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In re M-I L.L.C.
505 S.W.3d 569
| Tex. | 2016
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Background

  • M-I L.L.C. (M-I) and National Oilwell Varo (NOV) compete in oilfield solid-control screens; M-I alleges trade secrets and bidding/pricing/customer knowledge were known by its former employee Jeff Russo.
  • Russo left M-I for NOV; M-I asserted Russo breached a non-compete and possessed confidential information and threatened litigation and injunctive relief. Russo sued to declare the non-compete unenforceable; M-I counterclaimed and also sued NOV for misappropriation and tortious interference.
  • At a temporary-injunction hearing M-I sought to present trade-secret evidence via witness LaTosh'a Moore and asked the court to exclude NOV’s designated representative (Federico Mezzatesta) from portions of the hearing; the trial court refused without conducting the required balancing and only ordered Mezzatesta not to disclose any trade secrets he heard.
  • M-I submitted an in camera affidavit of Moore to the court of appeals as an offer of proof; the trial court later ordered production of that affidavit without first reviewing it in camera because the affidavit had not been before the trial court.
  • M-I petitioned the Texas Supreme Court for mandamus relief, arguing the trial court abused its discretion by (1) refusing to exclude NOV’s representative without balancing due-process and trade-secret interests, and (2) ordering disclosure of the Moore affidavit without in camera review. The Court conditionally granted mandamus.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether the trial court abused its discretion by refusing to exclude NOV’s designated representative from portions of a temporary-injunction hearing involving alleged trade secrets M-I: The trial court should have excluded Mezzatesta (or held an in camera determination) because disclosure to a competitive decision-maker risks irreparable competitive harm; Trade Secrets Act authorizes protective measures including exclusion NOV: Due process and open-courts principles (and the witness-rule exemption for company representatives) entitle its representative to attend; exclusion would be improper secrecy like Star Chamber The court held the trial court abused its discretion by failing to balance competing due-process and trade-secret interests before refusing exclusion; remanded to perform the required balancing
Whether the trial court abused its discretion by ordering production of the Moore affidavit without conducting an in camera review M-I: The Moore affidavit—submitted only to the court of appeals—might contain trade secrets; the trial court must review confidential materials in camera before ordering disclosure NOV/Russo: The affidavit is a witness statement/discoverable and should be produced The court held the trial court abused its discretion; when the document is the only evidence of privilege, the trial court must examine it in camera before ordering disclosure

Key Cases Cited

  • Walker v. Packer, 827 S.W.2d 833 (Tex. 1992) (mandamus standard: abuse of discretion and no adequate appellate remedy)
  • Mathews v. Eldridge, 424 U.S. 319 (U.S. 1976) (due-process balancing test)
  • Connecticut v. Doehr, 501 U.S. 1 (U.S. 1991) (consideration of private and opposing interests in due-process analysis)
  • Garcia v. Peeples, 734 S.W.2d 343 (Tex. 1987) (need to balance harm to proprietary interests before restricting dissemination of trade secrets)
  • Weisel Enters. v. Curry, 718 S.W.2d 56 (Tex. 1986) (trial court must review allegedly privileged documents in camera when they alone substantiate privilege)
  • Helminski v. Ayerst Labs., 766 F.2d 208 (6th Cir. 1985) (civil litigant’s right to be present analyzed under due process; exclusion may be permitted in limited circumstances)
Read the full case

Case Details

Case Name: In re M-I L.L.C.
Court Name: Texas Supreme Court
Date Published: May 20, 2016
Citation: 505 S.W.3d 569
Docket Number: NO. 14-1045
Court Abbreviation: Tex.