Background: LLC Dispute Over Failed Meat Processing Plant

This case arises from a dispute among members of ZMDR, LLC d/b/a Republic Foods, formed to operate a meat processing plant in Missouri. Plaintiff John Malouff, individually and derivatively on behalf of ZMDR, along with his operating company M&M Livestock, LLC, sued ZMDR itself, its managers Jeremy Robinson and David DeVito, and member NMD Enterprises, LLC. Plaintiffs alleged the processing plant failed due to gross mismanagement and asset depletion by the defendant managers, and sought recovery for unpaid livestock sales M&M made to ZMDR.

The Jurisdictional Challenge and Procedural Posture

Defendants filed a plea to the jurisdiction in their May 2025 supplemental answer, arguing plaintiffs failed to plead facts sufficient to satisfy the $5 million minimum amount in controversy required by Section 25A.004(b) of the Texas Government Code. In a prior order, the Court deferred ruling on the plea to give the parties an opportunity to amend their pleadings and provide additional jurisdictional briefing. After reviewing the parties' submissions, the Court concluded that plaintiffs, in their amended petition, had pleaded facts sufficient to satisfy the $5 million threshold requirement and denied the plea.

The Original Petition's Allegations

In their original petition, plaintiffs complained that defendants ran ZMDR into the ground through a series of managerial missteps and refused to pay plaintiffs for livestock sales made to ZMDR. The original petition invoked the Court's jurisdiction under multiple subsections of Section 25A.004, all of which require more than $5 million in controversy. The case illustrates the pleading standards required to establish the Business Court's subject matter jurisdiction, particularly for derivative proceedings and internal affairs disputes under Section 25A.004(b).