Silber v. Shallow Prod. Solutions, Inc.
| Decision Date | 31 October 2022 |
| Docket Number | 08-20-00221-CV |
| Parties | Joshua SILBER, Appellant, v. SHALLOW PRODUCTION SOLUTIONS, INC., Appellee. |
| Court | Texas Court of Appeals |
ATTORNEY FOR APPELLANT: Jessica Glatzer Mason, Foley & Lardner LLP, 1000 Louisiana St., Ste. 2000, Houston, TX 77002.
ATTORNEY FOR APPELLEE: Randy Howry, Howry Breen & Herman, LLP, 1900 Pearl Street, Austin, TX 78705.
Before Rodriguez, C.J., Palafox, and Alley, JJ.
This is an appeal from the denial of a special appearance. The underlying case involves a Texas Company that believes its business opportunity to operate in the Toborg oil and gas field in Pecos County was co-opted by a competitor. And more particularly, it believes the co-option was aided by its former employee and officer who was hired by—and allegedly divulged confidential information to—the competitor. The only question before us is whether the competitor's president and CEO who lives in California, is subject to the jurisdiction of a Texas Court for several intentional torts.
Based on the allegations—and one view of some disputed evidence—the CEO (1) attended meetings in Texas to learn about the prospects of oil-and-gas production; (2) formed a Texas limited-liability company to acquire contracts, and later property, in the Toborg Field; (3) hired the Texas company's former employee for the specific purpose of working in the Toborg Field; and (4) was informed of the former employee's non-compete contract that would have precluded Silber from hiring him. Because these allegations show some purposeful availment for the privilege of doing business in Texas, and a connection between the Texas contacts and the asserted claims, we affirm the trial court's denial of the special appearance.
The parties include Appellant Joshua Silber who is a resident of California and CEO and president of Surge Solutions, Inc., a Delaware Corporation. In 2019, Surge Solutions hired Jeffrey Lambert, a former officer and employee of Appellee Shallow Production Services, Inc. (SPS). After Surge Solutions hired Lambert, SPS sent a cease and desist letter to Lambert, alleging that he violated a non-compete clause governing his previous employment contract with SPS. When Lambert kept working for Surge Solutions, SPS sued Lambert for breach of contract and various intentional torts. SPS later amended its petition to add (1) Surge Solutions; (2) Surge Toborg LLC (a subsidiary formed by Surge Solutions to develop and acquire the Toborg Field); (3) Robert Fortenberry (Surge Solution's vice president); and (4) Silber as defendants. Silber filed a special appearance, arguing that SPS's amended petition did not allege specific facts that subjected him to personal jurisdiction in Texas and that he lacked sufficient contacts with Texas to subject him to the trial court's jurisdiction. Following a hearing, the trial court denied Silber's special appearance.
According to SPS's fourth amended petition, it developed a proprietary operating system for producing crude oil from shallow wells. To safeguard its proprietary system, SPS's bylaws bind company directors to non-compete and non-disclosure requirements. In early 2015, SPS approached Dominion Natural Resources to demonstrate its system in an oil and gas field owned by Dominion (the Toborg Field). Dominion expressed an interest in either selling its interest in the field to SPS, or entering a joint venture to develop the field. Starting in 2016, SPS was contracted to operate the Toborg Field. SPS's system increased production from the field, and SPS continued to discuss with Dominion acquisition of the field.
In the fall of 2016, SPS met with Robert Fortenberry, who at the time was employed by Ultimate EOR. The purpose of the meeting was to evaluate the development potential of the Toborg Field. SPS and Ultimate EOR entered into a Non-Disclosure Agreement, so that SPS could share its proprietary information with Fortenberry. SPS was also pursuing the acquisition of an adjacent field owned by Millennium Natural Resources; SPS disclosed that fact to Fortenberry. Fortenberry expressed an interest in participating with SPS in its operations. Their relationship soured, however, when SPS learned that Fortenberry had surreptitiously approached Millennium in an effort acquire the field through another entity.
SPS's petition also details the dealing of its former employee Jeff Lambert and the other defendants in this case. In early 2018, SPS terminated Lambert who was both an employee and a director. While with SPS, Lambert had access to its proprietary information. And in that same time frame, Fortenberry had left Ultimate EOR and co-founded Surge Solutions, Inc. with Joshua Silber. In May 2019, a representative of Dominion instructed SPS to deliver certain equipment to an unnamed contractor in the Toborg Field. SPS soon learned that Lambert and Fortenberry were on site in the Toborg Field. That same month, Lambert emailed SPS that he was in the Pecos County area to pick up his belongings. But SPS learned that Lambert had stayed in Pecos County and "was actively engaged in a drilling program and enhanced recovery operation being conducted by Surge Toborg, LLC, Surge Solutions, Inc., Robert Fortenberry and Joshua Silber" in the Toborg Field.
