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RSM Production Corp. and Jack Grynberg v. Global Petroleum Group, Ltd.
Citations: 507 S.W.3d 383; 2016 Tex. App. LEXIS 11372; 2016 WL 6110913Docket: 01-15-00866-CV
Court: Court of Appeals of Texas; October 20, 2016; Texas; State Appellate Court
Original Court Document: View Document
On October 20, 2016, the Court of Appeals for the First District of Texas affirmed the trial court's decision to grant a special appearance filed by Global Petroleum Group, Ltd. (Global) in a case brought by RSM Production Corp. and Jack Grynberg (collectively, RSM) for misappropriation of trade secrets related to seismic data. RSM, a Texas-registered corporation with a principal business location in Colorado, claimed that Grynberg had invested significant resources over 25 years to gather seismic data about oil and gas reserves off Grenada's coast. RSM alleged that Global, a Grenadian limited liability company founded by Lev Model, misappropriated this data through connections with British Petroleum Exploration Co. (BPX). RSM contended that BPX had copied the seismic data in 1999 without consent and later transferred it to Global through Model’s affiliations with BPX and its joint venture, TNK-BP. RSM accused Global of using the data for commercial purposes and disseminating it unlawfully after obtaining an exploration license from the Grenadian government. RSM's lawsuit, filed in Houston on December 12, 2013, sought injunctive relief and damages from Global and other companies (Tricon, Blackwater, and SeaBird) involved in the alleged misuse of the data. In response, Global challenged the jurisdiction, asserting it had no presence in Texas, did not conduct business there, and had no relevant contacts aside from its contracts with the other defendants. The court ultimately found in favor of Global regarding the jurisdictional issue. Global obtained an exploration license from the Grenadian government in 2008 to explore hydrocarbon potential off Grenada's coast. It claimed to have received specific vintage 2D seismic data, including the allegedly misappropriated data central to this lawsuit, from the Grenadian government on March 4, 2008. The development project was paused in late 2008 due to political changes but resumed in 2013 after the political climate improved. In March 2013, Global contracted Tricon to process and interpret the seismic data, providing both digital and hard copies of the data to Tricon in Grenada and Venezuela, respectively. Tricon subsequently subcontracted portions of the work to Interactive Exploration Solutions, Inc. (INEXS), which received only processed data from Tricon, not the original seismic data. Global asserted that its contracts with Texas entities were unrelated to the 2D data in question and that it did not disclose any relevant data to those parties. To support its argument against personal jurisdiction in Texas, Global provided declarations from several individuals involved in the Grenadian project. Marco Angeli, a consultant overseeing the project, stated that Global is based in Grenada and has no Texas operations, asserting that only Tricon had access to the seismic data. Mikhail Zhabin, an executive assistant, confirmed that Global received RSM’s seismic data from the Grenadian government in 2008 and later sent it to Tricon. Vincenzo de Lisa, Global’s senior geophysicist, clarified that only Tricon's processed data was sent to INEXS. Dan Ward, vice president of operations at INEXS, stated that INEXS was contracted by Tricon to interpret specific 2D seismic data. INEXS faced challenges in interpreting parts of Tricon's digital data and requested the original paper data, which included a section labeled “GRYNBERG-1.” Ward noted that the seismic data was too old and suffered from navigational issues, rendering it unusable and of no value for INEXS’s interpretation and mapping efforts. In response to a special appearance, RSM contended that jurisdiction was appropriate due to Global's significant contacts in Texas, such as hiring contractors that processed seismic data in Houston, entering contracts with local companies, indemnifying Texas entities in the litigation, and sending representatives to Houston multiple times for discussions about the seismic data. RSM claimed that Global transferred seismic data to Tricon, which then shared it with INEXS for processing in Houston. RSM highlighted several contracts between Global and various companies related to oil and gas development activities in Grenada. These included contracts with GX Technologies for licensing seismic data, Oreo Navigation Company for conducting a marine 3D seismic survey, Blackwater for project management of drilling operations, INEXS for evaluating and processing 3D seismic data, and Tricon for processing seismic data. RSM deposed Angeli and Zhabin, with Angeli indicating that most of Global's operations were conducted through contractors, primarily based in Venezuela, and that Tricon's work for Global was