Eagle Oil & Gas Co. v. Shale Exploration, LLC, 549 S.W.3d 256 (Tex. App.—Houston [1st Dist.] 2018, pet., pet. dismissed) involves the familiar situation where a plaintiff sues for both breach of a confidentiality agreement and for misappropriation of trade secrets. Defendant asserted that plaintiff was limited to a breach of contract claim because the misappropriation claim was barred by the economic loss rule, which bars a recovery in tort for economic losses caused by a breach of contract if the losses are due to the failure to fulfill a contractual obligation. Continue Reading The Economic Loss Rule Does Not Prohibit a Plaintiff from Asserting Both Breach of Contract and Common Law Misappropriation of Trade Secrets Claims
In part one of this series, we saw that collecting a judgment from an individual is difficult because Texas protects up $50,000.00 of personal property items for single individuals and $100,000.00 in personal property items for families. This is one of many debtor protections under Texas law.
Another protection is Texas’s “strong pro-homestead tradition.” Norris v. Thomas, 215 S.W.3d 851, 854 (Tex. 2007). Continue Reading Not So Fast: The Difficulties of Collecting Judgments in Texas (Part II)
When the Texas Uniform Trade Secrets Act (TUTSA) was enacted, it removed trade secret theft as a possible basis for asserting a Texas Theft Liability Act (TTLA) claim. One of the biggest impacts of this change was the recovery of attorneys’ fees for trade secrets cases. Under the TTLA, attorneys’ fees were available to prevailing parties. Under TUTSA, attorney’ fees were only available to a prevailing party if (1) the claim for misappropriation was made in bad faith; (2) a motion to terminate an injunction is made or resisted in bad faith; or (3) willful and malicious misappropriation exists. Thus, with the enactment of TUTSA, attorneys’ fees became much more difficult to recover.
Importantly, though, litigants must remember that the TTLA still applies to misappropriations that took place before TUTSA’s September 1, 2013 enactment date. The Fifth Circuit case of Automation Support, Inc. v. Humble Design, LLC, No. 17-10433, 2018 WL 1474937 (5th Cir. Mar. 26, 2018) provides a good reminder of this. Continue Reading Don’t Forget about the Texas Theft Liabilty Act When Analyzing a Trade Secrets Claim
When a business severs ties with one of its affiliates, it can be difficult to retrieve and erase all the trade secret information provided to the affiliate. That problem was on display in the franchise context in Stockade Companies, LLC v. Kelly Restaurant Group., LLC, No. 1:17-CV-143-RP, 2017 WL 4640443 (W.D. Tex. Oct. 16, 2017), which involved a franchisor accusing its former franchisee of misappropriating its “buffet system” in its restaurants. Continue Reading If You Own a Trade Secret, You Probably Shouldn’t Throw It Away in a Dumpster
In one of my earlier blog posts, I explained the how Texas’s anti-SLAAP statute, the Texas Citizens Participation Act (TCPA), is used as a defense to a misappropriation of trade secrets claim. Craig v. Tejas Promotions, LLC, No. 03-16-00611-CV, 2018 WL 2050213 (Tex. App.—Austin May 3, 2018, no pet. h.) provides another example of this defense. Continue Reading The TCPA Strikes Again
One of the hardest lessons to learn in litigation is that obtaining a judgment against an opposing party by no means guarantees that your client will be paid. Unless the opposing party has the cash on hand (and a willingness to pay) or an insurance policy covering the claim, you will need to obtain a writ of execution from the court and then have your local constable attempt to seize the party’s assets to pay for the judgment.
When it comes to individuals in Texas, finding those assets can be difficult. Continue Reading Not So Fast: The Difficulties of Collecting Judgments in Texas (Part I)