LINCOLN, Neb. (DTN) -- The Texas Supreme Court on June 12 declined to hear an appeal of a Gillespie County cattle operation to revive a $30 million fraud verdict in a cattle DNA case against the operator of a cattle breed registry, after a state appeals court overturned the verdict.
Cattle producer Twinwood Cattle Company is a competitor with HeartBrand Holdings, Inc. in the seedstock industry.
In 2009, Twinwood purchased 210 head of full-blood Akaushi cattle from HeartBrand under a so-called "full-blood contract" that essentially warranted that the cattle were genetically pure and required Twinwood to join the American Akaushi Association.
In February 2025, the Texas 14th Court of Appeals in Houston ordered a new trial on surviving claims against the association.
Whether another trial takes place remains to be seen, as HeartBrand Holdings and the association have been tied up in Chapter 11 federal bankruptcy proceedings since 2022 after the jury verdict. Bankruptcy came about after the companies failed to post a bond required to pause the collection of the original $30 million judgement.
HEART OF THE DISPUTE
Twinwood wanted to raise the genetically pure Akaushi, also known as Red Wagyu. The paperwork proving the animals' bloodline is a significant portion of the breed's worth.
In this case, however, the only organization that kept official records -- the American Akaushi Association -- happened to be owned by Twinwood's direct business competitor HeartBrand.
In the original lawsuit, Twinwood alleged HeartBrand used control of the association to thwart Twinwood's business by issuing fake pedigree certificates and by refusing to hand over DNA laboratory records to Twinwood that were needed to register its cattle with a different registry.
In 2021, a jury agreed with Twinwood and awarded the company about $30 million in damages. That verdict including the damages was thrown out, primarily because the appeals court ruled the verdict did not detail how the money was to be divided.
NEXT STEPS
Houston-based attorney for Twinwood, Willie Wood, told DTN his client would be filing a new motion with the Texas Supreme Court to get a new trial.
"Twinwood is pursuing a motion for rehearing on the Texas Supreme Court denial of review, as Twinwood views there are material undecided issues of material importance to the jurisprudence of the state," Wood told DTN.
"Though the more than $30 million judgment has been reversed in part and reversed and remanded in part for a new trial, the court of appeals recognized the case against AAA was subject to a new trial. That was undisturbed by the Texas Supreme Court."
HeartBrand President Jordan Beeman said in a statement that the Texas Supreme Court's ruling was the right decision.
"From the start, this case was a misguided effort to wreck our family's business, launched by a former colleague we once trusted and financed by an Indonesian billionaire," Beeman said.
"But even in an unfair trial, HeartBrand Beef and the Beeman family never lost faith that justice would prevail. We were glad when the court of appeals reversed the trial court and we're even more pleased today that the Texas Supreme Court has put this attack on HeartBrand and on my father to an end. This ruling is tremendous news for the Akaushi breed and positions us to keep growing our company while supporting the breed's long-term success."
2016 SETTLEMENT
One of the claims that survived the appeals court ruling was that HeartBrand specifically refused to release DNA lab reports and breached a contract following a 2016 settlement.
The settlement came about when HeartBrand sold an Akaushi bull to another producer without imposing the same restrictions imposed on Twinwood through the contract.
HeartBrand terminated the contract and freed Twinwood to sell its Akaushi genetics to anyone other than association members.
In 2011, the association registered some of Twinwood's cattle without verifying their DNA.
The Texas appeals court held that Twinwood was bound by the 2016 settlement that released "all existing, future, known and unknown claims" arising out of the contract before the settlement was reached.
In reversing the original $30 million verdict, the appeals court found that the trial court had never submitted the release defense to the jury.
And as part of its membership application filed with the association, according to court documents, Twinwood essentially waived any claims against the association.
The jury in the case found HeartBrand liable for using the association as a tool to perpetuate alleged fraud. The appeals court, however, found the evidence insufficient to support the allegation.
The Japanese Akaushi breed is known as the "Emperor's Breed." The breed did not exist outside of Japan until 1994 when eight females and three males were shipped to the U.S. on a specially equipped Boeing 747.
By 2015, full-blooded Akaushi in the U.S. were numbered at an estimated 1,000 bulls and 8,700 females. The breed has spread across the country.
HeartBrand has been in the business of selling full-blooded Akaushi bulls and semen and marketing beef under its own branded label since 2006.
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