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Exxon Corp., et al. v. Mobil Corp., et al. Type of Case: Patent infringement Verdict: $171 million Outcome: Judgment absorbed when parties’ companies merged What happened with this $171 million jury verdict can be summed up in one word: ExxonMobil. In 1998, Exxon sued Mobil for infringing on a patent issued in 1994 that covered a metallocene catalyst used to make plastics. Mobil argued Exxon’s patent was invalid, and even if valid, argued there was no infringement. But U.S. District Judge Kenneth Hoyt of Houston ruled the Exxon patent was valid and Mobil had directly infringed upon it. The jury awarded actual damages of $171 million on Aug. 11, 1998. Afterward, Mobil appealed, says its attorney, David L. Burgert, a member in Porter & Hedges in Houston. But on Nov. 30, 1999, Exxon and Mobil merged to form a new company called ExxonMobil Corp. The judgment was absorbed in the merger, says Burgert, and the case was ultimately dismissed. William C. Slusser, a member in Slusser & Frost in Houston, served as counsel for Exxon in the patent-infringement suit. He says he’s not aware of many cases where large jury verdicts go away because of a corporate merger. “It’s pretty unusual for a merger to coincide with a major piece of litigation between two companies,” he says. Did the jury award have any effect on the ownership interests of the individual companies’ shareholders? “I’m not able to get an answer as far as a dollar figure,” says Tom Cirigliano, ExxonMobil spokesman. “The best answer I can give is that our shareholders have benefited because the dispute was brought to an end with no additional legal costs.” – Stephanie Hoops Lot$Off Stores Inc. v. Chase Manhattan Bank of New York Type of Case: Securities fraud Verdict: $150.9 million Outcome: $13 million recovery after appellate reduction If plaintiffs’ lawyers think they have any better chance of upholding punitive damages in the federal system instead of state court, they should look at what happened to this complicated 1997 securities fraud case. When Lot$Off came to a verdict, the plaintiff’s lawyers from Akin, Gump, Strauss, Hauer & Feld scored one of the biggest hits ever in U.S. District Court in San Antonio with $150.9 million in damages — a whopping $138 million of that in punitives. U.S. District Judge H.F. Garcia presided. But much like the name of their client’s chain of discount stores, the plaintiff’s lawyers found the 5th U.S. Circuit Court of Appeals took lots off the verdict when it issued a decision in the case two years later. The appellate court affirmed the nearly $13 million in compensatory damages, but eliminated the punitives finding that the damage done did not reach a level of wrongful intent to warrant such an award. According to its lawyers, San Antonio-based Lot$Off began offering common stock to foreign investors in 1994. The company delivered the shares to Chase Manhattan Bank. The shares were later placed in escrow with Banques Paribas, a Swiss bank. Lot$Off contended that $5.5 million in shares were released before payment was received — allegedly purchased by a couple of swindler investors, one of whom later did prison time, the plaintiff’s lawyers say. Lot$Off settled with Banques Paribas before the verdict, leaving Chase to take the hit. “Certainly, in the 5th Circuit, it is doubtful that a large punitive is going to stand,” concedes Barry Chasnoff, a partner in the San Antonio office of Akin Gump who represented Lot$Off. “The fact is those large awards are going to be closely scrutinized.” Chase lawyers strongly denied the bank did anything wrong. After pleading that the fraud was the result of investors who allegedly didn’t pay for the stock and that the bank was also a victim of the fraud, defense lawyers for Chase were shocked by the verdict. “Big verdicts come down against big companies, that’s one thing we have to realize,” says Joseph Latting, a partner in the Austin office of Locke, Liddell & Sapp, who represented Chase. “Thank goodness sanity prevailed at the 5th Circuit.” Chasnoff remembers one of the jurors calling his office after the verdict. The juror said that because the jury panel had learned that Banques Paribas had settled, they assumed one of the companies had done something “terribly wrong,” Chasnoff recalls. “The first thing they did in the jury room was hold hands and pray,” Chasnoff says, recalling the conversation with the juror. “As she drove home [after the verdict was announced] she realized that in calculating the damages they had made a mathematical error. … It should have been substantially more [damages]. And she never told us what her approach was.” Post trial, both sides stuck by their positions. The 5th Circuit panel offered extra argument time, Chasnoff and Latting say. The parties even went into a mediation room at the 5th Circuit in an attempt to settle the case immediately after argument, but that attempt failed. The $13 million has since