Thomas v. Joule Processing LLC <b><font color="red">Count 5- Breach of contract of the Consulting Agreement electronically transferred to USDC ND/NY- Albany Division. </font></b>, 4:23-cv-01615

Background

JTurbo (founded by Jacob Thomas) developed novel hydrogen liquefaction technology and shared designs, process simulations, vendor/customer lists, pricing and other proprietary information with Joule under an Exclusivity Agreement and later an Amended and Restated Exclusivity Agreement. The Amended Exclusivity Agreement contains a broad merger clause.
On Sept. 29, 2021, JTurbo and Joule made an oral Design Fee Agreement (Joule to pay $500,000/unit to JTurbo for up to three units sold to Plug); in Jan. 2022 the Amended Exclusivity Agreement was executed.
Thomas entered a Consulting Agreement with Plug (Jan. 2022) containing a mandatory forum-selection clause requiring litigation in Albany, New York; Plug later reduced and then terminated consulting hours.
Plug acquired Joule in Jan. 2022. Plaintiffs allege Defendants used and marketed JTurbo’s proprietary technology (including a LinkedIn post claiming ownership), sold units to customers (Nikola, TC Energy) without compensating or consulting JTurbo, and otherwise misappropriated trade secrets.
Plaintiffs sued asserting DTSA and TUTSA claims plus multiple contract and common-law tort claims (Counts 1–9). Defendants moved to dismiss Counts 4–9. The court dismissed Counts 4, 6, 7, 8, and 9 with prejudice and severed/transferred Count 5 to the Northern District of New York (Albany).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Breach of Design Fee Agreement (Count 4): whether the oral Design Fee Agreement survives the later Amended Exclusivity Agreement	Design fee term ambiguous; parol evidence (Design Fee Agreement) should be considered to enforce payment	The Amended Exclusivity Agreement contains a valid merger clause that supersedes prior agreements addressing the same subject matter	Amended Exclusivity Agreement supersedes the Design Fee Agreement; Count 4 dismissed with prejudice
Breach of Consulting Agreement (Count 5): whether forum-selection clause (Albany, NY) should be enforced or the claim dismissed/kept in Texas	Enforcement is unreasonable and inconvenient given parties/witnesses and other forum clauses in related agreements	Consulting Agreement contains mandatory forum-selection clause; enforcement and transfer appropriate	Forum-selection clause enforced; claim severed and transferred to N.D.N.Y. (Albany) under § 1404(a)
Preemption of common-law torts by TUTSA (Counts 6–9): do tort claims rely on same facts as trade-secret misappropriation?	Tort claims (tortious interference, unfair competition, breach of fiduciary duty, conspiracy) arise from independent wrongful acts and should survive	The common-law claims are grounded in the alleged misappropriation and therefore are preempted by TUTSA	All common-law tort claims are preempted by TUTSA and dismissed with prejudice
Leave to amend / futility	Plaintiffs request leave to amend deficient claims	Defendants argue amendment would be futile (merger clause, TUTSA preemption)	Leave to amend denied as futile for Counts 4 and 6–9; dismissal with prejudice

Key Cases Cited

Ashcroft v. Iqbal, 556 U.S. 662 (establishes the plausibility pleading standard)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (standard for stating a plausible claim)
Atl. Marine Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Texas, 571 U.S. 49 (forum-selection clauses are given controlling weight and enforced via § 1404(a))
Bremen v. Zapata Off–Shore Co., 407 U.S. 1 (enforcement of forum clauses unless unreasonable or unjust)
Spectators' Commc'n Network Inc. v. Colonial Country Club, 253 F.3d 215 (merger clause/supersession of prior agreements)
Haynsworth v. The Corp., 121 F.3d 956 (factors for avoiding enforcement of forum-selection clause as unreasonable)
Title Source, Inc. v. HouseCanary, Inc., 612 S.W.3d 517 (test for whether common-law claims are preempted by TUTSA)
AMID, Inc. v. Medic Alert Found. U.S., Inc., 241 F. Supp. 3d 788 (TUTSA displaces conflicting civil remedies for misappropriation)
Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909 (tortious interference requires independently tortious or unlawful conduct)
Foman v. Davis, 371 U.S. 178 (leave to amend should be freely given unless amendment would be futile)