Earlier this week, Charlotte Rutherford (“Rutherford”) filed her responsive brief in the appeal filed by her former employer Schlumberger. The case is considered to be high profile in the legal community because Rutherford succeeded in having the majority of Schlumberger’s claims against her dismissed based on her reliance upon the Texas Citizens’ Participation Act (“TCPA”).
Rutherford was formerly an in-house lawyer working for Schlumberger. Schlumberger filed a lawsuit alleging that Rutherford misappropriated Schlumberger’s trade secrets and breached fiduciary duties to Schlumberger by taking copies of Schlumberger computer files and hard copy documents to her new employer, Acacia Research Group (“Acacia”). Schlumberger refers to Acacia as a “patent troll.” Schlumberger alleged that Rutherford used the stolen Schlumberger records to help Acacia identify a patent to acquire that could be used to file a patent infringement lawsuit against Schlumberger.
Rutherford filed a motion to dismiss the case pursuant to the TCPA – arguing that Schlumberger filed the lawsuit in response to her exercise of the right to petition the courts for relief and her freedom of association with her co-workers at Acacia. The trial court dismissed all of Schlumberger’s claims against Rutherford accept for a breach of contract claim based upon a written confidentiality agreement. The trial court also awarded $350,000 in attorney’s fees to Rutherford and entered $250,000 in sanctions against Schlumberger.
Some of the reports covering this case resonated with Chicken Little’s cry that the sky is falling. There is a fear that this case will be cited in future lawsuits as precedent for dismissing a broad array of otherwise valid claims. Regardless of whether the Houston Court of Appeals ultimately affirms the trial court’s ruling, I do not see widespread dismissal of lawsuits based upon the Schlumberger ruling. This is because Schlumberger’s case against Rutherford arose out of an unusual fact pattern. How often will an employee (allegedly) steal trade secrets then use the trade secrets to file a lawsuit against her former employer?
There is a different issue though that I do find troubling. Rutherford is Schlumberger’s former lawyer. Lawyers have a duty not to use against their clients confidential information that they learn about the client during the course of providing legal representation to the client. I do not see a public policy reason for why the TCPA should be interpreted to shield a lawyer from a client’s claim that the lawyer breached this duty to advance a lawsuit.
It will be interesting to see how this appeal is ultimately resolved. For now, you can see Schlumberger’s and Rutherford’s legal briefs that lay out their arguments here.