also largely performed in Venezuela. Angeli testified about the varied sources of seismic data used by Global, including vintage 2D data from the Grenadian government, which contained RSM's proprietary data alongside other sources. He acknowledged that this vintage data had limited utility, leading Global to seek additional data from other entities. Angeli also confirmed that INEXS received some 2D seismic data from Tricon’s Venezuela office in Houston and mentioned his trips to Houston related to the Grenada project. Global produced emails indicating that seismic data, including paper copies of RSM's data, was stored in Houston for a period before being returned to Grenada in January 2014, after RSM initiated the lawsuit. On June 4, 2013, Angeli met with representatives from Blackwater and INEXS, facilitated by Tricon, to discuss the hydrocarbon potential of a concession. Dan Ward of INEXS presented preliminary results based on processed 2D data from the Grenadian government and Tricon. Angeli noted that Blackwater was conducting a pre-feasibility study for infrastructure to transport gas from offshore Grenada to Trinidad. On June 25, 2013, Angeli and Oscar Zuloaga from Global met with Blackwater in Houston to review a preliminary report on mapped offshore reservoirs, which did not include seismic data. Concurrently, Global’s geophysicist, de Lisa, met with INEXS in Houston to discuss the interpretation of vintage 2D data, which included government data. Angeli also engaged with SeaBird/Oreo regarding 3D mapping services, sending 3D seismic data obtained from SeaBird to Houston and discussing procurement of further 3D data in September or October 2013. It was established that Tricon and INEXS created the mapping used by SeaBird for 3D data collection, based on vintage 2D data, including some proprietary data of RSM, and data from other licensed sources. In September 2013, Ward and Zuloaga met with Tricon regarding newly acquired 3D data. Zhabin, a Global employee, initially transferred 2D seismic data to Tricon on a USB drive and detailed the purpose of developing seismic data for future exploration and drilling. Zhabin had limited contact with Tricon, while other Global representatives maintained regular communication. In 2013, Global representatives made multiple trips to Houston for business related to the Grenada project, including one trip in 2014 to find legal counsel for a lawsuit filed by RSM. The trial court dismissed RSM's claims against Global for lack of personal jurisdiction, leaving Tricon, Blackwater, and SeaBird as defendants, leading RSM to file an interlocutory appeal. RSM argues that the trial court incorrectly granted Global’s special appearance, which challenges the court's personal jurisdiction over a nonresident defendant. The standard of review for such a determination is de novo, as it involves a question of law. A trial court often needs to resolve factual questions before deciding on jurisdiction. If the court does not provide findings of fact and conclusions of law, all necessary supporting facts are implied. Texas courts may assert personal jurisdiction over nonresidents under the long-arm statute if they conduct business or commit a tort in Texas, aligning with due process requirements. The long-arm statute allows jurisdiction as far as federal constitutional limits permit, requiring that a nonresident establish minimum contacts with Texas, maintaining fairness and substantial justice. Minimum contacts are established when a defendant purposefully engages in activities benefiting from Texas law. The Supreme Court of Texas identifies three aspects of "purposeful availment": only the defendant's contacts matter, the acts must be purposeful rather than random, and the defendant must seek some benefit from the jurisdiction. Jurisdiction can be specific or general, with RSM claiming specific jurisdiction based on Global’s contacts with Texas. Specific jurisdiction exists when the claims arise from the defendant's purposeful contacts. In special appearance cases, the initial burden is on the plaintiff to demonstrate sufficient jurisdictional claims, which then shifts to the defendant to negate those claims. The defendant may challenge jurisdiction on factual or legal grounds. To negate jurisdiction factually, the defendant can provide evidence demonstrating a lack of contacts with Texas, thereby countering the plaintiff’s claims. Legally, the defendant can argue that even if the plaintiff's facts are accurate, they do not suffice to establish jurisdiction; this includes showing insufficient purposeful availment, that the claims do not stem from the defendant's contacts, or that exercising jurisdiction violates principles of fair play and substantial justice. Specific jurisdiction analysis centers on the connection between the defendant, the forum, and the litigation. For nonresident defendants, their forum contacts must have a substantial link to the case's operative facts. Texas jurisprudence establishes a flexible