Wright's Well Control Services, LLC v. Oceaneering International, Inc. et al, No. 2:2015cv01720 - Document 318 (E.D. La. 2017)
Court Description: ORDER AND REASONS granting 224 and 225 Motion to Dismiss. For the foregoing reasons, plaintiff's motions to dismiss defendants' counterclaims for attorney's fees are GRANTED. Defendants' counterclaims for attorney's fees are DISMISSED. Signed by Judge Sarah S. Vance on 11/20/2017. (cg)
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Wright&#039;s Well Control Services, LLC v. Oceaneering International, Inc. et al Doc. 318 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA WRIGHT’S WELL CONTROL SERVICES, LLC VERSUS CIVIL ACTION NO. 15-1720 OCEANEERING INTERNATIONAL, INC. SECTION “R” (3) ORD ER AN D REASON S Before the Court are Plaintiff Wright’s Well Control Services, LLC’s m otions to dism iss Defendants Oceaneering International, Inc.’s and Christopher Mancini’s counterclaims for attorney’s fees. 1 For the following reasons, the Court grants plaintiff’s motions. I. BACKGROU N D The facts and allegations that follow are lim ited to what is relevant to the two m otions before the Court. 2 Plaintiff Wright’s Well Control Services, LLC (WWCS) and Defendant Oceaneering International, Inc. (Oceaneering) 1 R. Docs. 224, 225. A m ore in-depth discussion of the facts underlying this dispute can be found in the Court’s Novem ber 16, 20 15 Order. See generally R. Doc. 56. A m ore extensive discussion of the deep-sea technology and associated patents at issue can be found in the Court’s February 13, 20 17 Order. See generally R. Doc. 141. 2 Dockets.Justia.com both provide hydrate rem ediation services for the oil and gas industry. WWCS alleges that by the end of 20 0 9 it developed a “hydrate remediation system ” that provided a faster, safer, and m ore cost-effective way to clear hydrates in deepwater environm ents. 3 It further alleges that Oceaneering and WWCS worked together on at least two hydrate rem ediation projects in 20 0 9 and 20 10 , the ATP job and the Marubeni J ob. 4 WWCS contends that, while working together on these jobs, Oceaneering stole WWCS trade secrets related to its hydrate rem ediation system to develop Oceaneering’s own hydrate remediation system, the “Flowline Rem ediation System ” (FRS). Oceaneering asserts that at som e point between 20 0 9 and 20 11, Oceaneering independently built its FRS without trade secrets from WWCS, and started to use its FRS in com petition with WWCS’s system . 5 On February 27, 20 17, WWCS filed its fourth amended com plaint, which is the operative com plaint, against both Oceaneering and Oceaneering em ployee Christopher Mancini. 6 The com plaint asserts patent infringem ent claim s, as well as claim s for Louisiana statutory m isappropriation of trade secrets under the Louisiana Uniform Trade Secrets Act, Texas com m on law 3 4 5 6 R. Doc. 147 at 4-6. R. Doc. 182-2 at 3-9. R. Doc. 182-1 at 6. R. Doc. 147. 2 m isappropriation, Texas com m on law m isappropriation of trade secrets, and Texas com m on law breach of contract, breach of confidential relationship, tortious interference with prospective business relations, fraudulent inducem ent, business disparagem ent, and unfair com petition. 7 Mancini filed an answer and a counterclaim for attorney’s fees on March 13, 20 17. 8 Oceaneering filed an answer and several counterclaim s, including one for attorney’s fees, on March 16, 20 17. 9 Both defendants sought attorney’s fees under Texas Civil Practice and Remedies Code Sections 134A.0 0 5 and 38.0 0 1, and Louisiana Revised Statutes Section 51:1434. 10 WWCS now m oves to dism iss defendants’ counterclaim s for attorney’s fees. 11 In response to plaintiff’s m otion, Mancini abandoned his counterclaim for attorney’s fees under Texas Civil Practice and Remedies Code Section 38.0 0 1. 12 Therefore, the Court will not address the merits of that counterclaim . 7 Id. at 36-46 ¶¶ 89-139. R. Doc. 157. The Court has since granted plaintiff’s m otion to voluntarily dism iss its claim s against Mancini with prejudice. R. Doc. 170 . 9 R. Doc. 161. 10 R. Doc. 157 at 43; R. Doc. 161 at 49-50 . 11 R. Doc. 224, 225. 12 R. Doc. 237 at 6. 