Tech startup sues its lawyers after winning $222 mln Walmart verdict

By Blake Brittain

Jan 9 (Reuters) - A tech startup and lawyers that represented it in trade-secret litigation against Walmart WMT.O have sued each other in Texas after the startup's $222 million jury win against the retail giant last year.

Law firm Williams Simons & Landis sued Zest Labs in Texas federal court on Wednesday for allegedly failing to pay its attorneys' fees. Zest countersued the firm and its lawyers' former firm Vinson & Elkins in Texas state court on Thursday for allegedly "bungling" the litigation and costing Zest up to $200 million in additional damages from Walmart.

Williams Simons & Landis' attorney William Brewer said the firm delivered "extraordinary results" in the Walmart case and that Zest's lawsuit was "nothing more than an attempt to deflect from paying our client."

Zest's attorney David Wynne, in the startup's lawsuit against the firms, called Williams Simons & Landis' lawsuit "a cynical attempt to distract from its own legal malpractice," and said Vinson & Elkins "failed to meet the standard of care required for litigating a trade secret misappropriation case."

Spokespeople for Vinson & Elkins did not immediately respond to a request for comment on Friday. Walmart is not involved in either lawsuit.

Zest Labs had sued Walmart in 2018 for allegedly stealing its Zest Fresh technology, which tracks produce freshness from farms to stores. Zest said it worked with Walmart and shared proprietary information with the retail giant until 2017.

Zest's lead attorneys left Vinson & Elkins in 2020 to form the firm that later became Williams Simons & Landis. The company won $115 million in a trial in 2021, but an Arkansas federal judge ordered a new trial in 2023 after finding that Zest's attorneys withheld relevant evidence before the first trial.

Zest hired a new firm, Bartko Pavia, in 2024, and won $222 million following a retrial last May based on what Williams Simons & Landis called "the same evidentiary record originally created by WSL." The companies settled in July under undisclosed terms.

Williams Simons & Landis' Wednesday lawsuit said Zest refused to pay for the firm's work in the Walmart case and called the refusal a "transparent and baseless money grab to avoid the financial obligations of their clients." It also said Zest withheld information about the Walmart settlement, restructured the company and transferred its assets to "prevent WSL from learning of, tracing, or recovering fair compensation."

Zest's lawsuit accused Williams Simons & Landis; and Vinson & Elkins of "excessive and unconscionable billing" of more than $13 million for their work and said it "could have, and likely would have, recovered a $420 million judgment, not a $220 million judgment, absent Defendants' malpractice." It accused the firms of negligence and breaking their fiduciary duties and requested at least $1 million in damages.

The cases are Williams Simons & Landis PC v. RiskOn International Inc f/k/a EcoArk Holdings, U.S. District Court for the Western District of Texas, No. 1:26-cv-00034 and Zest Labs Inc v. Vinson & Elkins LLP, District Court of Harris County, No. 2026-01330.

For Zest Labs: David Wynne and Ken Wynne of Wynne Law

For Williams Simons & Landis: William Brewer and Joshua Harris of Brewer Attorneys & Counselors

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