A law firm has lost a challenge to a trial court order imposing sanctions against it and awarding $69,861.19 in attorney’s fees to ExxonMobil.
The appeal was brought by Dr. Robert Corwin, attorney Richard Brualdi, and The Brualdi Law Firm.
Court records show that on Oct. 11, 2023, Exxon announced a merger with Pioneer Natural Resources, an oil and gas exploration and production company valued at $59.5 million. Pioneer’s shareholders were scheduled to vote on the proposed merger at a special meeting on Feb. 7, 2024. On Jan. 17, 2024, however, Corwin, a Pioneer shareholder, sued to enjoin the closing of the vote on the merger.
Corwin, who was represented by Brualdi, accused Exxon of negligent misrepresentation and violating the Texas Securities Act.
He sought an emergency temporary injunction against the closing of the shareholder vote on the merger. The hearing was set for Feb. 2, 2024, five days before the scheduled shareholder vote. Following the hearing, the trial court denied the request for injunctive relief.
The trial court found that Brualdi had consciously filed a groundless request for a temporary injunction to annoy, alarm, and abuse Exxon, court records state.
Ten days later, Corwin filed a notice of non-suit and the trial court dismissed his claims.
Court records show Exxon moved for sanctions against Brualdi. At a hearing, Exxon’s counsel testified that “merger tax lawsuits” place a defendant “between a rock and a hard place” because “you either settle and pay the mandatory attorney’s fees or you take a risk, however small, of an injunction and all the consequences that come with that.”
The counselor testified that Brualdi did not need to make a settlement demand in the case because he knew the terms of any settlement based on his personal experience handling litigation in numerous shareholder suits filed by Brualdi.
He testified that Brualdi’s “rate to settle these cases” is “$425,000.”
On March 31, the First Court of Appeals concluded that the trial court did not abuse its discretion by imposing sanctions on Brualdi, affirming the order.
“The trial court did not sanction Mr. Brualdi or the firm for the actions he took in unrelated matters,” the opinion states. “Rather, the court considered the actions he had taken in previous cases in other courts only as evidence of his motive in this case.”
Appeals case No. 01-24-00207-CV
