In this edition of Litigation Roundup, Citgo draws another suit — this one seeking $400 million — from members of the so-called Citgo 6 who were imprisoned in Venezuela for years, XTO gets a win in a lawsuit over exposure to natural gas production activities that had been lingering in the courts for seven years and we detail some interesting grants from the Texas Supreme Court.
Have a development we should include in the next Litigation Roundup? Let us know at tlblitigation@texaslawbook.net.
Hood County District Court
XTO Beats Residents’ Natural Gas Exposure Suit
ExxonMobil subsidiary XTO saw an exposure lawsuit brought against it in Hood County come to an end on May 29, after the last three plaintiffs in the lawsuit informed the court they no longer wanted to pursue their negligent nuisance claim.
In 2017, 49 plaintiffs who live in the Quail Ridge community filed 19 separate lawsuits against XTO, alleging emissions from the company’s natural gas production activities caused property damage and personal injuries.
By early 2024, the number of plaintiffs had dwindled — 38 of the plaintiffs had been dismissed from the lawsuit by the court or abandoned their claims — leaving just six lawsuits active.
Hood County District Judge Bryan T. Bufkin, who presided over the case, consolidated the six remaining suits brought by 14 plaintiffs in April and set trial for June 3.
Pretrial motion practice by XTO saw the court trim the claims to only negligent nuisance and negligent trespass and also whittled the number of plaintiffs down further after Judge Bufkin agreed all adults left in the litigation were barred from bringing suit based on the statute of limitations.
That left four minors in the litigation, and their attorney told Judge Bufkin on May 28 they wanted to abandon their claims, according to the final judgment.
The plaintiffs are represented by Charles E. Soechting Jr. and David C. Greenstone of Simon Greenstone Panatier.
XTO is represented by Russell Lewis, Laura Shoemaker McGonagill and Lexie Ammons of Baker Botts and by Andy Sims, Michael Reer and Desireé Malone of Harris, Finley & Bogle.
The case number is C2017244.
Harris County District Court
Citgo Draws Another Lawsuit from ‘Citgo 6’ Members
Two more members of the so-called Citgo 6 — employees of the oil and gas company who were arrested by the Venezuelan government during a 2017 visit to meet with leaders of PDVSA, the Venezuelan state-owned oil company that owns a majority of Houston-based Citgo — have filed a lawsuit seeking damages.
Brothers Jose Luis Zambrano and Alirio Jose Zambrano, who were imprisoned from 2017 until 2022, are seeking $400 million in damages. Last year, Tomeu Vadell filed a lawsuit seeking $100 million in damages for his own imprisonment.
Vadell was arrested in November 2017 and imprisoned for more than four years — 1,775 days — until his release Oct. 1, 2022, in exchange for the United States releasing two nephews of Venezuelan President Nicholas Maduro’s wife, who had been convicted on drug charges.
The Zambranos allege they, like Vadell, were ordered to leave their homes to attend a mandatory meeting in Venezuela as a ruse to lure dual U.S.-Venezuela citizens to the country so they could be detained. The Zambranos were accused of financial improprieties but allege Citgo knew they didn’t have any corporate responsibilities.
Eric K. Gerard of Sorrels Law, who represents the Zambranos, issued a statement slamming Citgo’s alleged conduct during the yearslong ordeal.
“The most damning piece of evidence is the fact the Citgo vice president actually responsible for financing decisions was never arrested and allowed to go free,” Gerard said. “Never in my years as a prosecutor or plaintiffs’ lawyer have I seen a more flagrant example of a big corporation abdicating its duty to the people it was supposed to protect. These hardworking, honorable men were set up, detained, and tortured over and over — and Citgo knew they were innocent all along.”
U.S. District Judge Andrew S. Hanen issued an order March 29 remanding the Vadell case back to state court in Harris County where it was originally filed in March 2023. Judge Hanen made that ruling after determining that settling the dispute would not require the courts to run afoul of the so-called act of state doctrine, which is intended to prevent courts from second-guessing official acts of foreign governments.
“When one considers the rationales for applying the act of state doctrine … one is led to the inescapable conclusion that a jury finding on the merits of this case would not infringe on the interests of the United States and would not undermine any relationship between this country and Venezuela,” Judge Hanen wrote, noting that Venezuela is not a party to this suit. “Citgo’s responsibility, if any, can be independently evaluated without Venezuela’s participation in the trial and without it or any of its assets being at risk.”