been paid — which wasn’t an easy task because Lot$Off filed for bankruptcy and a verdict collection agency also became involved, Latting says. Chase has since sued Akin Gump in New York state court, alleging the firm’s shoddy security advice to Lot$Off was part of the reason for the fraud. Akin Gump responded by counter-suing in San Antonio federal court. Both suits are pending. The verdict didn’t do much to help Lot$Off. The business closed years ago, Chasnoff says. And despite the notoriety of obtaining a big verdict, the case didn’t change Chasnoff’s career, who’s on Akin Gump’s management team. “They kind of expect me to have good results when I take a case to trial,” Chasnoff says of his firm. “Maybe it would have been different if I had lost.” Likewise, the case hasn’t really helped Latting’s career. “It wasn’t very good for my stomach lining,” Latting says of the Lot$Off verdict. “It made me wonder about the jury system.” Latting went on to win a $350 million judgment in a technology case in Austin state court last year. A final judgment has not yet been entered. – John Council Tennessee Gas Pipeline Co. v. KCS Resources Type of Case: Fraud/breach of contract Verdict: $143 million Outcome: Judgment not entered; plaintiff released defendant from verdict Some big verdicts are reduced on appeal, some settle and others are remitted by trial judges. Yet this huge verdict was eliminated in an unusual way — the plaintiffs dropped their claim after they were hit by what was essentially an offsetting verdict. Years in the making, this complicated fraud case pitted a natural gas company, Tennessee Gas Pipeline, against gas producer KCS Resources. Tennessee Gas Pipeline alleged it was cheated by KCS when it sold TGP gas secretly injected with propane. The propane was allegedly injected to meet the terms of the contract between the companies. That contract allowed TGP to reject weak gas. Yet while the case was being tried in Zapata County, the Texas Supreme Court was considering Lenape Resources Corp. v. Tennessee Gas Pipeline, in which the contract between the same two companies was in dispute. Lenape is the former name of KCS. In the contract case, the high court found that TGP couldn’t get out of its contract with Lenape. So lawyers on both sides went to the bargaining table. “KCS gave up its contract under Lenape,” says Mark Wawro, a partner in Houston’s Susman Godfrey, who represented TGP. “And in exchange, Tennessee gave up its claim under that verdict.” Charles Roberts of San Antonio’s Jeffers & Banack believes the jury verdict in the case was “obscene” and the result of a runaway jury. But everything worked out in the end, he says. But Wawro says the jury verdict was exactly what they’d asked for: a punitive amount that was four times the amount of the $28.5 million in actual damages. Damage caps don’t apply to this kind of case, he says. “You’re always concerned when a verdict comes back like that because it was so beyond reason,” Roberts says. “But judgment was never entered because it was settled as part of the overall accommodation.” – John Council Johnny B. Aaron, et al. v. Abex Corp. and Carborundum Corp. Type of Case: Personal injury Verdict: $115.6 million Outcome: Settled confidentially post trial This big verdict was also a big pain-in-the-neck for the Carborundum Co. The plaintiffs’ and defendants’ counsel say it was the first big verdict against the company. “Carborundum wasn’t happy with having to pay it,” says the defendants’ lawyer Jeffrey H. Marsh, a partner in Houston’s Mattingly & Marsh. But, he adds, the amount of money Carborundum ended up paying was “a very small fraction of the verdict.” Abex, the steelworkers’ employer, was nonsuited, according to the opinion. Yet plaintiffs’ attorney W. Mark Lanier, a partner in Houston’s Lanier, Parker & Sullivan, says, “My clients were happy with the settlement.” In Aaron, 21 Alabama steelworkers alleged they were exposed to asbestos between 1970 and 1983 at a Birmingham, Ala., steel mill while using a diamond-tipped wheel manufactured by Carborundum. The diamond-tipped wheel was used for cutting steel and sharpening tools. The steelworkers alleged defective product and failure-to-warn claims. The defendants denied the plaintiffs were exposed to asbestos from that particular wheel, denied the wheel emitted asbestos and denied the workers were ill. In 1998, a Brazoria County jury found for the plaintiffs, awarding a total of $115.6 million — $850,000 to each of the 18 plaintiffs suffering from asbestosis, $100,000 to each of the three plaintiffs exposed to asbestos and $100 million in punitive damages to be evenly divided. Lanier says 23rd District Judge Ben Hardin worked hard to try to get the case settled before appeal. He says the judge didn’t rule on post-trial motions pending multiple mediations ordered by the court. The case finally did settle for a confidential amount. Lanier says his strategy to get the defendants to settle was to ask the trial court