571 S.W.3d 346
Tex. App.2018Background
- Dresser-Rand sued four former long‑time sales employees and their new employer Universal for breach of confidentiality agreements, misappropriation of trade secrets (state and federal), CFAA violations, conversion, and theft after the employees resigned en masse and began working for Universal.
- Dresser‑Rand alleges forensic evidence showed each employee downloaded confidential databases, bid materials, and client/contact information to USB drives or personal emails in December 2016 while accepting offers from Universal and then used that information to compete.
- The parties entered an agreed permanent injunction preserving electronic evidence; Dresser‑Rand later alleged the employees/Universal destroyed relevant electronic storage devices and sought a spoliation presumption.
- Universal and the Former Employees moved to dismiss under the Texas Citizens Participation Act (TCPA), arguing the suit targeted their exercise of free speech/association; the trial court denied Universal’s motion and the employees’ motions were overruled by operation of law.
- On appeal the court reviewed de novo whether the TCPA applied and whether Dresser‑Rand had produced clear and specific prima facie evidence on each element of its claims; the court affirmed the denial of the TCPA motions because Dresser‑Rand met the prima facie burden.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TCPA applies | Dresser‑Rand: suit is not based on protected speech/association and is exempt under commercial‑speech exception | Universal/Employees: suit "relates to" their exercise of free speech/association under TCPA definitions | Court: TCPA did not defeat suit because plaintiff established prima facie case on all claims; affirmed denial of dismissal |
| Whether plaintiff made clear & specific prima facie showing on breach of contract | Dresser‑Rand: affidavits and forensic report identify contracts, access/copies of files, and resulting damages | Defendants: evidence is vague, lacks specifics about transfer/use to third parties | Court: Swan affidavit + forensic declaration provided sufficient specific facts to infer breach and damages; prima facie met |
| Whether plaintiff made clear & specific prima facie showing on trade‑secret/DC/DTSA and CFAA claims | Dresser‑Rand: identified trade‑secret databases, protective measures, copying while accepting competitor offers, and competitive use | Defendants: plaintiff failed to identify the particular documents as trade secrets or prove unauthorized use | Court: evidence was sufficiently clear and specific for state/federal trade‑secret claims and CFAA at TCPA stage; prima facie met |
| Whether spoliation presumption warranted / need to resolve commercial‑speech exemption | Dresser‑Rand: argued spoliation and commercial‑speech exemption supported denying TCPA motion | Defendants: contested spoliation and exemption applicability | Court: affirmed denial based on plaintiff’s prima facie showing and therefore did not need to decide spoliation or commercial‑speech issues on appeal |
Key Cases Cited
- D Magazine Partners, L.P. v. Rosenthal, 529 S.W.3d 429 (Tex. 2017) (TCPA requires plaintiff show clear and specific evidence to avoid dismissal)
- In re Lipsky, 460 S.W.3d 579 (Tex. 2015) (explains TCPA's two‑step burden‑shifting and prima facie standard)
- ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895 (Tex. 2017) (interpreting TCPA definitions and burden under section 27.005)
- Lippincott v. Whisenhunt, 462 S.W.3d 507 (Tex. 2015) (statutory construction rules and TCPA scope)
- Hersh v. Tatum, 526 S.W.3d 462 (Tex. 2017) (application of TCPA to matters of public concern in defamation context)
- Schlumberger, Ltd. v. Rutherford, 472 S.W.3d 881 (Tex. App.-Houston [1st Dist.] 2015) (discussing sufficiency of evidence to resist TCPA dismissal)