Carlton Energy Group, LLC v. Gene E. Phillips, Individually and D/B/A Phillips Oil Interests, LLC, Eurenergy Resources Corporation, Syntek West, Inc., and Cabeltel International Corporation

Opinion

ACCEPTED 01-09-00997-CV FIRST COURT OF APPEALS HOUSTON, TEXAS 12/30/2015 2:10:26 PM CHRISTOPHER PRINE CLERK

NO. 01-09-00997-CV ________________________________________________________ FILED IN IN THE COURT OF APPEALS 1st COURT OF APPEALS FOR THE FIRST JUDICIAL DISTRICT OF TEXASHOUSTON, TEXAS 12/30/2015 2:10:26 PM AT HOUSTON CHRISTOPHER A. PRINE ________________________________________________________Clerk

Carlton Energy Group, LLC,

Appellant/Cross-Appellee,

v.

Gene E. Phillips, Individually and d/b/a Phillips Oil Interests, LLC, et al.,

Appellees/Cross-Appellants. ________________________________________________________

ON REMAND FROM THE SUPREME COURT OF TEXAS CAUSE NUMBER 12-0255 ________________________________________________________

REPLY TO CARLTON ENERGY GROUP, LLC’S RESPONSE TO MOTION FOR LEAVE TO FILE SUPPLEMENTAL BRIEFING ________________________________________________________

Carlton’s emphatic opposition to supplemental briefing on remand is curious.

Carlton presumably wants this Court to render a judgment totaling more than $50 million

based on arguments written in 2010 as alternatives to the relief each primarily sought—in

Carlton’s case, a nine-figure judgment based on the jury’s verdict; in Phillips’s, a take-

nothing judgment based on various legal theories. But the reasons Carlton gives for this

rush to (a huge) judgment make little sense.

1 Carlton first claims that the “Supreme Court nowhere in its opinion indicates that

this Court should re-open briefing” but that claim is simply wrong. This Court can read

the Supreme Court’s opinion and make its own interpretation of the language that

“Phillips is entitled to argue that the jury’s verdict was against the great weight and

preponderance of the evidence,” Slip Op. at 25, 2015 WL 2148951 at *11, and that

Movants’ “argu[ment] that the evidence is factually insufficient to support the

judgment . . . may be raised on remand,” Slip Op. at 26, 2015 WL 2148951, at *12.

Especially given that some of the possible outcomes suggested by the Supreme Court for

consideration on remand were never discussed by either side in any briefing to any court,

it is literally impossible for Phillips to raise its insufficiency argument without further

briefing.

Second, Carlton argues that the constitutional issue should not be briefed because

that issue was not previously raised by Movants in this Court. In their briefing, Movants

will show that the constitutional issue has not, and indeed could not, have been waived in

this Court or at any other stage prior to the Supreme Court’s decision. The Movants’

constitutional challenge goes to this Court’s authority to conduct any sufficiency review

at all, and this Court cannot make a considered ruling on that challenge without

considering the parties’ arguments and authorities. Indeed, Carlton’s plea that this Court

prohibit briefing on this issue even if it accepts briefing on an ordinary sufficiency

challenge doth protest too much. This Court can ensure that such arguments neither

increase the size of the briefs nor enlarge the time allotted to prepare them. Why, then, is

2 Carlton so adamant that the Court need not consider whether it has the power to render

the judgment Carlton seeks?

Finally, this remains an important case that should be carefully considered—

especially given that the Supreme Court itself indicated that some evidence supported

actual damages that could be as low as $60,000 or as high as $31.16 million. Carlton

counters that the case is old, and this is true—but that is only because the parties and the

courts alike have found the case difficult. Indeed, at the time the Supreme Court issued

its mandate, this case was by far the oldest on its docket. The fact that this case was

pending before the Supreme Court for so long is now not a basis for this Court to “rush to

judgment,” particularly when the Supreme Court, as Carlton has suggested in its briefing,

may have remanded the case so that this Court could consider these important issues first.

Thus, it is hard to imagine a case less suitable for expedited treatment than this one.

Reliance on the earlier briefing will certainly impair this Court’s ability to reach a

correct result. Not only will it make it far more difficult for the Court to determine

whether it has jurisdiction at all, but, if it decides that it does, this Court will be forced to

rely on out of date briefing which was written primarily to advocate positions that the

Supreme Court has determined are irrelevant. The Movants’ main brief in this Court

devoted less than 2 pages to a factual sufficiency attack on the trial court’s $31.16 million

award, and their reply and post-submission briefs devoted little more attention to this

issue—and even then, most came in a no-evidence context. And, as already mentioned,

nothing in any brief has addressed the other extrapolated valuations raised by the

Supreme Court.

3 For all of these reasons, Movants submit that their motion should be granted

because further briefing is required in the interests of justice.

Respectfully submitted,

BAKER BOTTS L.L.P.

By: /s / Thomas R. Phillips Thomas R. Phillips tom.phillips@bakerbotts.com State Bar No. 00000102 Evan A. Young evan.young@bakerbotts.com State Bar No. 24058192 Benjamin A. Geslison ben.geslison@bakerbotts.com State Bar No. 24074269 98 San Jacinto Blvd. Ste 1500 Austin, Texas 78701 T: (512) 322-2565 F: (512) 322-8363

HOLMGREN JOHNSON MITCHELL MADDEN LLP

Mitchell Madden mmadden@hjmmlegal.com State Bar No. 12789350 Melissa Johnson State Bar No. 19142900 melissa@hjmmlegal.com 13800 Montfort Dr. Ste 160 Dallas, Texas 75240 T: (972) 484-7780 Attorneys for Appellees/Cross-Appellants Gene E. Phillips, Individually and d/b/a Phillips Oil Interests, L.L.C.

4 HAWKINS PARNELL THACKSTON & YOUNG LLP

Robert B. Gilbreath rgilbreath@hptylaw.com State Bar No. 07904620 4514 Cole Ave. Ste 500 Dallas, Texas 75205

William V. Dorsaneo State Bar No. 06012000 3315 Daniel Avenue Dallas, Texas 75202 T: (214) 780-5114 Attorneys for Appellees/Cross-Appellants Syntek West, Inc. and CabelTel International Corporation

5 CERTIFICATE OF SERVICE

I certify that a copy of this Reply was served electronically on all counsel of record listed below on December 30, 2015:

Fred Hagans David M. Gunn Kendall C. Montgomery BECK REDDEN & SECREST, L.L.P. Paula Janecek Mathers 1221 McKinney St. Ste 4500 HAGANS BURDINE MONTGOMERY & Houston, Texas 77010 RUSTAY, P.C. Email: dgunn@beckredden.com 3200 Travis, Fourth Floor Houston, Texas 77006 Vincent L. Marable III Email: FHagans@hagans-law.com PAUL WEBB, P.C. 221 North Houston Street Roger D. Townsend Wharton, Texas 77488 Kevin Dubose Email: trippmarable@sbcglobal.net ALEXANDER DUB OSE & TOWNSEND, LLP Warren W. Harris Jeffrey L. Oldham 1844 Harvard Street Houston, Texas 77008 BRACEWELL & GIULIANI LLP Email: rtownsend@adtappellate.com 711 Louisiana Street Ste 2300 Houston, Texas 77002 Email: Warren.Harris@bgllp.com

/s/ Thomas R. Phillips Thomas R. Phillips