Devon Energy Corp. v. Donald C. Westacott
| Decision Date | 24 March 2011 |
| Docket Number | CIVIL ACTION NO. H-09-1689 |
| Parties | DEVON ENERGY CORPORATION, Plaintiff, v. DONALD C. WESTACOTT, Defendant. |
| Court | U.S. District Court — Southern District of Texas |
This case presents an unusual twist to issues that arise all too often when an employee leaves to work for a competitor and litigation results. The former employer often alleges that the employee downloaded or transmitted proprietary data and used it in his new job. In this case, the former employer, Devon Energy, alleges that its employee, Donald Westacott, a petrophysicist, erased proprietary data from the hard drive of the computer workstation he used before leaving to take a new job. Devon Energy alleges that Westacott's action destroyed the only source of a reservoir analysis that he was paid $125,000 to create. Westacott acknowledges that he deleted files from the computer he used at Devon Energy. Westacott vigorously disputes that he destroyed proprietary data, much less the only source of such data, or that he deleted Devon Energy files with the intent to deprive the company of access to them.
Devon Energy asserts claims for misappropriating and converting trade secrets and proprietary data and for violating the Computer Fraud and Abuse Act ("CFAA"), 18 U.S.C. § 1030. Devon Energy has moved for partial summary judgment that Westacott is liable under all three claims, reserving damages for later determination. (Docket Entry No. 37). Westacott responded, surreply, (Docket Entry No. 66). Westacott also moved to strike corrections to the deposition testimony of his supervisor at Devon Energy, William S. Coffey. Westacott moved under Federal Rule of Civil Procedure 30(e), (Docket Entry No. 39). Devon Energy responded, (Docket Entry No. 54). Devon Energy and Westacott have also filed motions in limine. (Docket Entry Nos. 42, 44).
Based on the record; the motions, responses, reply, and surreply; and the relevant law, this court denies Westacott's motion to strike the deposition testimony and denies Devon Energy's motion for partial summary judgment. The parties' motions in limine are denied without prejudice to reasserting them in light of this Memorandum and Opinion. A status conference is set for April 8, 2011 at 5:00 p.m.
The reasons for these rulings are explained below.
The factual background is drawn from the extensive summary judgment record.1 Westacottis a petrophysicist. Devon Energy is an energy company. Devon Energy hired Westacott in August 2008 to work in its Oklahoma City, Oklahoma office. His salary was $200,000. William Coffey was Westacott's supervisor.
Among Westacott's duties was an analysis of the gas reserves in the Barnett Shale, which is near Fort Worth, Texas. Westacott's workstation was equipped with a Devon Energy computer that had a 500-gigabyte hard drive. Devon Energy had a computer usage policy that made it clear that "computer equipment and internet access" are for "business use." (Docket Entry No. 37, Ex. D-4 at 1). The policy prohibited "[d]eliberate introduction of malicious programs into the network or server and [a]dding, removing, and/or modifying of Information Systems without prior consent from" the IT department. (Id. at 2). Under the usage policy, "[a]ll information used to conduct Company business, " which "could include information created pursuant to employees' personal use of Devon equipment, " is Devon Energy property. (Id.).
In January 2009, Westacott began to consider leaving Devon Energy. On January 20, Westacott gave notice that he would resign. His final work day was January 29. Before leaving, Westacott decided to erase files on the workstation computer he had used at Devon Energy. Westacott wanted to ensure that he removed all the personal files he had on that computer, including financial information and applications he had installed. Westacott asserts that he told his supervisor, Coffey, of his plans. (Docket Entry No. 51, Ex. Z, ^ 28). Westacott used a program called "Kill Disk."
Westacott asserts that he intended to delete only his "personal directories." (Docket EntryNo. 38, Ex. A at 87). "If anything else was removed, " he asserts, "it was purely accidental." (Docket Entry No. 51, Ex. Z, ¶ 50). Westacott testified that he also wanted to comply with Devon Energy's policy against unsupported software. (Id., ¶ 27). Westacott points to an October 16, 2008 internal Devon Energy IT newsletter stating that "[b]oth employees and contractors are required to clean up and remove unsupported, non-approved software and applications from their Devon computers to protect company information and reduce unnecessary business costs." (Docket Entry No. 47, Ex. J). Westacott contends that he intended to remove software and applications that had not been provided by Devon Energy. Westacott asserts that Coffey was aware that he had installed them on his computer and that he was deleting these and other files. (Docket Entry No. 38, Ex. A at 51; Docket Entry No. 51, Ex. Z¶ 20).
