Silverthorne Seismic, LLC v. Sterling Seismic Servs.
| Decision Date | 07 October 2021 |
| Docket Number | Civil Action H-20-2543 |
| Court | U.S. District Court — Southern District of Texas |
| Parties | Silverthorne Seismic, LLC, Plaintiff, v. Sterling Seismic Services, Ltd., d/b/a Sterling Seismic & Reservoir Services, Defendant. |
Pending before the court are three cross-motions for partial summary judgment and two motions to strike. Dkts. 34, 51, 53, 73, 83. Plaintiff Silverthorne Seismic, LLC (“Silverthorne”) filed a motion for partial summary judgment on liability for its breach of contract claims and the Defend Trade Secrets Act (“DTSA”) claim. Dkt. 53. Defendant Sterling Seismic Services, Ltd. d/b/a Sterling Seismic & Reservoir Services (“Sterling”) filed a motion for partial summary judgment on the DTSA claim (Dkt. 34), a motion for partial summary judgment on the breach of contracts claims and the exemplary damages and attorneys' fees for the DTSA claim (Dkt. 51), a motion to strike Silverthorne's motion for partial summary judgment (Dkt. 73), and a motion to strike Silverthorne's reply brief (Dkt. 83). After reviewing the motions, responses, replies, local rules, court procedures and applicable law, the court is of the opinion that Sterling's motion for partial summary judgment on the breach of contracts claims and on the exemplary damages and attorneys' fees for the DTSA claim (Dkt. 51) should be GRANTED IN PART AND DENIED IN PART, and the remaining four motions (Dkts. 34, 53, 73, 83) should be DENIED.
This case concerns the disclosure of Silverthorne's seismic data to a third party. Dkt. 53, Ex A. Bart Wilson is president and founder of Silverthorne and Silverthorne Seismic II, LLC (“Silverthorne II”). Dkt. 47, Ex 3. Silverthorne II generally conducts seismic surveys, and Silverthorne generally holds the seismic data acquired by Silverthorne II. Id. In 2016, Silverthorne II conducted a 390 square mile seismic survey in the Scoop region of Oklahoma (the “North Scoop Survey”). Dkt. 53, Ex. A. In 2018-19, Silverthorne II conducted a second seismic survey covering 178 square miles adjacent to the North Scoop Survey (the “South Scoop Survey”). Id. Silverthorne II contracted with Dawson Geophysical Company (“Dawson”) to acquire the seismic data for the South Scoop Survey. Dkt. 47, Ex. 2. Silverthorne II and Dawson then contracted with GoldStar Land Services, LLC to obtain the necessary permits. Dkt. 47, Ex. 3. On September 12, 2018, Casillas Petroleum Resource Partners II, LLC (“Casillas”) obtained a license to the seismic data for a 166.5 square mile area from the North Scoop Survey and South Scoop Survey. Dkt. 53, Ex. A-2. On October 3, 2019, Silverthorne II assigned its rights to the seismic data to Silverthorne. Dkt. 34, Ex. 2.
Silverthorne next contracted with DownUnder GeoSolutions (Americas), LLC to process the raw seismic data. Dkt. 53, Ex. A. Casillas requested that Sterling also process the raw seismic data to provide Casillas with two sets of processed data. Id. To that end, Sterling and Silverthorne executed a nondisclosure agreement on May 3, 2019, restricting the disclosure of seismic data from the North Scoop Survey to the area Casillas had licensed. Id. In October 2019, Silverthorne directed Dawson to deliver the raw field data for the entire South Scoop Survey to Sterling as well. Id. On October 16, 2019-after transmitting the raw data for the South Scoop Survey- Silverthorne and Sterling executed a second nondisclosure agreement regarding the South Scoop Survey. Dkt. 51, Ex. 12. Silverthorne included a shapefile showing the area Casillas had licensed with the second nondisclosure agreement. Dkt. 53, Ex. A.
Sterling delivered a preliminary version of the processed data to Casillas in November of 2019. Dkt. 68, Ex. 2. In February 2020, Casillas provided Silverthorne with a copy of Sterling's preliminary version of the processed data. Dkt. 53, Ex. A. Upon examination, Silverthorne found that process data contained 15.06 square miles of data not covered by Casillas' license. Id. Casillas had previously decided not to license the seismic data from this 15.06 square mile section before the disclosure took place. Dkt. 51, Ex. 1. Casillas may have further disclosed the unlicensed data to as many as 22 other parties. Dkt. 68, Ex. 3.
