This blog post covers recent developments in the case addressed earlier this year in a previous litigation blog post, which can be read here.

In late August of this year, the 127th District Court of Harris County, Texas, granted the Anti-SLAPP[1]motion filed by Caroline Rutherford, a non-practicing entity (NPE) employee. Rutherford had been sued by her former employer, Schlumberger, for allegedly using Schlumberger’s confidential, proprietary information to assist an affiliate of her new employer in purchasing a patent it later asserted against Schlumberger. In granting the motion, the district court dismissed nearly all of Schlumberger’s claims—breach of fiduciary duty, trade secret misappropriation, conversion, and civil theft—allowing only Schlumberger’s breach of contract claim to stand. In connection with the ruling, the district court awarded Rutherford a judgment for $350,000 in attorneys’ fees and $250,000 in sanctions. Not surprisingly, both parties filed notices of appeal. Last week, the first round of appellate briefs was filed.

In its 78-page brief as Appellant[2], Schlumberger cites the very recent (October 2014) 1st Court of Appeals decision in Cheniere Energy, Inc. v. Lofti and the 2013 14th Court of Appeals decision in Jardin v. Soren Marklund, et al. as supportive of its position that the Texas Anti-SLAPP law was intended to apply to acts and interests that are more public than those involved in the Rutherford case. Schlumberger’s brief also takes issue with the lower court’s disregard of circumstantial evidence supporting the claims dismissed and points out that, under the district court’s reading of the Anti-SLAPP law, claims with support sufficient to go to a trier of fact might not ever get past the initial dismissal hurdle. Finally, Schlumberger challenges the sanctions and attorneys’ fees awards as abuses of discretion.

Rutherford filed her own brief as Cross-Appellant, challenging the district court’s choice to deny dismissal of Schlumberger’s breach of contract claim. Her brief argues that Schlumberger’s surviving breach of contract claim was asserted in response to her exercise of rights of petition and association (rights protected by the Anti-SLAPP law), and that Schlumberger has failed to adduce “clear and specific” evidence of breach of contract or harm arising from same.

As noted in our earlier post, for trade secret litigators practicing in Texas, this case is one to watch. In fact, if Schlumberger’s characterization of the trial court’s decision is correct, the impact of the appeal and any subsequent consideration by the Texas Supreme Court might extend beyond typical trade secret litigation to affect other types of business and employment claims in the state. We will continue to provide updates in this blog.[3]