On May 29, Citgo filed a motion to dismiss Vadell’s intentional infliction of emotional distress claim against it under the Texas Citizens Participation Act.
“Specifically, the Vadell plaintiffs allege Citgo intentionally inflicted emotional distress on them when Citgo made statements to the family members about Citgo’s limitations on its ability to end Mr. Vadell’s detention,” the motion alleges. “[B]ecause it seeks to impose liability on Citgo for statements Citgo made relating to matters of public concern, this cause of action deserves early scrutiny on a motion to dismiss under the [TCPA].”
The Zambrano case has been assigned to Harris County District Judge Robert Schaffer, and Harris County District Judge Dawn Rogers is presiding over the Vadell case.
In the Vadell case, Citgo is represented by John Zavitsanos, Rey Flores, Daryl Moore, Nathan Campbell and Jarmonique Smith of Ahmad, Zavitsanos & Mensing. Citgo’s counsel had not filed an appearance in the Zambrano case as of Monday.
The Zambranos are also represented by Randy Sorrels of Sorrels Law. Vadell is represented by Rusty Hardin, Daniel Dutko, Joe M. Roden and Megan Moore of Rusty Hardin & Associates.
The Zambrano case number is 2024-34207. The Vadell case number is 2023-174486.
Texas Supreme Court
Civil Barratry Case is Granted
The Texas Supreme Court agreed on Friday to answer two questions about the state’s civil barratry statute: What is its extraterritorial reach, if any, and is it subject to a two- or four-year statute of limitations.
A date and time for oral arguments has not been set. The case pits Louisiana residents Mark Cheatham Sr. and Mark Cheatham Jr. against their former Texas attorneys Michael Pohl and Robert Ammons, who they allege unlawfully solicited them as clients.
After Ladonna Cheatham and two of her children were killed in a crash in February 2014, her son Mark Cheatham Jr., his father Mark Cheatham Sr. and her mother Luella Miller entered into a representation agreement with Pohl and Ammons. The family later sued the attorneys in Harris County in June 2017, alleging the attorneys paid a financing company run by Pohl’s wife, Donalda Pohl, to offer funeral expenses money and incentivize them to hire Pohl and Ammons.
The attorneys argued in Harris County that the two-year statute of limitations had run on the Cheatham family’s barratry claim, but the trial court rejected that argument and held that a four-year limitations period applied to the claim.
The trial court did, however, dismiss the claims against the attorneys after finding the barratry statute had no extraterritorial reach to cover conduct occurring outside of Texas.
The First Court of Appeals in Houston reversed, finding the complained of conduct occurred in Texas and that even if the conduct had not occurred in Texas the statute can extend to cover out-of-state conduct.
The Cheathams are represented by Kevin Dubose of Alexander Dubose & Jefferson and Lance and David Kassab of The Kassab Law Firm.
Michael Pohl is represented by Parth S. Gejji and Allison Standish Miller of Beck Redden, Billy Shepherd and Stephen Bailey of Shepherd Prewett.
Donalda Pohl is represented by Mark W. Collmer and Conrad B. Guthrie of Collmer Law Group.
The Ammons Law Firm is represented by Thomas R. Phillips and Bradley H. Bowen of Baker Botts and Daryl L. Moore and Kelsi Stayart White of Ahmad, Zavitsanos & Mensing.
The case number is 23-0045.
SCOTX to Decide University Disciplinary Records Disclosure Fight
A case that asks whether the results of university disciplinary proceedings are subject to disclosure under the Texas Public Information Act has been accepted by the Texas Supreme Court.
UT filed its petition for review in February 2023, and the justices agreed to hear the case on Friday. A date and time for oral arguments has not been set.
The dispute centers on a request lodged by Gatehouse Media’s Austin American-Statesman newspaper with the University of Texas for certain information regarding its findings that a student was an “alleged perpetrator” of a violent crime or sexual offense that violated university policy.
UT argued the information was exempt from disclosure under the Federal Education Rights and Privacy Act. The trial court sided with the newspaper, and the Eighth Court of Appeals affirmed 2-1.
UT is represented by Lanora C. Pettit, Bill Davis and Kyle D. Highful of the attorney general’s office.
Gatehouse Media is represented by Maitreya Tomlinson of The Tomlinson Firm and John Bussain of The Bussain Law Firm.
The case number is 23-0023.
