appeals court

Brad Jackson Wins Second Favorable Judgment in a Week

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business litigation

The Law Offices of Brad Jackson recently scored our second big business litigation victory in less than a week by winning a summary judgment for two clients in a multimillion-dollar contract dispute. The decision issued in Dallas district court followed our successful defense of another client in a $100,000 fraudulent transfer claim.

The most recent ruling stems from a lawsuit that was filed against our clients by their former business partner, who claimed he was wrongly fired. Brad won that case in a summary judgment that protected our clients from more than $1 million in alleged damages.

The former partner responded by filing an appeal with Dallas’ 5th District Court of Appeals. Brad won the appeal last year when the court confirmed that our clients’ former partner was owed nothing and ordered him to pay for the costs of the appeal.

Despite the clear loss, the business partner and his attorneys were not done trying to force our clients to pay him something.

Fired Partner Argues for Stock Buyback

After he was fired, the former partner claimed that a contract among the owners obligated our clients to purchase his company stock, which he claimed was worth roughly $2 million. The Court initially denied summary judgment motions from both sides before scheduling a jury trial for last October to decide the contract dispute.

Prior to the trial, Brad helped convince the Court that an interpretation of the partners’ agreement should be determined by the Judge as a matter of law. The trial was postponed so both sides could brief the Court on the disputed issues.

Court Agrees with Brad Jackson in Ruling

In his brief, Brad argued that the contested contract did not include an obligation for our clients to buy back their former partner’s stock. Instead, Brad told the Court that the contract created an option for them to buy the stock if they chose to do so.

After considering arguments from both sides, the Court agreed with Brad and issued a final judgment representing a complete victory for our clients.

In the decision, Presiding Judge Maricela Moore of Dallas’ 162nd District Court ruled in our clients’ favor by granting both our previous and current summary judgment motions. In addition to awarding the business partner zero damages, the ruling also requires him to pay our clients’ court costs.

Although the former partner has lost multiple summary judgment decisions and appeals court rulings, he already has indicated that he intends to appeal this latest loss as well. Of course, we will continue to defend our business litigation clients and protect their legal rights through the appellate process.

Why Massive Trinity Industries Judgment was Reversed

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Big news for Dallas-based Trinity Industries came down late last month when a three-judge panel from the U.S. 5th Circuit Court of Appeals unanimously reversed and rendered, throwing out a $663.3 million adverse judgment. This case presented the odd situation where a plaintiff and jury said the government was defrauded, but the government wanted no part of it.

Like a lot of appeals court rulings, the final decision is focused more on the law’s intent rather than what the plaintiff alleged.

Case Background

The original 2014 verdict followed an earlier mistrial and three years of contentious litigation in the U.S. District Court for the Eastern District of Texas in Marshall. The lawsuit was filed under the federal False Claims Act by a man who owned a company that competed against Trinity. The False Claims Act allows individuals to file lawsuits aimed at protecting the government from fraud. Often, the government will join such cases as a plaintiff, but not always.

The plaintiff accused Trinity of defrauding the federal government by not disclosing a redesign in its ET-Plus guardrail system that was sold under federally subsidized state contracts. Jurors heard one week of testimony before slapping Trinity with a $175 million verdict that climbed to more than $663 million in the final judgment after the addition of penalties and attorney fees.

Court’s Reasoning

Trinity appealed, noting that the government never said there was anything wrong with the company’s guardrails as it continued to buy them. Notably, the Federal Highway Administration decided not to join the lawsuit as a plaintiff and instead issued an official memorandum during the trial expressing its continued confidence in the ET-Plus system.

On September 29, the 5th Circuit panel ruled in Trinity’s favor by reversing the earlier judgment and dismissing all claims against the company. Considering that Trinity didn’t tell the Federal Highway Administration about modifying its guardrail system and later made millions and millions of dollars selling the same system, you might ask, “So why didn’t Trinity lose on appeal?”

The answer, according to the unanimous three-judge panel, boiled down to a question of materiality.

The 5th Circuit noted that even though the plaintiff and the East Texas jury may have believed the government was defrauded, the government’s actions painted a much different picture.

“When the government, at appropriate levels, repeatedly concludes that it has not been defrauded, it is not forgiving a found fraud— rather it is concluding that there was no fraud at all,” the court concluded.

While some will argue that the ruling ignored the jury’s decision, the 5th Circuit’s reasoning no doubt will be relied upon by future defendants in False Claims Act cases until or unless this issue reaches the U.S. Supreme Court.