Among the files deleted was a 1.3-gigabyte file named "GXDB.db." This file contained data from Westacott's work on the Barnett Shale analysis. Westacott contends that he did not believe he was destroying the only source for this file. He contends that he had backed up all his work files on his password-protected network drive and that Devon Energy backed up that drive daily. (Docket Entry No. 51, Ex. Z, ¶¶ 21, 23, 36 ()). He also contends that the GXDB.db file was simply a copy of a Devon Energy database that he was going to use to do his Barnett Shale analysis. (Id.).
Coffey, Westacott's supervisor, testified that Westacott showed him screenshots of work on the Barnett Shale analysis after Westacott announced his resignation. (Docket Entry No. 38, Ex. B, ¶ 8). On January 30, the day after Westacott left Devon Energy, Coffey tried to access Westacott's Barnett Shale files. Neither Coffey nor anyone in Devon Energy's IT department was able to do so. (Id.). Coffey testified that Westacott never told him he planned to erase the hard drive. (Id., ¶ 11). When Coffey asked Westacott about the Barnett Shale file, Westacott responded that he "had no idea" what had happened. (Id., ¶¶10, 11).
On February 6, Thomas F. Taylor, a manager of corporate security for Devon Energy, and another Devon Energy employee, Gerald Colca, went to Westacott's home to ask about the missing information. (Id., Ex. D). Taylor testified that Westacott denied erasing the computer hard drive. Westacott told Taylor that he deleted some personal files but was sure he did not accidentally delete company files. (Id.). Taylor also testified that Westacott said that he had some work files on a thumb drive. Although initially willing to give the thumb drive to Devon Energy, Westacott ultimately refused to do so. (Id.).
Devon Energy sued Westacott on June 3, 2009. It accused Westacott of conversion and misappropriation of trade secrets and of violating the CFAA. Devon Energy has moved for partial summary judgment on liability. The claims rest on Westacott's deletion of the Barnett Shale data from the Devon Energy computer hard drive.
Each theory of liability is analyzed below.
Summary judgment is appropriate if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). "The movant bears the burden of identifying those portions of the record it believes demonstrate the absence of a genuine issue of material fact." Triple Tee Golf, Inc. v. Nike, Inc., 485 F.3d 253, 261 (5th Cir. 2007) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-25 (1986)).
If the burden of proof at trial lies with the nonmoving party, the movant may satisfy its initialburden by "'showing'—that is, pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case." See Celotex, 477 U.S. at 325. While the party moving for summary judgment must demonstrate the absence of a genuine issue of material fact, it does not need to negate the elements of the nonmovant's case. Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005) (citation omitted). "A fact is 'material' if its resolution in favor of one party might affect the outcome of the lawsuit under governing law." Sossamon v. Lone Star State of Tex., 560 F.3d 316, 326 (5th Cir. 2009) (quotation omitted). "If the moving party fails to meet [its] initial burden, the motion [for summary judgment] must be denied, regardless of the nonmovant's response." United States v. $92,203.00 in U.S. Currency, 537 F.3d 504, 507 (5th Cir. 2008) (quoting Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc)).
When the moving party has met its Rule 56(a) burden, the nonmoving party cannot survive a summary judgment motion by resting on the mere allegations of its pleadings. The nonmovant must identify specific evidence in the record and articulate how that evidence supports that party's claim. Baranowski v. Hart, 486 F.3d 112, 119 (5th Cir. 2007). "This burden will not be satisfied by 'some metaphysical doubt as to the material facts, by conclusory allegations, by unsubstantiated assertions, or by only a scintilla of evidence.'" Boudreaux, 402 F.3d at 540 (quoting Little, 37 F.3d at 1075). In deciding a summary judgment motion, the court draws all reasonable inferences in the light most favorable to the nonmoving party. Connors v. Graves, 538 F.3d 373, 376 (5th Cir. 2008).
The moving party bears a heavier burden when seeking summary judgment on a claim or defense on which it would bear the burden of proof at trial. Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986). "[I]f the movant bears the burden of proof on an issue, either because he is the plaintiff or as a defendant he is asserting an affirmative defense, he...
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