The petition further alleges that Surge Toborg, Surge Solutions, Fortenberry "and/or Joshua Silber hired" Lambert to exploit SPS's trade secrets and confidential information and "gain an unfair competitive advantage over SPS in Pecos County[.]" Moreover, Lambert was using proprietary knowledge and technologies "at the request of and for the benefit" of the Surge entities, Fortenberry and Silber. Further, Lambert had established a residence in Pecos County. In June 2019, SPS served Lambert with a cease-and-desist letter related to violations of the non-compete and non-disclosure agreements. Despite this, the petition alleges that Lambert remained employed and was exploiting his knowledge of SPS's trade secrets and confidential information to help the Surge entities, Fortenberry, and Silber to develop and acquire the Toborg Field. SPS finally alleges that it lost the opportunity to acquire the Toborg Field.
Based on these factual allegations, the petition asserts claims against Silber for: (1) misappropriation of trade secrets under the Texas Uniform Trade Secrets Act; (2) conversion; (3) tortious interference with contractual relations; (4) tortious interference with prospective relations; and (5) conspiracy.
Silber filed a special appearance under TEX.R.CIV.P. 120a, urging that he lacked sufficient contacts with Texas to allow the trial court to assert jurisdiction over him. In particular, Silber argued that: (1) because he was not a Texas resident, he was not "at home" in Texas and had not purposefully availed himself of the laws and privileges of Texas; (2) SPS improperly attempted to invoke Texas jurisdiction by imputing the alleged wrongdoing of the other defendants to him; (3) SPS relied on conclusory claims of tortious conduct without alleging specific facts in support of SPS's claims; and (4) the trial court's exercise of jurisdiction over him would offend traditional notions of fair play and substantial justice. Silber filed his own declaration in support of the special appearance, which in part states: (1) he is not a resident or citizen of Texas; (2) he has never performed work in, entered or executed contracts in Texas; (3) he has never conducted any drilling program or enhanced recovery operation in Pecos County; (4) he has never hired any person to perform work in Texas; and (5) he denies committing each of the torts alleged against him. His declaration also states that Lambert is no longer employed by Surge Solutions.
SPS's response to Silber's special appearance argued that: (1) Silber committed tortious interference, trade secret misappropriation, and conspiracy by retaining Lambert to provide services and information in Pecos County, Texas; and (2) Silber regularly recruited Texas residents for employment inside the state. In support of its response, SPS submitted several exhibits that we detail below. But SPS focuses on Surge Solution's internal documents that suggest Silber's awareness of the existence of potential "legal liability" issues that it might face if he hired Lambert, and the fact that Silber did not act to remedy the situation after he spoke to SPS's CEO, Murray Conradie, about the potential legal issues with Lambert's employment.
Following a hearing, the trial court denied Silber's special appearance without entering associated findings of fact or conclusions of law. This appeal follows.
Silber raises five issues challenging the trial court's denial of his special appearance: (1) SPS failed to plead specific facts supporting specific jurisdiction over Silber; (2) Silber negated any properly pleaded jurisdictional facts; (3) SPS failed to offer any evidence authorizing specific jurisdiction over Silber; (4) there is no evidence that the trial court's assertion of specific jurisdiction comports with traditional notions of fair play and substantial justice; and (5) the evidence does not support the trial court's implied findings authorizing specific jurisdiction over Silber. We consider these issues together to address the central question of whether SPS sufficiently alleged, and the evidence sufficiently shows, that the trial court has specific jurisdiction over Silber.
Whether a court has personal jurisdiction over a defendant is a question of law. BMC Software Belgium, N.V. v. Marchand , 83 S.W.3d 789, 794 (Tex. 2002). To resolve the question of law, however, a trial court must frequently resolve questions of fact. American Type Culture Collection, Inc. v. Coleman , 83 S.W.3d 801, 806 (Tex. 2002). When the parties agree...
To continue reading
Request your trial
-
Nusret Dall. v. Regan
...to jurisdiction in one forum, not proof that the Constitution would allow no other. Id. at 793; see Silber v. Shallow Prod. Sols., Inc., 656 S.W.3d 500, 515 n.4 (Tex. App.-El Paso 2022, no pet.) (same); Nawracaj v. Genesys Software Sys., Inc., 524 S.W.3d 746, 756-57 (Tex. App.-Houston [14th......