Recif Res., LLC v. Juniper Capital Advisors, L.P.

• Decision Date: 17 November 2020
• Docket Number: CIVIL ACTION NO. H-19-2953
• Parties: RECIF RESOURCES, LLC, Plaintiff, v. JUNIPER CAPITAL ADVISORS, L.P., et al., Defendants.
• Court: U.S. District Court — Southern District of Texas

RECIF RESOURCES, LLC, Plaintiff, v. JUNIPER CAPITAL ADVISORS, L.P., et al., Defendants.

CIVIL ACTION NO. H-19-2953

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

November 17, 2020

MEMORANDUM AND ORDER

This case arises from unsuccessful discussions between the parties regarding a potential oil-and-gas development project. The case is now before the Court on two motions seeking summary judgment in connection with the claims asserted by Plaintiff Recif Resources, LLC ("Recif"). The first is the Motion for Summary Judgment ("Juniper's Motion") [Doc. # 130] filed by Defendants Juniper Capital Advisors, L.P., Juniper Capital Investments, LLC, Juniper Capital III, LP, and State Line Exploration, LLC (collectively, "Juniper").¹ The second pending motion isRecif's Motion for Summary Judgment on Breach of Contract and Misappropriation of Trade Secrets ("Recif's Motion") [Doc. # 135].²

The Court has carefully reviewed the record and the applicable legal authorities. Based on that review, the Court denies Recif's Motion and grants Juniper's Motion.

I. BACKGROUND

Recif's claims against Juniper are based on information that Recif provided to Juniper. In October 2017, Kevin Voelte introduced Recif to Juniper. Voelte, an investment banker, was assisting Recif in its search for private equity investment for an oil-and-gas development project in Recif's Area of Interest ("AOI") in the Louisiana Austin Chalk.³ Recif was asking potential private-equity investors "for a $100MM equity investment into the Recif Prospect in order to acquire mineral leases on 50,000 acres and to drill 13 wells on those leases over three years. In the fourth year, Recif planned to sell the Recif Prospect and predicted a fourfold return for investors at oil prices averaging $50 a barrel." First Amended Complaint("Complaint") [Doc. # 52], ¶ 29. Paul C. Langlois and Steven M. Jones are Recif's sole principals.

To facilitate their discussions regarding Juniper's investment in the oil-and-gas project in Recif's AOI, Recif and Juniper entered into a Confidentiality Agreement that required Juniper to keep confidential all proprietary information that Recif provided to Juniper.⁴ See Confidentiality Agreement, Exh. 18 to Juniper's Motion, ¶ 2. "Recif Information" is a defined term, referring to Recif's proprietary information. See id., ¶ 15. Excluded from Juniper's "obligations of secrecy" is information that:

a. is or becomes part of the public domain through no fault of [Juniper] in violation of this Agreement, notwithstanding, however, RECIF electronic leashold [sic] shape/mapping files and the lease and property descriptions of the Properties related thereto shall not be construed as being part of the public domain;

b. was in [Juniper's] possession prior to the time it was acquired hereunder; or

c. was received by [Juniper] without any obligation of secrecy from a third party rightfully in possession of the Information and having no direct or indirect obligation of secrecy to RECIF that would prohibit the disclosure of such Information to [Juniper].

Id., ¶ 6. Pursuant to the terms of the Confidentiality Agreement, Recif provided certain proprietary information to Juniper. Recif describes its proprietary information as "secrets." See First Amended Complaint ("Complaint") [Doc. # 52], ¶¶ 11, 13, 77.

In May 2018, Juniper terminated its discussions with Recif. At approximately the same time, Juniper formed State Line Exploration LLC ("State Line"). State Line then entered into a business relationship with Amelia Resources, LLC ("Amelia"), from whom it obtained leases (the "State Line Leases") for properties outside the Recif AOI. Recif alleges that in connection with Juniper's relationship with Amelia, Juniper improperly used and/or disclosed Recif's proprietary information in violation of the Confidentiality Agreement. Recif states its allegations broadly to allege that everything Recif provided to Juniper was proprietary and was improperly used or disclosed by Juniper. Following extensive discovery, however, primarily at issue are four well logs and a map with the outline of the Recif AOI ("Recif AOI Map").

In the Complaint, Recif asserts a breach of contract claim based on Juniper's alleged violations of the Confidentiality Agreement, and a trade secret misappropriation claim based on Juniper's alleged misuse of Recif's proprietary information which Recif alleges constitutes trade secrets. Recif also asserts state law claims of fraudulent inducement, fraudulent misrepresentation, civil conspiracy,"detrimental reliance/promissory estoppel," unfair competition, and unjust enrichment.

After comprehensive discovery, Juniper filed its Motion seeking summary judgment on all claims asserted against it. Recif filed its Motion seeking summary judgment in its favor on its breach of contract and trade secret misappropriation claims. The two motions have been fully briefed and are now ripe for decision.

