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LLC v. Oceaneering International, Inc.

United States District Court, E.D. Louisiana

November 20, 2017

WRIGHT'S WELL CONTROL SERVICES, LLC
v.
OCEANEERING INTERNATIONAL, INC.

         SECTION “R” (3)

          ORDER AND REASONS

          SARAH S. VANCE UNITED STATES DISTRICT JUDGE.

         Before the Court are Plaintiff Wright's Well Control Services, LLC's motions to dismiss 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. BACKGROUND

         The facts and allegations that follow are limited to what is relevant to the two motions before the Court.[2] 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. 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.[3] 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.[4] 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.[5]

         On February 27, 2017, WWCS filed its fourth amended complaint, which is the operative complaint, against both Oceaneering and Oceaneering employee Christopher Mancini.[6] The complaint asserts patent infringement claims, as well as claims for Louisiana statutory misappropriation of trade secrets under the Louisiana Uniform Trade Secrets Act, Texas common law misappropriation, Texas common law misappropriation of trade secrets, and Texas common law breach of contract, breach of confidential relationship, tortious interference with prospective business relations, fraudulent inducement, business disparagement, and unfair competition.[7]

         Mancini filed an answer and a counterclaim for attorney's fees on March 13, 2017.[8] Oceaneering filed an answer and several counterclaims, including one for attorney's fees, on March 16, 2017.[9] Both defendants sought attorney's fees under Texas Civil Practice and Remedies Code Sections 134A.005 and 38.001, and Louisiana Revised Statutes Section 51:1434.[10] WWCS now moves to dismiss defendants' counterclaims for attorney's fees.[11] In response to plaintiff's motion, Mancini abandoned his counterclaim for attorney's fees under Texas Civil Practice and Remedies Code Section 38.001.[12] Therefore, the Court will not address the merits of that counterclaim.

         II. LEGAL STANDARD

         The Court applies the same test to a motion to dismiss a counterclaim as it does to a motion to dismiss a complaint. To survive a Rule 12(b)(6) motion to dismiss, plaintiffs must plead enough facts to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 547 (2007)). 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 misconduct alleged.” Id. at 678. A court must accept all well-pleaded facts as true and must draw all reasonable inferences in favor of the plaintiff. Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 239, 244 (5th Cir. 2009). 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 complaint must establish more than a “sheer possibility” that plaintiffs' claim is true. Id. It need not contain detailed factual allegations, but it must go beyond labels, legal conclusions, or formulaic recitations of the elements of a cause of action. Twombly, 550 U.S. at 555. In other words, the face of the complaint must contain enough factual matter to raise a reasonable expectation that discovery will reveal evidence of each element of the plaintiffs' claim. Lormand, 565 F.3d at 257. If there are insufficient factual allegations to raise a right to relief above the speculative level, Twombly, 550 U.S. at 555, or if it is apparent from the face of the complaint that there is an insuperable bar to relief, Jones v. Bock, 549 U.S. 199, 215 (2007); Carbe v. Lappin, 492 F.3d 325, 328 n.9 (5th Cir. 2007), the claim must be dismissed.

         III. DISCUSSION

         A. Oceaneering's Counterclaim for Attorney's Fees on Plaintiff's Breach of Contract Claim

         WWCS first argues that Oceaneering's counterclaim for attorney's fees under Texas Civil Practice and Remedies Code Section 38.001 must be dismissed because that provision does not authorize attorney's fees against limited liability companies.[13] Because state law provides the rule of decision for this counterclaim, the Court must 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); Samuels 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 must make an Erie guess as to how the state's highest court would decide the issue. Martin K. Eby Constr. Co. v. Dall. Area Rapid Transit, 369 F.3d 464, 468 (5th Cir. 2004).

         Section 38.001 authorizes “attorney's fees from an individual or corporation” on breach of contract claims. The Texas Supreme 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. 2016), a Texas court of appeal held that this provision does not allow attorney's fees against limited liability companies. The court observed that, “as used in Texas statutes, the legal entities identified by the terms ‘corporation' and ‘limited liability company' are distinct entities with some but not all of the same features.” Id. at 453. Further, the court noted that an earlier version of Section 38.001 “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 encompass” partnerships or other legal entities, “because to read the term otherwise would render ...


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