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Vine Oil & Gas LP v. Indigo Minerals, LLC

United States District Court, E.D. Texas, Sherman Division

August 30, 2019

VINE OIL & GAS LP, VINE MANAGEMENT SERVICES LLC, BRIX OIL & GAS LP, and BRIX OPERATING LLC Plaintiffs,
v.
INDIGO MINERALS, LLC, and INDIGO NATURAL RESOURCES LLC, Defendants.

          MEMORANDUM OPINION AND ORDER

          AMOS L. MAZZANT, UNITED STATES DISTRICT JUDGE

         Pending before the Court is Indigo's Motion to Dismiss for Failure to State a Claim and Motion to Dismiss for Improper Venue, or in the Alternative, to Transfer to the Southern District of Texas (Dkt. #25).

         After reviewing the relevant pleadings and motions, the Court finds the motion should be DENIED.

         BACKGROUND

         I. Factual Background

         Plaintiff Vine Oil & Gas LP is a Delaware limited partnership with its corporate office in Plano, Texas.[1] Plaintiffs Vine Management Services LLC, Brix Oil & Gas LP, and Brix Operating LLC (together with Vine Oil & Gas LP, “Vine”) are related entities located in Plano, Texas. Vine is a private oil and gas company engaged in the business of developing the Haynesville and Mid-Bossier shales. Vine holds a significant working interest in the Haynesville Basin, and it maintains production sites in a variety of parishes across northern Louisiana.

         Defendant Indigo Natural Resources, LLC, a Texas limited liability company with its corporate office in Houston, Texas, is a private natural gas and natural gas liquids producer, engaged in the business of developing the Haynesville Shale, the Bossier Shale, and the Holly Vaughn formation. Defendant Indigo Minerals, LLC (together with Indigo Natural Resources, LLC, “Indigo”), a Texas limited liability company in Houston, Texas, is a private oil and gas exploration company engaged in aggregating mineral interests and acquiring and developing working interests in oil and gas wells located in East Texas and throughout Louisiana, Mississippi, and Alabama.

         Vine and Indigo are apparently competitors in the Haynesville Basin and elsewhere. In an effort to secure and maintain a competitive advantage over other market players, Vine gathers performance data from each of its drilling operations and stores it in a secure database-referred to as the “Pason database.” In addition to performance data, the Pason database stores other confidential information, including Vine's trade secret processes, formulas, and techniques. Vine periodically grants access to the Pason database to employees, consultants, and other third parties who it determines ought to have access to its confidential information; in turn, those with access agree to keep the information they access confidential “through either the employee handbook or [a Master Services Agreement (MSA)]” (Dkt. #1).

         One such person with access to the Pason database was Daniel Ho, an employee of Halliburton Energy Services (“Halliburton”). Vine hired Halliburton to provide it with various engineering services, and the companies entered a MSA whereby Halliburton and its employees agreed to keep all Vine information confidential. During the engagement between Vine and Halliburton, Mr. Ho had access to the Pason database: his role was to evaluate Vine's performance and advise Vine on how it could improve, and this involved accessing Vine's confidential information. When Halliburton later promoted Mr. Ho, allegedly in or around May 2017, Vine required that Mr. Ho's access to the Pason database and its other confidential information be terminated.

         On or about April 30, 2019, two Vine employees allegedly spoke with Todd Epperson, a representative from Ulterra Drilling Tech, LP, where they learned that an Indigo representative had apparently told Mr. Epperson that he, the Indigo representative, “had access to all of Vine's data” (Dkt. #1). Upon receiving this information, Vine investigated the matter and discovered that within the past year, the Pason database was accessed over 32, 000 times with Mr. Ho's credentials. Hundreds of different IP addresses are alleged to have accessed the database, sometimes from different locations at the same time.

         Vine claims that Mr. Ho gave his login credentials to multiple users at Indigo, who Vine claims then used those credentials to access the Pason database and view Vine's confidential information. Vine's position is that, during the period in question, neither the Indigo users nor Mr. Ho had access to the Pason database or Vine's permission to access the Pason database; that Indigo accessed and used Vine's confidential information, including its trade secrets; that Indigo has attempted to conceal its usage of Vine's trade secrets; and that as a result, Indigo's performance has improved at Vine's expense. Further, Vine alleges that that Mr. Ho obtained his login credentials at its headquarters in Plano, Texas; that its trade secrets were developed and used daily at those headquarters; that its trade secrets were used in its operations in the Haynesville Shale, which is spread across Panola, Harrison, Rusk, Shelby, San Augustine, Sabine, Gregg, Marion, Upshur, and Nacogdoches counties; and that at least one IP address located in Collin County, Texas accessed the Pason database approximately 86 times.

         Vine's specific legal claims are (1) misappropriation of trade secrets under the Texas Uniform Trade Secrets Act, codified at §§ 134.001-134.005 of the Texas Civil Practice and Remedies Code; (2) misappropriation of trade secrets under the Defense of Trade Secrets Act, codified at 18 U.S.C. § 1832; and (3) violations of the Computer Fraud and Abuse Act, codified at 18 U.S.C. § 1030.

         II. Procedural History

         On May 10, 2019, Vine filed a complaint against Indigo (Dkt. #1).[2] On June 4, 2019, Indigo filed a Motion to Dismiss for Failure to State a Claim and Motion to Dismiss for Improper Venue, or in the Alternative, to Transfer to the Southern District of Texas (Dkt. #25). On June 18, 2019, Plaintiffs filed a consolidated response (Dkt. #30). On June 25, 2019, Indigo filed a reply (Dkt. #37).

         LEGAL STANDARD

         I. Rule 12(b)(6) Motion

         The Federal Rules of Civil Procedure require that each claim in a complaint include a “short and plain statement . . . showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Each claim must include enough factual allegations “to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

         A Rule 12(b)(6) motion allows a party to move for dismissal of an action when the complaint fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). When considering a motion to dismiss under Rule 12(b)(6), the Court must accept as true all well-pleaded facts in plaintiff's complaint and view those facts in the light most favorable to the plaintiff. Bowlby v. City of Aberdeen, 681 F.3d 215, 219 (5th Cir. 2012). The Court may consider “the complaint, any documents attached to the complaint, and any documents attached to the motion to dismiss that are central to the claim and referenced by the complaint.” Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010). The Court must then determine whether the complaint states a claim for relief that is plausible on its face. ‘“A claim has facial plausibility when the plaintiff pleads factual content that allows the [C]ourt to draw the reasonable inference that the defendant is liable for the misconduct alleged.'” Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “But where the well-pleaded facts do not permit the [C]ourt to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Iqbal, 556 U.S. at 679 (quoting Fed.R.Civ.P. 8(a)(2)).

         In Iqbal, the Supreme Court established a two-step approach for assessing the sufficiency of a complaint in the context of a Rule 12(b)(6) motion. First, the Court should identify and disregard conclusory allegations, for they are “not entitled to the assumption of truth.” Iqbal, 556 U.S. at 664. Second, the Court “consider[s] the factual allegations in [the complaint] to determine if they plausibly suggest an entitlement to relief.” Id. “This standard ‘simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary claims or elements.'” Morgan v. Hubert, 335 Fed.Appx. 466, 470 (5th Cir. 2009) (citation ...


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