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LLC v. Oceaneering International, Inc.

United States District Court, E.D. Louisiana

August 23, 2017


         SECTION “R” (3)



         Before the Court are defendant Oceaneering International, Inc.'s two motions for partial summary judgment on plaintiff Wright's Well Control Services, LLC's various Texas and Louisiana law claims.[1] For the following reasons, the Court grants Oceaneering's first motion in part, [2] and grants its second motion.[3]

         I. BACKGROUND

         The facts and allegations that follow are limited to what is relevant to the two motions before the Court.[4] Plaintiff Wright's Well Control Services, LLC (“WWCS”) and Defendant Oceaneering International, Inc. (“Oceaneering”) both provide hydrate remediation services for the oil and gas industry.[5] The dispute concerns a technological system that WWCS developed for removing hydrates from subsea, deepwater pipelines.[6]

         WWCS alleges that by the end of 2009 it developed a “hydrate remediation system” that provided a faster, safer, and more cost-effective way to clear hydrates in deepwater environments.[7] It further alleges that Oceaneering and WWCS worked together on at least two hydrate remediation projects in 2009 and 2010, the ATP job and the Marubeni Job.[8]WWCS contends that, while working together on these jobs, Oceaneering stole WWCS trade secrets related to its hydrate remediation system to develop Oceaneering's own hydrate remediation system, the “Flowline Remediation System” (“FRS”). Oceaneering asserts that at some point between 2009 and 2011, Oceaneering independently built its FRS without trade secrets from WWCS, and started to use its FRS in competition with WWCS's system.[9]

         On May 21, 2015, WWCS filed its initial complaint against Oceaneering, pleading patent infringement as well as various claims under Texas and Louisiana state law.[10] On November 16, 2015, the Court dismissed WWCS's breach of contract claim with prejudice to the extent it that rested on information in WWCS's patent applications or on conduct that occurred after December 11, 2012, and dismissed plaintiff's statutory trade secret misappropriation claim under the Texas Uniform Trade Secrets Act.[11] After plaintiff filed a second and third amended complaint, Oceaneering moved to dismiss plaintiff's federal patent infringement claims. On February 13, 2017, the Court granted Oceaneering's motion and dismissed WWCS's patent claims, but without prejudice and with leave to amend.[12]

         On February 27, 2017, WWCS filed its fourth amended complaint, which is the operative complaint.[13] The complaint asserts patent infringement claims, as well as claims for Texas common law misappropriation, Texas common law misappropriation of trade secrets, Louisiana statutory misappropriation of trade secrets under the Louisiana Uniform Trade Secrets Act (“LUTSA”), and Texas common law breach of contract, breach of confidential relationship, tortious interference with prospective business relations, fraudulent inducement, business disparagement, and unfair competition.[14]

         Oceaneering now moves for partial summary judgment on certain of these claims. More specifically, Oceaneering argues in its first motion for summary judgment that WWCS's Texas law business disparagement, unfair competition, common law misappropriation, breach of confidential relationship, and tortious interference with prospective business relations claims are barred by the applicable statutes of limitations.[15] Its second motion argues that WWCS's Texas common law misappropriation of trade secrets and Louisiana statutory misappropriation of trade secrets claims are also time-barred.[16] WWCS filed responses in opposition, [17] and Oceaneering replied.[18]


         Summary judgment is warranted when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). When assessing whether a dispute as to any material fact exists, the Court considers “all of the evidence in the record but refrain[s] from making credibility determinations or weighing the evidence.” Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 2008). All reasonable inferences are drawn in favor of the nonmoving party, but “unsupported allegations or affidavits setting forth ‘ultimate or conclusory facts and conclusions of law' are insufficient to either support or defeat a motion for summary judgment.” Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); see also Little, 37 F.3d at 1075. “No genuine dispute of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the non-moving party.” EEOC v. Simbaki, Ltd., 767 F.3d 475, 481 (5th Cir. 2014).

         If the dispositive issue is one on which the moving party will bear the burden of proof at trial, the moving party “must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial.” Int'l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991). The nonmoving party can then defeat the motion by either countering with evidence sufficient to demonstrate the existence of a genuine dispute of material fact, or “showing that the moving party's evidence is so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the moving party.” Id. at 1265.

         If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324. The nonmovant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue for trial. See, e.g., id.; Little, 37 F.3d at 1075 (“Rule 56 mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” (quoting Celotex, 477 U.S. at 322)).


         In its motions for partial summary judgment, Oceaneering asserts that WWCS's claims are barred by the applicable statutes of limitations. Oceaneering relies primarily on the January and February 2017 deposition testimony of David Wright, WWCS's sole owner and designated corporate representative under Federal Rule of Civil Procedure 30(b)(6), [19] as well as copies of emails that it attached to its motions. WWCS disputes when each claim accrued, i.e., when the limitations period actually began, and asserts that the “Texas discovery rule” delayed the accrual of the challenged claims so that they were all filed within the applicable limitations period.[20]Accordingly, whether Oceaneering is entitled summary judgment on each claim depends on the limitations period and the accrual date. The Court will first address WWCS's claim for business disparagement, because it is the only claim unrelated to the allegations of misappropriation of information.

