied claim.
“The relevant inquiry, however, is whether Lucid’s as-applied claims are legally and factually distinct from the arguments we considered in those cases,” the panel explained.
“Tesla and Lucid manufacture and sell the same product through the same business model, and the stated purpose of Louisiana and Texas’s direct-sales bans is to protect dealers and consumers from anti-competitive behavior,” the panel wrote. “Given the precedent we are duty-bound to follow and its striking similarity to the legal and factual arguments before us, Lucid’s as-applied equal protection claim fails as a matter of law.”
Chief Judge Walker Elrod, in her concurrence dubitante, explained the court’s precedent “appears to tie us to this conclusion.”
“However, I have doubts both as to whether the Tesla case forecloses Lucid’s as-applied challenge to Texas’s law prohibiting direct sales by car manufacturers and as to the substantive correctness of Tesla’s holding about the rationality of such laws as applied to relatively new entrants in the car market.”
She also wrote that she was in agreement with a point raised by Judge Higginbotham in his concurrence dubitante: “that this legal regime does not appear to be based on a legitimate concern for consumers’ welfare.”
Judge Higginbotham explained he wanted to express his “discomfort with Tesla’s restraint of an electric-vehicle manufacturer that perpetuates none of the ills that motivated Texas Occupations Code section 2301.476’s enactment.”
It was in the 1930s, as a way to protect franchisees from being exploited by General Motors, Ford and Chrysler, that direct-sales prohibitions on automobiles began to proliferate, Judge Higginbotham wrote.
Judge Higginbotham took aim at an argument presented by intervenor-defendant Texas Automobile Dealers Association, that the ban fosters competition and reduces consumer prices and that allowing vertical integration would increase prices by eliminating intra-brand dealer competition.
“This position cannot withstand scrutiny under basic economic principles,” he wrote. “…Rather, Lucid’s vertical integration could lower consumer prices by eliminating double marginalization. Double marginalization captures the increase in consumer prices from varied firms in the production and distribution chain exercising their market power to set supercompetitive prices. Free from the price ramifications of double marginalization, a vertically integrated manufacturer may leverage its market power in the distribution chain to decrease consumer prices.”
Relying on Tesla to deny Lucid relief in this case, he wrote “mystifies and troubles me.”
“A per se presumption of cognizable harm when an automobile manufacturer engages in vertical integration, detached from facts of the manufacturer’s business model, defies the fact-specific nature of the rational basis inquiry in an applied challenge,” Judge Higginbotham wrote. “I concur in the majority, as I am bound to follow our precedent, but I do so with great reservation.”
Lucid is represented by Andrew Grossman, Billy Donley, Rachel Hooper and Kristin Shapiro of Baker & Hostetler.
Texas is represented by Daniel Ortner, Jacob Przada, Zachary Rhines and Kelsey Warren of the state’s attorney general’s office.
The case number is 25-50319.
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