Ryan Broussard v. IPSCO Tubulars, Inc. D/B/A/ TMK IPSCO ( 2022 )

Opinion filed February 3, 2022
In The
Eleventh Court of Appeals
__________
No. 11-20-00054-CV
__________
RYAN BROUSSARD, Appellant
V.
IPSCO TUBULARS, INC. D/B/A TMK IPSCO, Appellee
On Appeal from the 70th District Court
Ector County, Texas
Trial Court Cause No. A-19-08-1063-CV
OPI NI ON
This is an appeal from the denial of a special appearance in a suit brought by
Appellee, IPSCO Tubulars, Inc. d/b/a TMK IPSCO (IPSCO), against two former
employees.1 In its amended petition, IPSCO has alleged claims for misappropriation
of trade secrets, breach of loyalty, breach of contract, and damages; it has also
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IPSCO’s pleadings name Doug Dunford and Ryan Broussard, former employees of IPSCO and
current employees of OFS International, LLC (OFSi), as defendants in the underlying suit. This appeal
solely concerns the trial court’s ruling on Broussard’s special appearance.
requested temporary and permanent injunctive relief. Appellant, Ryan Broussard—
a Colorado resident and former employee of IPSCO in Texas—specially appeared
to contest a Texas state district court’s exercise of personal jurisdiction over him. In
two issues on appeal, Broussard challenges the trial court’s denial of his special
appearance. We affirm.
I. Factual Background
IPSCO is a Texas-based company that designs and produces connections for
steel tubular goods used in the oil and gas industry. The underlying litigation
concerns its design of threaded connections that are used to connect pieces of tubular
steel in oil and gas wells.
Broussard began working for IPSCO in 2012, immediately following his
graduation from Texas A&M University, as a design engineer. Broussard was
involved in numerous projects in the capacity of lead engineer, and he “was one of
six employees who had total access to IPSCO’s . . . server, which housed its most
confidential information.” By January of 2016, Broussard had transitioned from a
product-development role into a sales role. In 2017, Broussard moved from Texas
to Denver, Colorado, where he continued working for IPSCO and with IPSCO’s
Texas-based customers.
In April of 2019, Broussard resigned from his employment with IPSCO.
Broussard thereafter sought employment with OFS International, LLC (OFSi), a
Texas-based, former sister company of IPSCO. 2 Following his interview with OFSi
in Texas, Broussard began working for OFSi in a product-design role even though
he continued to reside in Colorado. Broussard has since designed a threaded
2
IPSCO has sued OFSi in the United States District Court for the Southern District of Texas and
asserted claims for misappropriation of trade secrets and breach of contract against its former sister
company.
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connection for OFSi that is being manufactured in Texas and marketed and sold to
Texas-based customers.
Because of his actions and involvement with OFSi, IPSCO subsequently sued
Broussard and asserted claims for misappropriation of trade secrets, breach of
loyalty, and breach of contract. In its operative pleading, IPSCO has alleged, inter
alia, that it “discovered that OFSi is using Broussard . . . to design and market
products under OFSi’s own name that are based on IPSCO trade secrets, which . . .
Broussard had access to by virtue of [his] employment and Confidentiality
Agreement [with IPSCO].” Broussard later filed an amended special appearance,
which the trial court denied following a hearing.
On appeal, Broussard asserts that the trial court erred when it denied his
special appearance. Specifically, he contends that the trial court erred when it found
it had specific jurisdiction over him because (1) the jurisdictional facts alleged by
IPSCO are not substantially related to the operative facts of the underlying litigation;
and (2) Broussard’s actions and conduct in Colorado do not constitute a purposeful
availment of the privilege and benefits of doing business in Texas.
II. Standard of Review
We review a trial court’s ruling on a special appearance de novo. Kelly v. Gen.
Interior Const., Inc., 301 S.W.3d 653, 657 (Tex. 2010) (explaining that “[w]hether a
court can exercise personal jurisdiction over a nonresident defendant is a question
of law”); Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007).
