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Trade Secret Jury Verdict : EMS Gulf Coast, LLC v. Tanner Construction Co. of Texas Inc. et al

EMS claimed lost profits of $1,140,000 million and argued that the defendants were also liable for $1,286,000 that EMS allegedly paid for the CenterPoint-Freebird agreement. In November 2006, Freebird Gas Storage awarded a contract to pipeline servicing company Tanner Construction Co. of Texas Inc., a competitor of plaintiff EMS Gulf Coast. Freebird Gas had previously used CenterPoint Energy for pipeline servicing, pursuant to a pipeline-servicing agreement, and several former CenterPoint employees worked for Tanner Construction. EMS claimed to have purchased the CenterPoint-Freebird agreement from CenterPoint in October 2006. EMS sued Tanner Construction and several affiliates, and the former CenterPoint employees for misappropriation of trade secrets (such as pricing and the scope of the contract) contained in the CenterPoint-Freebird agreement, conspiracy to misappropriate trade secrets, unfair competition, breach of duty to maintain the confidentiality of trade secrets, tortious interference with business relations and prospective business relations, breach of fiduciary duty and destruction of property. The defense moved for summary judgment, arguing that, although EMS acquired several pipeline-servicing agreements from CenterPoint in October 2006, the CenterPoint-Freebird agreement was not one of them; that trade secrets were excluded from the assets EMS bought; that Freebird did not consent to an assignment of the CenterPoint-Freebird agreement to EMS and had a right to withhold consent; that the CenterPoint-Freebird agreement did not contain a confidentiality clause and was neither confidential nor used by Tanner in acquiring its contract; and that the former CenterPoint employees made no covenants not to compete with CenterPoint and were not prohibited from working for Tanner Construction. The defense denied any damages, arguing that Freebird would not have awarded a contract to EMS regardless of Tanner Construction's involvement or lack thereof, and that EMS had paid CenterPoint nothing for the CenterPoint-Freebird agreement.

Full post as published by The Trade Secrets Vault on April 07, 2008 (boomark / email).