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How to Beat an Anti-SLAAP Motion in a Trade Secrets Case

By Heath Coffman

How to Beat an Anti-SLAAP Motion in a Trade Secrets Case | The Fort Worth Business & Employment Law Reporter

If you have been reading this blog, you know that I have frequently commented on the use of Texas’s anti-SLAPP statute the Texas Citizens Participation Act (TCPA) to defeat a Texas Uniform Trade Secrets Act (TUTSA) claim. Most of the early cases involved defendants using the TCPA to dismiss a plaintiff’s TUTSA claim. Universal Plant Services, Inc. v. Dresser-Rand Group, Inc., No. 01-17-00555-CV, 2018 WL 6695813 (Tex. App.—Houston [1st Dist.] Dec. 20, 2018, no pet.) involves a plaintiff overcoming defendants’ TCPA motions.

Universal Plant Services involves a familiar fact pattern to any trade secret case: several salesmen leave their employer (in this case, Dresser-Rand) to work for a competitor. Before leaving these salespeople allegedly used multiple thumb drives to download confidential and proprietary information and sent to themselves multiple emails attaching confidential and proprietary excel spreadsheets. After settlement talks between the salesmen, their new employer Universal, and Dresser Rand broke down, Dresser Rand sued for (1) breach of the confidentiality provision of their employment contract, (2) violation of TUTSA, (3) violation of the Defend Trade Secrets Act (DTSA), (4) violation of the Computer Fraud and Abuse Act, (5) conversion, and (6) violation of the Texas Theft Liability Act (TTLA). The salesmen and Universal responded with TCPA motions to dismiss based on their rights of free speech and free association.

The trial court denied these motions, and Houston’s First Court of Appeals affirmed. Although Dresser Rand argued that the commercial speech exception applied, the First Court of Appeal affirmed because it found that Dresser Rand had met its burden of presenting prima facie evidence of each element of every one of its causes of action. The Court noted that Dresser Rand presented affidavit testimony from an expert who had forensically examined the salesmen’s computers and determined that they had downloaded proprietary and confidential materials around the same time that they were receiving offers from Dresser Rand. Additionally, Dresser Rand presented the affidavit of one of its vice presidents who specifically identified the confidential materials, described the methods that Dresser Rand used to keeps it information a secret, and provided a value for the material. This evidence—combined with the employee’s contracts—established Dresser Rand’s prima facie case to defeat defendants’ TCPA motions.

The Court did not address Dresser Rand’s commercial speech argument.

Universal Plant Services provides a great example of the work a plaintiff should do to make sure it can survive a TCPA motion. Interestingly, though, the First Court of Appeals affirmed Dresser Rand’s showing on the conversion and TTLA although those claims should have been preempted by TUTSA. The opinion contains no discussion on this point.

The opinion also contains a lengthy concurrence by Justice Keys criticizing Texas court’s interpretation that the TCPA applies to commercial litigation claims.