When the trial court does not issue findings of fact and conclusions of law in support
of its ruling, as in the case before us, we infer “all facts necessary to support the
judgment and [that are] supported by the evidence.” Kelly, 301 S.W.3d at 657; Moki
Mac, 221 S.W.3d at 574 (quoting BMC Software Belgium, N.V. v. Marchand, 83
S.W.3d 789, 795 (Tex. 2002)).
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III. Analysis
“Texas courts may assert in personam jurisdiction over a nonresident if (1) the
Texas long-arm statute authorizes the exercise of jurisdiction, and (2) the exercise of
jurisdiction is consistent with federal and state constitutional due-process
guarantees.” Moki Mac, 221 S.W.3d at 574 (citing Schlobohm v. Schapiro, 784
S.W.2d 355, 356 (Tex.1990)); see Moncrief Oil Int’l Inc. v. OAO Gazprom, 414
S.W.3d 142, 149 (Tex. 2013).
Under Texas’s long-arm statute, trial courts may exercise personal jurisdiction
over a nonresident defendant who engages in acts “that may constitute doing
business” in Texas. TEX. CIV. PRAC. & REM. CODE ANN. § 17.042 (West 2015). In
effect, the broad “doing business” language in Texas’s long-arm statute allows the
trial court’s jurisdiction to “reach as far as the federal constitutional requirements of
due process will allow.” Kelly, 301 S.W.3d at 657 (quoting Moki Mac, 221 S.W.3d
at 575); see also Guardian Royal Exch. Assurance, Ltd. v. English China Clays,
P.L.C., 815 S.W.2d 223, 226 (Tex. 1991). Therefore, “if an assertion of jurisdiction
accords with federal due-process limitations,” the Texas long-arm statute authorizes
the exercise of such jurisdiction. Moki Mac, 221 S.W.3d at 575.
Pursuant to the federal due-process requirements, personal jurisdiction is
proper when the nonresident defendant has established minimum contacts with the
forum state, and the exercise of personal jurisdiction comports with “traditional
notions of fair play and substantial justice.” Moki Mac, 221 S.W.3d at 575 (quoting
Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Minimum contacts give
rise to personal jurisdiction when the nonresident defendant “purposefully avails
[himself] of the privilege of conducting activities within the forum State,” thereby
“invoking the benefits and protections of its laws.” Id. (quoting Hanson v. Denckla,
357 U.S. 235, 253 (1958)).
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We note that “[a] nonresident defendant’s forum-state contacts may give rise
to two types of personal jurisdiction”—general jurisdiction or specific jurisdiction.
Id. (“If the defendant has made continuous and systematic contacts with the forum,
general jurisdiction is established whether or not the defendant’s alleged liability
arises from those contacts.” (citing BMC Software, 83 S.W.3d at 796)). In the
specific-jurisdiction context, “purposeful availment alone will not support” the
exercise of personal jurisdiction. Id. at 579. Rather, the question of a nonresident
defendant’s purposeful availment “has no jurisdictional relevance unless the
defendant’s liability arises from or relates to the forum contacts.” Id. Thus, there
are “two co-equal components” of the specific-jurisdiction analysis: if the
nonresident defendant has (1) purposefully availed himself of the privilege and
benefits of doing business within the forum state and (2) his alleged liability arises
out of or is related to an activity conducted within the forum state, specific
jurisdiction is established. See id. at 576, 579 (adopting the “substantial connection”
test for analyzing the second component of specific jurisdiction in Texas).
Furthermore, the plaintiff bears the initial burden of pleading sufficient
allegations to invoke a trial court’s jurisdiction over a nonresident defendant under
the Texas long-arm statute. Id. at 574; Kelly, 301 S.W.3d at 658. If the plaintiff
satisfies its burden, the burden then shifts to the nonresident defendant to negate
every bases of jurisdiction alleged by the plaintiff. Id.; see BMC Software, 83 S.W.3d
at 793.
