United States District Court, S.D. Texas, Houston Division
OPINION AND ORDER
MELINDA HARMON, UNITED STATES DISTRICT JUDGE
in the above-referenced cause are the following motions: (1)
Plaintiff‘s Emergency Motion for Contempt, Doc. 26; (2)
Plaintiff‘s Emergency Motion to Modify the Consent
Preliminary Injunction Order, Doc. 27; (3) Plaintiff‘s
Motion for Expedited Hearings, Doc. 28; (4) Defendants‘
Emergency Opposed Motion to Disqualify Experts and for
Sanctions Against Plaintiff, Doc. 33; and (5)
Plaintiff‘s Opposed Motion for Protective Order and to
Quash Defendants‘ Subpoenas Duces Tecum to
Plaintiff‘s Non-Party Expert, Doc. 34.
March 27, 2017, the parties appeared before this Court for a
hearing on the pending motions. After three days of
proceedings during which the Court heard extensive testimony,
as well as a thorough review of the filings,  hearing exhibits,
and relevant law, the Court denies Defendants‘ motions
and grants Plaintiff‘s motions with the exception of
Plaintiff‘s Motion for Expedited Hearings, which is now
case arises from Defendant Mark Coyle‘s
("Coyle") alleged misappropriation of trade secrets
before and immediately after departing Plaintiff Orion Marine
Construction, Inc. ("Orion") to work for a major
competitor, Defendants Crosby Dredging, LLC (TX) and Crosby
Dredging, LLC‘s (LA) (collectively,
employment courtship with Crosby began sometime in September
2016. Doc. 26-2 at 4; Tr. 1-23:7-1-24:11. His initial
discussions about employment opportunities with Crosby
started with Crosby‘s Dredging Operations Manager,
Roland Maturin ("Maturin") on LinkedIn, and soon
after Coyle sent his resume to Crosby. Id. Coyle
interviewed with Crosby in New Orleans on January 4, 2017,
Tr. 1-34:10-15. On January 6, 2017, Coyle sent a draft
employment agreement to Crosby, the terms of which awarded
him a 1% commission on any projects he brought to Crosby. Ex.
5. That same day, he drafted his resignation letter to Orion.
On January 9, Coyle submitted his resignation letter to the
company. Tr. 1-38:12-1-39:5.
his employment tenure with Orion, Coyle signed
acknowledgments of his receipt and certification of
compliance with Orion‘s Corporate Ethics and Legal
Compliance Policy and Code of Business Conduct and Ethics.
Exs. 2, 4. Nevertheless, soon after he began courting Crosby
in September, Coyle began forwarding confidential emails
regarding bid proposals and other proprietary information to
his personal email address. See, e.g., Exs. 11, 12.
Coyle continued forwarding confidential e-mails, peaking in
December and January, until after his official resignation
from Orion. See, e.g., Exs. 8, 16, 17. During the
same timeframe, he also downloaded Orion documents to a
number of thumb drives, a MyPassport portable hard drive
device, a Surface 3 tablet computer device, and a Dropbox
account. Doc. 27-1; Tr. 1-140:8-12.
discovering Coyle‘s actions, on January 25, 2017, Peter
Bulcher ("Bulcher"), Orion‘s Vice President
and General Counsel, sent an email to Coyle advising him to
"return any and all confidential and or proprietary
information . . . taken with you when you left the Company,
" and "to the extent such information . . . cannot
be physically returned to the Company" to "keep
such information confidential." Ex. 21. Coyle did not
respond to the letter and engaged counsel instead. Tr.
1-108:7-1-109:5. In spite of Bulcher‘s letter, on
February 12, 2017, Coyle proceeded to delete hundreds of the
files he had taken. Doc. 26-2 at 12. See also Ex.
30. A few days later, on February 16, Lavigne sent an email
to Crosby and Coyle notifying Defendants of the impending
lawsuit and advising Coyle that he was obligated to maintain
and not destroy documents or email. Doc. 22.
February 17, 2017, this Court entered a Temporary Restraining
Order ("TRO") enjoining Defendants from destroying
or erasing any of Orion‘s business materials or
proprietary information and all records or documents relevant
to the suit "in any form" and "wherever
located." Doc. 12. The terms of the TRO specifically
stated that its terms encompassed documents, emails, reports,
software, files and electronic data. Id. On February
21, 2017-after the TRO was entered-Coyle proceeded to delete
another 128 files. Doc. 26-2 at 12. See also Ex. 30.
Then, on March 1, 2017, he deleted a file folder. Doc. 26-2
at 12. See also Ex. 30.
March 3, 2017, the Court entered the parties‘ Consent
Preliminary Injunction Order ("PIO"). Doc. 21.