for an additional trial setting for 20 more of his plaintiffs. “My view was that I would show Carborundum that this verdict was not a fluke,” says Lanier. “If I tried a second case and won another verdict that quickly they’d have had a lot more cases filed against them in less defense-friendly states than Texas.” Lanier describes the settlement as “a fair amount.” Marsh says Carborundum wanted to settle because it had bigger things going on — the company was pretty much out of business and was working on a merger. Carborundum is no longer in business, Marsh says. As a result of the verdict, Lanier says his firm’s name became better known in the world of asbestos litigation. – Stephanie Hoops Ginsburg v. Goldstein Type of Case: Legal malpractice Verdict: $106 million Outcome: Settled confidentially post-trial If ever there was a case where both parties walked away feeling like winners, Ginsburg v. Goldstein is it. Lynne Ginsburg sued her divorce attorney Robert N. Goldstein alleging he lured her into a “bait and switch” situation by first agreeing to an hourly fee arrangement then talking her into a contingent-fee agreement instead. Altogether, Ginsburg paid Goldstein $5.3 million to handle her divorce, as reported in The Blue Sheet, a Texas Lawyeraffiliate. Goldstein countered at trial that $5 million of the amount paid had been a gift from Ginsburg. In 1998, a jury returned a $33.5 million verdict against Goldstein for actual damages. An additional $72.5 million in punitive damages was tacked on by Dallas County Court-at-Law Judge David Lopez, bringing the total judgment to $106 million. The case settled confidentially while on appeal. Goldstein’s attorney, William Ravkind of Dallas’ Ravkind & Ravkind, says it settled for “a thousand light years less than what the verdict was.” But Ginsburg’s attorney, Larry Friedman of Dallas’ Friedman, Driegert & Hsueh, describes the settlement as “a substantial amount.” After the settlement, Goldstein decided he didn’t want to practice law anymore; he went into the television production business, says Ravkind. Goldstein’s television company, Dallas-based Goldstein/Habeeb Productions, is the creator of “Cheaters TV,” a program that gives men and women who think their loved ones are cheating a chance to confront them. The show made the “worst” list in the January 2000 “Best & Worst” issue of D Magazine. Fort Worth Star-Telegram television critic Ken Parish Perkins, who’s written about Goldstein’s show, says there’s a chance it may be aired this fall on KDFW Channel 4 in Dallas. Ginsburg is happy just to have been vindicated by the huge plaintiff’s verdict, says Friedman, who was also pleased with the settlement. “You never spend your money before you get your money,” he says. “But I don’t do things for the money. I represent little people who have been wronged.” Ravkind says it was embarrassing to explain the large jury verdict to people, but he’s OK with it. “I had a bunch of lawyers call me up and make fun of me,” he says. “They said, ‘We didn’t think you lost cases.’ But that’s the name of the game. You live and die with the jury verdicts.” – Stephanie Hoops Jaime Antonio Cruz, et al. v. Atchison, Topeka and Santa Fe Railway Co., et al. Type of Case: Wrongful death Verdict: $60.4 million Outcome: Settled confidentially post trial In many ways, Cruz is a throwback to an earlier era when tort cases — and the laws that regulated damage awards — were simpler. A straightforward auto/train wrongful death, Cruz had none of the scientific intrigue of a toxic tort or medical malpractice case. And because the accident happened in 1993, punitive damage caps established a year later didn’t apply. Even so, the ultimate result of this big verdict was much like other post-tort reform cases — the intermediate appellate court reversed the punitive damages award and the parties eventually settled. In this case, Gregorio and Maria Gutierrez and their 13-year-old son Greg were killed in a vehicle as they crossed a train track in West Texas. The plaintiffs’ lawyers alleged the train failed to blow its whistle prior to the accident; the defense contended the driver failed to yield the right of way to the train. An El Paso jury in 1997 found the train engineer and the railroad 100 percent negligent. They awarded $9.2 million in actual damages, $7.2 million in future actual damages and $44 million in punitive damages. El Paso’s 8th Court of Appeals cut the punitive damages on appeal, leaving about $16 million in actual damages intact. “I’m never surprised by the court of appeals taking a hard look at damages,” says Kevin Glasheen, a partner in Lubbock’s Fadduol, Glasheen & Valles who represented the plaintiffs in the case. “That’s what they are charged with doing.” The Texas Supreme Court requested briefing on the case but hadn’t ruled on the petition for review when the case settled for a confidential amount in 1998. “Our evaluation was we had a 95 percent chance of affirming the actual damages