Super Starr International, LLC v. Fresh Tex Produce, LLC
531 S.W.3d 829
Tex. App.2017Background
- Fresh Tex Produce, LLC (Distributor) and Super Starr International, LLC (Importer) formed Tex Starr Distributing, LLC (LLC) under an operating agreement; Distributor and Importer were 50/50 members. An exclusivity provision made the LLC the sole U.S. distributor of the Importer’s hybrid "Royal Star" papayas for a limited term.
- The revised operating agreement (effective Jan 2014) contained a two‑year exclusivity clause that expired Dec. 31, 2015; disputes followed when Importer announced it would sell directly beginning July 2016.
- Distributor alleged misappropriation of customer lists and confidential information by Importer employees (photos, copying, employee hires) and brought claims including TUTSA, breach of fiduciary duty, TTLA, tortious interference, and related derivative claims on behalf of the LLC.
- After an evidentiary hearing, the trial court issued a broad temporary injunction: (1) forced continuation of the exclusivity arrangement; (2) prohibited soliciting Distributor/LLC customers/accounts/growers and diverting opportunities; and (3) ordered preservation of electronic information.
- On interlocutory appeal, the court examined legal sufficiency of the claims supporting injunctive relief, the breadth and specificity of the restrictions (Rule 683), and whether preservation of ESI was supported.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a probable right to relief existed to support exclusivity (partnership/joint‑venture claims) | Distributor: agreements and course of dealing show a partnership/joint venture justifying enforcement of exclusivity | Importer: operating agreement and statute show LLC is not a partnership; exclusivity expired Dec. 31, 2015 | Held: No evidence of partnership/joint venture; exclusivity provision unambiguous and expired; injunction enforcing exclusivity reversed/dissolved |
| Whether non‑competition provisions could be supported by fiduciary, TTLA, tortious interference, and aiding/abetting claims | Distributor: wrongdoing (diversion, use of confidential info) supports restraints | Importer: claims are legally insufficient or preempted; competition after exclusivity is lawful | Held: Claims for breach of fiduciary duty, TTLA, tortious interference, and aiding/abetting legally insufficient to support those restraints; those parts of injunction dissolved |
| Whether TUTSA claim supports injunctive relief and scope of restraints | Distributor: TUTSA evidence (customer lists, copying, photos) supports injunction against misuse of trade secrets | Importer: operating‑agreement provisions (inspection, other business) permit access/competition; injunction must not bar lawful competition | Held: Some evidence supports TUTSA claim, so limited injunctive relief may be appropriate, but injunction must be narrowed and tailored to protect only trade secrets/confidential info |
| Whether injunction’s ESI preservation (anti‑spoliation) was supported | Distributor: preservation was necessary to protect rights and evidence | Importer: preservation restriction was not raised or supported at hearing and no proof of imminent spoliation | Held: No evidence of probable, imminent, irreparable harm from deletion; ESI preservation restriction abused discretion and was dissolved |
Key Cases Cited
- Butnaru v. Ford Motor Co., 84 S.W.3d 198 (Tex. 2002) (elements and standard for temporary injunction)
- Plains Exploration & Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d 296 (Tex. 2015) (contract interpretation; unambiguous language controls)
- Ingram v. Deere, 288 S.W.3d 886 (Tex. 2009) (use of the word "partner" in colloquial sense is not dispositive of partnership formation)
- Allied Capital Corp. v. Cravens, 67 S.W.3d 486 (Tex. App.—Corpus Christi 2002) (appellate standard: draw inferences favoring trial court when reviewing injunction evidence)
- Qwest Commc’ns Corp. v. AT&T Corp., 24 S.W.3d 334 (Tex. 2000) (Rule 683 specificity requirements for injunctions are mandatory)
- Brookshire Bros., Ltd. v. Aldridge, 438 S.W.3d 9 (Tex. 2014) (Texas spoliation law and available remedies)