Two Gray Reed lawyers give their take on a recent Texas appellate court’s ruling in Mesa v. Deep Energy, an opinion that will have profound impacts on mineral liens and contractual provisions purporting to waive mineral liens.

Writing on the firm’s website, Ethan Wood and Joe Virene describe the case in which Mesa sued Deep Operating for failing to pay fully for work Mesa performed on three wells. Deep Operating’s parent company claimed that Mesa contractually waived its right to assert liens against Deep Operating’s wells and waived its right to seek payment on the contract from any entity other than Deep Operating, which at that point was in bankruptcy.

“Relying on a 2012 case out of the Dallas Court of Appeals and a 2015 decision from the Texas Supreme Court, the Houston Court concluded that when a party to a contract agrees to seek payment or damages only from one source to the exclusion of all others, that party has effectively waived its rights to such payment or damages from other parties,” the authors write.

Read the article.

Faegre Baker Daniels is being sued for legal malpractice by a company that says the firm provided “erroneous” legal services relating to the launch and operation of a fund set up to acquire and manage crypto assets, according to a Bloomberg Law report.

Digital Capital Management’s complaint alleges that the law firm provided “inaccurate analysis and advice” to Digital Capital’s predecessor, Crypto Asset Management, LP, regarding how to register under the Investment Advisers Acts of 1940.

Crypto Asset Management alleges the firm advised the plaintiffs that “Crypto Assets are not securities” and to thus structure the fund’s business “accordingly.” The advice was “erroneous,” the complaint says, resulting in a censure and penalty from the SEC.

Read the Bloomberg Law article.

A financial tug-of-war is emerging over the $13.5 billion that the nation’s largest utility has agreed to pay to victims of recent California wildfires, as government agencies jockey for more than half the money to cover the costs of their response to the catastrophes, reports Insurance Journal.

Pacific Gas & Electric had acknowledged that  its power lines ignited some of the 2017-2018 fires that caused billions in damages. The company declared bankruptcy nearly a year ago as it faced about $36 billion in claims.

“Those claims were settled as part of the $13.5 billion deal that PG&E reached last month with lawyers representing uninsured and underinsured victims,” explains the Journal‘s Daisy Nguyen.

But the settlement leaves open just how much would be used to compensate victims, their lawyers and federal and state agencies for the money they spent on rescue and recovery operations.

Read the Insurance Journal report.

The ABA Journal reports that a lawsuit claims that Akin Gump Strauss Hauer & Feld and its lawyers took advantage of a corporate CEO who was suffering from substance abuse and mental health problems.

The Journal‘s Debra Cassens Weiss explains:

“The suit, filed in state court in New York, says Akin Gump took over finances and bookkeeping for Future Media Architects, a family-owned company that acquires and sells internet domain names. Akin Gump also directed and negotiated the sale of the domain names, often without input from its then-CEO and half owner, Thunayan Al-Ghanim, the suit says.”

…

“But eventually,” the suit alleges, “Akin Gump—aware that Thunayan was in no condition to monitor either FMA’s or Akin Gump’s activities—took advantage of the opportunity to loot FMA’s assets for personal profit.”

Read the  ABA Journal article.

A former Skadden attorney is suing Sullivan & Cromwell for legal malpractice, claiming that the firm represented a client in a matter for which one of its partners had once been an arbitrator, in violation of ethics rules, reports Bloomberg Law.

The plaintiff, Andrew Delaney, claims that Sullivan & Cromwell acted “unlawfully” and “unethically” in the international arbitration matter, according to Bloomberg’s Melissa Heelan Stanzione.

“The Harvard Law School graduate’s complaint alleges that Sullivan & Cromwell partner James H. Carter chaired an arbitration panel that found in favor of Delaney’s clients, and the firm subsequently “proceeded to represent the losing party” to oppose enforcement of the award,” Stanzione writes.

Read the Bloomberg Law article.

A post by Pepper Hamilton explores whether an enforceable no-damage-for-delay clause in a construction contract is also a bar to recovery of “acceleration” damages, i.e., the costs incurred by the contractor in its attempt to overcome delays to the project’s completion date.

Authors Ted R. Gropman and Christine Z. Fan point out that courts are split as to whether damages for a contractor’s “acceleration” efforts are distinguishable from “delay” damages such that they may be recovered under an enforceable no-damage-for-delay clause.

They discuss  a few ways for a contractor to circumvent an enforceable no-damage-for-delay clause to recover acceleration damages.

Read the article.

Texas legal news in 2019 reflected the debates and court disputes being heard all across the country, according to this year’s list of Top 10 stories highlighted by Androvett Legal Media & Marketing.

Each year the Texas-based marketing and public relations agency follows news developments and develops a list of the biggest legal stories.

“Selecting the Top 10 is never easy,” said Androvett founder and CEO Mike Androvett. “There is no question that Texas is at the forefront of national debate over everything from the border wall to gun control measures. But just as important are the local issues directly affecting the lives of Texans.”

