United States District Court, S.D. Texas, Houston Division
ORDER GRANTING EMERGENCY MOTION TO REMAND
Rosenthal Chief United States District Judge
Gordon sued Baker Hughes Oilfield Operations, Inc. in July
2016, in Texas state court. (Docket Entry No. 1, ¶ 1).
Gordon asserted state-law claims for race discrimination and
retaliation under Texas Labor Code §21.001, and
misappropriation of trade secrets under the Texas Uniform
Trade Secrets Act, Tex. Civ. Prac. & Rem. Code §
134A.002. (Docket Entry No. 1-4, ¶ 6). On January 11,
2018, the state court granted Baker Hughes's motion to
compel arbitration and granted Gordon's motion to amend
his petition. Id.
second amended petition omitted Baker Hughes as a defendant
and brought a misappropriation-of-trade-secrets claim under
the Texas Uniform Trade Secrets Act against Derek Mathieson,
William D. Marsh, Alan Crain, Martin S. Craighead, Jay
Martin, Belgacem Chariag, Mario Ruscev, and Maria Borras. All
of the defendants are or were Baker Hughes employees. (Docket
Entry No. l-ll, ¶¶2-9, 18).
Hughes hired Gordon in April 2013 as a senior market research
analyst. (Docket Entry No. 1-11 at ¶ 13). Gordon alleged
• he had independently developed a thesis for
forecasting oil prices that was useful to Baker Hughes and
was a basis for Gordon's employment, id.,
• during his employment, he provided Baker Hughes with
multiple forecasts, including forecasts of oil prices,
outlooks for oil rig counts, and opinions on the factors
driving oil prices, id, ¶¶ 18-33;
• the forecasts were shared with Mathieson, Marsh,
Crain, Craighead, Martin, Chariag, Ruscev, and Borras,
without Gordon's consent, id.;
• the forecasts were trade secrets under the Texas
Uniform Trade Secrets Act, id., ¶ 22;
• he provided certain Baker Hughes employees with the
forecasts based on representations that the company would use
them to determine whether to promote him, but instead the
defendants used the forecasts "to make millions of
dollars worth of trades" for personal gain, through
insider trading, id., ¶¶ 19, 20, 21, 29,
• Mathieson, Ruscev, Marsh, Crain, Martin, Craighead,
and Borras each used Gordon's trade-secrets (the
forecasts), obtained through improper means (the
misrepresentation as to the reason for getting the
information), to commit unlawful insider trading,
id., ¶¶ 30-35, 42, 44.
April 2018, the defendants removed to federal court. (Docket
Entry No. 1). The defendants argue that this court has
federal subject-matter jurisdiction because resolving
Gordon's state-law misappropriation claim requires the
court to determine whether the defendants used the allegedly
misappropriated information for unlawful insider trading
under the Securities Exchange Act of 1934 and Rule 10b-5.
Id., ¶¶ 6, 7. Gordon moved to remand, the
defendants responded, and Gordon replied. (Docket Entry Nos.
4, 8, 9).
on the pleadings; the motion, response, and reply; the
record; the applicable law; and the arguments counsel
presented, Gordon's motion to remand is granted. The
reasons for this ruling are set out below.
The Legal Standard for Federal-Question Removal
th[e] 'well-pleaded complaint' rule, a federal court,
has original or removal jurisdiction only if a federal
question appears on the face of the plaintiffs well-pleaded
complaint." Bernhardv. Whitney Nat'l Bank,
523 F.3d 546, 551 (5th Cir. 2008). "A federal question
exists only where a well-pleaded complaint establishes either
that federal law creates the cause of action or that the
plaintiffs right to relief necessarily depends on resolution
of a substantial question of federal law." Bd. of
Comm 'rs v. Tenn. Gas Pipeline Co., 850 F.3d 714,
721 (5th Cir. 2017) (quoting Singh v. Duane Morris
LIP, 538 F.3d 334, 337-38 (5th Cir. 2008)).
removal of "a case pleading only state-law claims"
is appropriate if "the vindication of a right under
state law necessarily turn[s] on some construction of federal
law," Bernhard, 523 F.3d at 551 (quoting
Franchise Tax Bd. v. Const. Laborers Vacation Trust,
463 U.S. 1, 9 (1983)), "[o]nly in a 'special and
small category of cases' will federal jurisdiction exist
when state law creates the cause of action. Bd. of Comm
'rs, 850 F.3d at 721 (quoting Gunn v.
Minton, 568 U.S. 251, 258 (2013)). "That limited
category of federal jurisdiction only exists" if the
Grable test is met. Bd. of Comm 'rs,
850 F.3d at 721-22 (quoting Singh, 538 F.3d at 338).
"That is, federal jurisdiction over a state law claim
will lie if a federal issue is: (1) necessarily raised, (2)
actually disputed, (3) substantial, and (4) capable of
resolution in federal court without disrupting the
federal-state balance approved by Congress."
Gunn, 568 U.S. 251 at 258 (quoting Grable &
Sons Metal Prods, v. Darue Eng'g & Mfg., 545
U.S. 308, 313-14 (2005)).
makes two arguments for remand: first, that the removal was
not timely; and second, and more importantly, that his
petition does not require the court to decide a federal issue
in order to resolve any state-law claim. (Docket Entry No. 4,
at 3). The defendants respond that their notice of removal
was timely filed, and that Gordon's state-law
misappropriation claim requires determining whether insider
trading occurred, a federal question sufficient for
jurisdiction. (Docket Entry No. 8, at 1, 16).
Removal was Timely
notice of removal must "be filed within thirty days
after the receipt by the defendant, through service or
otherwise, of a copy of the initial pleading." 28 U.S.C.
§ 1446(b). "[A] named defendant's time to
remove is triggered by simultaneous service of the summons
and complaint, or receipt of the complaint, 'through
service or otherwise,' after and apart from service of
the summons, but not by mere receipt of the complaint