In this edition of Asked & Answered, Susman Godfrey partner Justin Nelson talks about settlements against Fox News and the AI company Anthropic, along with where he sees AI regulation headed. Nelson also discusses lessons learned in his career from clerking for U.S Supreme Court Justice Sandra Day O’Connor to running for Texas attorney general.
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The 40-Year Legacy of Pennzoil v. Texaco — An Appeal for the Ages
Executives at Texaco woke up Nov. 20 — exactly 40 years ago today — like it was the morning after aliens attacked in the movie Independence Day. A day earlier, a Houston jury ruled the New York-based oil and gas giant had tortiously interfered with a 1984 agreement Getty Oil made to merge with Pennzoil and awarded Pennzoil $10.53 billion. Texaco’s stock took a beating — dropping from $80 per share when the litigation started to $32 the week following the trial. Some Wall Street analysts were openly warning about bankruptcy. The company’s convertible bonds plummeted in value. Texaco’s debt rating was cut by Standard & Poor’s. Interest accruing on the judgment was $2.8 million every single day.
Between Thanksgiving 1985 and Christmas 1987, the two energy companies and their ever-expanding roster of litigators did battle. The litigation itself multiplied, including a precedent-setting federal case in New York over Texaco’s appeals bond, a monumental appellate battle, a bizarre decision by the Texas Supreme Court, the world’s largest corporate bankruptcy at the time and a historic settlement.
Both sides hired major reinforcements — fresh legs and fresh eyes, if you will — as the trial teams had been going full speed for 21 straight months. The appeals team for Texaco beefed up with several heavy hitters from Fulbright & Jaworski and David Boies of Cravath in New York. Pennzoil added a Texas superstar in V&E’s Harry Reasoner and Laurence Tribe of Harvard Law School.
In Part II of our series looking back at the significance of the Pennzoil v. Texaco trial, The Lawbook examines the post-verdict appeals, which were historic and precedent-setting.
Reid Collins Secures $112.3M Verdict for Aluminum Company in Insurance Case
After a five-day trial, a South Carolina jury found insurance companies had breached their obligations after an incident at an aluminum plant resulted in property damage. A team from Austin-based Reid Collins & Tsai represented the plaintiff.
Stars Hit Back in Fight With Mavericks
After filings this week, the fight between the ownership groups of the Dallas Stars and Dallas Mavericks will play out in Delaware bankruptcy court and in the Texas Business Court. The Stars, represented by Winstead, have hired a team of lawyers from Blank Rome to aid in the bankruptcy proceeding. The Mavericks are represented by Jackson Walker.
Mary Kay Founder Denied Bid for Legal Funds
Richard R. Rogers, who cofounded Mary Kay with his mother in 1963, filed suit against Mary Kay Holding Company in August, arguing the entity was required to hand over fees to fund litigation over a trust dispute with his son. A magistrate judge in Delaware disagreed.
Judge Rejects Kyle Bass’ Efforts to Reverse Judgment in Water Rights Case
An Anderson County district judge ruled late Monday that she will not reconsider a court-approved settlement in a case pitting a group of poultry and cattle farmers against the Neches & Trinity Valleys Groundwater Conservation District that could restrict or even prohibit Dallas businessman Kyle Bass from drilling for millions of gallons of water on two of his East Texas ranches.
Texas Stock Exchange Infringement Case Against Toronto Stock Exchange Heads for Mediation
After a roughly two-hour hearing, U.S. District Judge Karen Gren Scholer sent a trademark infringement lawsuit that the Texas Stock Exchange filed against the Toronto Stock Exchange to mediation. The Texas Stock Exchange took the fight to court in 2024 after receiving a cease and desist letter from the Toronto Stock Exchange that claimed its design was too similar and would cause confusion.
PE Firm Buys Topgolf in $1.1B Deal
Topgolf Callaway Brands said Tuesday that it sold a 60 percent stake in its Topgolf and Toptracer business to Los Angeles private equity firm Leonard Green & Partners in a deal valued at $1.1 billion, with the sale of the stake generating approximately $770 million for Topgolf Callaway. The deal is expected to close early next year.
Former SCOTX Chiefs Make Case for Judicial Independence
Nathan Hecht, Wallace B. Jefferson and Thomas Phillips held court in a large tent on Austin’s Congress Avenue last weekend to discuss issues related to the Third Branch of government. They fielded questions about a recent constitutional amendment that gave the governor greater authority over judicial discipline and the rise of claims under the Texas Constitution.
Houston Retirement Home Files for Bankruptcy in DFW
Buckingham Senior Living Community cited between 1,000 and 5,000 creditors who are owed between $100 million and $500 million, according to court documents. Buckingham has hired McDermott, Will & Schulte as its lead legal advisor. Partner Marcus Alan Helt of the firm’s Dallas office filed the first day documents in the case.