A prominent Dallas businessman is accused of witness tampering in a case pending in a Texarkana federal court.
Orix USA Corp., a financial services firm based in Dallas, filed suit against Preston Hollow Capital in the Texarkana Division of the Eastern District of Texas in October 2015. The suit accuses Jim Thompson and other Orix higher-ups of forming Preston Hollow to compete with Orix while Thompson was still serving as Orix's CEO.
The suit alleges Preston Hollow, under Thompson's guidance, stole proprietary and confidential information and property from Orix and that Preston Hollow has "siphoned" critical staff from Orix in violation of their employment contracts and federal law.
Orix is represented by the Jackson Walker firm, including Chip Babcock of Houston and Texarkana lawyers George McWilliams and David Folsom, who is a retired U.S. District Judge who previously served in the Eastern District of Texas. McWilliams declined to comment on behalf of Orix. Preston Hollow is represented by the Baker Botts firm of Dallas. Preston Hollow's lead attorney Rod Phelan could not be reached for comment Friday.
On June 10, Orix filed an emergency motion for sanctions against Thompson that alleges witness tampering. The motion complained about texts, phone calls and emails Thompson sent to Orix's head of information technology in the months leading up to, during and after he was deposed in the case.
Thompson made "no caller ID" calls to Orix IT head Brad DeLong beginning in March, according to DeLong's declaration attached as an exhibit to the sanctions motion. When DeLong answered one of the calls, it was Thompson, who referred to Orix as "bad guys," as he complained about the lawsuit. DeLong's declaration chronicles emails and a stack of legal documents stuffed in his mailbox at his personal residence, which DeLong perceived as a threat.
The motion alleges that Thompson glared at DeLong during his deposition June 6 and made audible sounds of disapproval at his responses to questions. After he was deposed, DeLong received another email from Thompson expressing his disappointment in him and describing his testimony as "untruthful," while encouraging him to "come clean." DeLong's declaration expresses a desire for the communications from Thompson to stop and a belief that Thompson was trying to influence his testimony.
After Orix's lawyers filed the sanctions motions, DeLong received two more calls from Thompson that he did not answer. Preston Hollow's lawyers claim the dials were accidentally made by Thompson while he was trying to look up other information on his phone. Orix accuses Thompson of indirectly attempting to influence other witnesses in the case after the sanctions motion was filed by getting others to contact witnesses on his behalf.
Preston Hollow argued at a hearing June 30 before U.S. District Judge Robert Schroeder III that while Thompson's behavior is not ideal, it does not rise to the level of witness tampering because Thompson did not try to "put words in (DeLong's) mouth."
Schroeder declined to formally sanction Thompson for witness tampering after the two sides argued the motion June 30. However, Thompson is no longer allowed to attend depositions and is prohibited from communicating with any witness directly or indirectly about the pending litigation.
"I view this conduct as very inappropriate. And it's inappropriate even in a case like this where emotions are running high," Schroeder said.
Schroeder told Phelan, "It would behoove Mr. Thompson not to engage in any further conduct of this nature."
Earlier this week, Orix filed a third amended complaint in the case. Preston Hollow has responded, denying any wrongdoing. A bevy of motions are pending before Schroeder in the suit and another case between Orix and Preston Hollow is pending in a Texas district court in Dallas.
In the federal suit pending in Texarkana, Orix is asking for an injunction that would prevent Preston Hollow from using Orix's name in its financial services offerings, bar Preston Hollow from infringing on Orix's trademark, stop alleged false affiliation, stop false advertising and end alleged unfair competition. The suit asks that Preston Hollow be ordered to stop using Orix's property, such as pitch books, and that any Orix property and documents being held by Preston Hollow be returned.
The suit asks that Preston Hollow be ordered to pay actual damages, punitive damages and reimburse Orix for attorney fees and other costs associated with the litigation.