standard for this connection, which must demonstrate a substantial connection resulting in the alleged injuries. The analysis focuses on the defendant's actions and choices to conduct business in the state. In this case, RSM must plead and provide evidence that Global's actions related to RSM's claims occurred in Texas. The trial court faced conflicting evidence from both parties and did not issue specific findings of fact or conclusions, implying that all facts supporting the judgment backed by evidence are accepted. RSM's claim against Global involves misappropriation of trade secrets, necessitating that Texas courts have personal jurisdiction based on Global's relevant contacts with the state. To succeed in a misappropriation of trade secrets claim under Texas law, RSM must prove the existence of a trade secret, breach of a confidential relationship or improper acquisition of the secret, unauthorized use of the secret, and resulting damages. The definition of use encompasses any commercial exploitation that harms the trade secret owner. Although RSM's appeal does not address the elements of a breach of confidence claim under Grenadian or English law, the trial court's analysis aligns RSM's claims with Texas law regarding misappropriation of trade secrets. RSM accused Global of committing a tort in Texas by misappropriating RSM's 2D seismic data for use in developing offshore reserves in Grenada under a contract with the Grenadian government. RSM claimed that Global sourced the data from BPX or TNK-BP, neither of which are Texas companies, and did not present evidence that Global acquired the data in Texas. Global provided jurisdictional evidence that it obtained the data from the Grenadian government. For Texas courts to exercise specific jurisdiction over a nonresident defendant, the cause of action must arise from purposeful contacts with Texas. In response to Global's special appearance, RSM alleged that Global's contractual relationships with Texas-based entities involved dissemination and use of RSM's proprietary data, asserting that provisions related to indemnity, consent-to-jurisdiction, and choice-of-law were relevant contacts with Texas. RSM also claimed that Global utilized RSM's data during trips to Texas and through communications with Texas entities. RSM specifically noted Global's interactions with Tricon and INEXS, asserting that Global provided these companies with RSM's seismic data and that communications referenced RSM’s data being located in Houston prior to RSM's lawsuit in December 2013. RSM alleged Global transported portions of the data to Houston and removed them post-lawsuit. While Global acknowledged providing 2D seismic data to Tricon, it contended that this occurred in Grenada and Venezuela, arguing that such actions did not relate to RSM’s claims in Texas. Global confirmed that INEXS had some misappropriated data but presented evidence that this data was transferred to INEXS by Tricon under a subcontract, and that INEXS ultimately did not make use of the data, which was of limited use and integrated with other data sources. Global's interactions with Tricon and INEXS do not provide sufficient evidence to establish specific jurisdiction in connection with RSM's claims, as required by legal standards. Relevant case law indicates that only the defendant's contacts with the forum state matter, and a defendant cannot be held accountable due to the actions of third parties. In cases involving multiple defendants, each defendant's contacts must be evaluated separately. Global's activities were primarily directed toward Grenada and Venezuela, not Houston, and the connection to Texas was incidental, resulting from Tricon's actions rather than Global's. RSM further claimed that Global's contracts with GX Technology, SeaBird/Oreo, and Blackwater, which involved seismic data, established jurisdiction related to the misappropriation of trade secrets. However, evidence indicated these contracts were not significantly related to the alleged misappropriation. Global's contracts were focused on acquiring seismic data from third-party sources and developing oil and gas reserves in Grenada, without directly using RSM's proprietary data. RSM argued that Global's use of Tricon’s report implied the use of RSM’s trade secrets, as RSM’s data contributed to the vintage 2D data used in the report. However, testimonies confirmed that RSM’s data was not used in the report, and Global sought additional data from various sources to meet its needs. Furthermore, it was asserted that other entities engaged in exploration with Global did not have access to RSM’s proprietary information. RSM has not provided sufficient evidence to support its claim that Global's contracts with GX Technology, Oreo/SeaBird, and Blackwater are substantially related to RSM's misappropriation claim against Global. According to relevant case law, a plaintiff must present evidence that connects the defendant's acts to the claims and occurred in Texas. RSM contends that