II. SUMMARY JUDGMENT STANDARD

Rule 56 of the Federal Rules of Civil Procedure provides for the entry of summary judgment against a party who fails to make a sufficient showing of the existence of an element essential to its case and on which it will bear the burden at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Curtis v. Anthony, 710 F.3d 587, 594 (5th Cir. 2013); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc). Summary judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a); Celotex, 477 U.S. at 322-23; Curtis, 710 F.3d at 594. Where the movant bears the burden of proof at trial on the issues at hand, it "bears the initial responsibility of demonstrating the absence of a genuine issue of material fact with respect to those issues." Transamerica Ins. Co. v. Avenell, 66 F.3d715, 718 (5th Cir. 1995); see also Brandon v. Sage Corp., 808 F.3d 266, 269-70 (5th Cir. 2015); Lincoln Gen. Ins. Co. v. Reyna, 401 F.3d 347, 349 (5th Cir. 2005).

For summary judgment, the initial burden falls on the movant to identify areas in which there is an "absence of a genuine issue of material fact." ACE Am. Ins. Co. v. Freeport Welding & Fabricating, Inc., 699 F.3d 832, 839 (5th Cir. 2012). The moving party may meet its burden by pointing out "the absence of evidence supporting the nonmoving party's case." Malacara v. Garber, 353 F.3d 393, 404 (5th Cir. 2003) (citing Celotex, 477 U.S. at 323; Stults v. Conoco, Inc., 76 F.3d 651, 656 (5th Cir. 1996)).

If the moving party meets its initial burden, the non-movant must go beyond the pleadings and designate specific evidence showing that there is a genuine issue of material fact for trial. Gen. Universal Sys., Inc. v. Lee, 379 F.3d 131, 141 (5th Cir. 2004); Littlefield v. Forney Indep. Sch. Dist., 268 F.3d 275, 282 (5th Cir. 2001) (internal citation omitted). "An issue is material if its resolution could affect the outcome of the action." Spring Street Partners-IV, L.P. v. Lam, 730 F.3d 427, 435 (5th Cir. 2013).

In deciding whether a genuine and material fact issue has been created, the court reviews the facts and inferences to be drawn from them in the light most favorable to the nonmoving party. Reaves Brokerage Co. v. Sunbelt Fruit &Vegetable Co., 336 F.3d 410, 412 (5th Cir. 2003). A genuine issue of material fact exists when the evidence is such that a reasonable jury could return a verdict for the non-movant. Tamez v. Manthey, 589 F.3d 764, 769 (5th Cir. 2009) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

"'Conclusional allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legalistic argumentation do not adequately substitute for specific facts showing a genuine issue for trial.'" Pioneer Exploration, L.L.C. v. Steadfast Ins. Co., 767 F.3d 503, 511 (5th Cir. 2014) (quoting Oliver v. Scott, 276 F.3d 736, 744 (5th Cir. 2002)); accord Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 399 (5th Cir. 2008). Although the Court may not make credibility determinations or weigh any evidence, the Court is not required to accept conclusory allegations, speculation, and unsubstantiated assertions which are either entirely unsupported, or supported by a mere scintilla of evidence. Chaney v. Dreyfus Serv. Corp., 595 F.3d 219, 229 (5th Cir. 2010) (citing Reaves Brokerage Co., 336 F.3d at 413); accord, Little, 37 F.3d at 1075. Instead, the nonmoving party must present evidence of specific facts that show "the existence of a genuine issue concerning every essential component of its case." Firman v. Life Ins. Co. of N. Am., 684 F.3d 533, 538 (5th Cir. 2012) (citation and internal quotation marks omitted). In the absence of any proof, the court will not assume that the non-movant could orwould prove the necessary facts. Little, 37 F.3d at 1075 (citing Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990)).

Affidavits cannot preclude summary judgment unless they contain competent and otherwise admissible evidence. See FED. R. CIV. P. 56(c)(4); Love v. Nat'l Med. Enters., 230 F.3d 765, 776 (5th Cir. 2000); Hunter-Reed v. City of Houston, 244 F. Supp. 2d 733, 745 (S.D. Tex. 2003). A party's self-serving and unsupported statement in an affidavit will not defeat summary judgment where the evidence in the record is to the contrary. See In re Hinsley, 201 F.3d 638, 643 (5th Cir. 2000).

Finally, "[w]hen evidence exists in the summary judgment record but the nonmovant fails even to refer to it in the response to the motion for summary judgment, that evidence is not properly before the district court." Malacara, 353 F.3d at 405. "Rule 56 does not impose upon the district court a duty to sift through the record in search of evidence to support a party's opposition to summary judgment." Id. (internal citations and...