The Androvett team has compiled its annual top 10 legal news list since 2011.

Among the headlines featured:

• Court battles have played out in the lawsuits against Austin-based InfoWars TV show host Alex Jones for promoting conspiracy theories claiming the horrific 2012 mass school shooting at Sandy Hook Elementary never happened. He has lost some recent rulings.
• A new federal judge took the bench in Waco and immediately positioned the Western District as a challenger to the Eastern District’s stronghold on the patent litigation “rocket docket” title.
• Houston homeowners earned a federal court win against the Army Corps of Engineers over its management of the Addicks and Barker Reservoirs which resulted in catastrophic flooding during Hurricane Harvey.
• On death row for more than 20 years on a murky murder conviction, Rodney Reed was less than a week away from the death chamber when the state granted an indefinite stay of execution to consider new evidence.

The complete Top 10 Texas Legal Stories of 2019 can be found at https://www.androvett.com/news/the-top-texas-legal-stories-of-2019.

The Eight Circuit has rejected a plaintiff’s claim that an arbitration clause in a retainer agreement she signed with a law firm was unconscionable, according to Carlton Fields’ Reinsurance Focus.

The plaintiff claimed she had received a call from a purported agent of the firm informing her of a purported life-threatening medical condition, leading her to have surgery that she considered to be less than successful. She sued the law firm and other defendants, and the firm sought to compel arbitration pursuant to a retainer agreement.

The district court found the arbitration agreement was unconscionable and refused to compel arbitration. Despite acknowledging that the circumstances that gave rise to this lawsuit were “troubling,” the Eighth Circuit determined that the retainer agreement was not procedurally unconscionable.

Read the article.

American Lawyer Media and The National Trial Lawyers have named the Aldous\Walker law firm a finalist for a 2020 Elite Trial Lawyers Law Firm of the Year honor, based on the firm’s continuous winning record in court.

The finalist honor recognizes the firm for courtroom wins in two categories, dram shop litigation and child abuse. Winners will be announced Jan. 20 at the NTL Summit in Miami.

“These are very important results for the individuals and families involved,” said Brent Walker of Aldous\Walker, who along with firm founder Charla Aldous tried both cases. “To be recognized for achieving some measure of justice in the courtroom for our clients is a tremendous honor.”

Aldous\Walker and other firms are being recognized for having “demonstrated repeated success in cutting-edge work on behalf of plaintiffs over the last 15 months,” as well as a track record of client wins through the preceding three to five years, according to ALM and The National Trial Lawyers.

One of the firm’s cases cited for the honor involved representing Stacey Jackson, mother of Dallas Cowboys player Jerry Brown, who was killed in a rollover accident in 2012. A Dallas County jury determined a club had overserved alcohol to the car’s driver, Dallas Cowboys lineman Josh Brent, and delivered a verdict on damages in the amount of $25 million.

In the second case, the firm represented a young woman who was raped in 2012 by two high school football players. In February 2019, a Denton County jury awarded her $32 million for aggravated sexual assault.

Earlier in 2019, American Lawyer Media cited those two cases and a third in naming Aldous\Walker a finalist for Elite Trial Lawyers. The third case involved a $37.6 million verdict against Honda for the defective design of a third-row seat belt that failed to protect a young Dallas woman in an accident and left her a quadriplegic.

Blomberg Law is reporting that a real estate developer is suing New York City litigation boutique O’Shea & Partners for breach of contract, alleging it charged “grossly excessive” and padded fees when it represented the developer beginning in 2013.

Plaintiffs claim the firm charged “almost $1.9 million over a three year period, without engaging in any discovery, or document collection, whatsoever.”

In the complaint in the New York court, plaintiffs Madison Equities LLC and the group’s principal, Robert Gladstone, are seeking at least $900,000 over the “fraudulent” billing, writes Bloomberg’s Melissa Heelan Stanzione.

Read the Bloomberg Law article.

The University of Phoenix — a for-profit college chain that has been under scrutiny for years — has reached a landmark settlement agreement with the Federal Trade Commission following accusations of unfair and deceptive practices that will result in widespread student loan forgiveness, Forbes reports.

“Too often, students would graduate from the University of Phoenix with dismal career prospects, minimal ongoing support, and a lot of student loan debt that could be impossible to repay,” writes Adams S. Minsky, a Forbes contributor. “The University allegedly specifically targeted people of color and military veterans.”

Under the settlement, the university will pay $191 million, of which $141 million will be used to forgive some student loans for certain borrowers who attended the university.

Read the Forbes article.

A Davis Wright Tremaine post illustrates the application of a forum selection clause in a contract.

In Down-Lite International, Inc. v. Chad Altbaier, a federal magistrate judge denied defendant’s motion to transfer venue from Ohio to California largely because the parties’ forum selection clause designated Ohio as the venue for disputes.