and I think the railroad evaluated it accordingly,” Glasheen says. “We were in a strong position because it’s very difficult to get the Supreme Court to review actual damages.” The railway’s lawyer — John S. Howell of El Paso — could not be reached for comment. While awaiting the ruling, the surviving Gutierrez children lived with an uncle in a small house. One of the children is now 19 and is attending college and the other is 15. The children’s recovery from the case is in a trust, one-third of which went to pay their lawyers, according to Glasheen. Glasheen used his fees to invest in his firm. It allowed him to hire additional office staff and young graduates from Texas Tech University School of Law. “It’s given us the opportunity to carry the level of staff that we need to really handle a good volume of major cases and be able to move our cases aggressively,” Glasheen says. – John Council David Snyder and Eldon Davidson v. Texas State Technical College Type of Case: Texas Whistleblower Act Verdict: $36 million Outcome: Remitted to $2.7 million recovery post verdict by trial judge Sometimes even if plaintiffs can harness the outrage of a jury and win a big verdict, the damages awarded don’t wash with the trial judge. That’s what happened in this whistleblower case in which the trial judge reduced the $36 million awarded in damages to $2.7 million. The 1997 trial resulted in one of the biggest whistleblower verdicts against the state of Texas. Two former employees at the Amarillo campus of Texas State Technical College alleged that college officials committed numerous instances of theft, fraud and records tampering. After they reported the alleged wrongdoing, plaintiffs David Snyder, a former police chief at the campus, was fired, and Eldon Davidson, a former dean of students, was forced to resign, according to their lawyer, Kevin Glasheen of Lubbock. As reported in The Blue Sheet, TSTC lawyers contended at trial that Snyder was fired for insubordination and Davidson quit months after his annual contract was not renewed. Robert O’Keefe, a Texas assistant attorney general who defended the college at trial, did not return a phone call seeking comment. Jurors believed the plaintiffs and rewarded them handsomely. But not long after the verdict, 201st District Judge Scott McCown of Austin chopped about $33 million without explanation. “The judge picked the number,” says Glasheen. “It was the largest number that he could allow.” Glasheen was happy with the eventual outcome, given how tough it is to sue the state successfully because of sovereign immunity. He was even left with a rare souvenir after winning the verdict. “The Legislature passed a bill to pay us [the plaintiffs] and Gov. [George W.] Bush signed it,” Glasheen says. “It was pretty fun.” – John Council Michael Johnson, et al. v. Cook Fort Worth Children’s Medical Center, et al. Type of Case: Medical malpractice Verdict: $29 million Outcome: Settled confidentially post trial When a medical malpractice case involves an injury to a child, it’s usually not much of a surprise when a jury returns a hefty verdict. Yet in this emotional case in which a child was left with permanent brain damage, punitive damages were never an issue — the plaintiffs didn’t ask for them. As alleged by the plaintiffs, the parents of 6-month-old Makaiah Johnson took her to the hospital emergency room, where a doctor thought she might have a stomach virus or ear infection. Makaiah suffered permanent brain damage and Michael and Allison Johnson sued, alleging that negligent care at the hospital caused the baby’s injuries. They asked for $29 million in actual damages and got it, says their lawyer Steven Laird, a partner in Fort Worth’s Laird & Jones. But Laird declined to pursue punitive damages, partly because of the added burden the Legislature placed on plaintiffs in recent years — specifically a state law enacted six years ago that malice must be proven before punitives can be won, Laird says. “More and more, I think plaintiffs’ lawyers are realizing that punitive damages are exceedingly rare and juries have a difficult time in getting past the recent label of malice that has been placed on the threshold,” says Laird. “I’m convinced that the majority of jurors place an additional burden, at least subconsciously, on the plaintiff in order to get beyond the word ‘malice,’ ” he says. After the trial, the parties settled confidentially, Laird says. He declines to discuss the terms. At trial, Richard Griffith, a partner in Fort Worth’s Cantey & Hanger who defended the hospital, denied that the child’s injuries were due to the care she received at the hospital; instead, he alleged the girl suffered from Leigh’s disease. Makaiah died after the jury’s verdict, Griffith says. “I can’t say much about it because of the settlement,” Griffith says. “An arrangement was hit so that the case would not go beyond a certain limit.” The settlement did not go beyond the insurance company’s policy limit, which