May, 2013 | The Law Offices of Gregory D. Jordan

American Airlines Settles Lawsuit Against Orbitz

American Airlines’ litigation against Orbitz has been settled. The airline had sued Orbitz and other online air travel providers, claiming that the defendants were attempting to block American’s entry into the market. The lawsuit had been filed in U.S. District Court for the Southern District of Texas in Fort Worth, where American’s parent corporation, AMR Corp., is based. Terms of the settlement were not disclosed.

American reached a settlement agreement in March with Travelport, an airfare data provider that also owns 48 percent of Orbitz. The two companies agreed to a new global distribution system. Last year, American reached a settlement with Sabre Holdings Corp., an online flight reservation provider. A jury trial had already begun in Texas state court when the Sabre settlement was reached. American had accused the companies of antitrust violations.

The resolution of the litigation against Orbitz is another step for AMR Corp. to emerge from bankruptcy protection. The bankruptcy court must still approve the settlement agreement. AMR Corp. recently announced plans for a merger with US Airways to form the world’s largest airline.

The dispute with Orbitz arose over the agency’s method of displaying information about the airline’s flights and fares. American wanted to introduce its own method of displaying information, which allows consumers to take into account information other than air fares. The lawsuit claimed that Orbitz displayed fares for American Airlines that were higher than they actually were. In 2010, American removed its fares from Orbitz, but the fares reappeared in June of 2011.

UTB Professor Alleges Wrongful Termination

A tenured English professor at the University of Texas at Brownsville has filed a lawsuit alleging that she was wrongfully terminated. Professor Susan Mills filed the lawsuit in U.S. District Court for the Southern District of Texas.

According to the lawsuit, Mills began working for the university in 1992 and became a tenured professor in August 2010. When the university separated from Texas Southmost College, university officials claimed that the split required faculty cutbacks, and Mills and 87 other faculty members received notice that their positions would be terminated. However, Mills alleges that the university actually sought to hire instructors, including in the English department, at the same time her employment was being terminated.

Mills is seeking a court order for her position to be reinstated. The lawsuit names the university itself and three university officials, including the university’s President Juliet Garcia, as defendants.

Mills alleges in the lawsuit that a Department Review Committee recommended to Garcia that four out of 21 faculty members’ positions be terminated, but that one of the committee members submitted false information indicating that another professor was above Mills in the university’s hierarchy. Mills claims that Garcia relied on this information in terminating her employment. According to the lawsuit, Mills appealed her termination to a university Hearing Committee, which unanimously recommended that the decision to terminate her employment be reversed. However, Garcia ignored this recommendation.

The lawsuit cites the free speech clause of the First Amendment and the due process clause of the Fifth Amendment as “protections for the academic community.” A request for a temporary restraining order preventing Mills’ termination was denied.

Fired Television Station Worker Sues for Age Discrimination

A man has filed an employment discrimination lawsuit against a Houston television station, claiming his employment was terminated because of his age.

Charles Hobson, of Harris County, Texas, worked for KRIV from 1990 to 2011 as a live truck operator, staff photographer and editor. He claims that KRIV and co-defendants Fox Television Stations, Inc., Fox Entertainment Group and News Corp. fired him because of his age. The lawsuit alleges that Fox had been engaged in layoffs that disproportionately affected older employees of the station. According to the complaint, employees of the station that were hired before 2004 are participants in pension and benefit plans that are more extensive than those offered to newer employees.

Hobson claims in the lawsuit that in 2009, he began receiving vague, negative comments about his work performance. According to Hobson, in the 19 years previous, there had been no negative comments about his work performance. The lawsuit claims that the station’s news director added negative remarks to the 2009 performance evaluation written by his immediate supervisor, and that his 2010 evaluation was simply written by the news director and given to his immediate supervisor to present to Hobson, again with negative comments.

The lawsuit claims that the station’s news director made comments to Hobson that he “could have been better” or “could have done something different,” and other vague remarks. Hobson also claims he was disciplined for broadcast mistakes that occurred due to inclement weather and computer malfunctions.

According to the complaint, there are approximately 18 employees of the station who have similar job titles to Hobson’s, and Hobson was the oldest or one of the two oldest. The lawsuit claims that younger employees performed similarly to Hobson but did not receive the same negative remarks. According to the complaint, Hobson’s employment was terminated in January of 2011 and a younger employee was hired as his replacement.

The lawsuit, filed in the U.S. District Court for the Southern District of Texas in Houston, claims that the defendants violated the Age Discrimination in Employment Act (ADEA). The ADEA protects workers over age 40 from age-based discrimination. The plaintiff is also suing under the Employee Retirement Income Security Act (ERISA). Hobson previously filed a charge of age discrimination with the Equal Employment Opportunity Commission (EEOC) and the Civil Rights Division of the Texas Workforce Commission, which are procedural steps before litigation.

The lawsuit seeks a jury trial and damages for loss of past and future wages, as well as emotional pain and suffering, inconvenience and loss of enjoyment of life.

Lawsuit Over Natural Gas Payments Seeks Class Action Status

A lawsuit has been filed by Texas landowners against Chesapeake Energy over reduced royalties, and unlike similar lawsuits already pending, this one is seeking class action status.