Boeing Denied Review in SWAPA Case
The Texas Supreme Court on Friday declined to get involved in a lawsuit where the 9,000-member labor union Southwest Airlines Pilots Association is alleging the Boeing Company cost it millions of dollars via its false representations about the airworthiness of the 737 MAX aircraft.
Boeing filed its petition for review in October 2022, challenging a Fifth Court of Appeals ruling issued in March 2022 that had revived the union’s lawsuit. The Fifth Court of Appeals determined that SWAPA had standing to assert claims on its own behalf, but that at the time it filed suit against Boeing it didn’t have standing to assert claims on behalf of its members.
“Although SWAPA’s subsequently acquired assignments of member interests do not cure the jurisdictional defects in the present case, the assignments might confer standing on SWAPA to file suit in the future,” the Dallas appellate panel wrote. “Thus, while the trial court properly dismissed the suit without providing SWAPA an opportunity to amend its pleadings, the dismissal should have been without prejudice.”
The panel also rejected Boeing’s argument that the Railway Labor Act preempted the SWAPA’s state law tort claims because resolving their claims would require interpreting the current and former collective bargaining agreements between the airline and its pilots.
The union had argued, among other things, that because Boeing isn’t an airline carrier the RLA doesn’t apply.
“Absent support from the statutory text or other controlling authority, we cannot conclude that the state law claims between the parties here are within the purview of the RLA” the panel held. “Accordingly, the claims are not preempted. To conclude otherwise would judicially legislate expansion of the RLA far beyond the purpose Congress sought to advance. This we decline to do.”
The Texas Supreme Court’s decision clears the way for the case to return to Dallas County District Judge Aiesha Redmond’s courtroom.
Boeing is represented by Nina Cortell and Christopher Knight of Haynes Boone, Anne M. Johnson and Kelli Bills of Tillotson Johnson & Patton, Craig S. Primis and Ronald K. Anguas Jr. of Kirkland & Ellis and E. Leon Carter and Courtney Barksdale Perez of Carter Arnett.
The SWAPA is represented by David S. Coale and Jamie R. Drillette of Lynn Pinker Hurst & Schwegmann, Jeffrey W. Hellberg Jr. of Wick Phillips Gould & Martin and Anthony U. Battista and Mary Dow of Condon & Forsyth.
The case number is 22-0631.
U.S. Court of Appeals for the Fifth Circuit
Couple’s Suit Against Whole Foods, Baby Food Maker Revived
A three-judge panel on May 28 determined that parents Grant and Sarah Palmquist will get another chance to pursue their lawsuit against the manufacturer and the seller of baby food they allege gave their young son heavy metal poisoning.
The Palmquists filed suit against Hain Celestial Group and Whole Foods Market in Texas state court in 2021 alleging the Hain’s Earth’s Best organic baby food they fed their son caused him to suffer a “rapid” regression in his social, language and behavioral skills.
The suit came in the wake of a House Oversight and Reform Committee report showing Hain’s baby food contained elevated levels of heavy metals.
After the suit was removed to federal court by the companies, U.S. District Judge Jeffrey Brown granted judgment as a matter of law in favor of Hain. The judge also dismissed Whole Foods from the suit after finding the grocer had been improperly joined.
The appellate panel found that the Palmquists were entitled to have their case remanded back to state court to pursue claims against Whole Foods and reversed Judge Brown’s decision denying their request.
“As the Palmquists argue, the Whole Foods business model depends on this reputation and customers’ willingness to a pay a premium for products that Whole Foods advertises as healthy and high quality,” the panel wrote. “Therefore, the district court erred in concluding that Whole Foods was improperly joined and in denying the Palmquists’ motion to remand.”
Judges Carl E. Stewart, Edith Brown Clement and James C. Ho sat on the panel.
The Palmquists are represented by Russell S. Post, Owen McGovern and Bennett Ostdiek of Beck Redden, Constance Pfeiffer, Jason LaFond and Austin Brumbaugh of Yetter Coleman and Kurt B. Arnold and Micajah Boatright of Arnold & Itkin.
Hain is represented by Michael Imbroscio and Paul Schmidt of Covington & Burling, Thomas Wright, Eric Boettcher and Raffi Melkonian of Wright, Close & Barger and Brian Cano of Fee, Smith, Sharp & Vitullo.
Whole Foods is represented by Bradley Chambers and Emma Short of Baker, Donelson, Bearman, Caldwell & Berkowitz.
The case number is 23-40197.