A. Purposeful Availment
Because Broussard’s second issue on appeal concerns the purposeful-
availment component of our specific-jurisdiction analysis, we will first consider his
arguments with respect to that issue. In this regard, Broussard contends that, because
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he resides and works in Colorado, he has not purposefully availed himself of the
privilege and benefits of doing business in Texas. We disagree.
We consider three factors when determining whether a nonresident defendant
has purposefully availed himself of the privilege and benefits of conducting
activities in Texas. Moncrief, 414 S.W.3d at 151; Moki Mac, 221 S.W.3d at 575
(citing Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 784–85 (Tex.
2005)). First, “only the defendant’s contacts with the forum are relevant, not the
unilateral activity of another party or a third person.” Moki Mac, 221 S.W.3d at 575
(citing Michiana, 168 S.W.3d at 785)). Second, “the contacts relied upon must be
purposeful rather than random, fortuitous, or attenuated.” Id.; see also Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 476 n.18 (1985). Third, “the defendant must seek
some benefit, advantage, or profit by availing itself of the [forum’s] jurisdiction.”
Id. (quoting Michiana, 168 S.W.3d at 785) (internal quotation marks omitted).
Here, Broussard’s contacts with Texas were neither unilateral activities by
IPSCO nor random or fortuitous. Broussard accepted employment and executed a
Confidentiality Agreement with IPSCO in Texas. That agreement included a choice-
of-law provision, which designated Texas law as controlling. From 2012 to 2017,
Broussard resided and worked in Texas as an employee of IPSCO. Further,
Broussard continued working for IPSCO after he moved to Colorado in 2017. While
residing in Colorado, Broussard (1) personally requested, and received, continuous
and unfettered access to IPSCO’s trade secrets databases that were retained on
servers located in Texas; (2) between July 2018 and April 2019, traveled to Texas
for business purposes on at least thirteen separate occasions; (3) telephonically
attended and participated in IPSCO’s weekly product development meetings and, on
occasion, traveled to Texas to attend those meetings in person; and (4) traveled to
Texas to visit rig locations and supervise IPSCO employees.
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Additionally, it cannot be ignored that Broussard has benefitted from his
contacts with Texas. In April 2019, after resigning from his position with IPSCO,
Broussard sought, and later obtained, employment with one of IPSCO’s Texas-based
competitors, OFSi. Indeed, Broussard traveled from Colorado to Texas to interview
with OFSi for the sole purpose of securing a position as design engineer with that
company. See Moncrief, 414 S.W.3d at 154 (finding purposeful availment where the
defendant attended two meetings in Texas with a Texas corporation and accepted
alleged trade secrets created in Texas regarding a potential joint venture in Texas
with that corporation). Broussard completed his employee onboarding and training
with OFSi in Texas. Moreover, since the inception of his employment with OFSi,
Broussard has routinely (1) traveled to Texas to conduct business on behalf of OFSi
and (2) engaged in frequent communications with his OFSi coworkers and
customers, who are located in Texas.
Ultimately, Broussard has routinely and purposefully reached into the state of
Texas to conduct business, acquire alleged trade secrets, solicit employment, and
attend business-related meetings. Because such activities undoubtedly aim to
benefit Broussard, we hold that Broussard purposefully availed himself of the
privilege and benefits of doing business in Texas and the protections of its laws. See
BMC Software, 83 S.W.3d at 795. Accordingly, we overrule Broussard’s second
issue on appeal.
B. Substantial Connection
Because Broussard purposefully availed himself of the privilege and benefits
of doing business in Texas, we now turn to the second component of the specific
jurisdiction analysis and Broussard’s first issue on appeal. In this regard, Broussard
contends that IPSCO failed to allege jurisdictional facts that bear a substantial
connection to the operative facts of the underlying litigation. Specifically, Broussard
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argues that “IPSCO has not identified any trade secrets used or disclosed in Texas,
any breach of contract that occurred in Texas, or any breach of the duty of loyalty
that occurred in Texas.”