Global's use of proprietary data was relevant, but it was incidental to Global’s activities focused on Grenadian oil and gas reserves. RSM argues that Global's claim of not committing a tort in Texas is a merits argument inappropriate at this stage. However, RSM's assertion of specific jurisdiction is based on the allegation that Global used the proprietary data in Houston. Global’s challenge brings the issues of its data use and Texas connections before the court. A court assessing jurisdiction can consider evidence beyond the pleadings. RSM's claims that Global's contracts with Texas entities provide sufficient contacts for specific jurisdiction are rejected, as these contracts do not establish a general waiver of Global's right to contest personal jurisdiction. Although choice-of-law provisions can be considered, they are insufficient alone to confer jurisdiction without additional connections, as demonstrated in precedents. The dispute in Burger King was anchored in a franchise agreement containing a choice-of-law provision and the business relationship between the involved parties. In contrast, RSM's claims do not stem from Global's contracts with Texas entities, and RSM fails to cite any cases establishing specific jurisdiction based solely on choice-of-law or indemnification provisions unrelated to the plaintiff's claims. The case of KC Smash 01, LLC v. Gerdes highlights that a defendant's actions aimed at benefits outside Texas do not establish jurisdiction within the state. RSM references Moncrief Oil, where specific jurisdiction was affirmed based on a defendant attending a Texas meeting involving trade secrets; however, RSM has not demonstrated that Global participated in any such meeting in Texas, as Global claims it provided the contested seismic data in Grenada and Venezuela. Furthermore, RSM's reliance on M&F Worldwide Corp. is misplaced because, unlike that case where in-state meetings were directly linked to the lawsuit, there is no evidence indicating Global attended meetings in Texas related to the alleged misappropriation of data. RSM also invokes two recent Texas Supreme Court cases—Searcy and Cornerstone Healthcare Group—but these do not support RSM’s claims. In Parex, the court examined jurisdiction over companies involved in a failed share sale, ultimately ruling that Texas courts lacked specific jurisdiction over one of the companies, Parex Canada. Parex Canada engaged in negotiations to purchase shares of Ramshorn’s Colombian oil and gas assets from Nabors in Houston but did not specifically target Texas assets or seek to establish operations in Texas. Its interactions were not influenced by Nabors being based in Texas, as Parex Canada was focused solely on Colombian assets. The fact that Nabors negotiated with a Texas corporation (ERG) did not establish jurisdiction over Parex Canada, as that decision was made unilaterally by Nabors. In contrast, the Texas Supreme Court determined that specific jurisdiction could be exercised over Ramshorn due to its Texas-based executives allegedly making misrepresentations during transactions with ERG in Texas. Ramshorn's president, who also served as an executive for Nabors, engaged in fraudulent representations while negotiating the sale of assets in Houston, which connected the claims directly to Texas. The court distinguished between Ramshorn and Global's situation, noting that Global's actions were not conducted in Texas nor did they stem from a relationship with RSM prior to litigation. While Global did have some meetings in Texas, these were related to oil and gas interests in Grenada, not involving RSM’s alleged trade secrets. This difference was highlighted in comparison to the Cornerstone case, where the defendants actively targeted and profited from Texas assets, thereby justifying jurisdiction. The Court determined that the claims against Global arise from its contacts with Texas, which were insufficient to establish jurisdiction. The transaction's facts, central to the claims, did not involve Global targeting Texas assets or profiting from any investment in Texas. RSM failed to demonstrate that Global attended any relevant meetings in Texas or caused RSM's trade secrets to be present there. Unlike the case involving Cornerstone, there was no indication that Global relied on RSM's trade secrets for its development deal in Grenada; instead, Global acquired the information as a byproduct of that deal. Global engaged with a Coloradan corporation in Venezuela to process data, which then involved a Texas company for analysis, but this was not a targeted effort towards Texas assets. The Court highlighted that Global's contacts with Texas were primarily for business related to its Grenadian interests, not for discussing trade secrets. Consequently, the trial court reasonably concluded that Global did not purposefully seek the benefits of Texas jurisdiction regarding the misappropriation claims, affirming the trial court's decision to sustain Global's special appearance against RSM.