Star Systems International Limited v. 3M Company and 3M Innovative Properties Company, 05-15-00669-CV

Background

3M sued former employee Lockhart and several former consultants (Cheung, Karr, Lai, Shyur, Tang) alleging disclosure of 3M confidential information and asserting claims including tortious interference with confidentiality agreements, conspiracy, conversion, and violation of the Texas Uniform Trade Secrets Act (TUTSA).
Four consultants (Cheung, Lai, Tang, Shyur) had confidentiality agreements containing broad arbitration clauses; Karr’s relevant agreement (as pled) lacked an arbitration clause (dispute exists over which Karr agreement controls).
Star Systems (Appellant) moved to compel arbitration and to stay litigation, arguing 3M was equitably estopped from avoiding arbitration and that non‑arbitrable claims were factually intertwined with arbitrable ones.
The trial court compelled arbitration only as to 3M’s tortious‑interference claims tied to the four consultants with arbitration clauses, but denied arbitration (and a stay) for claims of conspiracy, conversion, TUTSA, and claims relating to Karr and Lockhart.
Appellant appealed/interlocutory sought mandamus, arguing the denied claims are factually intertwined or address the same issues as the compelled claims, so they must be arbitrated or stayed to avoid rendering arbitration moot.

Issues

Issue	Plaintiff's Argument (3M)	Defendant's Argument (Star)	Held
Whether non‑contract claims (conspiracy, conversion, TUTSA) are subject to arbitration because they are factually intertwined with arbitrable tortious‑interference claims	Non‑contract claims are legally distinct and "easily separable" from contract‑based tortious‑interference claims	The same factual proof (misuse/disclosure of confidential information) underlies all claims, so they are factually intertwined and must be arbitrated	Trial court refused to compel those claims to arbitration (Appellant contends this is reversible error)
Whether claims concerning Karr’s agreement must be stayed or compelled given other consultants’ claims are arbitrable	Karr’s agreement lacks an arbitration clause (as pled), so claims tied to it are litigable	3M does not distinguish facts between Karr and the other consultants; proceeding on Karr in court while others go to arbitration renders arbitration moot and should be stayed	Trial court declined to stay Karr‑related claims (Appellant appeals that denial)
Whether claims against Lockhart should be stayed pending arbitration	Lockhart’s non‑compete/other claims against him are independent and litigable	Lockhart’s alleged disclosure and any customer loss depend on resolution of whether confidential information was misused by other consultants — thus should be stayed	Trial court denied stay as to Lockhart (Appellant asserts this was erroneous)
Standard of review for trial court’s arbitration & stay rulings	—	Abuse of discretion for mixed factual/legal rulings; de novo for pure legal interpretation of arbitration clauses	Appellant argues abuse‑of‑discretion applies; legal issues (scope/enforceability) reviewed de novo

Key Cases Cited

In re Merrill Lynch Trust Co. FSB, 235 S.W.3d 185 (Tex. 2007) (courts should stay litigation that would render arbitration moot; arbitration given priority when it will resolve material issues)
In re FirstMerit Bank, N.A., 52 S.W.3d 749 (Tex. 2001) (party seeking arbitration must show valid agreement and dispute falls within its scope)
Prudential Sec. v. Marshall, 909 S.W.2d 896 (Tex. 1995) (strong policy favoring enforcement of arbitration agreements; courts should construe arbitration clauses broadly)
Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266 (Tex. 1992) (claims are arbitrable if factually intertwined with arbitrable contract claims even when grounded in different legal theories)
Ascendant Anesthesia PLLC v. Abazi, 348 S.W.3d 454 (Tex. App.—Dallas 2011) (scope of arbitration clause is a question of law reviewed de novo; factual intertwinement sufficient for arbitration)
Cleveland Constr., Inc. v. Levco Constr., Inc., 359 S.W.3d 843 (Tex. App.—Houston 2012) (abuse of discretion governs review of denial to compel arbitration and to stay proceedings)
Gray Wireline Serv. v. Cavanna, 374 S.W.3d 464 (Tex. App.—Waco 2011) (stay appropriate where parallel litigation would render arbitration futile)
In re Sun, 86 S.W.3d 313 (Tex. App.—Austin 2002) (tort claims are intertwined with arbitrable claims when based entirely on the same alleged acts)