was reported to be $40 million, Griffith says. Although he lost at trial, Griffith notes, “I’m still traveling along. They [Cook Children's Medical Center] didn’t fire me or anything. They’re still using our firm.” – John Council Danny Irick, et al. v. Angel Brothers Enterprises Inc., et al. Type of Case: Auto negligence Verdict: $26.9 million Outcome: A high-low agreement resulted in a $5.9 million recovery In this verdict, a high-low agreement swallowed $21 million of the jury’s award. In 1996, Angela Irick was on her way to choir practice with her older sister, Melissa, who was driving, when the car was struck by another vehicle. Both sustained injuries, but Angela’s were more severe: She is a quadriplegic, although she has some sensations below the shoulders. The driver of the vehicle that struck the Iricks settled before trial. The Iricks sued Angel Brothers Enterprises Inc. alleging the accident was caused by gravel it hadn’t cleaned off the road after construction work, as reported in The Blue Sheet. Angel Brothers argued that the gravel wasn’t the cause of the accident; rather it was Melissa’s fault for not keeping a proper lookout, The Blue Sheet reported. While the jury deliberated, the parties entered a $5.9 million high-$3.7 million low agreement on behalf of his clients, Angel Brothers’ attorney Lansford O. Ireson Jr. says. Both sides waived their right to appeal. The jury returned a verdict of about $26.9 million, all in actual damages. Ireson, a partner in Ireson & Weizel in Houston, says he believes the high-low agreement was reached because “there were such catastrophic injuries that we think plaintiffs’ counsel wanted to recover something. … You never know how a trial’s going to come out.” The plaintiffs’ lawyer, Fort Worth solo John David Hart, did not return two phone calls seeking comment. Several attorneys not involved in Irick say they’ve observed more use of high-lows in recent years. “People are more aware of them than they were 20 years ago, and I think high-low agreements are going to be coming into use more and more,” comments plaintiffs’ attorney Helene T. Bergman, a Houston sole practitioner. Jeffrey W. Ryan, a partner in Chamblee & Ryan in Dallas, agrees. “I’m seeing more high-low agreements now than I did six or seven years ago,” he says. “I think it’s happening now because of the huge unpredictability of juries.” Bergman believes juries tend to be more defense-oriented today than they were 10 years ago, and it’s not as easy for a plaintiff to roll the dice and let the jury decide. “In today’s climate there has to be some type of guarantee for the injured claimant,” she says . — Stephanie Hoops Paul Hastings v. Associated Milk Producers Inc. and Duininck Brothers Inc. Type of Case: Personal injury Verdict: $22.4 million Outcome: Settled confidentially post trial The verdict in this case certainly changed plaintiff Paul Hastings’ life — but it also played a part in changing the life of defense counsel Edwin E. “Ed” Wright III, a partner in Stradley & Wright in Dallas. In August 1995, Hastings worked for Duininck Brothers Inc., painting a bridge atop some scaffolding in Decatur. An Associated Milk Producers truck allegedly struck the scaffold and Hastings fell 11 feet, breaking his neck, according to The Blue Sheet. He is now a quadriplegic. Hastings alleged AMP’s truck driver was negligent; AMP contended Hastings was contributorily negligent for not wearing a safety belt. Duininck settled prior to trial. A Wise County jury in 271st District Judge John Fostel’s court found Duininck 70 percent at fault, AMP 15 percent at fault and Hastings 15 percent at fault. After a reduction for contributory negligence, the total verdict came to around $22.4 million in actual damages. The case subsequently settled for a confidential amount. The verdict not only made it possible for Hastings to get a larger settlement than he otherwise might have, it also gave him greater control over his future care, says his attorney Steve T. Hastings of Corpus Christi’s Huerta, Hastings & Allison. Wright’s life also changed not long after the 1998 verdict. He says within six months to a year after the verdict, he changed his practice considerably. The case was one of several that made him decide insurance defense work wasn’t his cup of tea. “Without breaching any confidentiality or privileges, the case settled for the figure we recommended prior to trial,” says Wright. “Which means that my firm and I have not been referred any more cases from that insurance carrier.” Wright also alleges an insurance carrier in an unrelated case cut his fee after telling him that he shouldn’t have billed for reviewing letters pertaining to discovery disputes — his secretary should have done that. Wright says he felt he was in an “ethical quagmire,” so he changed the focus of his practice. Today he handles plaintiffs’ medical malpractice cases and works as a certified mediator.

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