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Scott Environmental Services, Inc. v. Newfield Exploration Co.

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

October 22, 2019

SCOTT ENVIRONMENTAL SERVICES, INC., Plaintiff,
v.
NEWFIELD EXPLORATION COMPANY, ZACHARY MCCARDELL, and KEVIN PARKER, Defendants.

          MEMORANDUM OPINION AND ORDER

          ROY S. PAYNE, UNITED STATES MAGISTRATE JUDGE.

         Defendant Newfield Exploration Company (hereinafter “Newfield”) filed a Motion to Stay and Compel Arbitration (“Motion to Stay”) (Dkt. No. 14), which is now before the Court.[1] Newfield also filed a Motion for Leave to File Supplement to its Motion to Stay and Compel Arbitration (“Motion for Leave”). (Dkt. No. 30.) Newfield also filed a Motion for Oral Hearing on these Motions. (Dkt. No. 62.)

         After consideration, the Court DENIES both Newfield's Motion to Stay and its Motion for Leave. Consequently, the Court DENIES-AS-MOOT Newfield's Motion for Oral Hearing.

         I. BACKGROUND

         This lawsuit involves allegations that Newfield misappropriated confidential information from Plaintiff Scott Environmental Services, Inc. (“Scott”). Scott also alleges that Newfield employees Zachary McCardell and Kevin Parker misappropriated confidential information. Scott and Newfield entered into a Master Service Agreement, which all parties had signed by April 25, 2013. (Dkt. No. 14-1 at 1.) This agreement refers to Newfield as “Company” and refers to Scott as “Contractor.” (Id.) The Master Service Agreement includes provisions regarding confidential information that was shared between the parties, including the following language:

Contractor may disclose confidential information to Company in connection with the services. Company shall treat, protect, and safeguard as proprietary and confidential this Agreement and all confidential information disclosed to Company using at least as great a degree of care as used to maintain the confidentiality of its own confidential information, but in no event less than a reasonable degree of care. Except with specific prior written authorization. Company shall not use any of Contractor's confidential information other than for the purpose for which it has been disclosed. Company will disclose Contractor's Confidential information only to Company's employees who need to know such Information, provided that such employees are bound by terms and conditions protecting such confidential information no less restrictive than those of this Agreement. “Confidential information” as used in this Agreement means any and all (and without limitation) technical and nontechnical information including trade secret, and proprietary information, techniques, models, charts, readings, logs, interpretations, extractions, mappings and integrations, production data, test data, log data, images plots and formulae related to the current, future and proposed work and services, and information concerning product or process research and development, design details and specifications, engineering, financial data, and marketing plans of Company.

(Id. at 8.) The Master Service Agreement also included an arbitration provision:

Any and all disputes claims or controversies arising out of or in connection with this Contract or the furnishing of products and/or services hereunder [herein "Dispute”] shall be referred to and determined by binding arbitration as the sole and exclusive remedy of the parties as to the Dispute. Such arbitration shall be conducted in accordance with the rules of the American Arbitration Association . . . .

(Id. at 7-8.)

         Three years after entering into the Master Service Agreement, Scott and Newfield entered into a Non-Disclosure Agreement (hereinafter “NDA”) on May 16, 2016. (Dkt. No. 14-4 at 4.) Kevin Parker and Zach McCardell, who were employees for Newfield, were also parties to the NDA. (Id. at 1, 4.) One stated purpose of the NDA was to allow the observation of Scott's operations. (Id. at 1.) The NDA provides that Newfield will not disclose or use for personal or financial gain the operations observed, as well as a long list of other confidential information. (Id.) The Non-Disclosure Agreement also includes a forum selection clause, which states that:

[a]ll parties to this Agreement agree that proper venue for any action of original jurisdiction seeking to enforce this Agreement shall lie in the United States District Court for the Eastern District of Texas, Marshall Division or in a Texas State Court have jurisdiction in Gregg County, Texas and that this Agreement shall be construed in accordance with the laws of Texas and/or any applicable federal law.

(Id. at 3.)

         II. NEWFIELD'S MOTION FOR LEAVE TO FILE SUPPLEMENT TO ITS MOTION TO STAY AND COMPEL ARBITRATION

         In Newfield's Motion for Leave (Dkt. No. 30), it seeks leave to file a supplement to its Motion to Stay and Compel Arbitration (Dkt. No. 14) to address additional case law. The Court concludes that Newfield has not shown good cause for supplementing its Motion to Stay and Compel Arbitration (Dkt. No. 14) as the newly provided caselaw was available to Newfield at the time Newfield filed its Motion to Stay and Compel Arbitration. Further, even if the Court were to allow supplementation, the Court concludes that the cases set forth by ...


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