With respect to the relatedness component of specific jurisdiction, our
minimum-contacts analysis focuses on “the relationship among the defendant, the
forum, and the litigation.” Moki Mac, 221 S.W.3d at 575–76 (quoting Guardian
Royal, 815 S.W.2d at 228). “The ‘arise from or relate to’ requirement lies at the heart
of specific jurisdiction by defining the required nexus between the nonresident
defendant, the litigation, and the forum.” Id. at 579. In assessing the strength of this
nexus, we must determine whether “a substantial connection [exists] between the
nonresident defendant and Texas arising from” conduct that constitutes purposeful
availment. Id. at 584. “[F]or a nonresident defendant’s forum contacts to support
an exercise of specific jurisdiction, there must be a substantial connection between
those contacts and the operative facts of the litigation.” Id. at 585 (citing Guardian
Royal, 815 S.W.2d at 229–33); accord Moncrief, 414 S.W.3d at 156. “If the plaintiff
fails to plead facts bringing the defendant within the reach of the long-arm statute,
the defendant need only prove that [he] does not live in Texas to negate jurisdiction.”
Kelly, 301 S.W.3d at 658–59. As such, to analyze the relatedness component, we
will address the specific claims that IPSCO has asserted against Broussard:
(1) misappropriation of trade secrets, (2) breach of contract, and (3) breach of the
duty of loyalty.
1. Misappropriation of Trade Secrets
IPSCO’s misappropriation-of-trade-secrets claim principally concerns the
alleged conduct and actions by Broussard that constitute a “disclosure or use” of
trade secrets belonging to IPSCO. See CIV. PRAC. & REM. § 134A.002(3)(B)(ii)
(West 2019). Broussard asserts that IPSCO failed to draw a connection between the
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forum contacts it has alleged against him and its misappropriation-of-trade-secrets
claim. Broussard further argues that IPSCO neither (1) alleged that he used or
disclosed any of its trade secrets or confidential information in Texas nor
(2) identified any trade secret that he actually acquired in Texas. We disagree.
In its first amended petition, IPSCO pleaded that Broussard “received
unfettered access” to its trade secrets information, which is located on its servers in
Texas. Although IPSCO’s reference to its “server location,” in isolation, may be
insufficient to justify the exercise of personal jurisdiction over a nonresident
defendant, this particular allegation could be relevant to the specific-jurisdiction
analysis if it is harmonized and considered with other sufficiently pleaded
jurisdictional contacts. See Info Servs. Grp., Inc. v. Rawlinson, 302 S.W.3d 392, 402
(Tex. App.—Houston [14th Dist.] 2009, pet. denied) (holding that the location of
servers is a unilateral choice by the owner and, without more, does not constitute a
purposeful availment for purposes of satisfying the first component of the specific-
jurisdiction analysis). Conversely, Broussard argues that any alleged “disclosure or
use” of IPSCO trade secrets would have occurred in Colorado. However, the record
before us shows that IPSCO pleaded and asserted, as noted below, that Broussard’s
alleged disclosure of its trade secrets occurred in Texas:
[Broussard] traveled to Texas for the job interview [with OFSi] where
he discussed with the competing company plans for him to be the
company’s design engineer, designing threaded connections—the
same type of work he was doing as an engineer with IPSCO.
At the hearing on Broussard’s special appearance, IPSCO’s counsel reiterated the
above and similar allegations:
[Broussard] traveled to Texas to interview with OFS[i], where he and
OFS[i] discussed plans for Broussard to design threaded connections as
the company’s design engineer . . . [Broussard] has designed a knock-
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off threaded connection for OFS[i] that is being manufactured in Texas
and marketed and sold to Texas-based customers.
IPSCO’s counsel also emphasized IPSCO’s allegation that Broussard “frequently
communicates with Texas-based coworkers and customers about the threaded
connections he is designing for OFS[i].”
