Judge Melissa Andrews of Texas’ Business Court has remanded a high-profile lawsuit involving the alleged rigging of the Texas Lottery back to a Travis County district court. The ruling follows the plaintiff’s decision to drop certain allegations that had triggered the Business Court to assert jurisdiction.
The controversy surrounding the jackpot in question led Lt. Gov. Dan Patrick to describe the Texas Lottery as “probably the biggest money laundering scheme in the country.”
The Reed v. Rook TX lawsuit arose from Jerry Reed’s $7.5 million Lotto Texas jackpot in May 2023. One month prior, Rook TX—a New Jersey-based company—claimed a $95 million jackpot after allegedly misrepresenting its date of formation in violation of Texas law.
Not only is Reed’s legal team asserting that he is entitled to the $95 million, but it is simultaneously attempting to expose a potential money laundering scheme.
On Monday, Judge Andrews ordered the case be sent back down to the 353rd District Court. In her opinion, she explained how the case ended up in her Court to begin with.
“Although this is not the kind of case one might typically expect to find in the Business Court, Reed (perhaps unintentionally) pleaded his way into this Court’s jurisdiction by alleging claims regarding the Rook defendants’ governance, governing documents, and internal affairs,” Judge Andrews wrote in the opinion.
According to state law, such cases fall within the Business Court’s jurisdiction.
Rook had removed the case to the Third Business Court Division by filing a notice of removal. Reed subsequently filed a motion to remand the case back to the district court, but was denied.
Manfred Sternberg—Reed’s attorney—told Texas Scorecard that he did not want this case heard in Business Court because it “is a newly created court of limited jurisdiction and its jurisdiction over the subject matter is not clear.”
On August 5, Reed released his fourth amended petition, which “omits his previous allegations related to Rook TX’s formation date, whether the Rook defendants were created for an improper purpose, and piercing the corporate veil.”
Because Reed removed the parts of the complaint that had originally allowed the Business Court to assert jurisdiction, there was no longer a justification for Judge Andrews to deny Reed’s motion to remand.
“Now, although later events generally do not divest a court of jurisdiction once properly acquired, Reed has successfully pleaded his way out of this Court’s jurisdiction by removing all such claims from his pleadings,” wrote Judge Andrews.
“This case has proved itself the exception to the rule in many instances, but it exemplifies at least one: the plaintiff is the master of the complaint,” she stated.
Sternberg praised Judge Andrews for her “well-reasoned written opinion” and couched the ruling as a move in the right direction.
The decision is a win for those who are skeptical of the Business Court’s intentions and Judge Andrews’ earlier ruling in the case.
In July, Judge Andrews refused to expose hidden corporate interests behind Rook TX’s alleged lottery rigging scheme.
Following Texas Scorecard’s reporting on the matter, Judge Andrews reversed her decision in August, ordering Rook TX members and partners to be disclosed to the Court but protected from public view.
Rook TX did not respond to Texas Scorecard’s request for comment in time for publication.
If you or anyone you know has information regarding judicial malfeasance, please contact our tip line: scorecardtips@protonmail.com.
