United States District Court, E.D. Texas, Sherman Division
PERFORMANCE PULSATION CONTROL, INC.
SIGMA DRILLING TECHNOLOGIES, LLC, INTREPID CONSULTING, LLC, JUSTIN MANLEY, ALLISON MANLEY, WILLIAM GARFIELD, and PAMELA GOEHRING-GARFIELD
MEMORANDUM OPINION AND ORDER
L. MAZZANT UNITED STATES DISTRICT JUDGE
before the Court is Defendants Justin Manley's
(“Manley”) and Sigma Drilling Technologies,
LLC's (“Sigma”) (collectively
“Defendants”) Motion for Leave to File
Counterclaim (Dkt. #82). After reviewing the relevant
pleadings and motion, the Court finds the motion should be
case involves Plaintiff Performance Pulsation Control,
Inc.'s (“PPC”) allegations that Manley, a
former employee, formed a competing company, Sigma, to market
and sell pulsation control products that he developed within
the course of his employment with PPC. Specifically, PPC
claims that Manley misappropriated PPC's trade secrets
and confidential information while acting as the Director of
Sales and Marketing for PPC. As a result, PPC filed suit
seeking declaration that it is the owner of such intellectual
property, as well as injunctive relief and monetary damages
for breach of contract, breach of fiduciary duty,
misappropriation, and unfair competition.
January 31, 2018, Defendants filed their Motion for Leave to
File Counterclaim (Dkt. #82). Specifically, Defendants seek
leave to file counterclaims against PPC requesting
declaratory and injunctive relief. On February 14, 2018, PPC
filed its response (Dkt. #93).
15(a) of the Federal Rules of Civil Procedure provides that a
party may amend its pleading once without seeking leave of
court or the consent of the adverse party at any time before
a responsive pleading is served. Fed.R.Civ.P. 15(a). After a
responsive pleading is served, a party “may amend only
with the opposing party's written consent or the
court's leave.” Id. Rule 15(a) instructs
the court to “freely give leave when justice so
requires.” Id. The rule “evinces a bias
in favor of granting leave to amend.” Jones v.
Robinson Prop. Grp., L.P., 427 F.3d 987, 994 (5th Cir.
2005) (quoting Lyn-Lea Travel Corp. v. Am. Airlines,
Inc., 283 F.3d 282, 286 (5th Cir. 2002)). But leave to
amend “is not automatic.” Matagorda Ventures,
Inc. v. Travelers Lloyds Ins. Co., 203 F.Supp.2d 704,
718 (S.D. Tex. 2000) (citing Dussouy v. Gulf Coast Inv.
Corp., 660 F.2d 594, 598 (5th Cir. 1981)). Whether to
allow amendment “lies within the sound discretion of
the district court.” Little v. Liquid Air
Corp., 952 F.2d 841, 845-46 (5th Cir. 1992). A district
court reviewing a motion to amend pleadings under Rule 15(a)
considers five factors: (1) undue delay; (2) bad faith or
dilatory motive; (3) repeated failure to cure deficiencies by
previous amendments; (4) undue prejudice to the opposing
party; and (5) futility of amendment. Smith v. EMC,
393 F.3d 590, 595 (5th Cir. 2004) (citing Foman v.
Davis, 371 U.S. 178, 182 (1962)).
seek leave to file counterclaims requesting declaratory and
injunctive relief. Defendants assert that the Court
“should grant leave . . . because there is no
substantial reason to deny Sigma's and Manley's
request.” (Dkt. #82 at p. 1). Conversely, Plaintiff
avers that leave is unwarranted since “Defendants'
proposed counterclaims against PPC are futile and made in bad
faith.” (Dkt. #93 at p. 1). The Court finds it is only
necessary to address Plaintiff's futility argument.
is within the district court's discretion to deny a
motion to amend if it is futile.” Stripling v.
Jordan Prod. Co., LLC, 234 F.3d 863, 872-73 (5th Cir.
2000). Futility exists when the amended complaint
“fail[s] to state a claim upon which relief could be
granted.” Id. at 873; see also Mason v.
Fremont Inv. & Loan, 671 F. App'x 880, 883 (5th
Cir. 2016). In determining futility, the Court applies
“the same standard of legal sufficiency as applie[d]
under Rule 12(b)(6).” Id.
request a declaration that “PPC has no ownership or
licensing rights to the intellectual property related to the
products sold by Sigma” and “that Manley owes no
continuing obligations to PPC resulting from Manley's
previous employment with PPC.” (Dkt. #83 at ¶ 25).
Plaintiff argues such relief is futile “because the
same intellectual property is already at issue in this
lawsuit.” (Dkt. #93 at p. 3). Stated differently,
Plaintiff claims that the Court should reject Defendants'
request for a declaratory judgment because such relief
“seek[s] resolution of matters that will already be
resolved as part of the claims in the lawsuit.” (Dkt.
#93 at pp. 3-4). The Court agrees.
resolution of the claims alleged in Plaintiff's Second
Amended Complaint resolve the concerns made issue in
Defendants' request for declaratory relief-who maintains
ownership and licensing rights over the intellectual property
at issue. See generally (Dkt. #73). As such, the
Court denies Defendants' request for leave to file a
counterclaim for a declaratory judgment. See Regus Mgmt.
Grp., LLC v. Int'l Bus. Mach. Corp., No.
3:07-CV-1779-B, 2008 WL 2434245, at *2 (N.D. Tex. June 17,
2008) (recognizing that courts need not permit repetitive and
unnecessary declaratory relief); Xtria LLC v. Tracking
Sys., Inc., No. 3:07-CV-0160-D, 2007 WL 1791252, at *3
(N.D. Tex. June 21, 2007) (dismissing declaratory judgment
relief because it duplicated an existing claim for relief).
additionally seek leave to file a counterclaim requesting
injunctive relief. Specifically, Defendants request the Court
grant a preliminary injunction preventing PPC from
“misappropriating Manley's and Sigma's
intellectual property and reverse engineering, manufacturing,
and selling the products derived therefrom.” (Dkt. #83
at ¶ 30). Further, Defendants seek a “permanent
injunction against PPC preventing PPC from manufacturing or
selling Manley's and Sigma's product.” (Dkt.
#83 at ¶ 36). Plaintiff responds that granting leave is
futile because such a counterclaim fails to “support a
viable claim upon which relief could be granted” and
Defendants “cannot establish the elements necessary to
obtain a remedy for injunctive relief.” (Dkt. #93 at
relief is not itself a cause of action, but an equitable
remedy predicated on a viable cause of action.”
Russell v. Bac Home Loans Servicing, L.P., No.
SA0-14-CA-480-FB, 2014 WL 12489704, at *10 (W.D. Tex. Aug.
21, 2014, report and recommendation adopted, 2015 WL
11545023 (W.D. Tex. Mar. 11, 2015) (citing Puente v.
CitiMortgage, Inc., No. 3:11-CV-2509-N, 2012 WL 4335997,
at *7 (N.D. Tex. Aug. 29, 2012). Here, Defendants fail to
plead a cause of action to sustain a request for injunctive
relief. Stated differently, there is no viable claim to