Down-Lite’s holding illustrates that courts tend to enforce forum selection clauses unless there is a compelling showing of prejudice to the party opposing the agreed-upon forum, according to the post.

Read the article.

While prohibiting disparagement of co-workers, products and services is lawful, prohibiting disparagement generally of the employer, management, or policies is not, according to a memo from the  National Labor Relations Board, the Office of General Counsel.

Fiona W. Ong discusses the memo in an article for Shaw Rosenthal.

The memo was in part a response to a law firm’s employee agreements that contained a provision prohibiting critical comments about the firm. Several former employees posted negative reviews about the firm on various websites, including Glassdoor.com, Indeed.com, Avvo, Yelp, and Yahoo.business. The law firm then filed suit against them for breach of contract and defamation.

Read the article.

Trump International Hotel
Image by Mike Peel

A federal appeals court in Virginia heard arguments Thursday about whether to revive a lawsuit accusing President Trump of violating the Constitution by profiting from his hotel near the White House, according to a report by  The New York Times.

The hearing marks the first time that a full appellate court has considered the emoluments or anticorruption clauses of the Constitution, and Trump is the first president to be sued for allegedly violating those clauses, writes the Times‘ Sharon LaFraniere.

The hearing was a spirited session that indicated sharp divisions among the judges over the legal consequences of the president’s conduct, according to LaFraniere.

Read the  NY Times article.

Bloomberg Law reports that a federal judge in Chicago ruled that Lincoln National Life Insurance Co. wrongly shortchanged a tax attorney’s disability benefits by $3,000 per month by determining he became disabled one day before he received a $65,000 raise.

Harlan Ten Pas, a former partner with McGladrey LLP, suffered a heart attack on Sunday over Labor Day weekend in 2014, one day before his raise became effective. The insurer based his disability benefits on his salary without the benefit.

Ten Pas sued, saying he was entitled to an additional $3,000 per month because the date of disability couldn’t be any earlier than the first non-holiday workday after his heart attack.

Read the Bloomberg  Law article.

The Salt Lake Tribune reports that the Utah Transit Authority’s former general counsel is suing the agency for $300,000 in deferred bonuses and benefits that leaders had voided as “unconscionably high.”

The agency responded in state district court by counter-suing Bruce Jones, alleging “fraud and legal malpractice.”

Jones claims he negotiated for the bonuses in exchange for keeping his base salary lower. The agency claims Jones represented “both himself and UTA in salary negotiations” on contracts that gave him the generous benefits, which were never approved by the board.

Read the Tribune article.

Jones Day has filed a motion seeking sanctions against plaintiffs who filed a $200 million lawsuit alleging that the law firm discriminates based on gender and motherhood, reports the ABA Journal.

The firm alleges in the sanctions motion that the plaintiffs made up the lawsuit’s pay-bias claims “out of whole cloth” and seeks their dismissal, writes the Journal‘s Debra Cassens Weiss. Jones Day also is seeking an order for the plaintiffs’ lawyers to pay fees and costs that the firm spent to litigate the motion.

Jones Day has claimed that the plaintiffs in the original suit wrongly assumed that female associates at the firm were paid less than their male counterparts.

Read the  ABA Journal article.

The Wall Street Journal takes a look at a specific product liability case and puts it into context in the larger question of how Amazon and other internet companies try to avoid a legal burden when the products they sell malfunction, causing injury and damage.

The article by Alexandra Berzon tells the story of malfunctioning hoverboards that caused millions of dollars in damages when they burst into flames.

“The cases are testing a longtime argument made by Amazon and other internet companies, one that underpins the modern tech industry,” she writes. “We are just operating a platform that connects buyers and sellers, the argument goes. It’s up to the sellers who use our site to make sure that they meet proper safety standards.”

Read the WSJ article.

Lewitt Hackman discusses two recent cases concerning franchise agreements, one involving a forum selection clause and the other covering indemnification.

Inn the first case: “A California Court of Appeal held that courts should not enforce forum selection clauses in contracts that also contain a jury waiver. For franchisors that have California franchisees, this ruling could complicate the ability to litigate claims in their chosen forum.”

And in the second case, a federal appellate court held that a franchisee must indemnify a franchisor for its litigation defense costs, vacating a district court’s order of summary judgment for the franchisee.

Read the article.

An embattled federal district court seat in North Carolina that multiple presidents struggled to fill over the course of 14 years finally has a new occupant, reports Bloomberg Law.

By a 68 to 21 vote, the U.S. Senate confirmed law professor Richard E. Myers to the U.S. District Court for the Eastern District of North Carolina, eliminating the longest-running vacancy in the federal judiciary and bolstering President Donald Trump’s efforts to reshape the courts with conservatives, according to Bloomberg’s Madison Alder.

“Myers, who Senate Judiciary Committee Chairman Lindsey Graham said would be the first black judge on his court, is a professor at the University of North Carolina School of Law and is a former federal prosecutor,” writes Alder.

Read the Bloomberg Law article.