SARAH S. VANCE, District Judge.
Plaintiff Wright's Well Control Services, LLC moves for summary judgment on defendant Oceaneering International, Inc.'s counterclaims.
The facts and allegations that follow are limited to what is relevant to the motion before the Court.
In 2008, ATP Oil and Gas Corporation contracted with Oceaneering to remove hydrates from a pipeline.
WWCS asserts that it completed the design and manufacture of its hydrate remediation system by early 2010.
WWCS filed its initial complaint on May 21, 2015.
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. A dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
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)).
WWCS moves for summary judgment on Oceaneering's counterclaims on the ground that insufficient evidence supports these claims. In addition to arguing that there is sufficient evidence in support of its counterclaims, Oceaneering urges the Court to strike WWCS's motion and to dismiss WWCS's breach of contract claim as untimely.
The Court further notes that each party's briefs are full of vitriol and accusations of ethical violations by the other party. Such vitriolic statements and unfounded accusations add nothing to the parties' arguments. The parties shall refrain from this type of argumentation in any oral or written statements to this Court.
Oceaneering first argues that WWCS's motion should be stricken for untimeliness.
The Court nevertheless declines to strike WWCS's motion. A district court has broad discretion to extend filing deadlines and to accept late-filed motion papers. See Hetzel v. Bethlehem Steel Corp., 50 F.3d 360, 367 (5th Cir. 1995). Moreover, Oceaneering fails to explain how it is prejudiced by the one-week delay in the filing of WWCS's motion. Therefore, the Court proceeds to the merits of the summary judgment motion.
Oceaneering's first counterclaim alleges that WWCS violated Section 43 of the Lanham Act, 15 U.S.C. § 1125, by falsely designating the origin of an Oceaneering schematic.
Section 43 of the Lanham Act provides in relevant part:
15 U.S.C. § 1125(a)(1). Oceaneering's claim asserts reverse passing off, or reverse palming off, which involves "selling or offering for sale another's product that has been modified slightly and then labeled with a different name." Roho, Inc. v. Marquis, 902 F.2d 356, 359 (5th Cir. 1990); see also Hunn v. Dan Wilson Homes, Inc., 789 F.3d 573, 588 (5th Cir. 2015). This claim requires evidence of both "use of false designation of origin and false representation in interstate commerce." Roho, 902 F.2d at 358. Oceaneering provides neither. First, Oceaneering cites no evidence that WWCS used its modified schematic in interstate commerce. Second, the schematic portrays WWCS's system, including the separator with the internal ball valve.
Oceaneering raises an additional allegation in support of its § 1125 claim in response to WWCS's summary judgment motion: that WWCS passed off Oceaneering's ROV as its own by removing Oceaneering's logo from photographs of the ROV and publishing those photographs in presentations and industry journals.
Oceaneering's state law unfair competition claim is based on two alleged actions: (1) a WWCS employee "snooped" on Oceaneering's FRS, and WWCS incorporated, or plans to incorporate, information obtained by snooping into its own system; and (2) WWCS obtained and misused information about Oceaneering's bid on the BP project.
In support of its allegations of snooping, Oceaneering cites a January 2011 email chain between Ben Comperry, purportedly a WWCS employee, and David Wright, WWCS's founder. Comperry sent three photographs of Oceaneering's "new skid" and relayed information about the skid, including that it had "cameras all over it."
To show that WWCS obtained and misused Oceaneering's bid information, Oceaneering first points to an email chain between Wright and JP Kenny employee Michael Dohm. Wright asked Dohm to send him the "Oceaneering gas separator" on October 25, 2012.
Texas unfair competition "requires that the plaintiff show an illegal act by the defendant which interfered with the plaintiff's ability to conduct its business. Although the illegal act need not necessarily violate criminal law, it must at least be an independent tort." Taylor Publ'g Co. v. Jostens, Inc., 216 F.3d 465, 486 (5th Cir. 2000) (citation omitted). Oceaneering does not identify the independent tort upon which its state law unfair competition claim relies, but its allegations sound in misappropriation of trade secrets and tortious interference with potential business relations. "A trade secret misappropriation in Texas requires: (a) the existence of a trade secret; (b) a breach of a confidential relationship or improper discovery of the trade secret; (c) use of the trade secret; and (d) damages." Taco Cabana Int'l, Inc. v. Two Pesos, Inc., 932 F.2d 1113, 1123 (5th Cir. 1991). Tortious interference with prospective business relations requires: "(1) a reasonable probability or expectation of entering into a contractual relationship; (2) intentional and malicious conduct by the defendant that prevents consummation of the contract; (3) no justification or privilege shields the defendant; and (4) actual harm or damages caused by defendant's conduct." Small Bus. Assistance Corp. v. Clear Channel Broad., Inc., 210 F.3d 278, 281 n.1 (5th Cir. 2000).
Regarding misappropriation of trade secrets, Oceaneering has pointed to evidence that WWCS improperly obtained photographs and information about Oceaneering's new skid from Comperry. It is disingenuous for WWCS to argue that Wright told Comperry not to snoop; the email clearly states: "Do not snoop to[o] much."