Charles and Robert Warren, along with a Johnson County couple, filed the lawsuit against Chesapeake Energy after they claim they saw significant reductions in their royalty payments.

Chesapeake had informed royalty owners in August 2011 that it would begin subtracting “post-production costs” from the sales prices for natural gas that it used to determine royalty payments. The company said then that if a royalty owner’s lease prohibited such charges – for expenses such as compressing and treating gas to ready it for sale – then the costs would not be deducted. However, the Warrens allege they saw such deductions even though their lease does contain a provision prohibiting charges for post-production costs.

Post-production costs can amount sometimes to between 80 cents and $1 per 1,000 cubic feet (mcf), which is significant when gas prices are around $2 per mcf, as they were last year. The Warrens claim that by March 2012 they were being paid as low as 42.4 cents per mcf for natural gas from the eight wells operated by Chesapeake. According to Charles Warren, the difference in payments ran to six figures.

The Warrens’ lawsuit joins several others against the company over reduced royalty payments, including a suit filed by Tarrant County landowners. The Warrens’ suit is now before Judge Barbara Lynn in U.S. District Court in Dallas. The fact that class action status is being sought is unusual for a Texas gas royalty lawsuit.

Chesapeake’s action in reducing royalty payments came at a time of extremely low natural gas prices. Prices began falling in 2008 and reached $1.90 per mcf in April 2012, a 10-year-low.

Some landowners have achieved results without legal action. A neighborhood association in Arlington, Texas questioned Chesapeake’s reduced royalty payments to residents, pointing out that their lease had a strong clause prohibiting the deduction of post-production costs. In that case, Chesapeake adjusted the royalty checks and residents have seen their payments more than doubled. Debbie Moore, the president of the neighborhood association, said that the group had insisted on the clause during the 2008 leasing process, upon the advice of another neighborhood group.

Chesapeake Energy is the second-largest natural gas producer in the Barnett Shale. The company has experienced cash flow and debt problems in recent years and has sold approximately $2 billion in assets. Chesapeake also recently dismissed its former CEO and Chairman Aubrey McClendon.

Frito-Lay Loses Texas Lawsuit Over Bowl-Shaped Chips

A Dallas jury found against Frito-Lay in the company’s lawsuit against a competitor who made bowl-shaped chips similar to Frito-Lay’s Tostitos Scoops.

The lawsuit was filed in U.S. District Court against Ralcorp Holdings and its subsidiary Medallion Foods. Ralcorp makes private-label products that carry the name of the store where they are sold. Ralcorp’s Cupz brand chips are sold in Kroger stores and its Bowlz brand is carried by Wal-Mart. Both brands of chips are bowl-shaped for easier dipping, similar to Tostitos Scoops.

Frito-Lay, owned by PepsiCo, argued that the Ralcorp chips were too similar to its own chips in design and manufacture, and infringed on the company’s intellectual property. The plaintiff sought $4.5 million in damages and a court order prohibiting the defendants from manufacturing their chips. According to Frito-Lay, the Scoops brand was introduced in 2001 and generates tens of millions of dollars in annual sales.

After a two-week trial, the jury of seven women and three men deliberated for about five hours before finding for the defendants. The jury found no infringement of patent or trade dress and awarded no damages to Frito-Lay. A PepsiCo spokesperson said the company was considering its post-trial options.

Frito-Lay argued that the defendants obtained trade secrets from a vendor and former employees, but the company did not call any witnesses who saw employees take trade secrets. The jury found that the defendants’ chips were sufficiently dissimilar to the plaintiffs’ product such that consumers would not be confused.

Frito-Lay, based in Plano, Texas, has been a wholly-owned subsidiary of PepsiCo since 1965. Ralcorp, based in St. Louis, was purchased recently by ConAgra Foods for $5 billion.

TransCanada Sued By Texas Landowners Over Keystone XL Pipeline

A group of landowners in Texas is suing TransCanada Corp. over the Keystone XL oil pipeline, saying that the company does not have the right to acquire their property by eminent domain. The group is challenging TransCanada’s status as a common carrier.

The lawsuit by the landowners is an obstacle for the phase of the pipeline that is planned from Cushing, Oklahoma to the Gulf coast of Texas. Another phase, from Alberta, Canada to Steele City, Nebraska, has been delayed by environmental concerns and still needs government approval. The finished pipeline will transport tar-sands oil from Canada to refineries on the Texas coast.

The lawsuit is being heard in the Ninth Court of Appeals in Beaumont, Texas, after District Court Judge Tom Rugg ruled against the landowners in September. A number of similar cases are making their way through the courts.

The landowners are hoping to build on the precedent of Texas Rice Land Partners Ltd. v. Denbury Green Pipeline-Texas LLC, a 2011 Texas Supreme Court case that opened the door for challenges to common-carrier status. In the Denbury case, a pipeline company tried to establish its status as a common carrier of carbon dioxide by filing an application with the Texas Railroad Commission. Landowners refused Denbury Green entry onto their land, and argued successfully in court that the company must do more to prove that it would be operating a pipeline that would be available for public use.

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