         A. Texas Law Business Disparagement

         At Wright's January deposition, he testified that Christopher Mancini, an Oceaneering employee, made disparaging statements about WWCS.[21]More specifically, Wright testified that Mancini called WWCS “an unsafe company to work for-or work with” because its equipment had failed.[22]Wright testified that he learned of Mancini's statement in 2011 or 2012, and that he learned of it because other people told Wright what Mancini said.[23]It is not clear from the record when Mancini actually made the allegedly disparaging statement. Wright further testified that Mancini was the only person Wright “heard” say WWCS was unsafe, and that he could not remember any other disparaging statement made by anyone else with Oceaneering.[24]

         WWCS alleges that Oceaneering's disparagement caused WWCS to suffer “economic loss.”[25] Under Texas law, business disparagement has a two-year limitations period if the injury alleged is direct pecuniary loss rather than personal loss in reputation. See Sting Soccer Operations Grp. LP v. JP Morgan Chase Bank, N.A., No. 15-127, 2016 WL 3917640, at *11 (E.D. Tex. July 20, 2016) (citations omitted); Dwyer v. Sabine Min. Co., 890 S.W.2d 140, 142 (Tex. App. 1994) (citing Tex. Civ. Prac. & Rem. Code § 16.003). The Court need not address whether WWCS's business disparagement claim accrued when Mancini made the allegedly disparaging statement or when WWCS became aware of it later on, because under either date the claim is time-barred. Wright testified that he became aware of the disparaging statement in either 2011 or 2012. Even assuming that Wright became aware on December 31, 2012, the limitations period would expire on December 31, 2014. As WWCS did not file its initial complaint until May of 2015, WWCS's business disparagement claim is time-barred. See Sefton v. Pathos, No. 00-314, 2002 WL 356518, at *7 (N.D. Tex. Feb. 28, 2002) (granting summary judgment on business disparagement claim because claim was time-barred); Dickson Constr. Inc. v. Fid. & Deposit Co. of Md., 960 S.W.2d 845, 850 (Tex. App. 1997) (“Dickson discovered F & D's sole disparaging comment in January 1993 almost immediately after it was made, more than two years before it filed suit and past the expiration of the two-year limitations period.”).

         WWCS's arguments to the contrary are meritless and do not create an issue of fact as to whether the business disparagement claim based on Mancini's comments is time-barred. First, WWCS argues that the discovery rule applies and delays the start of the limitation period. But the discovery rule does not extend the limitations period when the plaintiff has actual knowledge of the defendant's alleged wrongdoing.[26] See, e.g., Exxon Corp. v. Emerald Oil & Gas Co., L.C., 348 S.W.3d 194, 203 (Tex. 2011) (court did not need to address impact of discovery rule on limitations period because plaintiffs had actual knowledge of alleged wrongful actions more than two years before they filed); see also Pickaree v. Eli Lily Pharm. Co., No. 14-3481, 2015 WL 1800481, at *2-3 (S.D. Tex. Apr. 16, 2015) (discovery rule did not apply to extend limitations period when plaintiff had actual knowledge of her claim).

         Second, WWCS asserts that Oceaneering's “evidence does not prohibit finding other instances of disparagement that occurred” after 2012, and points out that Oceaneering has worked on “many projects” within the two-year statute of limitations.[27] But evidence of Oceaneering's work on a project is not evidence of disparagement. That Oceaneering worked on a project, without more, does not create a genuine issue of material fact as to another claim for business disparagement or as to whether WWCS's business disparagement claim based on Mancini's statement is time-barred. Accordingly, Oceaneering is entitled summary judgment on WWCS's claim that Oceaneering disparaged WWCS by calling it an unsafe company.[28]

         B. Tortious Interference with Prospective Business Relations

         Under Texas law, tortious interference with prospective business relations has a two-year limitations period. First Nat'l Bank of Eagle Pass v. Levine, 721 S.W.2d 287, 288-89 (Tex. 1986). The claim accrues when “existing negotiations, which are reasonably certain of resulting in a contract, are interfered with such that the negotiations terminate and harm to the plaintiff results.” Hill v. Heritage Res., 964 S.W.2d 89, 116 (Tex. App. 1997). WWCS's complaint alleges that Oceaneering interfered with the relationship between BP and WWCS regarding the Thunder Horse project. Oceaneering makes no argument and submits no evidence on when this interference occurred, but WWCS submits the July 11, 2013 BP Letter of Regret informing WWCS that it did not win the Thunder Horse project.[29] As it is undisputed that the negotiations with BP terminated in July 2013, WWCS timely filed its tortious interference with business relations claim in May 2015, and Oceaneering is not entitled summary judgment on this claim.

         C. The Texas Misappropriation-Related Claims, the Discovery Rule, and Wright's Knowledge

         Oceaneering also seeks summary judgment on the Texas law misappropriation-related claims: common law misappropriation, common law misappropriation of trade secrets, breach of confidential relationship, and unfair competition. According to WWCS's complaint, the underlying basis for all of these claims is the theft or misappropriation of WWCS's trade secrets and information related to WWCS's hydrate remediation system.[30] Each claim has either a two-year or three-year limitations period. See R. Ready Prods., Inc. v. Cantrell, 85 F.Supp.2d 672, 693 (S.D. Tex. 2000) (“Claims of unfair competition through misappropriation of trade secrets . . . are subject to a two year statute of limitations); Reaux Med. Indus., LLC v. Stryker Corp., No. 09-1582, 2012 WL 612534, at *2 (N.D. Tex. Feb. 27, 2012) (“Under Texas law, common law misappropriation has a two-year statute of limitations, while ...

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