3 8 II. LEGAL STAN D ARD The Court applies the sam e test to a motion to dism iss a counterclaim as it does to a motion to dism iss a com plaint. To survive a Rule 12(b)(6) m otion to dism iss, plaintiffs m ust plead enough facts to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (20 0 9) (quoting Bell Atlantic Corp. v. Tw om bly , 550 U.S. 544, 547 (20 0 7)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the m isconduct alleged.” Id. at 678. A court m ust accept all well-pleaded facts as true and m ust draw all reasonable inferences in favor of the plaintiff. Lorm and v. U.S. Unw ired, Inc., 565 F.3d 228, 239, 244 (5th Cir. 20 0 9). But the Court is not bound to accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678. A legally sufficient com plaint m ust establish m ore than a “sheer possibility” that plaintiffs’ claim is true. Id. It need not contain detailed factual allegations, but it m ust go beyond labels, legal conclusions, or form ulaic recitations of the elements of a cause of action. Tw om bly , 550 U.S. at 555. In other words, the face of the com plaint m ust contain enough factual m atter to raise a reasonable expectation that discovery will reveal evidence of each elem ent of the plaintiffs’ claim. Lorm and, 565 F.3d at 257. If there 4 are insufficient factual allegations to raise a right to relief above the speculative level, Tw om bly , 550 U.S. at 555, or if it is apparent from the face of the com plaint that there is an insuperable bar to relief, Jones v. Bock, 549 U.S. 199, 215 (20 0 7); Carbe v. Lappin, 492 F.3d 325, 328 n.9 (5th Cir. 20 0 7), the claim m ust be dism issed. III. D ISCU SSION A. Oce an e e rin g’s Co u n te rclaim fo r Atto rn e y’s Fe e s o n Plain tiff’s Bre ach o f Co n tract Claim WWCS first argues that Oceaneering’s counterclaim for attorney’s fees under Texas Civil Practice and Remedies Code Section 38.0 0 1 m ust be dism issed because that provision does not authorize attorney’s fees against lim ited liability com panies. 13 Because state law provides the rule of decision for this counterclaim , the Court m ust apply the law as interpreted by the state’s highest court. See F.D.I.C. v. Abraham , 137 F.3d 264, 267-68 (5th Cir. 1998); Sam uels v. Doctors Hosp., Inc., 588 F.2d 485, 488 (5th Cir. 1979). When there is no ruling by the state’s highest court, a federal court m ust m ake an Erie guess as to how the state’s highest court would decide the issue. 13 R. Doc. 225-1 at 4-5. 5 Martin K. Eby Constr. Co. v. Dall. Area Rapid Transit, 369 F.3d 464, 468 (5th Cir. 20 0 4). Section 38.0 0 1 authorizes “attorney’s fees from an individual or corporation” on breach of contract claim s. The Texas Suprem e Court has not addressed the scope of this provision. But in Alta Mesa Holdings, L.P. v. Ives, 488 S.W.3d 438 (Tex. Ct. App. 20 16), a Texas court of appeal held that this provision does not allow attorney’s fees against lim ited liability com panies. The court observed that, “as used in Texas statutes, the legal entities identified by the term s ‘corporation’ and ‘lim ited liability com pany’ are distinct entities with som e but not all of the sam e features.” Id. at 453. Further, the court noted that an earlier version of Section 38.0 0 1 “provided that ‘any person, corporation, partnership, or other legal entity having a valid claim against a person or corporation’ could recover attorney’s fees against the ‘persons or corporation.’” Id. at 454 (quoting Tex. Rev. Civ. Stat. art. 2226 (repealed 1985)). This language suggested that the term corporation “was not intended to encom pass” partnerships or other legal entities, “because to read the term otherwise would render use of these other terms m eaningless.” Id. The codification of Article 2226 into Section 38.0 0 1 “was intended to be nonsubstantive in nature”; thus, the court found, the term 6 corporation in Section 38.0 0 1 does not cover “‘other legal entities’ such as LLCs.” Id. at 455. A num ber of courts, both federal and state, have also held that Section 38.0 0 1 does not authorize attorney’s fees against lim ited liability com panies. See, e.g., BHL Boresight, Inc. v. Geo-Steering Sols., Inc., No. 15-627, 20 17 WL 2730 739, at *19 (S.D. Tex. J une 26, 20 17); Hoffm an v. L & M Arts, No. 10 -953, 20 15 WL 10 0 0 838, at *10 (N.D. Tex. Mar. 6, 20 15); CBIF Ltd. P’ship v. TGI Friday ’s Inc., No. 15-157, 20 17 WL 145540 7, at *25 (Tex. App. Apr. 21, 20 17) (“Under the plain language of section 38.0 0 1, a trial court cannot order lim ited liability partnerships, lim ited liability com panies, or lim ited partnerships to pay attorney’s fees.”); see also Choice! Pow er, L.P. v. Feeley , 50 1 S.W.3d 199, 214 (Tex. App. 20 16) (interpreting corporation narrowly “to exclude other legal entities”). Additionally, the Fifth Circuit has noted (in dictum ) that one Texas case supported the district court’s Erie guess that a lim ited liability com pany is not a corporation under Section 38.0 0 1. Hoffm