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Yetter Coleman Wins Texas Supreme Court Ruling for IBM, Reversing Tort Judgment

In a major opinion issued on March 15, 2019, the Texas Supreme Court ruled for our client, IBM, reversing a $17.5 million tort judgment. The appeal arose out of a lawsuit filed by Lufkin Industries, a large oilfield equipment supplier, against IBM for tort and contract claims stemming from a software implementation contract.

In 2015, a Lufkin, Texas jury found in favor of Lufkin Industries. In 2017, the original $20 million judgment was reduced by the Tyler appellate court.

The Texas Supreme Court reaffirmed its prior precedent that express disclaimers in contracts between sophisticated parties bar recovery in tort for alleged misrepresentations. It adopted IBM’s position that Lufkin cannot recover in tort because it disclaimed reliance on non-contract representations. The ruling further clarifies Texas law on contract protections and continues a line of decisions holding parties to their contract remedies. The Court remanded the case for a new trial solely on contract issues.

Briefing and argument to the Texas Supreme Court was led by Reagan Simpson, assisted by Lonny Hoffman, April Farris, Shane Pennington, and co-counsel at Kirkland & Ellis. The firm was also served as lead counsel for IBM at trial, including Paul Yetter, Bryce Callahan, and Doug Griffith.