Regarding tortious interference with prospective business relations, it is clear that both parties were in contention for the BP project.
Oceaneering's breach of contract counterclaim asserts that WWCS violated the NDA by misusing and improperly disclosing confidential information.
Oceaneering sent the EQD Manual to WWCS on March 17, 2010.
Texas law governs the NDA.
Oceaneering has pointed to no evidence of damages it sustained because of WWCS's alleged breach of the NDA. Notably, WWCS lost the BP bid to Oceaneering, and Oceaneering cites no other type of harm that WWCS's purported misuse of Oceaneering's bid information caused Oceaneering.
In addition, Oceaneering has failed to raise a genuine dispute as to whether WWCS's disclosure of the EQD Manual to Gulf Coast Manufacturing violated the NDA. Two sections of the NDA are relevant to this counterclaim. First, Section Two of the NDA forbids disclosure of confidential information "to any third party unless[] further disclosure is previously approved in writing."
The purpose for which WWCS allegedly sent the EQD Manual to Gulf Coast Manufacturing—to modify the EQDs for a WWCS project with Oceaneering—was clearly connected with the effort contemplated by the NDA. Additionally, under the terms of WWCS's September 15, 2009 purchase order for Oceaneering's EQDs, Oceaneering granted "a royaltyfree, non-exclusive license . . . to use and reproduce any INTELLECTUAL PROPERTY of [Oceaneering] provided to [WWCS]."
Oceaneering's final counterclaim seeks restitution for WWCS's use of Oceaneering's schematics and drawings.
Oceaneering fails to articulate what benefit WWCS obtained from using Oceaneering's schematics and drawings. Indeed, Oceaneering's argument on its unjust enrichment counterclaim is limited to one footnote in which it states: "Oceaneering has provided ampl[e] facts which entitle Oceaneering to bring its cause of action under the theory of unjust enrichment."
Oceaneering further argues in its opposition to WWCS's motion that the Court should sua sponte dismiss WWCS's breach of contract and fraudulent inducement claims as untimely.
The statute of limitations for both claims is four years. See Beavers v. Metro. Life Ins. Co., 566 F.3d 436, 439 (5th Cir. 2009) ("Texas applies a fouryear statute of limitations to breach of contract claims." (citing Tex. Civ. Prac. & Rem. Code § 16.051)); Tex. Civ. Prac. & Rem. Code § 16.004(a)(4) (fouryear statute of limitations period for actions based on fraud). But the discovery rule "operates to defer accrual of a cause of action until the plaintiff knows or, by exercising reasonable diligence, should have known of the facts giving rise to the claim." Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 734 (Tex. 2001). The rule is "a very limited exception to statutes of limitations," and applies "only when the nature of plaintiff's injury is both inherently undiscoverable and objectively verifiable." Id. An injury is inherently undiscoverable if it is, "by its nature, unlikely to be discovered within the prescribed limitations period despite due diligence." Id. at 734-35 (citing S.V. v. R.V., 933 S.W.2d 1, 7 (Tex. 1996)). Whether someone, by exercising reasonable diligence, should have known of the facts giving rise to his or her claim is generally a question of fact for the jury. See, e.g., Sw. Energy Prod. Co. v. Berry-Helfand, 491 S.W.3d 699, 722 (Tex. 2016).
According to Oceaneering, WWCS must have learned about Oceaneering's alleged violations of the NDA no later than January 2011, when Comperry sent photographs of, and information about, Oceaneering's FRS to Wright. If WWCS's causes of action for breach of contract and fraudulent inducement accrued at that time, then the filing of its initial complaint in May 2015 would be untimely.
Oceaneering has failed to come forward with evidence that would entitle it to a directed verdict on its statute of limitations defense if the evidence went uncontradicted at trial. See Int'l Shortstop, 939 F.2d at 1264-65. In the email cited by Oceaneering, Comperry states:
This information reveals no clear similarities between WWCS's system and the recently developed FRS such that WWCS would have been put on notice of Oceaneering's misuse of confidential information. See Slusser v. Union Bankers Ins. Co., 72 S.W.3d 713, 717 (Tex. App. 2002) ("A cause of action for breach of contract is generally regarded as accruing when the contract is breached or when the claimant has notice of facts sufficient to place him on notice of the breach." (emphasis added)); see also Berry-Helfand, 491 S.W.3d at 722 ("Because the discovery rule applies to trade-secret misappropriation claims, however, the limitations period did not begin to run until [plaintiff] knew or should have known of facts that in the exercise of reasonable diligence would have led to discovery of the misappropriation."). In addition, the photographs taken by Comperry show Oceaneering's pump (the Subsea Hydraulic Power Unit, or SHPU), not the FRS itself.
For the foregoing reasons, the Court GRANTS WWCS's motion for summary judgment. Oceaneering's counterclaims are DISMISSED WITH PREJUDICE. The Court further DENIES Oceaneering's request to dismiss WWCS's breach of contract and fraudulent inducement claims as untimely.