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 No. 4
MEMORANDUM OPINION AND ORDER
L. MAZZANT, UNITED STATES DISTRICT JUDGE.
before the Court is Defendants Sigma Drilling Technologies,
LLC, Intrepid Consulting, LLC, Justin Manley, Allison Manley,
William Garfield, and Pamela Goehring-Garfield's
(collectively “Defendants”) Motion for Leave to
Amend Defendants' Answer to Plaintiff's Second
Amended Complaint (Dkt. #127). 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 Justin
Manley, a former employee, formed a competing company, Sigma
Drilling Technologies, LLC, to market and sell pulsation
control products that he developed within the course of his
employment with PPC. Specifically, PPC claims that Justin
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 23, 2018, Plaintiff filed its Second Amended
Complaint (Dkt. #73). On February 27, 2018, Defendants filed
their Answer (Dkt. #98). On May 1, 2018, Defendants filed
their Motion for Leave to Amend Defendants' Answer to
Plaintiff's Second Amended Complaint (Dkt. #127). On May
15, 2018, Plaintiff filed its response (Dkt. #141).
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 amend their answer to assert that Plaintiff
brought its misappropriation claims under the Texas Uniform
Trade Secrets Act in bad faith and to request attorney's
fees pursuant to Texas Civil Practice and Remedies Code
§ 134A.005. Defendants contend that the Court
“should grant leave . . . because there is no
substantial reason to deny Defendants' request” and
doing so “will not prejudice PPC as discovery is still
ongoing and depositions have yet to be taken.” (Dkt.
#127 at pp. 1-2). In response, Plaintiff avers that leave is
unwarranted because Defendants' proposed amendment is
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 Fed.Appx. 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. In performing a
12(b)(6) analysis, the Court disregards conclusory
allegations, for they are “not entitled to the
assumption of truth.” Ashcroft v. Iqbal, 556
U.S. 662, 664 (2009).
support their request for leave, Defendants contend that
“[a]s discovery has progressed in this case Defendants
have developed reason to believe Plaintiff's [Texas
Uniform Trade Secrets Act] misappropriation claims have been
brought in bad faith.” (Dkt. #127 at p. 2). Moreover,
in their proposed First Amended Answer, Defendants allege
that “PPC's claims for misappropriation under the
Texas Uniform Trade Secrets Act are made in bad faith.”
(Dkt. #129 at p. 7). Aside from these conclusory statements,
Defendants fail to provide the Court with any factual support
for their claims. As such, the Court finds that
Defendants' amendment is futile and should be denied.
therefore ORDERED that Defendants'
Motion for Leave to Amend Defendants' Answer to
Plaintiff's Second ...