Under Local Rule 7.4, “[u]nless otherwise directed by the presiding judge, a party who has filed an opposed motion may file a brief within 7 days from the date the response is filed.” S.D. Tex. L.R. 7.4. In its procedures, the court has directed that “[r]eply briefs filed by movants will be considered if submitted before the court rules on the motion.” J. Miller Ct. P. 6(A)(5).
“The court requires concise, pertinent, and well organized memoranda of law.” J. Miller Ct. P. 7. The court has directed that “[w]ithout leave of court, any memorandum shall be limited to 25 pages.” Id.
A court shall grant summary judgment when a “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “[A] fact is genuinely in dispute only if a reasonable jury could return a verdict for the nonmoving party.” Fordoche, Inc. v. Texaco, Inc., 463 F.3d 388, 392 (5th Cir. 2006). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548 (1986). If the moving party meets its burden, the burden shifts to the nonmoving party to set forth specific facts showing a genuine issue for trial. Fed.R.Civ.P. 56(e). The court must view the evidence in the light most favorable to the non-movant and draw all justifiable inferences in favor of the non-movant. Env't Conservation Org. v. City of Dallas, 529 F.3d 519, 524 (5th Cir. 2008).
Sterling moves to strike Silverthorne's reply brief (Dkt. 79) as untimely. Dkt. 83. Silverthorne filed its reply brief 15 days after Sterling filed its response. See Dkts. 73, 79. Local Rule 7.4 permits filing a reply brief within 7 days of the response unless otherwise directed by the court. S.D. Tex. L.R. 7.4. The court wishes to stress the importance of timeliness; however, the court has directed that “[r]eply briefs filed by movants will be considered if submitted before the court rules on the motion.” J. Miller Ct. P. 6(A)(5). Silverthorne filed its reply brief before the court ruled on its motion for partial summary judgment. See Dkts. 53, 79. Therefore, Sterling's motion to strike the reply brief (Dkt. 83) is DENIED.
Sterling objects to Silverthorne's motion for partial summary judgment (Dkt. 53) for exceeding the page limit and moves to strike. Dkt 73. A 25-page limit applies to memoranda of law. J. Miller Ct. P. 7. Silverthorne incorporated arguments from its previous response brief (Dkt. 47) rather than presenting them in full. Dkt. 53. Sterling argues that the incorporated pages must count towards the page limit and moves to strike the motion for exceeding the 25-page limit. Dkt. 73. The court disagrees.
The court is considering all the briefing for three motions for partial summary judgment concurrently. See Dkts. 34, 47, 48, 51, 53, 68, 73, 74, 79. The incorporated response is part of that briefing. See Dkts. 47, 53. The court finds it inappropriate to strike a motion for incorporating arguments it was going to consider anyway. Therefore, Silverthorne's motion to strike (Dkt. 73) is DENIED.
There are two types of claims remaining in this lawsuit: the breach of contract claims and the DTSA claim. Dkt. 50. The parties have filed cross-motions for partial summary judgment on each type. Dkts. 34, 51, 53.
Under Texas law, the elements for a breach of contract claim are “(1) a valid contract exists; (2) the plaintiff performed or tendered performance as contractually required; (3) the defendant breached the contract by failing to perform or tender performance as contractually required; and (4) the plaintiff sustained damages due to the breach.” Pathfinder Oil & Gas, Inc. v. Great W. Drilling, Ltd., 574 S.W.3d 882, 890 (Tex. 2019). Sterling moves for partial summary judgment on the breach of contract claims arguing that there is no evidence Silverthorne sustained damages due to the breach. Dkt. 51. In addition, Sterling argues partial summary judgment is appropriate for the breach of contract claim based on a trilateral agreement theory because the merger doctrine precludes enforcement. Id. Finally, Sterling moves for attorney's fees as a prevailing party under the parties' nondisclosure agreement. Id. Silverthorne moves for partial summary judgment on liability for the breach of contract claim arguing the only issue for trial is the amount of damages to award. Dkt. 53. The court concludes Sterling is entitled to summary judgment on the breach of contract claims.
The fourth element for a breach of contract claim in Texas is that the plaintiff must show damages sustained due to the breach. Pathfinder Oil, 574 S.W.3d at 890. Sterling moves for partial summary judgment on the breach of contract claims arguing there is no evidence Silverthorne has sustained damages due to the breach. Dkt. 51. The court agrees.
Under Texas law, “damages for breach of contract are limited to ‘just compensation for the loss or damage actually sustained.'” Atrium Med. Ctr., LP v. Houston Red C LLC, 595 S.W.3d 188, 192 (Tex. 2020) (quoting Stewart v. Basey, 245 S.W.2d...
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