Based on the record before us, we conclude that IPSCO alleged in its operative
pleading, among other things, that Broussard: (1) acquired trade secrets in Texas
from IPSCO regarding its threaded connections; (2) disclosed IPSCO trade secrets
in Texas during his interview with OFSi; and (3) continues to routinely travel to
Texas for business purposes as part of his employment with OFSi. Therefore, we
hold that IPSCO pleaded sufficient facts that connect Broussard’s Texas contacts to
the operative facts of its asserted claim for misappropriation of trade secrets—
namely, Broussard’s unauthorized disclosure in Texas of IPSCO trade secrets. See
Kelly, 301 S.W.3d at 658–59 (noting that, for a tort claim, a plaintiff’s pleaded
allegation that the defendant committed the tortious act in Texas is a jurisdictional
fact that brings the defendant “within the reach of the long-arm statute”).
Accordingly, the trial court did not err when it denied Broussard’s special appearance
with respect to IPSCO’s misappropriation-of-trade-secrets claim.
2. Breach of Contract and Breach of Duty of Loyalty
Broussard next asserts that IPSCO failed to draw a connection between the
forum contacts it has alleged against him and its breach of contract claim; namely,
Broussard’s alleged breach of confidentiality. Specifically, Broussard argues that
(1) IPSCO has not pleaded or alleged any breach committed by him that occurred in
Texas and (2) the Texas choice-of-law provision in the parties Confidentiality
Agreement does not support specific jurisdiction. Broussard further asserts that
IPSCO failed to draw a connection between the forum contacts it has alleged against
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him and its breach-of-the-duty-of-loyalty claim. Here, because the jurisdictional
allegations that form the bases of these claims are related, we will consider them
together.
As we have previously discussed, Broussard executed a Confidentiality
Agreement with IPSCO in Texas. IPSCO alleged that “Broussard breached his
Confidentiality Agreement by obtaining employment with a direct competitor of
IPSCO within the 12-month period following the separation of his employment from
IPSCO.” That agreement included a choice-of-law provision, which designated
Texas law as controlling on disputed issues. See Leonard v. Salinas Concrete, LP,
470 S.W.3d 178, 190 (Tex. App.—Dallas 2015, no pet.) (noting that a Texas choice-
of-law provision in a contract, alone, does not necessarily establish the requisite
minimum contacts with Texas). However, and irrespective of the enforceability or
applicability of this choice-of-law provision, IPSCO further pleaded and alleged that
Broussard (1) traveled to Texas to resign from his position with IPSCO; (2) hired
Texas counsel to navigate his transition from IPSCO to OFSi; and (3) in order to
interview with OFSi, traveled to Texas, where he and OFSi personnel discussed
plans for him to design threaded connections as OFSi’s design engineer. Moreover,
IPSCO alleged that “OFSi and Broussard agree that Broussard was primarily, if not
solely, responsible for the design of an OFSi product which OFSi contends was
started in March 2019, when Broussard was still employed with IPSCO.”
The contacts that IPSCO has alleged existed between Broussard and Texas—
namely, executing a Confidentiality Agreement with IPSCO in Texas and then later
returning to Texas to interview with OFSi for the purpose of securing a design
engineer position while either still employed by IPSCO or within twelve months of
Broussard’s cessation of employment with IPSCO, in violation of this agreement—
simultaneously allege facts that, if proven, would constitute breaches of Broussard’s
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duties of confidentiality and loyalty. As such, we are assured that IPSCO has
sufficiently pleaded the requisite minimum contacts between Broussard and Texas:
contacts that are substantially connected to the operative facts of both its asserted
breach of contract/confidentiality and breach of loyalty claims.
Because we hold that IPSCO has pleaded sufficient jurisdictional
allegations—which Broussard, in turn, has failed to negate—in support of the trial
court’s exercise of specific jurisdiction over Broussard for IPSCO’s asserted
misappropriation-of-trade-secrets, breach of contract, and breach-of-loyalty claims,
we overrule Broussard’s first issue on appeal.
IV. This Court’s Ruling
We affirm the order of the trial court.
W. STACY TROTTER
JUSTICE
February 3, 2022
Panel consists of: Bailey, C.J.,
Trotter, J., and Williams, J.
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