an v. L & M Arts, 838 F.3d 568, 583 n.14 (5th Cir. 20 16). The Court finds the foregoing authority persuasive. Based on both plain m eaning and statutory history, the Texas Suprem e Court would likely hold that Section 38.0 0 1 does not authorize attorney’s fees against lim ited 7 liability com panies. Thus, Oceaneering has failed to state a claim against WWCS for attorney’s fees under Section 38.0 0 1. B. D e fe n d an ts ’ Co u n te rclaim s fo r Atto rn e y’s Fe e s o n Plain tiff’s Trad e Se cre ts Claim s WWCS next argues that defendants’ counterclaim s for attorney’s fees under Texas and Louisiana trade secrets statutes should be dism issed for lack of sufficient factual allegations. 14 Both statutes perm it a court to award attorney’s fees to the prevailing party if, am ong other things, a m isappropriation claim is m ade in bad faith. La. R.S. § 51:1434; Tex. Civ. Prac. & Rem . Code § 134A.0 0 5. Oceaneering’s counterclaim fails to state a claim for attorney’s fees under the trade secrets statutes because it does not allege sufficient factual allegations to support a finding of bad faith. Oceaneering argues that WWCS alleged trade secrets m isappropriation in bad faith because WWCS failed to protect its trade secrets. 15 Specifically, according to Oceaneering, WWCS attached docum ents containing alleged trade secrets to the com plaint. 16 This assertion surely pertains to whether plaintiff “has taken reasonable measures under the circumstances to keep the inform ation secret”—one of the 14 15 16 R. Doc. 224-1 at 5-7; R. Doc. 225-1 at 5. R. Doc. 236 at 7-8. R. Doc. 161 at 4 ¶ 14. 8 definitional elements of a trade secret. Tex. Civ. Prac. & Rem. Code § 134A.0 0 2; see also La. R.S. § 51:1431. But it does not suggest that WWCS acted dishonestly, or with som e im proper purpose, in bringing trade secrets claim s against Oceaneering. See Direct Techs., LLC v. Elec. Arts, Inc., 836 F.3d 10 59, 10 71 (9th Cir. 20 16) (affirming denial of attorney’s fees because no evidence suggested that plaintiff brought trade secrets claim “for an im proper purpose such as to extort a settlement”). Moreover, that WWCS attached allegedly secret information to its com plaint has no bearing on whether Oceaneering m isappropriated this inform ation before the filing of the com plaint. Mancini’s counterclaim also fails to allege sufficient factual allegations to support a finding of bad faith. Mancini asserts that WWCS had no basis to bring trade secrets claim s against Mancini in his individual capacity, rather than as an Oceaneering em ployee. According to Mancini, WWCS cofounder David Wright testified in a deposition that he did not believe Mancini m isappropriated WWCS’s trade secrets in his individual capacity. 17 Absent som e statutory exem ption, however, employees are liable for the torts they com m it within the scope of their em ployment. See Miller v. Key ser, 90 S.W.3d 712, 717 (Tex. 20 0 2) (noting “Texas’ longstanding rule that a 17 R. Doc. 157 at 41 ¶ 20 9. 9 corporate agent is personally liable for his own fraudulent or tortious acts”); Richardson v. Darby , 352 So. 2d 725, 726 (La. App. 4 Cir. 1977) (“An agent’s liability for his own tortious acts is unaffected by the fact that he acted in his representative capacity or by the authority or direction of another.” (citation om itted)); see also PMC, Inc. v. Kadisha, 93 Cal. Rptr. 2d 663, 678 (Cal. Ct. App. 20 0 0 ) (holding that a corporate officer is liable if she “knows or has reason to know about tortious m isappropriation . . . and allows it to occur”); Restatem ent (Third) Of Agency § 7.0 1 (20 0 6) (“An agent is subject to liability to a third party harm ed by the agent’s tortious conduct. Unless an applicable statute provides otherwise, an actor rem ains subject to liability although the actor acts as an agent or an em ployee, with actual or apparent authority, or within the scope of em ploym ent.”). Thus, even if Mancini com m itted trade secrets m isappropriation in his capacity as an Oceaneering employee—as WWCS alleged in its com plaint—Mancini could have been held personally liable. 18 18 As noted earlier, WWCS has voluntarily dism issed Mancini from this lawsuit. 10 IV. CON CLU SION For the foregoing reasons, plaintiff’s m otions to dism iss defendants’ counterclaim s for attorney’s fees are GRANTED. Defendants’ counterclaim s for attorney’s fees are DISMISSED. New Orleans, Louisiana, this _ 20th _ day of November, 20 17. ___ _____________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE 11
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