Under the terms of the PIO, Defendants agreed that they and
"their agents, employees, independent contractors, and
all persons acting with them" would be enjoined and
a. destroying, altering, erasing, secreting, or failing to
preserve any and all of Orion‘s business materials,
property, proprietary information, confidential information
or trade secrets and/or any and all record or documents that
may be relevant to this lawsuit; wherever located, and
whatever form, including but not limited to any document,
email, report, software, files, electronic data, tangible
evidence, financial records, and any and all communications
between Coyle and any employee, member, investor, or
consultant of Crosby Dredging;
b. disclosing, disseminating, or using for its own purpose or
any other purpose Orion‘s confidential information and
trade secrets, including, but not limited to, all files (and
the information contained therein) that Coyle removed from
Orion without authorization. For purposes of this order
"confidential information and trade secrets" is
defined as all files, documents, email, technology,
specifications, designs, processes, plans, intellectual
property, and other materials or items (regardless of media,
written, electronic or otherwise, and whether stored in local
or central databases, on personal computers, in files or
otherwise) of or developed or conceived by or for Orion.
However, this restriction does not apply to any documents or
information available in the public domain and was not
improperly placed in the public domain by any Defendant;
c. accessing, studying or taking notes regarding
Orion‘s confidential information or trade secrets that
Coyle removed and/or retained, including all business-related
information concerning Orion.
Doc. 21 ¶ 4. The parties also agreed to comply with the
Forensic Protocol Agreement ("FPA"), which required
Defendants to produce all email accounts and devices
(servers, computers, and external storage devices) belonging
to or used by Coyle and/or Martech Marine Consulting, LLC
within seven days of the entry of the PIO. Id.
¶ 5, p. 21.
discussions on the scope of the PIO, Orion‘s counsel,
Joseph Lavigne ("Lavigne"), proposed using LCG
Discovery Experts, LLC ("LCG") as the forensic
examiners. Doc. 40-3. Defendants agreed. See Doc.
21. Thus, the PIO designated LCG as the forensic examiner.
Id. at 5. LCG‘s Director of Investigations is
Andrew Frisbie ("Frisbie"). Tr. 2-48:25- 2-49:5.
the preliminary results indicated that Coyle had downloaded
hundreds of Orion‘s files during his courtship with
Crosby-and then deleted them after Orion initiated legal
action against Defendants-Orion filed its Emergency Motion
for Contempt, Doc. 26, Emergency Motion to Modify the Consent
Preliminary Injunction Order, Doc. 27, and Motion for
Expedited Hearings, Doc. 28. Defendants‘ responded with
their Emergency Opposed Motion to Disqualify Experts and for
Sanctions Against Plaintiff, Doc. 33. Orion then filed its
Opposed Motion for Protective Order and to Quash
Defendants‘ Subpoenas Duces Tecum to Plaintiff‘s
Non-Party Expert, Doc. 34.
hearing on the pending motions began on March 27, 2017 and
lasted for three days. During the proceedings, the Court was
presented with hundreds of pages of exhibits and heard
testimony from Maturin, Coyle, and Frisbie. The Court arrived
at its decision for the reasons that follow.
Legal Principles and Analysis
Orion's Motion for Contempt
courts possess the inherent authority to enforce their own
injunctive decrees. Travelhost, Inc. v. Blandford,
68 F.3d 958, 961 (5th Cir. 1995) (citing Waffenschmidt v.
MacKay, 763 F.2d 711, 716 (5th Cir. 1985)). When a party
violates a definite and specific order of the court requiring
him to perform or refrain from performing a particular act or
acts with knowledge of the court‘s order, he commits
contempt. SEC v. First Fin. Grp., 659 F.2d 660, 669
(5th Cir. 1981) (citations omitted). Because "contempt
is an affront to the court issuing the order, "
Waffenschmidt, 763 F.2d at 716, "the
willfulness of the contemnor‘s actions" are
irrelevant to a finding of contempt, Virgin Mobile USA,
LLC v. World MMP Inc., No. 06-cv-2444, 2007 WL 294145,
at *2 (S.D. Tex. Jan. 29, 2007).
party moving for civil contempt must demonstrate by clear and
convincing evidence: (1) that a valid court order was in
effect; (2) that the order required certain conduct by the
respondent; and (3) that the respondent failed to comply with
the court‘s order." Id. (citing FDIC
v. LeGrand, 43 F.3d 163, 170 (5th Cir. 1995)). The clear
and convincing evidence standard is higher than the
"preponderance of the evidence" standard, common in
civil cases, but not as high as "beyond a reasonable
doubt." United States v. Rizzo, 539 F.2d 458,
465 (5th Cir. 1976) (citations omitted). In the contempt
context, clear and convincing evidence is "that weight
of proof which produces in the mind of the trier of fact a
firm belief or conviction as to the truth of the allegations
sought to be established, evidence so clear, direct and
weighty and convincing as to ...